EQUITY, STOCK-BASED COMPENSATION AND EARNINGS (LOSS) PER SHARE

3 Months Ended

Dec. 31, 2023

Equity, Stock-Based Compensation, And Earnings Per Share

EQUITY, STOCK-BASED COMPENSATION AND EARNINGS (LOSS) PER SHARE

12.    EQUITY, STOCK-BASED COMPENSATION AND LOSS PER SHARE

Increase in Authorized Shares and Equity Plan Reserve

On November 4, 2021, the Company’s shareholders approved an amendment to the Company’s Second Amended and Restated Articles of Incorporation to increase the number of authorized shares from 20,000,000 shares, consisting of 19,000,000 common shares and 1,000,000 preferred shares, to 75,000,000 shares, consisting of 74,000,000 common shares and 1,000,000 preferred shares. Approval of this matter by the Inotiv shareholders was a condition to the closing of the Envigo acquisition. The amendment was effective on November 4, 2021. On November 4, 2021, the Company’s shareholders approved an amendment to the Company’s 2018 Equity Incentive Plan (the “Equity Plan”) to increase the number of shares available for awards thereunder by 1,500,000 shares and to make certain corresponding changes to certain limitations in the Equity Plan. At December 31, 2023, 176,983 shares remained available for grants under the Equity Plan.

Stock-Based Compensation

The Company expenses the estimated fair value of stock options, restricted stock and restricted stock units over the vesting periods of the grants. The Company recognizes expense for awards subject to graded vesting using the straight-line attribution method and forfeitures, as they are incurred. Stock based compensation expense for the three months ended December 31, 2023 and 2022, was $1,897 and $2,046, respectively.

Loss per Share

The Company computes basic loss per share using the weighted average number of common shares outstanding. The Company computes diluted loss per share using the if-converted method for preferred shares and convertible debt, if any, and the treasury stock method for stock options and restricted stock units.

The following table reconciles the numerator and denominator in the computations of basic and diluted loss per share:

(in thousands)	Three Months Ended December 31,
	2023		2022
Numerator:
Consolidated net loss	$	(15,828)	$	(86,932)
Less: Net (loss) income attributable to noncontrolling interests	(440)		391
Net loss attributable to common shareholders	(15,388)		(87,323)
Denominator:
Weighted-average shares outstanding - Basic and diluted	25,764		25,603
Anti-dilutive common share equivalents (1)	5,796		5,369
(1) Anti-dilutive common share equivalents are comprised of stock options, restricted stock units, restricted stock awards and 3,040,268 shares of common stock issuable upon conversion in connection with the convertible debt entered into on September 27, 2021.These common share equivalents were outstanding for the periods presented, but were not included in the computation of diluted loss per share for those periods because their inclusion would have had an anti-dilutive effect.