Minerva Neurosciences, Inc. Earnings Per Share Disclosure
NOTE 4 — NET INCOME (LOSS) PER SHARE OF COMMON STOCK
Basic income (loss) per share is calculated by dividing the net income (loss) by the weighted average number of shares of common stock outstanding. Diluted income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding, plus potential outstanding common stock for the period. Potential outstanding common stock includes stock options, but only to the extent that their inclusion is dilutive. Performance-based restricted stock units are excluded from the calculation of dilutive potential common shares until the performance conditions have been achieved on the basis of the assumption that the end of the reporting period was the end of the contingency period, if such shares issuable are dilutive.
In June 2023, in connection with the Private Placement (as defined and described in Note 6, Stockholders’ Deficit), the Company issued and sold pre-funded warrants exercisable for an aggregate of 575,575 shares of common stock. The purchase price of the pre-funded warrants was $9.99 per share, which was paid to the Company upon issuance of the pre-funded warrants. The exercise price of the pre-funded warrants is $0.01 per share. The pre-funded warrants are exercisable by the holders at any time and do not expire. As the remaining shares underlying the pre-funded warrants are issuable for nominal consideration of $0.01 per share, 575,575 shares of common stock underlying the unexercised pre-funded warrants were considered outstanding for purposes of the calculation of income (loss) per share as of December 31, 2024.
The following table sets forth the computation of basic and diluted income (loss) per share for common stockholders:
|
|
Year Ended December 31, |
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|||||
|
|
2024 |
|
|
2023 |
|
||
Net income (loss) |
|
$ |
1,438,865 |
|
|
$ |
(30,005,353 |
) |
|
|
|
|
|
|
|
||
Weighted average shares of common stock outstanding - basic |
|
|
7,568,981 |
|
|
|
6,506,372 |
|
Dilutive effect |
|
|
4,782 |
|
|
|
— |
|
Weighted average shares of common stock outstanding - diluted |
|
|
7,573,763 |
|
|
|
6,506,372 |
|
|
|
|
|
|
|
|
||
Net income (loss) per ordinary share: |
|
|
|
|
|
|
||
Basic |
|
|
0.19 |
|
|
$ |
(4.61 |
) |
Diluted |
|
|
0.19 |
|
|
$ |
(4.61 |
) |
The following securities outstanding at December 31, 2024 and 2023 have been excluded from the calculation of weighted average shares outstanding as their effect on the calculation of income (loss) per share is antidilutive:
|
|
Year Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Common stock options |
|
|
1,440,002 |
|
|
|
1,157,229 |
|
Performance-based restricted stock units |
|
|
228,209 |
|
|
|
228,209 |
|
Common stock warrants |
|
|
5,099 |
|
|
|
5,099 |
|
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.