0001554859-24-000017 | 10-Q | XBRL Viewer

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Condensed Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current Assets:
Cash and cash equivalents	$ 62,754	$ 57,200
Restricted cash	132	132
Trade accounts receivable, net of allowance for credit losses of $239 and $287, respectively	6,132	6,125
Inventory, net	408	445
Prepaid expenses and other current assets	2,479	2,042
Total current assets	71,905	65,944
Assets for lease, net	2,071	2,285
Property and equipment, net	649	720
Long-term investments	512	512
Notes held for investment (includes measured at fair value of $4,372)	5,372	5,372
Other non-current assets	249	270
Deferred tax assets	3,098	2,962
Total assets	83,856	78,065
Current liabilities:
Accounts payable	410	402
Accrued expenses	4,305	4,502
Deferred revenue	996	1,120
Other short-term liabilities	192	176
Total current liabilities	5,903	6,200
Long-term liabilities:
Other long-term liabilities	47	70
Total long-term liabilities	47	70
Commitments and contingencies (Note 14)
Stockholders' equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 7,134,193 and 7,099,441 shares issued, and 6,919,771 and 6,885,019 shares outstanding (treasury shares of 214,422 and 214,422), respectively	7	7
Additional paid-in capital	12,023	11,985
Retained earnings	65,876	59,803
Total stockholders' equity	77,906	71,795
Total liabilities and stockholders' equity	$ 83,856	$ 78,065

Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Fair Value Measurements

Fair Value Measurements

8.Fair Value Measurements

The following table presents fair value hierarchy of the Company’s financial assets measured at fair value on a recurring basis:


	Fair Value Hierarchy
	Level 1		Level 2		Level 3		Total
As of March 31, 2024
U.S. Government money market fund accounts	$	45,453	$	—	$	—	$	45,453
(Included in cash and cash equivalents)
U.S. Treasury bill		—		10,452		—		10,452
(Included in cash and cash equivalents)
Investment in debt securities		—		—		4,372		4,372
(Included in notes held for investment)
Total Assets	$	45,453	$	10,452	$	4,372	$	60,277


	Level 1		Level 2		Level 3		Total
As of December 31, 2023
U.S. Government money market fund accounts	$	41,373	$	—	$	—	$	41,373
(Included in cash and cash equivalents)
U.S. Treasury bill		—		10,494		—		10,494
(Included in short-term investments)
Investment in debt securities		—		—		4,372		4,372
(Included in notes held for investment)
Total Assets	$	41,373	$	10,494	$	4,372	$	56,239

Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy under FASB ASC 820, Fair Value Measurement, are described as follows:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs other than quoted prices included in Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and

Level 3 — Unobservable inputs that are supported by little or no market activity, which requires the Company to develop its own models.

The financial instruments of the Company consist primarily of cash, U.S. government money market fund accounts, trade receivables, trade payables, U.S. treasury bill investments and debt securities. Because carrying values of cash, trade receivables and payables are equal to or approximate their fair value, the Company excluded them from the leveling requirements. U.S. government money market fund accounts are classified as Level 1 due to their short-term nature, their market interest rates and also based on the fact that they are publicly traded. A U.S. treasury bill was purchased on February 6, 2024, at a cost of $10,372, and fair value accretes to maturity date at an interest rate of 5.25%. The U.S. treasury bill was classified as Level 2 as it was considered “off the run” because

similar treasury bills were issued before the most recent issue and were outstanding as of March 31, 2024 and therefore not considered as liquid as other treasury bills with the same maturity date. The Company estimates the fair value of the investment in debt securities using Level 3 inputs. The Company also invested in non-convertible promissory notes and equity securities in a privately held company, which were recorded on cost basis. See Note 7 and 9 to the Unaudited Condensed Financial Statements for more information.

The Company's privately held debt security is recorded at fair value on a recurring basis. The estimation of fair value for these investments requires the use of significant unobservable inputs, and as a result, the Company deems these assets as Level 3 within the fair value measurement framework.

The Company valued the debt security using a bond plus call option model reflecting the cash flow from the debt securities and assuming a 5% probability of an equity financing, a 75% probability of a change of control, and a 20% probability of payment at maturity or an insolvency event. The fair value of the Company’s privately held debt security was estimated at $4,372 as of March 31, 2024 and December 31, 2023.

The key inputs for the valuation model are:


	March 31,	December 31,
	2024	2023
Risk-free rate	3.94% - 5.26%		3.94% - 5.26%
Cash flow discount rate	27.8%		27.8%
Expert term in years	0.25- 2.92		0.25- 2.92
Expected volatility	120%		120%

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Stock Incentive Plan - Treasury Stock Acquired (Details) - USD ($) $ in Thousands	25 Months Ended
	Mar. 31, 2024	Mar. 14, 2022
Stock Option Plan
Shares authorized under Share Repurchase Program		$ 20,000
Treasury stock acquired (in shares)	148,500
Cost of treasury stock acquired	$ 4,991

Leases

3 Months Ended

Mar. 31, 2024

Leases

Leases

13.Leases

Lessee Arrangements

On July 31, 2020, the Company entered into a 61-month lease agreement for office space to use, as necessary, for office administration, lab space and assembly and storage purposes, located in Santa Clara, California. The Company took possession of the leased office space in September 2020, and the lease is effective through September 30, 2025.

As of March 31, 2024, the remaining lease term is 18 months with no options to renew. The Company recognized facilities lease expenses of $22 and $22 for the three months ended March 31, 2024 and 2023, respectively. The following table summarizes the future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms greater than one year as of March 31, 2024:


	Total
2024 Remaining period		70
2025		71
Total undiscounted future minimum lease payments		141
Less: present value discount		(3)
Total lease liabilities		138
Lease expense in excess cash payment		(9)
Total ROU asset	$	129

As of March 31, 2024, the Company’s ROU asset was $129, which was recorded on the Company’s balance sheet as other noncurrent assets, and the Company’s current and noncurrent lease liabilities were $91 and $47, respectively, which were recorded on the Company’s balance sheet as other short-term liabilities and other long-term liabilities, respectively. The Company used a discount rate of 2.5% for calculating ROU and lease liability.

