Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2019	Nov. 01, 2019
Document And Entity Information [Abstract]
Entity Registrant Name	Semler Scientific, Inc.
Entity Central Index Key	0001554859
Trading Symbol	smlr
Current Fiscal Year End Date	--12-31
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		6,527,916
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Current Reporting Status	Yes

Condensed Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Condensed Statements of Income - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Condensed Statements of Income
Revenues	$ 8,902	$ 5,579	$ 23,616	$ 15,526
Operating expenses:
Cost of revenues	974	615	2,755	1,999
Engineering and product development	617	587	1,777	1,443
Sales and marketing	2,345	1,798	6,626	5,283
General and administrative	1,855	1,033	4,798	2,908
Total operating expenses	5,791	4,033	15,956	11,633
Income from operations	3,111	1,546	7,660	3,893
Interest expense	(2)	(1)		(57)
Related party interest expense		(74)		(206)
Other expense	(1)	(3)	(3)	(4)
Other expense	(3)	(78)	(3)	(267)
Income before income taxes	3,108	1,468	7,657	3,626
Income tax (benefit) provision	(4,671)		(4,594)
Net income	$ 7,779	$ 1,468	$ 12,251	$ 3,626
Net income per share:
Basic (in dollars per share)	$ 1.20	$ 0.24	$ 1.91	$ 0.60
Diluted (in dollars per share)	$ 0.96	$ 0.19	$ 1.51	$ 0.48
Weighted average number of shares used in computing: basic and diluted income per share
Basic (in shares)	6,492,501	6,086,489	6,410,588	5,998,460
Diluted (in shares)	8,108,053	7,927,788	8,121,996	7,611,961

Condensed Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current Assets:
Cash	$ 8,542	$ 3,284
Trade accounts receivable, net of allowance for doubtful accounts of $36 and $52, respectively	3,271	2,801
Prepaid expenses and other current assets	274	153
Total current assets	12,087	6,238
Assets for lease, net	1,826	1,243
Property and equipment, net	220	223
Long-term deposits	15	15
Long-term deferred tax assets	4,709
Total assets	18,857	7,719
Current liabilities:
Accounts payable	669	280
Accrued expenses	2,909	2,797
Deferred revenue	1,169	435
Total current liabilities	4,747	3,512
Long-term liabilities:
Deferred rent	8	11
Total long-term liabilities	8	11
Stockholders' equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 6,552,916 and 6,349,985 shares issued, and 6,527,916 and 6,324,985 outstanding (treasury shares of 25,000 and 25,000), respectively	7	6
Additional paid-in capital	23,262	25,608
Accumulated deficit	(9,167)	(21,418)
Total stockholders' equity	14,102	4,196
Total liabilities and stockholders' equity	$ 18,857	$ 7,719

Condensed Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Condensed Balance Sheets
Allowance for doubtful accounts on trade accounts receivable (in dollars)	$ 36	$ 52
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	6,552,916	6,349,985
Common stock, shares outstanding	6,527,916	6,324,985
Treasury stock, shares	25,000	25,000

Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2017	$ 6		$ 23,843	$ (26,432)	$ (2,583)
Balance (in shares) at Dec. 31, 2017	5,902,244	(25,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of Common Stock			294		294
Issuance of Common Stock (in shares)	12,943
Warrant Exercises			64		64
Warrant Exercises (in shares)	66,914
Stock Option Exercises			440		440
Stock Option Exercises (in shares)	216,193
Stock-based Compensation			471		471
Net income				3,626	3,626
Balance at Sep. 30, 2018	$ 6		25,112	(22,806)	2,312
Balance (in shares) at Sep. 30, 2018	6,198,294	(25,000)
Balance at Jun. 30, 2018	$ 6		24,484	(24,274)	216
Balance (in shares) at Jun. 30, 2018	6,048,397	(25,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of Common Stock			294		294
Issuance of Common Stock (in shares)	12,943
Warrant Exercises (in shares)	26,139
Stock Option Exercises			195		195
Stock Option Exercises (in shares)	110,815
Stock-based Compensation			139		139
Net income				1,468	1,468
Balance at Sep. 30, 2018	$ 6		25,112	(22,806)	2,312
Balance (in shares) at Sep. 30, 2018	6,198,294	(25,000)
Balance at Dec. 31, 2018	$ 6		25,608	(21,418)	4,196
Balance (in shares) at Dec. 31, 2018	6,349,985	(25,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Warrant Repurchase			(2,687)		(2,687)
Warrant Exercises (in shares)	36,197
Stock Option Exercises	$ 1		59		$ 60
Stock Option Exercises (in shares)	166,734				176,365
Stock-based Compensation			282		$ 282
Net income				12,251	12,251
Balance at Sep. 30, 2019	$ 7		23,262	(9,167)	14,102
Balance (in shares) at Sep. 30, 2019	6,552,916	(25,000)
Balance at Jun. 30, 2019	$ 6		23,161	(16,946)	6,221
Balance (in shares) at Jun. 30, 2019	6,484,414	(25,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Warrant Exercises (in shares)	13,670
Stock Option Exercises	$ 1		15		16
Stock Option Exercises (in shares)	54,832
Stock-based Compensation			86		86
Net income				7,779	7,779
Balance at Sep. 30, 2019	$ 7		$ 23,262	$ (9,167)	$ 14,102
Balance (in shares) at Sep. 30, 2019	6,552,916	(25,000)

Condensed Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
Condensed Statements of Cash Flows - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 12,251	$ 3,626
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Amortization of debt discount		22
Accretion of non-cash interest		200
Depreciation	470	373
Deferred income tax	(4,709)
Loss on disposal of property and equipment		2
Loss on disposal of assets for lease	159	150
Bad debt expense	42	39
Stock-based compensation expense	282	470
Changes in Operating Assets and Liabilities:
Trade accounts receivable	(512)	(1,165)
Prepaid expenses and other assets	(122)	(60)
Accounts payable	389	(237)
Accrued expenses	109	(609)
Deferred revenue	734	(160)
Net Cash Provided by Operating Activities	9,093	2,651
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment	(106)	(131)
Proceeds from disposal of property and equipment		1
Purchase of assets for lease, net	(1,102)	(323)
Net Cash Used in Investing Activities	(1,208)	(453)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of warrants	(2,687)
Exercise of warrants		64
Exercise of stock options	60	440
Payments of loans payable		(1,072)
Net Cash Used in Financing Activities	(2,627)	(568)
INCREASE IN CASH	5,258	1,630
CASH, BEGINNING OF PERIOD	3,284	1,457
CASH, END OF PERIOD	$ 8,542	3,087
Cash paid for interest		192
Retirement of related party loans payable through common stock issuance		$ 294

Basis of Presentation	9 Months Ended
Basis of Presentation	Sep. 30, 2019
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, 2018 filed with the SEC on March 7, 2019 (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. Recently Issued Accounting Pronouncements Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU No. 2014-09”). The amendment in this ASU provides guidance on the revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The core principle of this update provides guidance to identify the performance obligations under the contract(s) with a customer and how to allocate the transaction price to the performance obligations in the contract. It further provides guidance to recognize revenue when (or as) the entity satisfies a performance obligation. This standard replaced most existing revenue recognition guidance. On August 8, 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU No. 2014-09 by one year, and permits early adoption as long as the adoption date is not before the original public entity effective date. Since the issuance of ASU 2014-09, the FASB has issued several amendments that clarify certain points, including ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing (“Topic 606”), ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 Emerging Issues Task Force Meeting, and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606. The updated revenue standard allows two methods of adoption: (1) retrospectively to each prior period presented (“full retrospective method”), or (2) retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption (“modified retrospective method”). The new standard further requires new disclosures about contracts with customers, including the significant judgments the company has made when applying the guidance. The Company adopted the new standard effective January 1, 2019, using the modified retrospective method. The Company determined that the adoption of this new standard did not have a material impact on its financial statements. Topic 606 affects revenue recognition for the Company’s variable license fee contracts, which represents approximately $2,660 and $1,375 of revenues for the three-month periods ended September 30, 2019 and 2018, respectively, and approximately $6,166 and $3,384 of revenues for the nine-month periods ended September 30, 2019 and 2018, respectively. Essentially all of the variable license fee contracts are with large healthcare organizations. The remainder of the revenue is earned from leasing the Company's testing product for a fixed monthly fee, which is not subject to Topic 606. It was determined that the impact of the new standard has no effect on the way revenue was currently being recognized. Reusable hardware equipment or accessories may be provided to a customer for a set price and then use of the associated software is billed to the customer monthly based on volume of use. Under this scenario, revenue is recognized when and only when the customer uses the product. The Company is rendering a service and recognizes revenue in direct proportion to how much service is rendered. The sale of the equipment or accessories is recognized as hardware sales upon shipment to the customer. The initial contract is for a specified time period with automatic renewal each period thereafter until canceled. In case there is a violation of any term of the contract, the Company may deactivate the service remotely, so that the customer cannot continue to use the product. Accounting Pronouncements Not Yet Adopted In January 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). Under the new guidance in ASU No. 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged, however, certain targeted improvements were made. ASU No. 2016-02 also simplifies the accounting for sale and leaseback transactions. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Lessees and lessors may not apply a full retrospective transition approach. The new standard also requires expanded disclosures regarding leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU No. 2018-11”). ASU No. 2018-11 provides another transition method in addition to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. This ASU also provides further guidance on lessors accounting policy election to not separate non-lease components from the associated lease components and limits this to circumstances in which the non-lease component or components otherwise would be accounted for under the new revenue guidance and both (1) the timing and pattern of transfer are the same for the non-lease component(s) and associated lease component, and (2) the lease component, if accounted for separately, would be classified as a an operating lease. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors. This ASU provide narrow scope improvements for lessor accounting by permitting lessors, as an accounting policy election, to treat certain sales taxes and other similar taxes as lessee costs, to exclude lessor costs paid by lessees directly to third parties from variable payments, and clarify the accounting by lessors for variable payments that related to both a lease component and a non-lease component. In January 2019, the FASB issued ASU No. 2019-01, Leases Codification Improvements, which reinstates the exception for lessors that are not manufacturers or dealers for determining fair value of the leased property as the underlying asset’s cost, clarifies the presentation on the statement of cash flows for sales type and direct financing leases for lessors that are depository and lending institutions and clarifies the transition disclosures related to accounting changes and error corrections in the year of adoption of the ASU. The Company will adopt the new standard on December 31, 2019 upon expiration of their status as an emerging growth company using the modified retrospective approach and the optional transition method under ASU No. 2018-11. The Company evaluated the impact of the new accounting standard on its lease contracts with customers and determined that there will be no impact to the accounting and revenue recognition under these lease contracts with customers. As for leases for which the Company is the lessee, management reviewed its lease obligations and determined that the Company generally does not enter into long-term lease obligations with the exception of its office leases. The Company is a lessee on certain real estate leases that will need to be reported as right of use assets and liabilities related to these leases in the Company’s financial statements on the date of adoption. The Company is in the process of determining the amounts to be recorded on adoption related to these leases and does not anticipate that adoption of this new standard will have a material impact on its financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“Topic 326”). This ASU requires timelier recording of credit losses on loans and other financial instruments held. Instead of reserves based on a current probability analysis, Topic 326 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. All organizations will now use forward-looking information to better inform their credit loss estimates. Topic 326 requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide information about the amounts recorded in the financial statements. In addition, Topic 326 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In April 2019, the FASB issued ASU2019-04 Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments to introduce amendments which will affect the recognition and measurement of financial instruments, including derivatives and hedging. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326); Targeted Transition Relief. The amendments in this ASU provide entities that have certain instruments within the scope of Subtopic 326-20 with an option to irrevocably elect the fair value option in Subtopic 825-10, applied on an instrument-by-instrument basis for eligible instruments upon adoption of Topic 326. This standard and related amendments are effective for the Company’s fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company does not anticipate this new standard will have a material impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of costs. The ASU specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. This standard is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company does not anticipate this new standard will have a material impact on its financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this ASU modify the disclosure requirements on fair value measurements removing the requirements to disclosure amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. In addition, it modified certain disclosures related to Level 3 fair value measurements and added additional disclosures regarding the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period. This update is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company does not anticipate this update to have a material impact on its financial statements.

