Note 14 — Net Income (Loss) Per Share

The holders of the Company’s pre-funded warrants are entitled to receive pro rata distributions if the Company declares or makes any dividend or other distribution of its assets to holders of shares of Common Stock, without regard to any beneficial ownership limitation applicable to the exercise of the pre-funded warrants. As a result, the pre-funded warrants are considered participating securities in accordance with ASC 260, Earnings Per Share. In periods in which the Company reports net income, the Company applies the two-class method to compute basic and diluted earnings per share. Under this method, earnings are allocated to Common Stock and participating securities based on their respective rights to receive dividends, as if all undistributed earnings for the period were distributed. The portion of earnings allocated to participating securities is deducted from net income in determining net income attributable to common stockholders for purposes of computing earnings per share. In periods in which the Company reports a net loss, losses are allocated to participating securities only if the security has a contractual obligation to share in losses. As the pre-funded warrants do not contain a contractual obligation to share in losses, no loss was allocated to the pre-funded warrants for the three and nine months ended September 30, 2025, or the three months ended September 30, 2026. For the nine months ended September 30, 2026, the Company reported net income and allocated earnings to the pre-funded warrants in accordance with the two-class method. On August 10, 2026, the Company obtained stockholder approval for the issuance of shares upon exercise of certain of the pre-funded warrants, satisfying the last substantive condition to their exercise. From that date, the shares underlying those pre-funded warrants are included in basic and diluted weighted-average shares outstanding in accordance with ASC 260 and are no longer subject to the two-class method; the two-class method continues to apply to pre-funded warrants not covered by such approval.

The Company computes diluted earnings per share by considering the impact of all potentially dilutive securities and applying the combination of methods that results in the most dilutive outcome in accordance with ASC 260. The Company evaluates the dilutive effect of each class of potential common shares using the treasury stock method, if-converted method, or the two-class method, as applicable. For instruments subject to the two-class method, the Company applies a hybrid approach under which the two-class earnings allocation is applied to the earnings pool adjusted for if-converted and treasury stock method adjustments applicable to other dilutive instruments. The treasury stock method is applied to stock options, unvested restricted stock units and to the Company’s liability-classified common stock warrants, the if-converted method is applied to convertible notes, and the two-class method is applied to participating pre-funded warrants not included in basic weighted-average shares. For liability-classified warrants included in diluted earnings per share, the numerator is adjusted to remove the change in fair value of the warrants recognized in earnings during the period. The convertible notes are not considered participating securities, as they do not provide the holder with a current right to participate in dividends or undistributed earnings prior to conversion.

The components of basic and diluted net income (loss) per share were as follows:

The Convertible Notes are evaluated for dilutive effect under the if-converted method, under which the after-tax interest expense on the notes is added back to the numerator and the notes are treated as converted at the stated conversion ratio. Pre-funded warrants issuable in settlement of interest accrued on the Convertible Notes during the period are included in the if-converted computation and, accordingly, are not treated as participating securities in the diluted computation. The notes are anti-dilutive when the after-tax interest per share issuable upon conversion exceeds earnings per share before giving effect to the notes. For the three months ended September 30, 2026, the Company reported a net loss; accordingly, all potentially dilutive securities, including the Convertible Notes (representing 2,971,433 gross shares issuable upon conversion), unvested restricted stock units, stock options and liability-classified common stock warrants, were anti-dilutive and excluded from the computation of diluted loss per share, while for the nine months ended September 30, 2026 the Convertible Notes and the liability-classified pre-funded warrants were dilutive and were included in the computation. In addition, the Company excluded the following potential common stock equivalents, presented based on amounts outstanding at each period end, from the computation of diluted earnings (loss) per share attributable to common stockholders for the periods presented because their inclusion would have been anti-dilutive.