Lessor Arrangements

The Company enters into contracts with customers for the Company’s QuantaFlo product. The Company has determined these contracts meet the definition of a lease under Topic 842. The lease portfolio primarily consists of operating leases that are short-term in nature (monthly, quarterly or one year, all of which have renewal options). During the three months ended March 31, 2024 and 2023, the Company recognized approximately $7,079 and $9,304, respectively, in lease revenues related to these arrangements, which is included in Revenues on the Unaudited Condensed Statements of Income. The Company made an accounting policy election to apply the practical expedient to not separate lease and eligible non-lease components. The lease component is the predominant component and consists of fees charged for use of the equipment over the period of the arrangement. The nature of the eligible non-lease component is primarily software support. The assets associated with these leasing arrangements are included in Assets for Lease on the Unaudited Condensed Balance Sheets as Assets (see Note 5).

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 6,073	$ 4,969

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Leases - Lessor Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Leases
Lease revenue	$ 7,079	$ 9,304
Lease, Practical Expedient, Lessor Single Lease Component [true false]	true

Stock Incentive Plan - Stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Number of Stock Options Outstanding
Balance, Beginning	1,021,785
Options exercised	(35,781)
Options granted	0	0
Balance, Ending	986,004		1,021,785
Exercisable, Ending	968,872
Weighted Average Exercise Price
Balance, Beginning	$ 3.84
Options exercised	2.45
Balance, Ending	3.89		$ 3.84
Exercisable, Ending	$ 3.49
Weighted Average Remaining Contractual Term, Options Outstanding (in years)	3 years 1 month 17 days		3 years 9 months 3 days
Weighted Average Remaining Contractual Term, Options Exercisable (in years)	1 year 11 months 1 day
Aggregate Intrinsic Value, Options Outstanding	$ 24,973		$ 41,333
Aggregate Intrinsic Value, Options Exercisable	$ 24,920

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Measurements

Schedule of financial assets measured at fair value on a recurring basis


	Fair Value Hierarchy
	Level 1		Level 2		Level 3		Total
As of March 31, 2024
U.S. Government money market fund accounts	$	45,453	$	—	$	—	$	45,453
(Included in cash and cash equivalents)
U.S. Treasury bill		—		10,452		—		10,452
(Included in cash and cash equivalents)
Investment in debt securities		—		—		4,372		4,372
(Included in notes held for investment)
Total Assets	$	45,453	$	10,452	$	4,372	$	60,277


	Level 1		Level 2		Level 3		Total
As of December 31, 2023
U.S. Government money market fund accounts	$	41,373	$	—	$	—	$	41,373
(Included in cash and cash equivalents)
U.S. Treasury bill		—		10,494		—		10,494
(Included in short-term investments)
Investment in debt securities		—		—		4,372		4,372
(Included in notes held for investment)
Total Assets	$	41,373	$	10,494	$	4,372	$	56,239

Schedule of key inputs for the valuation model


	March 31,	December 31,
	2024	2023
Risk-free rate	3.94% - 5.26%		3.94% - 5.26%
Cash flow discount rate	27.8%		27.8%
Expert term in years	0.25- 2.92		0.25- 2.92
Expected volatility	120%		120%

Stock Incentive Plan - Stock-based compensation - Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 27	$ 702
Cost of Revenues
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	5
Engineering and Product Development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	3	45
Sales and Marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	4	170
General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 15	$ 487

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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-Topic 718
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+ Details

Net Income Per Share, Basic and Diluted (Tables)

3 Months Ended

Mar. 31, 2024

Net Income Per Share, Basic and Diluted

Schedule of basic and diluted net EPS


	Three months ended March 31,
	2024					2023
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic	6,892,742	$	6,073	$	0.88	6,701,199	$	4,969	$	0.74
Common stock warrants	—		—			64,825		—
Common stock options	889,651		—			1,130,019		—
Diluted	7,782,393	$	6,073	$	0.78	7,896,043	$	4,969	$	0.63

Leases (Tables)

3 Months Ended

Mar. 31, 2024

Leases

Schedule of future minimum rental payments required under operating leases


	Total
2024 Remaining period		70
2025		71
Total undiscounted future minimum lease payments		141
Less: present value discount		(3)
Total lease liabilities		138
Lease expense in excess cash payment		(9)
Total ROU asset	$	129

Property and Equipment, net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Property and Equipment, net
Property and equipment, gross	$ 1,548	$ 1,544
Less: accumulated depreciation	(899)	(824)
Property and equipment, net	$ 649	$ 720

Concentration of Credit Risk

3 Months Ended

Mar. 31, 2024

Concentration of Credit Risk

Concentration of Credit Risk

12.Concentration of Credit Risk

Credit risk is the risk of loss from amounts owed by the financial counterparties. Credit risk can occur at multiple levels; as a result of broad economic conditions, challenges within specific sectors of the economy, or from issues affecting individual companies. Financial instruments that potentially subject the Company to credit risk consist of cash and accounts receivable.

The Company maintains cash with major financial institutions. The Company’s cash consists of bank deposits held with banks that, at times, exceed federally insured limits. The cash and cash equivalents also include treasury bills with original maturities of three months or less. As of March 31, 2024 and December 31, 2023, the Company held deposits of $6,981 and $5,465, respectively. These deposits are largely uninsured. The Company also invested in U.S. government money market funds and U.S. treasury bills in the amount of $45,453 and $10,452, respectively, as of March 31, 2024. As of December 31, 2023, the Company invested in U.S. treasury bills of $10,494 and U.S.government money markets funds of $41,373. The Company limits its credit risk by dealing with counterparties that are considered to be of high credit quality and by performing periodic evaluations of the relative credit standing of these financial institutions.

Management periodically monitors the creditworthiness of its customers and believes that it has adequately provided for exposure to potential credit loss. For the three months ended March 31, 2024, three customers (including affiliates) accounted for 45.0%, 24.7% and 10.5% of the Company’s revenues. For the three months ended March 31, 2023, two customers (including affiliates) accounted for 40.9% and 33.5% of the Company’s revenues. As of March 31, 2024, two customers accounted for 39.3% and 28.1% of the Company’s accounts receivable. As of December 31, 2023, three customers accounted for 27.5%, 27.5%, and 23.6% of the Company’s accounts receivable. The Company’s largest customer in terms of both revenues and accounts receivable in the three months ended March 31, 2024 is a U.S. diversified healthcare company and its affiliated plans.