Assets for Lease, net

9 Months Ended

Sep. 30, 2019

Assets for Lease, net

Assets for Lease, net

2. Assets for Lease, net

Assets for lease consist of the following:


	September 30,		December 31,
	2019		2018

Assets for lease	$	3,047	$	2,218
Less: accumulated depreciation		(1,221)		(975)
Assets for lease, net	$	1,826	$	1,243

Depreciation expense amounted to $124 and $97 for the three months ended September 30, 2019 and 2018, respectively. Depreciation expense amounted to $361 and $296 for the nine months ended September 30, 2019 and 2018, respectively. Reduction to accumulated depreciation for returned items was $38 and $24 for the three months ended September 30, 2019 and 2018, respectively. Reduction to accumulated depreciation for returned items was $115 and $85 for the nine months ended September 30, 2019 and 2018, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $62 and $43 for the three months ended September 30, 2019 and 2018, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $159 and $150 for the nine months ended September 30, 2019 and 2018, respectively.

Property and Equipment, net

9 Months Ended

Sep. 30, 2019

Property and Equipment, net

Property and Equipment, net

3. Property and Equipment, net

Capital assets consist of the following:


	September 30,		December 31,
	2019		2018

Capital assets	$	563	$	457
Less: accumulated depreciation		(343)		(234)
Capital assets, net	$	220	$	223

Depreciation expense amounted to $38 and $27 for the three months ended September 30, 2019 and 2018, respectively. Depreciation expense amounted to $109 and $77 for the nine months ended September 30, 2019 and 2018, respectively.

Accrued Expenses

9 Months Ended

Sep. 30, 2019

Accrued Expenses

Accrued Expenses

4. Accrued Expenses

Accrued expenses consist of the following:


	September 30,		December 31,
	2019		2018

Compensation	$	2,344	$	2,442
Accrued Taxes		185		81
Miscellaneous accruals		380		274
Total accrued expenses	$	2,909	$	2,797

Concentration of Credit Risk	9 Months Ended
Concentration of Credit Risk	Sep. 30, 2019
Concentration of Credit Risk
Concentration of Credit Risk	5. 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 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 any exposure to potential credit loss. For the three months ended September 30, 2018, two customers accounted for 51.8% and 22.2% of the Company’s revenue, respectively. For the nine months ended September 30, 2018, two customers accounted for 53.1% and 19.4% of the Company’s revenue, respectively. For the three months ended September 30, 2019, three customers accounted for 47.0%, 15.7% and 12.4% of the Company’s revenue, respectively. For the nine months ended September 30, 2019, three customers accounted for 50.7%, 12.9% and 12.8% of the Company’s revenue, respectively. As of December 31, 2018, two customers accounted for 43.5% and 40.4% of the Company’s accounts receivable, respectively. As of September 30, 2019, three customers accounted for 30.8%, 22.6% and 16.6% of the Company’s accounts receivable, respectively. The Company’s largest customer in terms of revenues for the three months ended September 30, 2019 and accounts receivable as of September 30, 2019 is a U.S. diversified healthcare company and its affiliated plans. As of December 31, 2018, two vendors accounted for 11.0% and 10.8% of the Company’s accounts payable, respectively. As of September 30, 2019, four vendors accounted for 15.4%, 12.3%, 10.9%, and 10.3% of the Company’s accounts payable, respectively.

