SharonAI Holdings Inc. Earnings Per Share Disclosure
Basic net income (loss) per share is computed by dividing net income (loss) applicable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income (loss) per share reflects the potential dilution of securities that could share in the earnings of an entity using the treasury method or the if-converted method, if applicable. The calculation of diluted net income (loss) per share gives effect to common share equivalents; however, potential common shares are excluded if their effect is anti-dilutive. Convertible Series B Preferred Stock issued and outstanding, and share-based options are considered common share equivalents and are only included in the calculation of diluted earnings per common share when net income is reported and their effect is dilutive.
The following securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive:
| ● | Stock options and RSU’s: shares |
| ● | Warrants: shares |
| For the Years Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Numerator: | ||||||||
| Net loss available to common shareholders | $ | (39,815,021 | ) | $ | (3,923,998 | ) | ||
| Less: Net loss attributable to the noncontrolling interest | (191,112 | ) | (18,717 | ) | ||||
| Net loss attributable to common shareholders | $ | (39,623,909 | ) | $ | (3,905,281 | ) | ||
| Denominator: | ||||||||
| Basic and diluted weighted average number of common shares outstanding | ||||||||
| Basic and diluted net loss per common share outstanding | $ | ) | $ | ) | ||||
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.