As of March 31, 2024, three vendors accounted for 31.0%, 17.8% and 9.5% of the Company’s accounts payable. As of December 31, 2023, two vendors accounted for 24.0% and 10.1% of the Company’s accounts payable.

Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Condensed Balance Sheets
Allowance for credit losses	$ 239	$ 287
Notes, Fair value	$ 4,372	$ 4,372
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	7,134,193	7,099,441
Common stock, shares outstanding	6,919,771	6,885,019
Treasury stock, shares	214,422	214,422

Property and Equipment, net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Property and Equipment, net
Depreciation expense	$ 74	$ 59

Leases - Future minimum rental payments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Future minimum rental payments required under operating leases
2024 Remaining period	$ 70
2025	71
Total undiscounted future minimum lease payments	141
Less: present value discount	(3)
Total lease liabilities	138
Lease expense in excess cash payment	(9)
Total ROU asset	$ 129	$ 150

Notes Held for Investment

3 Months Ended

Mar. 31, 2024

Notes Held for Investment

Notes Held for Investment

9.Notes Held for Investment

Notes receivable consist of the following for the periods presented:


	March 31,			December 31,
	2024			2023
Senior secured promissory notes	$	1,000	$	1,000
Secured convertible promissory notes		4,372		4,372
Total notes held for investment	$	5,372	$	5,372

In June 2022, the Company loaned Mellitus an aggregate of $1,000 through the purchase of two senior secured promissory notes that bear interest at a rate of 5% per annum, which mature in three years unless accelerated due to an event of default as provided in the notes. Repayment of notes is secured by a first priority interest in all of Mellitus’ assets.

In December 2022, the Company entered into a senior convertible promissory note arrangement with Monarch, providing Monarch with up to $5,000 in available funding, of which $4,500, in principal was drawn as of March 31, 2024. The remaining $500 was drawn down in April 2024. The Monarch debt security accrues interest at 10% per annum, payable monthly, and the principal balance is due December 6, 2024. The note along with up to $100 of transaction expenses is due and payable on the occurrence of an event of default or change of control unless accelerated due to the conversion into preferred stock prior thereto at the option of the Company. The Company has the option to extend the maturity date for two consecutive one-year terms. The Monarch debt security can be converted into Monarch’s shares at the Company’s option upon (a) an equity financing at Monarch, (b) upon a change of control at Monarch, or (c) at the Company’s option at any time prior to the maturity date. If converted upon a change of control, the Company has the right to receive a cash payment equal to the balance of the Monarch debt security or the amount payable upon conversion into Monarch’s shares. The Monarch debt security is redeemable at any time at Monarch’s option or automatically upon an event of default (as defined in the note).

The Company made an irrevocable election to account for the Mellitus and Monarch debt securities using the fair value option under ASC 825 – Financial Instruments (“ASC 825”) and will measure the fair value of the such debt securities in accordance with ASC 820. The Company made the fair value option election to present the debt securities in their entirety at fair value, which it believes to be preferable to recognizing the host instrument at fair value under ASC 320 and potentially separately recognizing certain embedded features as bifurcated derivatives under ASC 815. As of March 31, 2024 and December 31, 2023, the Company estimated the fair value of the Monarch debt security to be $4,372.

The Company recognizes interest income on the Monarch debt securities, which is included in interest income in the Unaudited Condensed Statements of Income. For the three months ended March 31, 2024 and 2023, the Company recognized $125 and $82, respectively, of interest income from Monarch note. Accrued interest is included in prepaid and other current assets. The Company recognizes changes in fair value of the notes in the statements of income separately from the interest income. For the three months ended March 31, 2024, the Company recorded no change in fair value.

Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Inventory
Inventory balance	$ 408	$ 445

Basis of Presentation

3 Months Ended

Mar. 31, 2024

Basis of Presentation

Basis of Presentation

1.Basis of Presentation

Semler Scientific, Inc., a Delaware corporation (“Semler” or “the Company”), prepared the unaudited interim financial statements included in this report in accordance with United States generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 7, 2024 (the “Annual Report”). In the opinion of management, these financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for any future period, including the full year.

Notes Held for Investment (Details) $ in Thousands	1 Months Ended		3 Months Ended	12 Months Ended
Notes Held for Investment (Details) $ in Thousands	Dec. 31, 2022 USD ($) item	Jun. 30, 2022 USD ($) item	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Apr. 30, 2024 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total notes held for investment			$ 5,372	$ 5,372
Interest income from promissory notes			125	82
Changes in fair value			0
Long-term Investments.			512	512
Senior secured promissory notes
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total notes held for investment			1,000	1,000
Interest rate (as a percent)		5.00%
Number of notes receivable \| item		2
Term (in years)		3 years
Aggregate principal amount		$ 1,000
Secured convertible promissory note
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total notes held for investment			4,372	4,372
Secured convertible promissory note \| Monarch
Accounts, Notes, Loans and Financing Receivable [Line Items]
Aggregate principal amount			4,500
Maximum amount of available funding	$ 5,000
Transaction fee	$ 100
Remaining amount available to be drawn					$ 500
Option to extend the maturity date \| item	2
Period to extend the maturity date	1 year
Fair value of the Debt Securities			$ 4,372	$ 4,372
Interest rate	10.00%

Income Taxes

3 Months Ended

Mar. 31, 2024

Income Taxes

Income Taxes

16.Income Taxes

The Company’s income tax provision for the three months ended March 31, 2024 and 2023 was $1,724 and $1,664, respectively. The income tax provision reflects its estimate of the effective tax rates expected to be applicable for the full year, adjusted for any discrete events that are recorded in the period in which they occurred. The estimates are re-evaluated each quarter based on the estimated tax expense for the full year.

For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the statements of income.

The effective tax rate for the three months ended March 31, 2024 was 22.11%, compared to 24.68%, in the same period of the prior year. The decrease in effective tax rate for the three months ended March 31, 2024 was primarily due to higher tax benefits associated with employee stock-based compensation.

