Processa Pharmaceuticals, Inc. Earnings Per Share Disclosure
Basic net loss per share is computed by dividing net loss by the weighted average common stock outstanding (which excludes unvested RSAs) and vested, but unissued RSUs. Diluted net loss per share is computed by dividing net loss by the diluted weighted average common stock outstanding, which includes potentially dilutive effect of stock options, unvested RSAs, unvested RSUs and warrants. The treasury-stock method is used to determine the dilutive effect of our stock options and warrants grants. Since we experienced a loss for both periods presented, basic and diluted net loss per share are the same and, as they would have an anti-dilutive impact on diluted net loss per share, any dilutive common shares outstanding were excluded from the computation shown below.
| 2024 | 2023 | |||||||
| Basic and diluted net loss per share: | ||||||||
| Net loss available to common shareholders | $ | (11,850,118 | ) | $ | (11,121,520 | ) | ||
| Weighted-average number of common shares-basic and diluted | ||||||||
| Basic and diluted net loss per share | $ | ) | $ | ) | ||||
| 2024 | 2023 | |||||||
| Weighted-average number of common shares outstanding – basic and diluted | ||||||||
| Weighted-average number of vested RSUs– basic and diluted | ||||||||
| Weighted-average number of common shares-basic and diluted | ||||||||
As described in Note 3, we issued various equity instruments during the years ended December 31, 2024 and 2023 which impact our EPS calculation. All granted RSAs are considered issued and outstanding for purposes of our financial statements. Unvested RSAs are included as dilutive securities, but are excluded from our denominator of basic EPS. At December 31, 2023, RSAs were not vested and were excluded from the EPS calculation. We had unvested RSAs at December 31, 2024. Vested RSUs are included in our computation of the weighted average shares for basic EPS and unvested RSUs are included as dilutive securities. At December 31, 2024 and 2023, and unvested RSUs were excluded from the EPS calculation.
| 2024 | 2023 | |||||||
| Stock options, unvested RSAs, unvested RSUs and purchase warrants | 2,013,154 | 296,326 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 20, 2025 | Showing above |
| 2023 | Mar 29, 2024 | |
| 2022 | Mar 30, 2023 | |
| 2021 | Mar 30, 2022 | |
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.