3. NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share has been computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents.

Diluted net income (loss) per share has been computed by dividing the net income (loss) by the sum of the weighted-average number of common shares and common share equivalents outstanding during the period, to the extent that such common share equivalents are dilutive.

For the year ended December 31, 2014, certain common share equivalents have been included in diluted net income per share, as their effect is dilutive. For the year ended December 31, 2014, common share equivalents include: (i) options and warrants to purchase common stock; (ii) options and warrants to purchase convertible preferred stock prior to their conversion into options and warrants to purchase common stock upon the IPO on July 22, 2014; and (iii) convertible preferred stock and the subordinated convertible note prior to their conversion into common stock upon the IPO. Common share equivalents for convertible preferred stock and the subordinated convertible note are determined using the if-converted method. Common share equivalents for options and warrants are determined using the treasury-stock method.

For the years ended December 31, 2013 and 2012, all common share equivalents have been excluded from the calculation of diluted net loss per share, as the effect would be antidilutive.

The following tables set forth the computation of the Company’s basic and diluted net income (loss) per share (in thousands, except shares and per share data):


	Year Ended December 31,
	2014			2013			2012
Numerator:
Net income (loss)	$	781		$	(3,542	)	$	(5,059	)
Add: interest expense related to subordinated convertible note		364			—			—
Less: gain on change in fair value of derivative related to subordinated convertible note		(118	)		—			—
Less: gain on extinguishment of derivative related to subordinated convertible note		(120	)		—			—

Net income (loss) attributable to common stockholders	$	907		$	(3,542	)	$	(5,059	)

Denominator:
Weighted-average shares used to compute basic net income (loss) per share attributable to common stockholders		5,815,928			1,010,795			1,009,236
Effect of potentially dilutive securities:
Shares of common stock subject to conversion from preferred stock		2,972,051			—			—
Shares of common stock subject to conversion from subordinated convertible note		134,341			—			—
Shares of common stock subject to outstanding options		360,681			—			—

Weighted-average shares used to compute diluted net income (loss) per share attributable to common stockholders		9,283,001			1,010,795			1,009,236

Net income (loss) per share attributable to common stockholders:
Basic	$	0.13		$	(3.50	)	$	(5.01	)

Diluted	$	0.10		$	(3.50	)	$	(5.01	)

The following potentially dilutive securities have been excluded from diluted net income (loss) per share, because their effect would be antidilutive:


	Year Ended December 31,
	2014		2013		2012
Shares of common stock subject to outstanding options		539,645		466,965		619,906
Shares of common stock subject to outstanding warrants		213,677		82,190		82,190
Shares of common stock subject to conversion from preferred stock		—		5,160,085		5,160,085
Shares of common stock subject to conversion from preferred stock warrants		—		541,613		541,613

Total common stock equivalents		753,322		6,250,853		6,403,794