The effective tax rate for the three months ended March 31, 2024 differed from the U.S. federal statutory rate of 21% primarily due to state income taxes (net of federal benefit), tax benefits associated with employee share-based compensation plans, and federal research and development (“R&D”) credit benefit. The effective tax rate for the three months ended March 31, 2023 differed from the U.S. federal statutory rate of 21% primarily due to state income taxes (net of federal benefit), and federal and state R&D credit benefit.

As of March 31, 2024, and December 31, 2023, the Company had $529 and $470, respectively, of unrecognized tax benefits, excluding interest and penalties. The Company recognized interest and penalty expenses related to uncertain tax positions of $101 and $87 as of March 31, 2024 and December 31, 2023, respectively.

On August 16, 2022, the Creating Helpful Incentives to Produce Semiconductors for America Act of 2022 (“CHIPS and Science Act”), and Inflation Reduction Act (“IRA”) was signed into law in the United States. Among other things, CHIPS and Science Act provides incentives and tax credits for the global chip manufacturers who choose to set-up or expand existing operations in the United States. The IRA imposes a 15% corporate alternative minimum tax for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. This act is primarily applicable to large corporations with an annual revenue of $1 billion or over. Implementation of this act had no impact on the Company’s financial statements as of March 31, 2024.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Paragraph 2
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Other Non-current assets (Tables)

3 Months Ended

Mar. 31, 2024

Other Non-current assets

Schedule of other non-current assets


	March 31,		December 31,
	2024		2023
Other		249		270
Total other non-current assets	$	249	$	270

Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies

Commitments and Contingencies

14.Commitments and Contingencies

Indemnification Obligations

The Company enters into agreements with customers, partners, lenders, consultants, lessors, contractors, sales representatives and parties to certain transactions in the ordinary course of the Company’s business. These agreements may require the Company to indemnify the other party against third party claims alleging that its product infringes a patent or copyright. Certain of these agreements require the Company to indemnify the other party against losses arising from: a breach of representations or covenants, claims relating to property damage, personal injury or acts or omissions of the Company, its employees, agents or representatives. The Company has also agreed to indemnify the directors and certain officers and employees in accordance with the by-laws of the Company. These indemnification provisions will vary based upon the nature and terms of the agreements. In many cases, these indemnification provisions do not contain limits on the Company’s liability, and the occurrence of contingent events that will trigger payment under these indemnities is difficult to predict. As a result, the Company cannot estimate its potential liability under these indemnities. The Company believes that the likelihood of conditions arising that would trigger these indemnities is remote and, historically, the Company has not made any significant payment under such indemnification provisions. Accordingly, the Company has not recorded any liabilities relating to these agreements. In certain cases, the Company has recourse against third parties with respect to the aforesaid indemnities, and the Company believes it maintains adequate levels of insurance coverage to protect the Company with respect to potential claims arising from such agreements.

401(K) Plan

Effective January 1, 2022, the Company started to match 50% of employee’s 401(k) deferral up to a maximum of 6% of the employee’s eligible earnings. For the three months period ended March 31, 2024 and 2023, the Company matched $64 and $101, respectively.

Other

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provides for an employee retention payroll tax credit for certain employers, which is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020 and before December 31, 2021. For each employee, wages (including health plan costs) up to $10,000 can be counted to determine the amount of the 50% credit. The Company started claiming this credit on its July 2020 payroll until mid-April 2021 when it determined that it no longer qualified given the change in government restrictions on travel that had impacted its sales activities. The Company’s determination that it qualified to claim the employee retention payroll tax credit is subjective and subject to audit by the Internal Revenue Service (“IRS”). If the IRS were to disagree with the Company’s tax position, it could be required to pay the retention credit claimed, along with penalties. As of March 31, 2024, the Company has claimed $1.24 million in this retention credit. No credit was claimed for the three months ended March 31, 2024 and 2023.

Litigation

From time to time in the normal course of business, the Company is subject to various legal matters, such as threatened or pending claims or litigation. Although the results of claims and litigation cannot be predicted with certainty, the Company does not believe it is a party to any claim or litigation the outcome of which, if determined adversely to it, would individually or in the aggregate be reasonably expected to have a material adverse effect on its results of operations or financial condition.

Accounts Receivable and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2024

Accounts Receivable and Allowance for Credit Losses

Accounts Receivable and Allowance for Credit Losses

3. Accounts Receivable and Allowance for Credit Losses

Accounts receivable are recorded at the invoiced amount, net of allowance for credit losses. The allowance for credit losses is based on management’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of this allowance for credit losses by considering historical experience, the age of the accounts receivable balances, the credit quality of the customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect customers’ ability to pay to determine whether a specific reserve is appropriate. Accounts receivable deemed uncollectable are charged against the allowance for credit losses when identified.

As of March 31, 2024, the allowance for credit losses was $239. Net change due to credit losses during the three months ended March 31, 2024 was $48. Allowance balance as of December 31, 2023, was $287.

Other Non-current assets

3 Months Ended

Mar. 31, 2024

Other Non-current assets

Other Non-current assets

10. Other Non-current assets

Other non-current assets consist of the following for the periods presented:


	March 31,		December 31,
	2024		2023
Other		249		270
Total other non-current assets	$	249	$	270

Other includes right-of-use asset (“ROU”) of $129, miscellaneous receivables of $100 and long-term deposits of $20 as of March 31, 2024. As of December 31, 2023, ROU asset of $150, miscellaneous receivable of $100 and long term deposits balances of $20, respectively.

Net Income Per Share, Basic and Diluted

3 Months Ended

Mar. 31, 2024

Net Income Per Share, Basic and Diluted

Net Income Per Share, Basic and Diluted

17.Net Income Per Share, Basic and Diluted

Basic earnings per share (“EPS”) represent net income attributable to common stockholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents net income attributable to common stockholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period using the treasury stock method.

