NOTE 2—EARNINGS PER SHARE

Earnings (loss) per Common Share

For the three and six months ended June 30, 2026, earnings (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. For the three and six months ended June 30, 2025, earnings (loss) per common share was computed using the two-class method related to the Company’s Series A Redeemable Convertible Preferred Stock, par value of $0.0001 (“Preferred Stock”), prior to its conversion into common shares on February 3, 2026. Under the two-class method, undistributed earnings available to stockholders for the period are allocated on a pro rata basis to the common stockholders and to the holders of the Preferred Stock based on the weighted average number of common shares outstanding and number of shares that could be issued upon conversion of the Preferred Stock. Diluted earnings per share is computed using the weighted average number of common shares outstanding and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the dilutive incremental common shares associated with restricted stock awards, shares issuable upon the exercise of stock options, using the treasury stock method, and the potential common shares that could be issued from conversion of the Preferred Stock, using the if-converted method (prior to its conversion into common shares on February 3, 2026). When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the diluted earnings per share calculation.

For the three months ended June 30, 2026 and the three and six months ended June 30, 2025, the Company incurred a net loss available to stockholders, therefore potential common shares were excluded from the diluted earnings per share calculation as being anti-dilutive, and basic and diluted net loss per share were the same for those periods. For the three months ended June 30, 2026, 0.9 million unvested restricted shares and 1.2 million shares issuable upon exercise of options, were excluded from the diluted earnings per share calculation. For the three and six months ended June 30, 2025, 1.1 million unvested restricted shares, 2.3 million shares issuable upon exercise of options, and 8.7 million common shares issuable upon the conversion of the Preferred Stock, were excluded from the diluted earnings per share calculation. For the six months ended June 30, 2026, no potential dilutive securities were anti-dilutive. On February 3, 2026, the Company caused the mandatory conversion of all 62,000 outstanding shares of Preferred Stock to be converted into 9,018,763 shares of common stock, see Note 7—Stockholders’ Equity for additional information. 

Earnings (loss) per share was calculated as follows: