Envoy Medical, Inc. Earnings Per Share Disclosure
17. Net Loss per Share
The following table sets forth the computation of basic and diluted loss per share (in thousands, except share and per share amounts):
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Numerator: | ||||||||
| Net loss | $ | (20,795 | ) | $ | (29,922 | ) | ||
| Less: Induced conversion of Series A Preferred Stock into Common Stock | (1,162 | ) | ||||||
| Less: Deemed dividend on waiver of restriction on Class A Common Stock | (495 | ) | ||||||
| Less: Cumulative preferred dividends | (5,521 | ) | (1,349 | ) | ||||
| Net loss attributable to common stockholders, basic and diluted | $ | (27,973 | ) | $ | (31,271 | ) | ||
| Denominator: | ||||||||
| Weighted-average Common Stock outstanding, basic and diluted | 18,790,448 | 12,295,391 | ||||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | (1.49 | ) | $ | (2.54 | ) | ||
The Company’s potentially dilutive securities below, presented based on amounts outstanding at each period end, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of shares of Common Stock outstanding used to calculate both basic and diluted net loss per share attributable to stockholders of Common Stock for these periods is the same.
| Year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Stock options | 2,214,769 | 1,967,734 | ||||||
| Series A Preferred Stock (as converted to common stock) | 3,588,406 | 3,913,043 | ||||||
| Publicly traded warrants | 14,166,666 | 14,166,666 | ||||||
| Shortfall Warrants | 3,209,511 | 3,874,394 | ||||||
| Contingent Sponsor Shares | — | 1,000,000 | ||||||
| 2024 Term Loan Warrants | 2,000,000 | |||||||
| 25,179,352 | 24,921,837 | |||||||
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.