Net Income (Loss) Per Common Share

6 Months Ended

Jun. 30, 2015

5.	Net income (loss) per common share:

Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per common share is computed by adjusting net income (loss) attributable to common shareholders to reallocate undistributed earnings based on the potential impact of dilutive securities.

Prior to the Company’s IPO, net income (loss) per share was calculated under the two-class method as the Company had outstanding shares that met the definition of participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common shareholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. All of the outstanding redeemable convertible preferred shares converted to common shares upon the consummation of the Company’s IPO.

As the Company reported a net loss attributable to common shareholders for the six months ended June 30, 2015 and no net income was attributable to common shareholders for the three and six months ended June 30, 2014, all stock options were anti-dilutive and were excluded from the diluted weighted average shares outstanding for those periods. For the three months ended June 30, 2015, common shares of 389,283 were excluded from the calculation of income per common share because their inclusion would be anti-dilutive.

The following is a reconciliation of the numerators and denominators of basic and diluted net income (loss) per common share:

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
Numerator:
Net income (loss) attributable to common shareholders used to compute net income (loss) per common share:
Basic	$	1,168		$	—	$	(7,988	)	$	—
Adjustment for change in fair value of liability classified stock options		(2,244	)		—		—			—
Diluted	$	(1,076	)	$	—	$	(7,988	)	$	—
Denominator:
Weighted average number of common shares:
Basic		14,241,827			1,347,237		14,227,203			1,346,274
Adjustment for dilutive effect of stock options		888,151			—		—			—
Diluted		15,129,978			1,347,237		14,227,203			1,346,274
Net income (loss) per common share - basic	$	0.08		$	—	$	(0.56	)	$	—
Net loss per common share - diluted	$	(0.07	)	$	—	$	(0.56	)	$	—