PALVELLA THERAPEUTICS, INC. Earnings Per Share Disclosure
Note 13. Net (Loss) Income Per Share
Basic and diluted net (loss) income per share is calculated as follows (in thousands, except share and per share amounts):
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|
Year Ended December 31, |
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|
2024 |
|
|
2023 |
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||
Net (loss) income per share, basic: |
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|
|
|
|
|
||
Numerator: |
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|
|
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|
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Net (loss) income attributable to common stockholders |
|
$ |
(17,434 |
) |
|
$ |
17,915 |
|
Less non-cumulative preferred Series C dividends accrued but not declared during the period |
|
|
— |
|
|
|
(3,600 |
) |
Less allocation of undistributed earnings to participating securities - preferred stock |
|
|
— |
|
|
|
(10,431 |
) |
(Loss) income available to common stockholders – basic and diluted |
|
$ |
(17,434 |
) |
|
$ |
3,884 |
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|
|
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|
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Denominator: |
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|
|
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Weighted-average number of shares outstanding used in computing net (loss) income per share, basic |
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|
2,225,934 |
|
|
|
1,770,167 |
|
Effect of dilutive securities: |
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|
|
|
|
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||
Stock options |
|
|
— |
|
|
|
23,813 |
|
Denominator for diluted net (loss) income per share – adjusted weighted average shares |
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|
2,225,934 |
|
|
|
1,793,980 |
|
|
|
|
|
|
|
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||
Net (loss) income per share, basic |
|
$ |
(7.83 |
) |
|
$ |
2.19 |
|
Net (loss) income per share, diluted |
|
$ |
(7.83 |
) |
|
$ |
2.17 |
|
The following potentially dilutive securities have been excluded from the calculation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:
|
Year Ended December 31, |
|
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|
2024 |
|
|
2023 |
|
||
Convertible preferred stock (1) (2) |
|
208,331 |
|
|
|
15,360,787 |
|
Stock options to purchase common stock |
|
1,673,352 |
|
|
|
346,523 |
|
Prefunded warrants to purchase common stock |
|
2,466,456 |
|
|
|
— |
|
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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.