Note 12 - Net Income (Loss) per Share

6 Months Ended

Jun. 30, 2026

Notes to Financial Statements

Earnings Per Share [Text Block]

12. Net Loss per Share

The Company computes basic and diluted earnings (loss) per share using the two-class method because the Series A Preferred Stock is a participating security that contractually participates with the Company’s common stock in any cash dividend or other distribution declared on the common stock on an as-converted basis. See Note 3 for a description of the terms of the Series A Preferred Stock, the Investment Agreement, and the related board designation rights. The Series A Preferred Stock does not have a contractual obligation to share in the Company’s losses.

Under the two-class method, net income is allocated between common stockholders and the holders of the Series A Preferred Stock (“Series A Preferred Stockholder”) based on their respective participation rights, and is computed using the more dilutive of (i) the two-class method with dilutive common share equivalents included in the denominator, with a corresponding reallocation of undistributed earnings, or (ii) the if-converted method, which adds preferred-as-converted shares to both the numerator (adding back preferred dividends) and the denominator. For the three and six months ended June 30, 2026, the if-converted method was more dilutive.

For periods in which the Company reports a net loss, no portion of the loss is allocated to the Series A Preferred Stock. Net loss attributable to common stockholders is adjusted for accretion of the Series A Preferred Stock to its maximum redemption value, which is treated as a deemed dividend to the Series A Preferred Stockholders and reduces income available to common stockholders. Basic loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period.

Diluted loss per share gives effect to all potentially dilutive common shares outstanding during the period, including employee stock options, restricted stock units, and common shares issuable on an as-converted basis upon conversion of the Series A Preferred Stock, using the treasury stock method or the if-converted method, as applicable. Potentially dilutive securities are excluded from the diluted loss per share computation when their effect would be anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per share:

		*Three Months Ended June 30,*								*Six Months Ended June 30,*
		*2026*				*2025*				*2026*				*2025*
Numerator
Net loss		$	(1,805,081	)		$	(362,178	)		$	(54,151	)		$	(518,360	)
Less: Accretion of paid-in-kind preferred dividends			(974,319	)			—				(1,072,627	)			—
Undistributed loss			(2,779,400	)			(362,178	)			(1,126,778	)			(518,360	)
Allocation to common stockholders			100.0	%			100.0	%			100.0	%			100.0	%
Undistributed loss - common			(2,779,400	)			(362,178	)			(1,126,778	)			(518,360	)
Distributed earnings (preferred dividends to common)			—				—				—				—
Net loss attributable to common - basic			(2,779,400	)			(362,178	)			(1,126,778	)			(518,360	)
Reallocation of undistributed earnings (diluted)			—				—				—				—
Net loss attributable to common - diluted		$	(2,779,400	)		$	(362,178	)		$	(1,126,778	)		$	(518,360	)
Denominator
Weighted average common shares - basic			11,019,387				10,517,528				10,904,337				10,431,987
Dilutive effect - incentive stock plan awards			—				—				—				—
Weighted average common shares - diluted			11,019,387				10,517,528				10,904,337				10,431,987
Net loss per common share
Basic		$	(0.25	)		$	(0.03	)		$	(0.10	)		$	(0.05	)
Diluted		$	(0.25	)		$	(0.03	)		$	(0.10	)		$	(0.05	)
Anti-dilutive shares excluded
Incentive stock plan awards (1)			1,620,876				2,451,477				1,620,876				2,451,477
Series A Preferred Stock (as-converted) (3)			26,749,161				—				14,918,675				—
(1) In the three and six months ended June 30, 2026 and 2025, the Company reported a net loss attributable to common shareholders and therefore all 1,620,876 and 2,451,477, respectively, of potential common shares underlying outstanding stock options and RSUs, as well as all shares of Series A Preferred Stock as converted, were excluded from the diluted computation as their inclusion would be anti-dilutive.