14. Net Loss Attributable to Common Stockholders per Share
For purposes of the diluted net loss attributable to common stockholders per share calculation, outstanding stock options, unvested RSAs, unvested RSUs, the conversion option derivative under the K2HV Loan Agreement, and warrants to purchase common stock are considered to be potentially dilutive securities, however the following weighted-average amounts were excluded from the calculation of diluted net loss attributable to common stockholders per share because their effect would be anti-dilutive:
| | | | | | | | | | | |
| December 31, |
| 2024 | | 2023 |
| Outstanding stock options | 7,634,937 | | | 5,700,070 | |
| Unvested RSUs | — | | | 361,500 | |
| Warrants to purchase common stock | 58,904 | | | 58,904 | |
| Common stock to be issued under the 2021 ESPP | 67,445 | | | 22,611 | |
| | | |
| Total | 7,761,286 | | | 6,143,085 | |
Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the applicable period. In computing diluted net loss per share, only potential shares of common stock equivalents that are dilutive are included. We considered each issue or series of issues of potential shares of common stock separately when determining whether potential shares of common stock equivalents are dilutive or anti-dilutive. We made such determination in sequence from the most dilutive to the least dilutive and concluded that the conversion option derivative under the K2HV Loan Agreement is dilutive to net loss per share for the year ended December 31, 2024. Pursuant to ASC Topic 260, Earnings Per Share, we applied the if-converted method to determine the effect of the conversion option derivative under the K2HV Loan Agreement on the diluted earnings per share calculations. Pursuant to such method, we adjusted the numerator for the gain recognized during the period in net loss due to the change in the fair value of the conversion option derivative liability under the K2HV Loan Agreement and the interest expense recognized during the period that is attributable to the portion of the term loan that is subject to the conversion option. We also increased the denominator to include the weighted-average number of additional shares of common stock that would have been outstanding if the conversion option derivative under the K2HV Loan Agreement were converted at the inception of the K2HV Loan Agreement. The following table summarizes the computations of basic and diluted net loss per share as presented in our consolidated statements of operations:
| | | | | | | | | | | |
| Year Ended
December 31, |
| 2024 | | 2023 |
| (in thousands, except share and per share amounts) |
| Numerator | | | |
| Net loss | $ | (70,515) | | | $ | (37,368) | |
| Less: change in fair value of derivative liability | (1,621) | | | — | |
| Plus: interest expense on converted term loan | 493 | | | — | |
| Adjusted net loss | $ | (71,643) | | | $ | (37,368) | |
| Denominator | | | |
| Weighted-average common stock outstanding, basic | 43,332,088 | | | 35,646,572 | |
| Dilutive effect of common stock issuable from assumed conversion of convertible term loan | 527,576 | | | — | |
| Weighted-average common stock outstanding, diluted | 43,859,664 | | | 35,646,572 | |
| Net loss per share | | | |
| Basic | $ | (1.63) | | | $ | (1.05) | |
| Diluted | $ | (1.63) | | | $ | (1.05) | |
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.