Basic and diluted EPS is calculated as follows:


	Three months ended March 31,
	2024					2023
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic	6,892,742	$	6,073	$	0.88	6,701,199	$	4,969	$	0.74
Common stock warrants	—		—			64,825		—
Common stock options	889,651		—			1,130,019		—
Diluted	7,782,393	$	6,073	$	0.78	7,896,043	$	4,969	$	0.63

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Commitments And Contingencies [Line Items]
Employer matching contribution	50.00%
Company match amount	$ 64	$ 101
Retention credit	1,240
Credit claimed	$ 0	$ 0
Maximum
Commitments And Contingencies [Line Items]
Maximum contribution of percentage of employee's eligible earnings	6.00%

Property and Equipment, net

3 Months Ended

Mar. 31, 2024

Property and Equipment, net

Property and Equipment, net

6. Property and Equipment, net

Property and equipment, net consists of the following:


	March 31,		December 31,
	2024		2023
Property and equipment, gross	$	1,548	$	1,544
Less: accumulated depreciation		(899)		(824)
Property and equipment, net	$	649	$	720

Depreciation expense amounted to $74 and $59 for the three months ended March 31, 2024 and 2023, respectively.

Fair Value Measurements (Details) - USD ($) $ in Thousands		3 Months Ended
Fair Value Measurements (Details) - USD ($) $ in Thousands	Feb. 06, 2024	Mar. 31, 2023	Mar. 31, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
U.S. Government money market fund accounts			$ 45,453	$ 41,373
Purchase cost		$ 37,496
U.S. Treasury bill
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Purchase cost	$ 10,372
Interest rate	5.25%
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
U.S. Government money market fund accounts			45,453	41,373
U.S. Treasury bill			10,452	10,494
Investment in debt securities			4,372	4,372
Total Assets			60,277	56,239
Recurring \| Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
U.S. Government money market fund accounts			45,453	41,373
Total Assets			45,453	41,373
Recurring \| Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
U.S. Treasury bill			10,452	10,494
Total Assets			10,452	10,494
Recurring \| Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment in debt securities			4,372	4,372
Total Assets			$ 4,372	$ 4,372

Stock Incentive Plan - Additional information (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Oct. 31, 2015 shares	Mar. 31, 2024 USD ($) shares	Mar. 31, 2023 USD ($) employee shares	Jan. 01, 2024 shares	Sep. 30, 2014 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense \| $		$ 27	$ 702
Number of stock option granted		0	0
Stock awards granted		0
Aggregate of shares granted fully vested stock awards			18,048
Number of non-employees \| employee			1
Fair value of stock awards on grant date \| $			$ 695
Net shares issued after deducting taxes paid on granted shares			14,099
2014 Stock Incentive Plan \| Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future stock-based compensation grants		2,089,605
Maximum number of shares issued pursuant to awards granted under plan		3,858,289			450,000
Maximum term of stock option grants		10 years
Number of share reserve approved	1,500,000
Number of shares increase in share reserve				275,401
Percentage of shares reserve increased	4.00%
Weighted average period of unvested stock awards		3 years 1 month 17 days
Total number of unvested shares		3,858,289
Fair value of unvested stock options \| $		$ 320
2007 Key Person Stock Option Plan \| Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future stock-based compensation grants		0

Assets for Lease, net (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Assets for Lease, net
Assets for lease	$ 3,185	$ 3,375
Less: accumulated depreciation	(1,114)	(1,090)
Assets for lease, net	$ 2,071	$ 2,285

Fair Value Measurements - Valuation model (Details)	Mar. 31, 2024 Y	Dec. 31, 2023 Y
Risk-free interest rate \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0394	0.0394
Risk-free interest rate \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.0526	0.0526
Cash flow discount rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.278	0.278
Expected term (in years) \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	0.25	0.25
Expected term (in years) \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	2.92	2.92
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input	1.20	1.20

Notes Held for Investment (Tables)

3 Months Ended

Mar. 31, 2024

Notes Held for Investment

Schedule of notes receivable


	March 31,			December 31,
	2024			2023
Senior secured promissory notes	$	1,000	$	1,000
Secured convertible promissory notes		4,372		4,372
Total notes held for investment	$	5,372	$	5,372

Basis of Presentation (Policies)	3 Months Ended
Basis of Presentation (Policies)	Mar. 31, 2024
Basis of Presentation
Basis of Presentation	Semler Scientific, Inc., a Delaware corporation (“Semler” or “the Company”), prepared the unaudited interim financial statements included in this report in accordance with United States generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 7, 2024 (the “Annual Report”). In the opinion of management, these financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for any future period, including the full year.

Stock Incentive Plan

3 Months Ended

Mar. 31, 2024

Stock Option Plan

Stock Option Plan

15.Stock Incentive Plan

The Company’s stock-based compensation program is designed to attract and retain employees while also aligning employees’ interests with the interests of its stockholders. Stock options have been granted to employees under the stockholder-approved 2007 Key Person Stock Option Plan (“2007 Plan”) and stock options and restricted stock have been granted to employees under the stockholder-approved 2014 Stock Incentive Plan (“2014 Plan”). Stockholder approval of the 2014 Plan became effective in

September 2014. The 2014 Plan originally provided that the aggregate number of shares of common stock that may be issued pursuant to awards granted under the 2014 Plan may not exceed 450,000 shares (the “Share Reserve”), however in October 2015, the stockholders approved a 1,500,000 increase to the Share Reserve. In addition, the Share Reserve automatically increases on January 1st of each year, for a period of not more than 10 years, beginning on January 1st of the year following the year in which the 2014 Plan became effective and ending on (and including) January 1, 2024, in an amount equal to 4% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year. The Company’s board of directors may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of shares of common stock than would otherwise occur. On January 1, 2024, the Share Reserve increased by 275,401. The Share Reserve is currently 3,858,289 shares as of March 31, 2024.

In light of stockholder approval of the 2014 Plan, the Company no longer grants equity awards under the 2007 Plan. As of March 31, 2024, there were no shares available for future stock-based compensation grants under the 2007 Plan and 2,089,605 shares of an aggregate total of 3,858,289 shares were available for future stock-based compensation grants under the 2014 Plan.

