Earnings per share

9 Months Ended

Sep. 30, 2025

The Company is required to present basic earnings per share and diluted earnings per share ("EPS") in its Consolidated Statements of Operations. Basic EPS amounts are computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted EPS reflects additional shares of common stock that would have been outstanding if potentially dilutive shares of common stock had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential shares of common stock that may be issued by the Company relate to outstanding unvested RSAs and RSUs granted to directors and employees, and stock options. The dilutive effect resulting from these potential shares is determined using the treasury stock method. The Company is also required to provide a reconciliation of the numerator and denominator used in the computation of both basic and diluted EPS.

On March 20, 2025, in connection with the $57.75 million Private Placement, the Company issued 60,400,106 shares of Common Stock and 90,832 shares of Series A Preferred Stock, which are convertible into 7,266,560 shares of Common Stock. In addition, as part of the Private Placement, on March 20, 2025, the Company’s amendments to (i) 6.25% Fixed to Floating Subordinated Note due June 30, 2028 (the “Subordinated Note”), and (ii) 8.5% Fixed Rate Senior Notes Due 2026 (the “Senior Notes” and together with the Subordinated Note, the “Notes”) became effective and noteholders converted approximately $7.0 million of the aggregate principal amount of the Notes into 9,333,334 shares of Common Stock. The amendments to Subordinated Note and Senior Notes allow for interest to be paid-in-kind, increasing the principal amount, while the Senior Notes amendment also extends the maturity date to April 15, 2028 and adjusts the interest rate in 2026.

On May 13, 2025, two noteholders of the Senior Notes converted $1.90 million of the aggregate principal and interests of the Notes into 2,529,275 shares of Common Stock.

On June 3, 2025, the Company entered into a Securities Purchase Agreement with accredited investors, facilitating a registered direct offering. The Company issued and sold 8,524,160 shares of its Common Stock, at a price of $1.25 per share. The net proceeds of the offering was approximately $10.47 million after estimated expenses.

On July 3, 2025 all Series A Preferred Stock was converted into 7,266,560 shares of the Company’s Common Stock.

During the three and nine months ended September 30, 2025, the Company granted restricted stock units (“RSUs”) and stock options under the 2025 Plan as part of its equity compensation program. Each RSU grants the recipient the right to receive one share of Common Stock on settlement. For the three months ended September 30, 2025, the Company granted an aggregate of 1,501,667 RSUs, and for the nine months ended September 30, 2025, the Company granted an aggregate of 10,254,187 RSUs. The RSUs generally vest in equal annual installments over a three-year period from the grant date, subject to continued service. A portion of the RSUs granted during the period vest in equal monthly installments over 12 and 36 months, also subject to continued service.

Information regarding the Company’s stock option grants during the period is provided in Note 8 – Share-Based Compensation and Employee Benefit Plan.

On July 25, 2025, Unity Bancorp Inc. provided the Company with formal notice of its desire to convert 100% of its outstanding principal balance and accrued unpaid interest of its Amended Senior Note, in an aggregate amount of approximately $2.0 million, into 2,673,369 shares of Common Stock at $0.75 per share. On July 26, 2025, American Bank Incorporated provided the Company with formal notice of its desire to convert 100% of its outstanding principal balance and accrued unpaid interest of its Amended Senior Note, in an aggregate amount of $0.8 million, into of 1,071,258 shares of Common Stock at $0.75 per share.

On August 29, 2025, the Company entered into a stock purchase agreement and a separate warrant purchase agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investors, an aggregate of 31,985,103 shares of the Company’s Common Stock. The Shares consist of (a) 19,196,000 shares of the Company’s voting Common Stock, and (b) 12,789,103 shares of the Company’s non-voting Common Stock that will be issuable six months after closing of the Offering upon exercise of three-year warrants. Upon such Warrant holders or their assignees meeting certain conditions, the Non-Voting Common Stock may be exchanged for shares of Voting Common Stock. The Shares will be sold to the Investors at a price per share of $1.25 per Share and the Warrants will be sold to Investors at a price of $0.125 per warrant share. The Warrants are exercisable no earlier than six months after the closing of the Offering at an exercise price of $1.56 per share, subject to increase to as much as $1.685 per share under certain conditions. The proceeds from the Offering, prior to deducting the estimated offering expenses, are expected to be approximately $25.6 million. Estimated offering expenses are $250,000.

These transactions affect the weighted average number of shares outstanding.

The following table summarizes the computation of basic and diluted loss per share for the three and nine months ended September 30, 2025 and 2024, including the effects of the Private Placement.


(Net loss in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Basis loss per share:
Net loss attributable to Common shareholders	$	(2,654)		$	(26,954)		$	(10,432)		$	(30,334)
Divided by:
Weighted average shares outstanding	99,937,915			3,976,073			63,946,427			3,976,073

Basic loss per share of common stock	$	(0.03)		$	(6.78)		$	(0.16)		$	(7.63)

Diluted loss per share:
Net loss attributable to Common shareholders	$	(2,654)		$	(26,954)		$	(10,432)		$	(30,334)

Weighted average shares outstanding	99,937,915			3,976,073			63,946,427			3,976,073

Effect of potentially dilutive restricted shares of common stock	—		(1)	—		(2)	—		(3)	—		(4)

Divided by:
Weighted average diluted shares outstanding	99,937,915			3,976,073			63,946,427			3,976,073

Diluted loss per share of common stock	$	(0.03)		$	(6.78)		$	(0.16)		$	(7.63)


(1)			The weighted average diluted shares outstanding does not include 5,809,410 anti-dilutive restricted shares of common stock for the three months ended September 30, 2025.
(2)			The weighted average diluted shares outstanding does not include 91,697 anti-dilutive restricted shares of common stock for the three months ended September 30, 2024.
(3)			The weighted average diluted shares outstanding does not include 8,616,493 anti-dilutive restricted shares of common stock for the nine months ended September 30, 2025.
(4)			The weighted average diluted shares outstanding does not include 44,296 anti-dilutive restricted shares of common stock for the nine months ended September 30, 2024.