Prime Medicine, Inc.PRME

Prime Medicine, Inc. Earnings Per Share Disclosure

10-KFiled Feb 28, 20252 min read
Net Loss per Share
As described in Note 2, Summary of Significant Accounting Policies, for periods in which the Company reports a net loss, potentially dilutive securities have been excluded from the computation of diluted net loss per share as their effects would be anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. The Company excluded the following potential common shares presented based on amounts outstanding at period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:
Year Ended December 31,
20242023
Anti-dilutive common stock equivalents:
Stock options to purchase common stock11,900,921 7,763,023 
Unvested restricted common stock awards3,497,474 4,735,996 
Total anti-dilutive common stock equivalents15,398,395 12,499,019 
Basic and diluted loss per share is computed by dividing net loss by the weighted-average common shares outstanding:
Year Ended December 31,
 (in thousands, except share and per share data)20242023
Numerator:
Net loss attributable to common stockholders$(195,882)$(198,133)
Denominator:
Weighted-average common shares outstanding, basic and diluted118,600,381 90,969,327 
Net loss per share attributable to common stockholders, basic and diluted$(1.65)$(2.18)
The weighted-average number of common shares outstanding used in the basic and diluted net loss per share calculations includes the weighted-average effect of pre-funded warrants sold by the Company to purchase 3,200,005 shares of the Company's common stock. The shares of common stock underlying the pre-funded warrants are considered outstanding for the purposes of computing earnings per share, because the shares may be issued for little or no consideration, they are fully vested, and the pre-funded warrants are immediately exercisable upon their issuance date.

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.

Other Available Disclosures

Income TaxesFair ValuePP&ELeasesCommitmentsStock CompensationNew Standards