5E Advanced Materials, Inc. Earnings Per Share Disclosure
12. Earnings (Loss) Per Common Share
Basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the respective period. Diluted loss per share includes certain adjustments to basic loss per share for income and to common shares outstanding that could occur if RSUs, PSUs, stock options and convertible securities such as the Convertible Notes and Warrants were exercised or converted into common stock. Diluted loss per share equals basic loss per share for the years ended June 30, 2025 and 2024, as the effect of including dilutive securities in the calculation would be antidilutive.
For the years ended June 30, 2025 and 2024, the following effects are excluded from the computation of dilutive loss per share as such effects would have an anti-dilutive effect.
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Year Ended June 30, |
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2025 |
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2024 |
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(in thousands) |
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Interest expense on convertible notes, net of amounts capitalized |
|
$ |
6,451 |
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|
$ |
6,175 |
|
Derivative gain — convertible note derivatives |
|
$ |
1,357 |
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|
$ |
749 |
|
Gain (loss) on extinguishment of debt |
|
$ |
17,333 |
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|
$ |
(20,953 |
) |
Additional shares assuming conversion of convertible notes(1) |
|
|
3,120 |
|
|
|
326 |
|
Additional shares assuming exercise of warrants |
|
|
6,096 |
|
|
|
— |
|
Stock options and unvested restricted stock units and |
|
|
725 |
|
|
|
194 |
|
Subsequent Equity Issuance – August 2025
As discussed in Note 16–Subsequent Events, subsequent to June 30, 2025, the Company issued an aggregate of 2,374,481 shares of its Common Stock in connection with the August 2025 Equity Offering (as defined in Note 16–Subsequent Events). The impact of the equity issuance is not reflected in the computation of earnings per share for the year ended June 30, 2025.
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.