Net (Loss) Income Per Share of Common Stock

9 Months Ended

Sep. 30, 2023

Net (Loss) Income Per Share of Common Stock

Net (Loss) Income Per Share of Common Stock

7. Net (Loss) Income Per Share of Common Stock

Basic net (loss) income per share of common stock is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period, without consideration for potential dilutive shares of common stock. Diluted net (loss) income per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, stock options, and unvested restricted stock, which would result in the issuance of incremental shares of common stock. Diluted net (loss) income per share of common stock is computed by dividing the net (loss) income attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and if-converted method, as applicable. Basic and diluted net (loss) income per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities, which include convertible preferred stock.

Under the two-class method, undistributed earnings are allocated to common stock and convertible preferred stock to the extent that each preferred security may share in earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the convertible preferred stock have no obligation to fund losses.

The pre-funded warrants to purchase common stock issued in connection with the November 2022 offering are included in the calculation of basic and diluted net loss per share as the exercise price of $0.001 per share is non-substantive and is virtually assured. The pre-funded warrants are more fully described in Note 8.

The computations for basic and diluted net (loss) income per share were as follows (in thousands, except per-share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023			2022	2023		2022
Numerator
Net (loss) income	$	(32,972)	$	73,290	$	(99,636)	$	14,496
Less: Net income attributable to preferred shareholders		—		(1,656)		—		(336)
Net (loss) income attributable to common shareholders		(32,972)		71,634		(99,636)		14,160
Denominator
Basic weighted average shares outstanding		53,920,109		37,202,269		52,755,114		37,084,060
Effect of dilutive securities		—		708,242		—		1,309,694
Diluted weighted average shares outstanding		53,920,109		37,910,511		52,755,114		38,393,754
Basic net (loss) income per share of common stock	$	(0.61)	$	1.93	$	(1.89)	$	0.38
Diluted net (loss) income per share of common stock	$	(0.61)	$	1.89	$	(1.89)	$	0.37

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding prior to the use of the two-class method, as they would be anti-dilutive:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2023	2022	2023	2022
Restricted stock awards and restricted stock units	1,265,316	—	1,265,316	—
Stock options	7,188,661	4,735,841	7,188,661	4,566,687
	8,453,977	4,735,841	8,453,977	4,566,687