Net Loss Per Share

6 Months Ended

Jun. 30, 2023

10.

NET LOSS PER SHARE

Basic net loss per share is computed by dividing the net loss in each period by the weighted-average number of common shares outstanding during such period. Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. For the periods presented, common stock equivalents, consisting of stock-based awards and the SWK Warrants, were not included in the calculation of the diluted loss per share because to do so would be antidilutive. The exercise prices of the SWK Warrants are subject to a proportionate adjustment in the event of a stock dividend or stock split. The Company concluded that they should be deemed participating securities. However, as the Company is currently operating in a net loss position for the three and six month periods ended June 30, 2023 and has not declared any dividends, such inclusion of the participating securities related to the SWK Warrants (as common stock equivalents) would be antidilutive and thus would be excluded from the calculation of net loss per share. When calculating diluted net loss per share, the Company includes, only if dilutive, the potential common shares associated with the Marathon Convertible Notes using the “if-converted” method, which adjusts the numerator for any impact to earnings for the period and includes in the denominator the shares assumed to be converted at the beginning of the period.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per common share for the three and six months ended June 30, 2023 and 2022 is as follows:


	For the Three Months Ended June 30, 2023			For the Three Months Ended June 30, 2022			For the Six Months Ended June 30, 2023			For the Six Months Ended June 30, 2022
Numerator:
Net loss	$	(8,090,720	)	$	(2,667,036	)	$	(24,371,426	)	$	(11,846,040	)

Denominator:
Basic:
Weighted average shares of common stock outstanding		24,462,895			15,273,707			22,765,268			14,794,637

Diluted:
Weighted average shares of common stock outstanding		24,462,895			15,273,707			22,765,268			14,794,637
Effect of potentially dilutive shares (1)		—			2,407,693			—			1,577,900
Total weighted average shares of common stock and potentially dilutive shares		24,462,895			17,681,400			22,765,268			16,372,537

Net loss per common share:
Basic:
Net loss applicable to common stockholders	$	(8,090,720	)	$	(2,667,036	)	$	(24,371,426	)	$	(11,846,040	)
Weighted average shares of stock outstanding, basic		24,462,895			15,273,707			22,765,268			14,794,637
Basic net loss per common share	$	(0.33	)	$	(0.17	)	$	(1.07	)	$	(0.80	)

Diluted:
Net loss applicable to common shareholders, diluted (1)	$	(8,090,720	)	$	(5,308,236	)	$	(24,371,426	)	$	(13,524,840	)
Weighted average shares of stock outstanding, diluted		24,462,895			17,681,400			22,765,268			16,372,537
Diluted net loss per common share	$	(0.33	)	$	(0.30	)	$	(1.07	)	$	(0.83	)

(1) In calculating diluted net loss per share, we excluded the impact of changes in the fair value of the Marathon Convertible Notes of $2.6 million and $1.7 million for the three and six months ended June 30, 2022, respectively. The 2,407,693 shares and 1,577,900 shares for the three and six months ended June 30, 2022, respectively are the weighted average shares associated with the original principal amount of the Marathon Convertible Notes and the shares that may be issuable upon the conversion of accrued interest owed at the beginning of the period.

As of June 30, 2023 and 2022, the number of shares of common stock underlying potentially dilutive securities excluded from the calculation of diluted net loss per share, because the company’s net loss meant that their inclusion would have been antidilutive for those periods, consist of:


	June 30,
	2023		2022
Options to purchase common stock		3,055,256		2,850,787
Shares associated with Marathon Convertible Note		2,400,000		—
March 2023 Offering warrants		2,920,306		—
SWK Warrants		1,000,000		150,000
Total		9,375,562		3,000,787

The application of the “if-converted” method to the 2.4 million shares associated with the Secured Convertible Notes, as of the beginning of the period, was not applicable for the three and six months ended June 30, 2023 because to do so would have been antidilutive.