Jushi Holdings Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE

6 Months Ended

Jun. 30, 2022


16. EARNINGS (LOSS) PER SHARE

The reconciliations of the net income (loss) and the weighted average number of shares used in the computations of basic and diluted Earnings (loss) per share attributable to Jushi shareholders are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator:
Net income (loss) and comprehensive income (loss) attributable to Jushi shareholders	$	12,066	$	2,826	$	(7,691)	$	(28,049)
Less undistributed net income (loss) for participating securities	(213)		(105)		66		282
Net income(loss) and comprehensive income (loss) - basic	11,853		2,721		(7,625)		(27,767)
Add-back undistributed net income (loss) for participating securities	213		105		(66)		(282)
Dilutive effect of net income from derivative warrants liability	(42,572)		(21,061)		(56,881)		(11,104)
Less undistributed net income (loss) for participating securities	(197)		(88)		140		961
Net loss and comprehensive loss attributable to Jushi shareholders - diluted	$	(30,703)	$	(18,324)	$	(64,432)	$	(38,192)

Denominator:
Weighted-average shares of common stock - basic	190,870,572		163,512,333		187,147,856		160,426,413
Dilutive effect of derivative warrants	14,826,581		33,028,892		20,890,427		33,671,370
Weighted-average shares of common stock - diluted	205,697,153		196,541,225		208,038,283		194,097,783

Net income (loss) per common share attributable to Jushi:
Basic	$	0.06	$	0.02	$	(0.04)	$	(0.17)
Diluted	$	(0.15)	$	(0.09)	$	(0.31)	$	(0.20)

Basic and diluted weighted-average shares of common stock for each of the presented period exclude the weighted average shares of participating securities. Basic earnings (loss) per share attributable to Jushi shareholders is computed by dividing the net income (loss) and comprehensive income (loss) – basic by the basic weighted-average shares of common stock. Diluted earnings (loss) per share attributable to Jushi stockholders are computed by dividing the net income (loss) and comprehensive income (loss) – diluted by the diluted weighted-average shares of common stock, which includes all potentially dilutive common stock equivalents, such as stock options, warrants, and convertible promissory notes.

Basic and diluted earnings (loss) per share attributable to Jushi shareholders are presented in conformity with the two-class method required for participating securities. The two-class method determines earnings (loss) per share for each class of common stock and participating securities according to dividends or any other distributions declared during the restricted period and their respective participation rights in undistributed earnings. On August 9, 2021, all the 149,000 previously issued and outstanding Super Voting Shares and all the 4,000,000 previously outstanding Multiple Voting Shares were converted into SVS in accordance with their terms as described in Jushi Holdings Inc.’s Articles of Incorporation. Refer to Note 12 - Equity. The number of basic and diluted weighted-average shares outstanding for 2021 assumes the conversion of the Multi Voting Share and Super Voting Shares into SVS as of the beginning of the year. Other than voting rights, the Multi Voting Shares and Super Voting Shares had the same rights as the SVS and therefore all these shares are treated as the same class of common stock for purposes of the earnings (loss) per share calculations.

The number of common stock (SVS) includes (1) restricted stock awards in which the participants have non-forfeitable rights to dividend or any other distributions declared during the restricted period and (2) shares issued to employees for which a corresponding non-recourse promissory note receivable with the employee is outstanding until the notes are repaid, and both are considered to be participating securities. Holders of restricted stock awards are not obligated to participate in losses until the shares are vested.

The following table summarizes equity instruments that may, in the future, have a dilutive effect on earnings (loss) per share, but were excluded from consideration in the computation of diluted net loss per share for the three and six months ended June 30, 2022 and 2021, because the impact of including them would have been anti-dilutive:


	June 30,
	2022	2021
Stock options	21,501,120	10,306,453
Warrants	28,752,940	31,874,060
Convertible promissory notes	910,000	910,000
	51,164,060	43,090,513

Additionally, 888,880 SVS for contingent consideration related to NuLeaf (Refer to Note 7 - Acquisitions) are not included in the calculation of earnings (loss) per share because their effect would have been anti-dilutive. Furthermore, $5,000 worth of potential SVS, which as of June 30, 2022 is equivalent to 3,291,885 SVS, for contingent consideration related to Nature’s Remedy are not included in the calculation of earnings (loss) per share because their contingency has not been satisfied as of June 30, 2022.