NOTE 12 – EARNINGS PER SHARE

 

EARNINGS (LOSS) PER COMMON SHARE

 

The following table sets forth the components used in the computation of basic and diluted income per share:

 

(In thousands, except share and per share data) 

Fiscal Year Ended

August 31, 2025

  

Fiscal Year Ended

August 31, 2024

 
Basic earnings per share:          
Numerator:          
Net income (loss)  $348,577   $(3,293)
Less: Deemed dividend to participating preferred stock   (2,961)   - 
Less: allocation to participating preferred stock   (17,455)   - 
Net income (loss) available to common stockholders — Basic  $328,161   $(3,293)
           
Denominator:          
Weighted average common shares outstanding - basic   24,137,713    2,493,931 
Basic earnings per common share  $13.60   $(1.32)
           
Diluted earnings per share:          
Numerator:          
Net income (loss) available to common stockholders — Dilutive  $328,681   $(3,293)
Denominator:          
Weighted average common shares outstanding - basic   24,137,713    2,493,931 
Add: dilutive securities          
Warrants   345,239    - 
RSAs   32,274    - 
Weighted average common shares outstanding - diluted   24,515,226    2,493,931 
Diluted earnings per common share  $13.39   $(1.32)

 

22,698 shares of Series A Preferred Stock and 125 shares of Series B Preferred Stock were outstanding during the period ended August 31, 2025 but were excluded from diluted earnings per share computation as they were anti-dilutive.

 

The following table summarizes the securities that were not included in the computation of diluted income per common share:

 

  

Outstanding as of

August 31, 2025

  

Outstanding as of

August 31, 2024 (3)

 
C-3 Warrants (1)   1,280    1,280 
C-1 and C-2 Warrants (2)   -    414,760 
RSAs   -    195,906 

 

(1)Warrants are out-of-money because the exercise price exceeded the average fair value during the period.
(2)These warrants were out of money during the fiscal year ended 08/31/2024 and expired on 01/15/2025
(3)The Company was in loss position as of 08/31/2024 and hence no dilutive securities were included.

 

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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.