7. Net Loss Per Share

The Company computes basic net (loss) income per share using the “two-class” method, which includes the weighted-average number of common stock outstanding during the period and other securities that participate in dividends (a participating security). Prior to the closing of the IPO, the Company’s shares of convertible preferred stock were participating securities as defined by ASC 260-10, Earnings Per Share. Under the two-class method, basic net (loss) income per share available to common stockholders is computed by dividing the net (loss) income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net (loss) income per share is computed using the more dilutive of (1) the two-class method, or (2) the “if-converted” method. The Company allocates net earnings on a pari passu (equal) basis to both common and preferred stockholders. Net losses are not allocated to preferred stockholders as they have no obligation to share in the Company’s net losses.

Diluted net (loss) income per share gives effect to all potentially dilutive securities, including convertible preferred stock, convertible promissory notes and shares issuable upon the exercise of outstanding stock options and warrants, using the treasury stock method. For the three and nine months ended September 30, 2014 and 2013, the Company excluded the effects of potentially dilutive shares that were outstanding during those respective periods from the denominator as their inclusion would be ant-dilutive due to the Company’s net losses during those periods.

The denominators used in the net loss per share computations are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013

Basic:
Weighted average common shares outstanding		22,713,040		4,288,243		20,351,005		4,080,869


Diluted:
Weighted average common shares outstanding - Basic		22,713,040		4,288,243		20,351,005		4,080,869
Convertible preferred stock*		—		—		—		—
Common stock options*		—		—		—		—
Common stock warrants*		—		—		—		—
Convertible promissory notes (as if converted)*		—		—		—		—

Denominator for diluted net loss per share available to common stockholders		22,713,040		4,288,243		20,351,005		4,080,869

No amounts were considered as their effects would be anti-dilutive.

Basic and diluted net loss per share available to common stockholders are computed as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013

Net loss	$	(6,545	)	$	(4,575	)	$	(13,573	)	$	(1,870	)
Add back: extinguishment of preferred shares		—			—			—			891

Net loss available to common stockholders - Basic and Diluted	$	(6,545	)	$	(4,575	)	$	(13,573	)	$	(979	)


Net loss per share available to common stockholders:
Basic and Diluted	$	(0.29	)	$	(1.07	)	$	(0.67	)	$	(0.24	)
Weighted-average common shares outstanding available to common stockholders:
Basic and Diluted		22,713,040			4,288,243			20,351,005			4,080,869

Securities outstanding at the end of the respective periods presented below, that could potentially dilute basic earnings per share in the future, that were not included in the computation of diluted net loss per share because to do so would have been antidilutive are as follows:


	September 30,
	2014		2013

Convertible preferred stock		—		12,554,171
Common stock options		964,360		490,160
Common stock warrants		—		19,851

Total		964,360		13,064,182

All shares of the Company’s convertible preferred stock were automatically converted to shares of the Company’s common stock upon the closing of the IPO on February 5, 2014 (see Note 8). All convertible promissory notes were either converted into shares of the Company’s Series D convertible preferred stock or repaid in cash by December 31, 2013.