Note 7 - Earnings Per Share

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

7.     Earnings per Share

Basic earnings per share excludes the dilutive effects of stock options, restricted stock units (RSUs), warrants, and the nil coupon non-redeemable convertible unsecured loan notes. Diluted earnings per share includes the dilutive effect of the nil coupon non-redeemable convertible unsecured loan notes, RSUs, warrants, and unexercised in-the-money stock options, except in periods of net loss where the effect of these instruments is anti-dilutive. Out-of-money stock options and warrants are excluded from diluted earnings per share because they are unlikely to be exercised and would be anti-dilutive if they were exercised. For the nine months ended September 30, 2023 and 2022, basic earnings per share is equal to diluted earnings per share because all outstanding stock awards, warrants, and convertible loan notes are considered anti-dilutive during periods of net loss. 

The following table sets forth the weighted-average shares used in calculating the earnings per share for the three and nine months ended September 30, 2023 and 2022.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Basic weighted-average shares		30,385,000		30,296,000		30,336,000		30,287,000
Conversion of unsecured loan notes		—		—		—		—
Unexercised options and unvested RSUs		242,000		75,000		—		—
Diluted weighted-average shares		30,627,000		30,371,000		30,336,000		30,287,000

For the three and nine months ended September 30, 2023, Fuel Tech had weighted-average outstanding equity awards of 246,500 and 382,200, respectively, and warrants of 2,850,000 in both periods, which were antidilutive or represent out-of-the-money options for the purpose of the calculation of diluted earnings per share. For the nine months ended September 30, 2023, Fuel Tech had 250,500 incremental equity awards that were excluded from the computation of diluted earnings per share as the inclusion of such would have been anti-dilutive due to a net loss in the period. For the three and nine months ended September 30, 2022, Fuel Tech had weighted-average outstanding equity awards of 296,500 and 674,000, respectively, and warrants of 2,850,000 in both periods, which were antidilutive for the purpose of the calculation of diluted earnings per share. For the nine months ended September 30, 2022, Fuel Tech had 33,000 incremental equity awards that were excluded from the computation of diluted earnings per share as the inclusion of such would have been anti-dilutive due to a net loss in the period. These equity awards could potentially dilute basic earnings per share in future years.