CareDx, Inc. Earnings Per Share Disclosure
3. NET LOSS PER SHARE ATTRIBUTABLE TO CAREDX, INC.
Basic and diluted net loss per share attributable to CareDx, Inc. have been computed by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents as their effect would have been antidilutive.
For the years ended December 31, 2018, 2017 and 2016, all common share equivalents have been excluded from the calculation of diluted net loss per share, as their effect would be antidilutive.
The following tables set forth the computation of the Company’s basic and diluted net loss per share (in thousands, except shares and per share data):
|
|
|
Year Ended December 31, |
|
|||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2016 |
|
|||
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to CareDx, Inc. used to compute basic net loss per share |
|
$ |
(46,756 |
) |
|
$ |
(55,469 |
) |
|
$ |
(39,469 |
) |
|
Net loss attributable to CareDx, Inc. used to compute diluted net loss per share |
|
$ |
(46,756 |
) |
|
$ |
(55,469 |
) |
|
$ |
(39,469 |
) |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute basic net loss per share attributable to CareDx, Inc. |
|
|
35,638,956 |
|
|
|
23,332,503 |
|
|
|
16,496,911 |
|
|
Weighted-average shares used to compute diluted net loss per share attributable to CareDx, Inc. |
|
|
35,638,956 |
|
|
|
23,332,503 |
|
|
|
16,496,911 |
|
|
Net loss per share attributable to CareDx, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(1.31 |
) |
|
$ |
(2.38 |
) |
|
$ |
(2.39 |
) |
|
Diluted |
|
$ |
(1.31 |
) |
|
$ |
(2.38 |
) |
|
$ |
(2.39 |
) |
The following potentially dilutive securities have been excluded from diluted net loss per share, because their effect would be antidilutive:
|
|
|
Year Ended December 31, |
|
|||||||||
|
|
|
2018 |
|
|
2017 |
|
|
2016 |
|
|||
|
Shares of common stock subject to outstanding options |
|
|
2,501,057 |
|
|
|
1,941,472 |
|
|
|
1,757,309 |
|
|
Shares of common stock subject to outstanding common stock warrants |
|
|
656,289 |
|
|
|
3,678,957 |
|
|
|
3,259,926 |
|
|
Shares of common stock subject to convertible notes |
|
|
— |
|
|
|
6,127,021 |
|
|
|
— |
|
|
Shares of common stock subject to contingent consideration |
|
|
— |
|
|
|
227,845 |
|
|
|
227,845 |
|
|
Restricted stock units |
|
|
968,364 |
|
|
|
436,176 |
|
|
|
306,245 |
|
|
Total common stock equivalents |
|
|
4,125,710 |
|
|
|
12,411,471 |
|
|
|
5,551,325 |
|
The Company issued 4,630,145 shares of preferred stock pursuant to the Private Placement and Subsequent Financing (as described in Note 11), which were completed on April 14, 2016 and June 15, 2016, respectively. All of the preferred stock was converted to common stock upon receipt of the approval of the Private Placement by the Company’s stockholders (the “Requisite Stockholder Approval”) on June 16, 2016. As of December 31, 2016, there was no preferred stock outstanding. On September 26, 2016, the Company completed the Public Offering (the “2016 Public Offering”), pursuant to which the Company issued and sold an aggregate of 2,250,000 shares of common stock.
On October 10, 2017, the Company completed an underwritten public offering (the “2017 Public Offering”), pursuant to which the Company issued and sold an aggregate of 4,992,840 shares. During 2017 and the three months ended March 31, 2018, 6,415,039 shares of common stock were issued due to the conversion of the JGB Debt. In the three months ended June 30, 2018, the Company achieved the milestone of performing 2,500 commercial AlloSure tests resulting in the issuance of 227,848 shares of common stock to the former owners of ImmuMetrix, Inc. (“IMX”) that was accounted for as contingent consideration.
On November 13, 2018, the Company completed an underwritten public offering (the “2018 Public Offering”) pursuant to which the company issued and sold an aggregate of 2,300,000 shares.
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.