EARNINGS (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2024

We compute basic and diluted earnings (loss) per share (“EPS”) by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.

We are required in periods in which we have net income to calculate EPS using the two-class method. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders but does not require the presentation of basic and diluted EPS for securities other than common stock. The two-class method is required because our Series A convertible preferred stock (“Series A Preferred Stock”) has the right to receive dividends or dividend equivalents should we declare dividends on our common stock as if such holder of the Preferred Stock had been converted to common stock. Under the two-class method, earnings for the period are allocated to the common and preferred stockholders taking into consideration Series A preferred stockholders participation in dividends on an as converted basis. The weighted-average number of common and preferred shares outstanding during the period is then used to calculate basic EPS for each class of shares.

Diluted EPS is computed in the same manner as basic EPS except that the denominator is increased to include the number of contingently issuable share-based compensation awards that would have been outstanding unless those additional shares would have been anti-dilutive. Dilutive common stock equivalents include the dilutive effect of in-the-money stock equivalents, excluding any common stock equivalents if their effect would be anti-dilutive. For the diluted EPS calculation, the if-converted method is applied and compared to the two-class method and whichever method results in a more dilutive impact is utilized to calculate diluted EPS. In periods in which we have a net loss, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation.

In periods in which we have a net loss, basic loss per share is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The two-class method is not used because the Preferred Stock does not participate in losses. As such, the net loss was attributed entirely to common stockholders.

The following table summarizes net loss attributable to common stockholders and participating securities used in the calculation of basic and diluted loss per common share:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands except share and per share amounts)	2024		2023		2024		2023
Basic loss per share:
Net loss attributable to common stock and participating securities used to calculate basic loss per share	$	(19,824)	$	(6,796)	$	(90,040)	$	(5,891)
Weighted average common shares outstanding	14,139,504		13,963,010		14,118,335		13,169,862
Dilutive effect of pre-funded warrants	300,357		300,357		300,357		300,357
Weighted average shares outstanding for EPS	14,439,861		14,263,367		14,418,692		13,470,219
Basic loss per share	$	(1.37)	$	(0.48)	$	(6.24)	$	(0.44)

Diluted loss per share:
Net loss attributable to common stock and participating securities used to calculate diluted loss per share	$	(19,824)	$	(6,796)	$	(90,040)	$	(5,891)
Weighted average common shares outstanding	14,139,504		13,963,010		14,118,335		13,169,862
Weighted average pre-funded warrants	300,357		300,357		300,357		300,357



Weighted average shares outstanding for EPS	14,439,861		14,263,367		14,418,692		13,470,219
Diluted loss per share	$	(1.37)	$	(0.48)	$	(6.24)	$	(0.49)

The following common stock equivalent shares were excluded from the calculation of diluted loss per share since their impact would have been anti-dilutive for the periods presented:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Shares underlying warrants	2,000,000	—	2,000,000	—
Stock options	232,768	193,651	232,768	193,651
Restricted stock units	135,427	415,489	135,427	415,489
Shares issuable under the Employee Stock Purchase Plan	53,646	27,266	53,646	27,266
Share equivalents excluded from EPS	2,421,841	636,406	2,421,841	636,406