Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements and notes follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company for the year ended December 31, 2023, except as described below.

Basic and Diluted Net (Loss) Income per Share of Common Stock

The Company calculates net (loss) income per common share in accordance with ASC 260, Earnings Per Share. Basic net (loss) income per common share for the three and six months ended June 30, 2024 and 2023 was determined by dividing net (loss) income applicable to common stockholders by the weighted average number of common shares outstanding during the period. Per ASC 260, Earnings Per Share, the weighted average number of common shares outstanding utilized for determining the basic net (loss) income per common share for the three and six months ended June 30, 2024 and 2023 includes the outstanding prefunded warrants to purchase 7,516,267 and 3,200,000 shares of common stock issued in the April 2022 public offering and December 2020 public offering. Diluted net (loss) income per common share for the three and six months ended June 30, 2024 and 2023 was determined as follows (in thousands, except share and per share amounts):


	Three Months Ended June 30,					Six Months Ended June 30,
	2024			2023		2024			2023
Net (loss) income allocated to common shares	$	(14,458	)	$	122,260	$	(14,047	)	$	88,384
Dilutive effect of convertible debt		—			433		—		$	1,047
Net (loss) income allocated to common shares	$	(14,458	)	$	122,693	$	(14,047	)	$	89,431

Weighted average common shares outstanding – basic		48,511,656			47,837,393		48,379,256			47,797,731
Dilutive effect of convertible debt		—			1,138,200		—			1,138,200
Dilutive effect of restricted stock units		—			947,768		—			230,320
Weighted average common shares outstanding – diluted		48,511,656			49,923,361		48,379,256			49,166,251

Net (loss) income per share – diluted	$	(0.30	)	$	2.46	$	(0.29	)	$	1.82

The following potentially dilutive shares of common stock and outstanding restricted stock units that contain certain performance contingencies have not been included in the computation of diluted net (loss) income per share for the three and six months ended June 30, 2024 and 2023, as the result would be anti-dilutive or the performance contingencies have not been met:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Outstanding stock options		2,842,808		1,970,536		2,842,808		1,970,536
Outstanding restricted stock units		3,263,345		400,000		3,263,345		400,000
Warrants to purchase common stock associated with December 2020 public offering - Series 2		—		6,800,000		—		6,800,000
Warrants to purchase common stock associated with April 2022 public offering		15,000,000		15,000,000		15,000,000		15,000,000
Warrants to purchase common stock associated with Loan Agreement		198,811		198,811		198,811		198,811
Common stock associated with March 2019 Notes		1,138,200		—		1,138,200		—
Warrants to purchase common stock associated with Danforth		50,000		50,000		50,000		50,000
Total		22,493,164		24,419,347		22,493,164		24,419,347

Reclassification of Prior Year Amounts

Certain prior year amounts within the changes in operating assets and liabilities on the unaudited condensed consolidated statement of cash flows and certain prior year accrued expenses have been reclassified for consistency with the current year presentation.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options and Derivatives and Hedging—Contracts in Entity’s Own Equity: Accounting for Convertible Instruments and Contracts in and Entity’s Own Equity (“ASU 2020-06”). The amendments in ASU 2020-06 reduce the number of accounting models for convertible debt instruments and revises certain guidance relating to the derivative scope exception and earnings per share. The amendments in ASU 2020-06 are effective for public business entities that meet the definition of a SEC filer and a smaller reporting company for fiscal years beginning after December 15, 2023, and interim periods within those years. The Company adopted ASU 2020-06 on January 1, 2024 and the adoption did not materially impact the unaudited condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures, which introduced new guidance on disclosures for reportable segments and significant segment expenses, including for entities with a single reportable segment. This guidance is effective for the Company for annual reporting periods beginning January 1, 2024 and interim periods beginning January 1, 2025. As a smaller reporting company, the Company is currently evaluating the impact ASU 2023-07 will have on its consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, which introduced new guidance on disclosures for income taxes, including enhancements to the rate reconciliation and income taxes paid disclosures. This guidance is effective for the Company for annual reporting periods beginning January 1, 2025. As a smaller reporting company, the Company is currently evaluating the impact ASU 2023-09 will have on its consolidated financial statements.