Net Loss Per Share

9 Months Ended

Sep. 30, 2020

8. Net Loss Per Share

The following table summarizes the computation of basic and diluted net loss per share of the Company:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Net loss	$	(36,078	)	$	(19,673	)	$	(87,688	)	$	(51,392	)

Deemed dividend resulting from extinguishment upon modification of series C preferred stock	$	(177,789	)		—		$	(177,789	)		—
Net loss attributable to common shareholders	$	(213,867	)	$	(19,673	)	$	(265,477	)	$	(51,392	)

Net loss per share attributable to common shareholders, basic and diluted	$	(3.00	)	$	(5.53	)	$	(9.92	)	$	(15.46	)

Weighted average shares of common stock, basic and diluted		71,248,846			3,556,303			26,766,687			3,323,456

As discussed in Note 5, on July 8, 2020, the Company’s board of directors and its Series C preferred stockholders approved an amendment to the conversion preferences and rights of the Series C preferred stock which, among other changes, resulted in a reduction in the conversion price of the Series C preferred stock from $3.21 to $3.027603. The changes to the conversion feature are considered to be a significant change to the substantive contractual terms of the Series C preferred stock, and, therefore, the Company accounted for the changes as an extinguishment and reissuance of the Series C preferred stock. In accordance with SEC staff guidance codified in ASC

260-10-S99-2,

when equity classified preferred shares are extinguished, the difference between (1) the fair value of the consideration transferred to the holders of the preferred shares and (2) the carrying amount of the preferred shares, net of issuance costs, is subtracted from (or added back to) net income to arrive at income available to common stockholders in the calculation of EPS. This difference between fair value of consideration transferred and carrying amount of the preferred shares, also referred to as a “deemed dividend”, has therefore been added back to net loss above to derive net loss attributable to common shareholders.

The Company’s potentially dilutive securities, which include Convertible Preferred Stock (prior to the IPO), options to purchase common stock and unvested restricted stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Convertible preferred stock		—		59,883,877		—		59,883,877
Options to purchase common stock		7,461,779		5,007,344		7,461,779		5,007,344
Unvested restricted stock		173,818		876,456		173,818		876,456

		7,635,597		65,767,677		7,635,597		65,767,677