Arena Group Holdings, Inc.AREN

Arena Group Holdings, Inc. Earnings Per Share Disclosure

10-KFiled Mar 30, 20161 min read
3.  Income (Loss) Per Share
 
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period plus dilutive common stock equivalents, using the treasury stock method.
 
Common stock equivalents for convertible preferred stock of 1,321,537 shares were excluded from the calculation of loss per share for the year ended December 31, 2015 and 2014, because they were not dilutive; these shares would have been dilutive if the Company had not had a net loss for the this period.
 
Stock options for the purchase of 175,000 and 200,000 shares were excluded from the calculation of loss per share for the ended December 31, 2015 and 2014, respectively, because their effect was anti-dilutive.

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.

Other Available Disclosures

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