Treasury Stock Acquired- Related Party Transaction

On March 14, 2022, the Company’s board of directors authorized a share repurchase program under which it may repurchase up to $20.0 million of its outstanding common stock. Under this program the Company may purchase shares on a discretionary basis from time to time through open market purchases, privately negotiated transactions or other means, including through Rule 10b5-1 trading plans or through the use of other techniques such as accelerated share repurchases. The timing and amount of any transactions will be subject to the discretion of the Company based upon market conditions and other opportunities that it may have for the use or investment of its cash balances. The repurchase program has no expiration date, does not require the purchase of any minimum number of shares and may be suspended, modified or discontinued at any time without prior notice. Since the inception of the program, the Company purchased 148,500 shares at a cost of approximately $4,991 as of March 31, 2024.

Stock Awards

No stock was granted during the three months period ended March 31, 2024. The Company granted fully vested stock awards of 18,048 shares of common stock to the non-employee members of the board of directors, employees and one non-employee as compensation during the three months ended March 31, 2023. Net shares issued after deducting taxes paid on these grants were 14,099. Fair value of these stock awards on grant date was $695.

Stock Options

Aggregate intrinsic value represents the difference between the closing market value as of March 31, 2024 of the underlying common stock and the exercise price of outstanding, in-the-money options. A summary of the Company’s stock option activity and related information for the three months ended March 31, 2024 is as follows:


	Options Outstanding
				Weighted
				Average
	Number of	Weighted		Remaining	Aggregate
	Stock Options	Average		Contractual	Intrinsic Value
	Outstanding	Exercise Price		Term (In Years)	(In Thousands)
Balance, December 31, 2023	1,021,785	$	3.84	3.76	$	41,333
Options exercised	(35,781)		2.45	—		—
Balance, March 31, 2024	986,004	$	3.89	3.13	$	24,973
Exercisable as of March 31, 2024	968,872	$	3.49	1.92	$	24,920

As of March 31, 2024, the fair value of unvested stock options was approximately $320. This unrecognized stock-based compensation expense is expected to be recorded over a weighted average period of 3.13 years.

No options were granted during the three months period ended March 31, 2024 and 2023.

The following table represents the stock based compensation for the three months ended March 31, 2024 and 2023:


	Three months ended March 31,
	2024		2023
Cost of Revenues	$	5	$	—
Engineering and Product Development		3		45
Sales and Marketing		4		170
General and Administrative		15		487
Total	$	27	$	702

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Long-Term Investments

3 Months Ended

Mar. 31, 2024

Long-Term Investments

Long-Term Investments

7.Long-Term Investments

Long term investments consist of the following for the periods presented:


	March 31,		December 31,
	2024		2023
Investments in SYNAPS Dx	$	512	$	512
Total long-term investments	$	512	$	512

In September 2020, the Company acquired a promissory note from NeuroDiagnostics Inc., which is doing business as SYNAPS Dx, in the principal amount of $500, $100 of which was retained for expense reimbursement. Subsequently, in December 2020, the Company agreed to convert the promissory note, together with all accrued interest thereon, into shares of preferred stock of SYNAPS Dx as repayment in full of the promissory note. The value of the note exchanged for the shares of preferred stock of SYNAPS Dx held by the Company as of March 31, 2024 and December 31, 2023 was approximately $512.

The investments in SYNAPS Dx were recorded in accordance with ASC 321, Investments – Equity Securities (“ASC 321”), which provides that investments in equity securities in privately-held companies without readily determinable fair values are generally recorded at cost, plus or minus subsequent observable price changes in orderly transactions for identical or similar investments, less impairments. The Company elected the practical expedient permitted by ASC 321 and recorded the above investments on a cost basis. As a part of the assessment for impairment indicators, the Company considers significant deterioration in the earnings performance and overall business prospects of the investee as well as significant adverse changes in the external environment these investments operate. If qualitative assessment indicates the investments are impaired, the fair value of these equity securities would be estimated, which would involve a significant degree of judgement and subjectivity.

The Company qualitatively assessed the investment for impairment in accordance with ASC 321. As of March 31, 2024 and December 31, 2023, the Company determined that there was no impairment for the investment in SYNAPS Dx.

Long-Term Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Equity Securities without Readily Determinable Fair Value [Line Items]
Total long-term investments	$ 512	$ 512
Investments in SYNAPS Dx
Equity Securities without Readily Determinable Fair Value [Line Items]
Total long-term investments	$ 512	$ 512

Stock Incentive Plan (Tables)

3 Months Ended

Mar. 31, 2024

Stock Option Plan

Schedule of stock option activity


	Options Outstanding
				Weighted
				Average
	Number of	Weighted		Remaining	Aggregate
	Stock Options	Average		Contractual	Intrinsic Value
	Outstanding	Exercise Price		Term (In Years)	(In Thousands)
Balance, December 31, 2023	1,021,785	$	3.84	3.76	$	41,333
Options exercised	(35,781)		2.45	—		—
Balance, March 31, 2024	986,004	$	3.89	3.13	$	24,973
Exercisable as of March 31, 2024	968,872	$	3.49	1.92	$	24,920

Schedule of stock-based compensation expense


	Three months ended March 31,
	2024		2023
Cost of Revenues	$	5	$	—
Engineering and Product Development		3		45
Sales and Marketing		4		170
General and Administrative		15		487
Total	$	27	$	702

Variable-Fee Revenue

3 Months Ended

Mar. 31, 2024

Variable-Fee Revenue

Variable-Fee Revenue

2.Variable-Fee Revenue

The Company recognizes variable-fee licenses (i.e., fee per test) and sales of hardware equipment and accessories in accordance with ASC 606, Revenue from Contracts with Customers. Total fees from variable-fee licenses represent approximately $8,007 and $8,561 for the three months ended March 31, 2024 and 2023, respectively. Total sales of hardware and equipment accessories represent approximately $817 and $340 of revenues for the three months ended March 31, 2024 and 2023, respectively. The remainder of the revenue is earned from leasing the Company's testing product for a fixed fee, which is not subject to ASC 606. See Note 13 to the Unaudited Condensed Financial Statements for more information.

Upon shipment under variable-fee license contracts, assets for lease are sold to the customers, and the asset is recognized as cost of revenue.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

Assets for Lease, net

3 Months Ended

Mar. 31, 2024

Assets for Lease, net

Assets for Lease, net

5. Assets for Lease, net

The Company provides financing of certain equipment through operating leases (see Note 13 to the Unaudited Condensed Financial Statements).

