FENNEC PHARMACEUTICALS INC. Earnings Per Share Disclosure
3. Loss per Share
Loss per common share is presented under two formats: basic loss per common share and diluted loss per common share. Basic loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period, plus the potentially dilutive impact of common shares equivalents (e.g. stock options and warrants). Dilutive common share equivalents consist of the incremental common shares issuable upon exercise of stock options and warrants. The following table sets forth the computation of basic and diluted net loss per share (in thousands except per share data):
Year Ended December 31, | |||||||
| 2024 |
| 2023 |
| |||
Numerator: |
|
| |||||
Net loss | $ | (436) | $ | (16,045) | |||
Denominator: |
|
|
|
| |||
Weighted-average common shares, basic |
| 27,294 |
| 26,574 | |||
Weighted-average common shares, diluted |
| 27,294 |
| 26,574 | |||
Net loss per share, basic and diluted | (0.02) | (0.60) | |||||
The following outstanding options, restricted share units, and warrants were excluded from the computation of basic and diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect (in thousands):
Year Ended December 31, | |||||
| 2024 |
| 2023 |
| |
Options to purchase common shares |
| 5,855 |
| 4,798 |
|
Restricted share units to obtain common shares | 324 | 218 | |||
Warrants to purchase common shares |
| 150 |
| 150 |
|
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.