Note 14. Earnings Per Share

 

Basic net income (loss) per common share is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares and potentially dilutive securities outstanding for the period. For the Company’s diluted earnings per share calculation, the Company uses the “if-converted” method for preferred stock and convertible debt and the “treasury stock” method for Warrants and Options.

 

For year Ended December 31  2024   2023 
Net loss  $(48,319,475)  $(17,279,847)
Weighted average shares outstanding – basic   2,772,867    2,128,728 
Basic net loss per share  $(17.43)  $(8.12)
Weighted average shares outstanding – diluted   2,772,867    2,128,728 
Diluted net loss per share  $(17.43)  $(8.12)

 

 

Weighted average shares calculation – basic  December 31, 2024   December 31, 2023 
Company public shares   196,330    196,330 
Company initial stockholders   170,159    170,159 
PCCU stockholders   1,129,307    998,896 
Issuance of Equity for Marketing Services   3,939    - 
Shares issued for Abaca acquisition
   396,790    157,762 
Restricted stock units issued   65,404    49,980 
Conversion of Preferred stock   810,938    555,601 
Grand total   2,772,867    2,128,728 

  

Certain share-based equity awards and warrants were excluded from the computation of dilutive earnings/ (loss) per share because inclusion of these awards would have had an anti-dilutive effect. The following table reflects the awards excluded. 

  

For year Ended December 31  2024   2023 
Warrants   601,829    639,329 
Share based payments   113,673    132,164 
Shares to be issued to Abaca shareholders   37,500    37,500 
Conversion of preferred stock   4,440    44,040 
Grand total   757,442    853,033 

 

The holders of Series A Convertible Preferred Stock shall be entitled to receive, and the Company shall pay, dividends on shares of Series A Convertible Preferred Stock equal (on an as-if-converted-to-Class-A-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Class A Common Stock when, as and if such dividends are paid on shares of the Class A Common Stock. No other dividends shall be paid on shares of Series A Convertible Preferred Stock.

 

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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.