Assets for lease consist of the following:


	March 31,		December 31,
	2024		2023
Assets for lease	$	3,185	$	3,375
Less: accumulated depreciation		(1,114)		(1,090)
Assets for lease, net	$	2,071	$	2,285

Depreciation expense amounted to $77 and $70 for the three months ended March 31, 2024 and 2023, respectively. Reduction to accumulated depreciation for returned and retired items was $53 and $197 for the three months ended March 31, 2024 and 2023, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $189 and $78 for the three months ended March 31, 2024 and 2023, respectively.

Condensed Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
Condensed Statements of Cash Flows - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 6,073	$ 4,969
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Depreciation	176	129
Deferred tax expense	(136)	(80)
Loss on disposal of assets for lease	189	78
Gain on short-term investments		(305)
Allowance for credit losses	(55)	48
Change in fair value of notes held for investment		107
Stock-based compensation	27	702
Changes in Operating Assets and Liabilities:
Trade accounts receivable	66	(5,507)
Inventory	37	(43)
Prepaid expenses and other current assets	(455)	(1,301)
Other non-current assets	21	25
Accounts payable	8	(537)
Accrued expenses	(196)	2,458
Other current and non-current liabilities	(131)	118
Net Cash Provided by Operating Activities	5,624	861
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment	(4)	(95)
Purchase of notes held for investment		(500)
Proceeds from maturities of short-term investments		20,211
Purchase of short-term investments		(37,496)
Purchase of assets for lease	(77)	(544)
Net Cash Used in Investing Activities	(81)	(18,424)
CASH FLOWS FROM FINANCING ACTIVITIES:
Taxes paid related to net settlement of equity awards	(45)	(146)
Proceeds from exercise of stock options	56
Net Cash Provided by (Used in) Financing Activities	11	(146)
INCREASE (DECREASE) IN CASH	5,554	(17,709)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD	57,332	23,014
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD	$ 62,886	$ 5,305

Property and Equipment, net (Tables)

3 Months Ended

Mar. 31, 2024

Property and Equipment, net

Schedule of property and equipment, net


	March 31,		December 31,
	2024		2023
Property and equipment, gross	$	1,548	$	1,544
Less: accumulated depreciation		(899)		(824)
Property and equipment, net	$	649	$	720

Long-Term Investments (Tables)

3 Months Ended

Mar. 31, 2024

Long-Term Investments

Schedule of carrying value of non-marketable equity investments


	March 31,		December 31,
	2024		2023
Investments in SYNAPS Dx	$	512	$	512
Total long-term investments	$	512	$	512

Accounts Receivable and Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Accounts Receivable and Allowance for Credit Losses
Allowance for credit losses	$ 239	$ 287
Net change due to credit losses	$ (48)

Assets for Lease, net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Assets for Lease, net
Depreciation expense	$ 77	$ 70
Reduction to accumulated depreciation for returned and retired items	53	197
Loss on disposal of assets for lease	$ (189)	$ (78)

Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings	Total
Balance at Dec. 31, 2022	$ 7		$ 16,449	$ 39,220	$ 55,676
Balance (in shares) at Dec. 31, 2022	6,906,544
Balance (in shares) at Dec. 31, 2022		(214,422)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Employee stock grants			695		695
Employee stock grants (in shares)	18,048
Taxes paid related to settlement of equity awards			(146)		(146)
Taxes paid related to settlement of equity awards (in shares)	(3,949)
Stock-based compensation			7		7
Net income				4,969	4,969
Balance at Mar. 31, 2023	$ 7		17,005	44,189	61,201
Balance (in shares) at Mar. 31, 2023	6,920,643
Balance (in shares) at Mar. 31, 2023		(214,422)
Balance at Dec. 31, 2023	$ 7		11,985	59,803	$ 71,795
Balance (in shares) at Dec. 31, 2023	7,099,441
Balance (in shares) at Dec. 31, 2023		(214,422)			(214,422)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Taxes paid related to settlement of equity awards			(45)		$ (45)
Taxes paid related to settlement of equity awards (in shares)	(1,029)
Stock option exercises			56		$ 56
Stock option exercises (in shares)	35,781				35,781
Stock-based compensation			27		$ 27
Net income				6,073	6,073
Balance at Mar. 31, 2024	$ 7		$ 12,023	$ 65,876	$ 77,906
Balance (in shares) at Mar. 31, 2024	7,134,193
Balance (in shares) at Mar. 31, 2024		(214,422)			(214,422)

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2024

Accrued Expenses

Schedule of accrued expenses


	March 31,		December 31,
	2024		2023
Compensation	$	2,045	$	2,008
Accrued Taxes		1,883		1,991
Miscellaneous Accruals		377		503
Total Accrued Expenses	$	4,305	$	4,502

Accrued Expenses

3 Months Ended

Mar. 31, 2024

Accrued Expenses

Accrued Expenses

11.Accrued Expenses

Accrued expenses consist of the following:


	March 31,		December 31,
	2024		2023
Compensation	$	2,045	$	2,008
Accrued Taxes		1,883		1,991
Miscellaneous Accruals		377		503
Total Accrued Expenses	$	4,305	$	4,502

Net Income Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Net Income Per Share, Basic and Diluted
Basic shares (in shares)	6,892,742	6,701,199
Common stock warrants (in shares)		64,825
Common stock options (in shares)	889,651	1,130,019
Diluted shares (in shares)	7,782,393	7,896,043
Net Income - Basic EPS	$ 6,073	$ 4,969
Net Income - Common stock warrants	0	0
Net Income - Common stock options	0	0
Net Income - Diluted EPS	$ 6,073	$ 4,969
Basic EPS (in dollars per share)	$ 0.88	$ 0.74
Diluted EPS (in dollars per share)	$ 0.78	$ 0.63

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Income Taxes
Income tax provision	$ 1,724	$ 1,664
Effective income tax rate	22.11%	24.68%
Federal statutory rate	21.00%	21.00%
Unrecognized tax benefits	$ 529		$ 470
Interest and penalty expenses related to uncertain tax positions	$ 101		$ 87

