PEDEVCO CORP Earnings Per Share Disclosure
NOTE 12 – EARNINGS PER COMMON SHARE
Earnings per common share-basic is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Net income per common share-diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing net income by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net income per common share-diluted considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares, as defined above, would have an anti-dilutive effect.
The calculation of earnings per share for the years ended December 31, 2023 and December 31, 2022 were as follows (amounts in thousands, except share and per share data):
Numerator: |
| 2023 |
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| 2022 |
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Net income |
| $ | 264 |
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| $ | 2,844 |
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Denominator: |
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Weighted average common shares – basic |
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| 87,031,692 |
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| 85,513,095 |
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Dilutive effect of common stock equivalents: |
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Options |
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| - |
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| - |
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Denominator: |
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Weighted average common shares – diluted |
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| 87,031,692 |
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| 85,513,095 |
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Earnings per share – basic |
| $ | 0.00 |
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| $ | 0.03 |
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Earnings (loss) per share – diluted |
| $ | 0.00 |
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| $ | 0.03 |
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For the years ended December 31, 2023 and 2022, share equivalents related to options to purchase 1,632,334 and 1,407,667 shares of common stock, respectively, were excluded from the computation of diluted net income per share as the inclusion of such shares would be anti-dilutive.
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.