NOTE 2—NET LOSS PER COMMON SHARE

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period utilizing the two-class method. Preferred stockholders participate equally with common stock stockholders in earnings, but do not participate in losses, and are excluded from the basic net loss calculation. Diluted net loss per share is computed by giving effect to all potential dilutive common shares, including outstanding options, warrants and convertible preferred stock. More specifically, as of December 31, 2023 and 2022, stock options, warrants, convertible common shares related to the Conversion Right, as defined in the CVR Agreement, and described in Note 4, “Fair Value Measurements,” and, if converted, preferred stock totaling approximately 2,500,000 and 789,000 common stock, respectively, were excluded from the computation of diluted net loss per share as their effect would have been anti-dilutive.