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Long-Term Investments - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended
	Sep. 30, 2020	Mar. 31, 2024	Dec. 31, 2023
Equity Securities without Readily Determinable Fair Value [Line Items]
Long-term investments		$ 512	$ 512
Investments in SYNAPS Dx
Equity Securities without Readily Determinable Fair Value [Line Items]
Promissory note acquired, principal	$ 500
Promissory note retained for expense reimbursement	$ 100
Long-term investments		512	512
Impairment		$ 0	$ 0

Inventory

3 Months Ended

Mar. 31, 2024

Inventory

Inventory

4. Inventory

Inventory, which is made up of finished goods, is recorded at the lower of cost or net realizable value. Cost is determined on the first-in, first-out method. The Company periodically analyzes its inventory levels to identify inventory that has a cost basis in excess of its estimated realizable value and writes down such inventory as appropriate. The inventory balance was $408 and $445 as of March 31, 2024 and December 31, 2023, respectively.

Assets for Lease, net (Tables)

3 Months Ended

Mar. 31, 2024

Assets for Lease, net

Summary of assets for lease, net


	March 31,		December 31,
	2024		2023
Assets for lease	$	3,185	$	3,375
Less: accumulated depreciation		(1,114)		(1,090)
Assets for lease, net	$	2,071	$	2,285

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2024	May 03, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-36305
Entity Registrant Name	SEMLER SCIENTIFIC, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-1367393
Entity Address, Address Line One	2340-2348 Walsh Avenue, Suite 2344
Entity Address, City or Town	Santa Clara
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95051
City Area Code	877
Local Phone Number	774-4211
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	SMLR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,065,835
Entity Central Index Key	0001554859
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

Other Non-current assets - Additional Information Details (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Other Non-current assets
ROU asset	$ 129	$ 150
Miscellaneous receivables	100	100
Long-term deposits	$ 20	$ 20

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accrued Expenses
Compensation	$ 2,045	$ 2,008
Accrued Taxes	1,883	1,991
Miscellaneous Accruals	377	503
Total Accrued Expenses	$ 4,305	$ 4,502

Leases - Lessee Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Jul. 31, 2020
Leases
Lease agreement term				61 months
Remaining lease term	18 months
Options to renew	false
Lease expenses	$ 22	$ 22
ROU asset	$ 129		$ 150
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other Assets, Noncurrent
Current lease liabilities	$ 91
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current
Noncurrent lease liabilities	$ 47
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent
Discount rate	2.50%

Other Non-current assets (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Other Non-current assets
Other	$ 249
Total other non-current assets	$ 249	$ 270

Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Fair Value Measurements
Percentage of probability of equity financing	5.00%
Percentage of probability of change of control	75.00%
Percentage of probability of payment at maturity or an insolvency event	20.00%
Debt securities measured at fair value	$ 4,372	$ 4,372

Variable-Fee Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
Variable-Fee Revenue (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Variable-fee licenses
Disaggregation of Revenue [Line Items]
Revenue	$ 8,007	$ 8,561
Hardware and equipment accessories
Disaggregation of Revenue [Line Items]
Revenue	$ 817	$ 340

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479941/924-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

Concentration of Credit Risk (Details) $ in Thousands	3 Months Ended		12 Months Ended
Concentration of Credit Risk (Details) $ in Thousands	Mar. 31, 2024 USD ($) customer item	Mar. 31, 2023 customer	Dec. 31, 2023 USD ($) customer item
Concentration of Credit Risk
Deposits	$ 6,981		$ 5,465
U.S. treasury bills	10,452		10,494
U.S. Government money market fund accounts	$ 45,453		$ 41,373
Customer concentration risk \| Revenue
Concentration of Credit Risk
Number of customers \| customer	3	2
Customer concentration risk \| Revenue \| Customer one
Concentration of Credit Risk
Concentration risk percentage	45.00%	40.90%
Customer concentration risk \| Revenue \| Customer two
Concentration of Credit Risk
Concentration risk percentage	24.70%	33.50%
Customer concentration risk \| Revenue \| Customer three
Concentration of Credit Risk
Concentration risk percentage	10.50%
Customer concentration risk \| Accounts receivable
Concentration of Credit Risk
Number of customers \| customer	2		3
Customer concentration risk \| Accounts receivable \| Customer one
Concentration of Credit Risk
Concentration risk percentage	39.30%		27.50%
Customer concentration risk \| Accounts receivable \| Customer two
Concentration of Credit Risk
Concentration risk percentage	28.10%		27.50%
Customer concentration risk \| Accounts receivable \| Customer three
Concentration of Credit Risk
Concentration risk percentage			23.60%
Vendor concentration risk \| Accounts payable
Concentration of Credit Risk
Number of vendors \| item	3		2
Vendor concentration risk \| Accounts payable \| Vendor one
Concentration of Credit Risk
Concentration risk percentage	31.00%		24.00%
Vendor concentration risk \| Accounts payable \| Vendor two
Concentration of Credit Risk
Concentration risk percentage	17.80%		10.10%
Vendor concentration risk \| Accounts payable \| Vendor three
Concentration of Credit Risk
Concentration risk percentage	9.50%

Condensed Statements of Income - USD ($) $ in Thousands	3 Months Ended
Condensed Statements of Income - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Condensed Statements of Income
Revenues	$ 15,903	$ 18,206
Operating expenses:
Cost of revenues	1,247	1,269
Engineering and product development	1,138	1,630
Sales and marketing	3,675	5,192
General and administrative	2,867	3,859
Total operating expenses	8,927	11,950
Income from operations	6,976	6,256
Interest and dividend income	819	484
Change in fair value of notes held for investment		(107)
Other income	2
Other income, net	821	377
Pre-tax income	7,797	6,633
Income tax provision	1,724	1,664
Net income	$ 6,073	$ 4,969
Net income per share, basic	$ 0.88	$ 0.74
Weighted average number of shares used in computing basic net income per share	6,892,742	6,701,199
Net income per share, diluted	$ 0.78	$ 0.63
Weighted average number of shares used in computing diluted net income per share	7,782,393	7,896,043