Basic earnings (loss) per share is calculated by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents. Diluted earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common stock and common stock equivalents outstanding for the period. For periods in which the Company incurs a net loss, outstanding common stock equivalents are not included in the calculation of diluted earnings (loss) per share as their effect is anti-dilutive. Accordingly, basic and diluted net loss per share for those periods are identical.

Holders of Series E convertible preferred stock met the definition of participating securities, which required the Company to apply the two-class method to compute both basic and diluted earnings (loss) per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all earnings for the period had been distributed. In the event the Board of Directors declared dividends or any distributions, the available distributions would be distributed (i) first, to the Series E convertible preferred stock until such holders have received on a cumulative basis an amount per share equal to the Series E original issue price, and (ii) second, to the holders of common stock and Series E convertible preferred stock (on an as converted basis) on a pro rata, pari passu, basis. The attribution of earnings to the Series E convertible preferred stockholders was based on its contractual rights to receive dividends and, for the quarter in which they converted, the attribution was calculated using a weighted-average method. The Series E convertible preferred stock did not contractually participate in the Company’s net losses, and therefore undistributed losses were not allocated to Series E convertible preferred stock. Immediately prior to the completion of the Company’s IPO on September 22, 2021, all outstanding shares of the Series E convertible preferred stock automatically converted on a one-to-one basis into an aggregate of 27,011,500 shares of common stock. See Note 12 for additional information related to the Series E convertible preferred stock.

The dilutive effect of stock options, warrants and unvested nonparticipating restricted stock is based on the treasury stock method while the dilutive effect of the convertible preferred stock is based on the if-converted method. These potential common stock equivalents are only included in the calculations when their effect is dilutive. The Company presents the more dilutive of the two-class method or if-converted method as diluted net income (loss) per share during the period. For the three and six months ended June 30, 2021, the Company presented diluted net income per share under the two-class method.

The following table presents information necessary to calculate earnings (loss) per share:


	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Numerator:
Net income (loss) attributable to Thorne HealthTech, Inc.	$	(5,590,705	)	$	(88,230	)	$	(611,646	)	$	4,618,260
Undistributed earnings (loss) attributable to Series E convertible preferred stockholders		—			(88,230	)		—			4,618,260
Numerator for basic earnings (loss) per share—net income (loss) available to Thorne HealthTech, Inc. common stockholders (A)		(5,590,705	)		—			(611,646	)		—
Effect of dilutive securities:
Undistributed earnings (loss) attributable to Series E convertible preferred stockholders—basic		—			(88,230	)		—			4,618,260
Undistributed earnings (loss) attributable to Series E convertible preferred stockholders—diluted		—			88,230			—			(4,618,260	)
Numerator for diluted earnings (loss) per share—net income (loss) available to Thorne HealthTech, Inc. common stockholders (C)		(5,590,705	)		—			(611,646	)		—

Denominator (1):
Denominator for basic earnings (loss) per share—weighted average shares (B)		52,731,604			17,650,035			52,648,653			17,650,035
Denominator for diluted earnings (loss) per share—adjusted weighted average common stock and common stock equivalents (D)		52,731,604			17,650,035			52,648,653			17,650,035
Basic earnings (loss) per share (A/B)	$	(0.11	)	$	—		$	(0.01	)	$	—
Diluted earnings (loss) per share (C/D)	$	(0.11	)	$	—		$	(0.01	)	$	—

(1) For the three and six months ended June 30, 2022, 18.1 million and 17.2 million warrants and stock-based awards, respectively, were excluded from the computation of diluted earnings (loss) per share because the effect would have been anti-dilutive under the treasury stock method.