NET INCOME PER SHARE

6 Months Ended

Jun. 30, 2022

Basic net income per share is calculated by dividing the net income by the weighted-average number of shares of common stock outstanding during the period. Upon consummation of the Zyla Merger in May 2020, the Company inherited outstanding Zyla warrants to purchase Zyla common stock, which were converted into the right to purchase shares of Assertio’s common stock. As these warrants are exercisable at any time at an exercise price of $0.0016 per share, they represent contingently issuable shares and therefore are included in the number of outstanding shares used for the computation of basic income per share. There were zero and 392,095 unexercised shares of common stock issuable upon the exercise of warrants as of June 30, 2022 and 2021, respectively.

Diluted net income per share is calculated by dividing the net income by the weighted-average number of shares of common stock outstanding during the period, plus potentially dilutive common shares, consisting of stock options, awards, and equivalents and convertible debt. The Company uses the treasury-stock method to compute diluted earnings per share with respect to its stock options and equivalents. The Company uses the if-converted method to compute diluted earnings per share with respect to its convertible debt. For purposes of this calculation, options to purchase stock are considered to be potential common shares and are only included in the calculation of diluted net income per share when their effect is dilutive.

The following table reflects the calculation of basic and diluted earnings per common share for the three and six months ended June 30, 2022 and 2021 (in thousands, except for per share amounts):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Basic net income per share
Net income (loss)	$	7,834	$	(14,169)	$	16,898	$	(9,625)
Weighted average common shares and warrants outstanding	46,274		44,706		45,746		41,321
Basic net income (loss) per share	$	0.17	$	(0.32)	$	0.37	$	(0.23)

Diluted net income per share
Net income (loss)	$	7,834	$	(14,169)	$	16,898	$	(9,625)

Weighted average common shares and share equivalents outstanding	46,274		44,706		45,746		41,321


Add: effect of dilutive stock options, awards, and equivalents	1,305		—		1,111		—
Diluted net income (loss) per share	$	0.16	$	(0.32)	$	0.36	$	(0.23)

The following table reflects outstanding potentially dilutive common shares that are not included in the computation of diluted net income per share, because to do so would be anti-dilutive, for the three and six months ended June 30, 2022 and 2021 (in thousands):


	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
2.5% Convertible Notes debt 2021	—	4	—	4


Stock options, awards and equivalents	2,124	2,924	1,614	2,899
Total potentially dilutive common shares	2,124	2,928	1,614	2,903