RE:RE:RE:Confusion on Earnings
Captain71 wrote: I’m even more confused with the reporting, but I hope one of you can explain.
They are reporting EPS fully diluted, using 31.7 million shares. The shares to be issued in accordance with the takeover of STS will be issued over the next 14 quarters. I was calculating shares outstanding at the end of fiscal 2022 at 21.8 million.
Don’t know the reason for this. Was it just to make the loss look smaller per share, or is this mandatory. In any case it will also make profit per share look smaller once the company returns to profitability.
Personally, I think the reason for the big hit last week was the negative earnings. Investors were looking for results by now from synergies of the merger. The results were definitely there for Revenue and Ebita, but we need the earnings too. They need to correct this.
GLTA
If you look at the balance sheet at the year end financials you will see that all of the assets of Star2Star has been included and amalgamated with Sangoma. Also, if you look at the shareholders equity component you will see that shares to be issued is included in shareholders equity. It makes sense that if they're going to include 100% of the assets on the balance sheet, then you should include the "shares to be issued" on the income statement when you're calculating earnings per share. All amounts in $CAD
Share capital : $226,333,036
Shares to be issued: $ 241,568,231
Contributed surplus: $ 6,925,843
Accumulated other comprehensive loss : $ 17,797,975
Retained earnings: $ 9,175,633
total shareholders equity : $466,204,768
It is also easier to make comparisons when you include all the shares outstanding and those to be issued. After July 31st 2025 there will be a total of 31,726,308 that can be traded in the open market. If the denominator in the earnings per share calculation includes the future shares that will be issued then it's easier to make quarter over quarter or year over year comparisons in earnings per share. Initially the company will take a hit on its earnings per share but it allows investors to see incremental changes to its earnings per share calculation over time.
Additional info: As of Dec 31, 2021 there are 19,030,708 weighted average shares outstanding. A total of 12,695,600 shares are to be issued over 14 quarters commencing on April 1st 2022 which works out to 906,828.57 additional shares outstanding per quarter or 3,627,314.29 shares outstanding over a full year.