Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2023

Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share is calculated by dividing the adjusted net income (loss) by the weighted average number of common shares outstanding combined with dilutive common share equivalents outstanding, if the effect is dilutive. Potentially dilutive common share equivalents consist of incremental shares of common stock issuable upon conversion of convertible notes payable, exercise of stock warrants and vesting and settlement of stock awards. The dilutive effect of non-vested stock issued under share‑based compensation plans, shares issuable under the Employee Stock Purchase Plan (ESPP), employee stock options outstanding, and the prefunded stock warrants are computed using the treasury stock method. The dilutive effect of the Convertible Notes is computed using the if converted method in accordance with ASU 2020-06, which was adopted by the Company on January 1, 2022.

The calculation of the basic and diluted earnings (loss) per share for the years ended December 31, 2023 and 2022 is as follows (in thousands):


	Year ended December 31,
	2023		2022
Numerator:
Net income (loss) for basic earnings per share	$	24,713	$	(42,305)
Adjustments to net income (loss) available to shareholders for diluted earnings
Paid-in-Kind interest expense on convertible notes payable and contract consideration convertible notes payable, net of tax	2,284		—
Valuation gain on convertible notes carried at fair value, net of tax	(29,969)		—
Net loss for fully dilutive earnings per share	$	(2,972)	$	(42,305)

Denominator:
Basic weighted average shares outstanding	24,830		12,404
Dilutive effect of convertible notes payable	3,547		—
Diluted weighted average shares outstanding	28,377		12,404

Basic earnings (loss) per share	$	1.00	$	(3.41)
Diluted loss per share	$	(0.10)	$	(3.41)

For the year ended December 31, 2023, weighted average shares for employee stock awards and weighted average shares for the Pre-Funded Warrants were not included in the dilution calculation since including them would have an anti-dilutive effect on the loss per share due to the adjusted net loss incurred during the period.

For the year ended December 31, 2022, paid-in-kind interest expense, net of tax, on Convertible Notes Payable and the change in fair value related to the Contract Consideration Convertible Notes Payable, net of tax, were not included in the dilution calculation since including them would have an anti-dilutive effect on the loss per share due to the net loss incurred during the period. For the year ended December 31, 2022 weighted average shares for convertible notes payable, weighted average shares for stock warrants and weighted average shares for employee stock awards were not included in the dilution calculation since including them would have an anti-dilutive effect on the loss per share due to the net loss incurred during the period.

The table below summarizes net income items that were excluded from the numerator for the diluted earnings calculation and shares that were excluded from the denominator for the diluted earnings calculation due to their anti-dilutive effects on earnings (loss) per share (in thousands):


	Year ended December 31,
	2023		2022
Anti-dilutive adjustment to net income available to shareholders excluded from numerator for diluted earnings computation
Paid-in-Kind interest expense on convertible notes payable and contract consideration convertible notes payable, net of tax	$	—	$	5,956
Valuation gain on convertible notes carried at fair value, net of tax	—		(75)
Total numerator adjustment excluded from diluted earnings computation	$	—	$	5,881

Anti-dilutive incremental shares excluded from denominator for diluted earnings computation
Average number of diluted shares for convertible notes payable and contract consideration convertible notes payable	—		9,108
Average number of diluted shares for stock warrants	1,251		802
Average number of diluted shares for stock options and restricted stock	94		128
Total incremental shares excluded from denominator for diluted earnings computation	1,345		10,038