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2019
Commitments and Contingencies
Commitments and Contingencies	6. Commitments and Contingencies Facilities Leases The Company recognized facilities lease expenses of $17 and $17 for the three months ended September 30, 2019 and 2018, respectively. The Company recognized facilities lease expenses of $51 and $52 for the nine months ended September 30, 2019 and 2018, respectively. 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 of the 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 had 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.

Stock Option Plan

9 Months Ended

Sep. 30, 2019

Stock Option Plan

Stock Option Plan

8. Stock Option 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”) or 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, 2015, the Share Reserve increased by 188,640 shares due to the automatic 4% increase. On January 1, 2016, the Share Reserve increased by 204,943 shares due to the automatic 4% increase. On January 1, 2017, the Share Reserve increased by 204,943 shares due to the automatic 4% increase. On January 1, 2018, the Share Reserve increased by 235,090 shares due to the automatic 4% increase. The Share Reserve is currently 2,783,616 shares as of September 30, 2019.

In light of stockholder approval of the 2014 Plan, the Company no longer grants equity awards under the 2007 Plan. As of September 30, 2019, 0 shares of an aggregate total of 407,500 shares were available for future stock-based compensation grants under the 2007 Plan and 996,968 shares of an aggregate total of 2,783,616 shares were available for future stock-based compensation grants under the 2014 Plan.

Aggregate intrinsic value represents the difference between the closing market value as of September 30, 2019 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 nine months ended September 30, 2019 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, January 1, 2019	1,761,447	$	3.18	6.84	$	55,000
Options exercised	(176,365)		2.72
Balance, September 30, 2019	1,585,082	$	3.23	6.11	$	61,460
Exercisable as of September 30, 2019	1,451,359	$	3.05	5.96	$	56,535

The total compensation cost related to unvested stock option awards not yet recognized was $515 as of September 30, 2019. The weighted average period over which the total unrecognized compensation cost related to these unvested stock awards will be recognized is 1.13 years. The weighted average fair value of options granted during the nine months ended September 30, 2018 was $5.97 per share, or an aggregate grant date fair value of $806. There were no options granted during the nine months ended September 30, 2019.

On January 2, 2018, the Compensation Committee of the Company’s Board of Directors granted, and the full Board ratified, an option to acquire an aggregate of 125,000 shares under the 2014 Plan to the Company’s CEO. This option vests 25% on the one-year anniversary of the grant date and monthly thereafter for 36 months, such that the option is vested in full on the four-year anniversary of the grant date. On January 2, 2018, the Company’s Compensation Committee granted, and the full Board ratified, options to each of the then-seated non-employee Directors to acquire 5,000 shares, for an aggregate of 10,000 shares, under the 2014 Plan. These options vest on the one-year anniversary of their grant date. On February 28, 2018, the Compensation Committee of the Company’s Board of Directors accelerated the vesting on stock options issued to consultants such that all unvested shares were vested on that date. This resulted in a one-time expense of $49 during the three months ended March 31, 2018.

Determining the Fair Value of Stock Options

The Company uses the Black-Scholes pricing model to determine the fair value of stock options. The fair value of each option grant is estimated on the date of the grant. There were no stock options granted during the nine months ended September 30, 2019. There were no stock options granted during the three months ended September 30, 2018. There were 135,000 stock options granted during the nine months ended September 30, 2018. The following assumptions for the periods presented were:


	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018

Expected term (in years)	—		—		—		5
Risk-free interest rate	—	%	—	%	—	%	2.02	%
Expected volatility	—	%	—	%	—	%	0.99	%
Expected dividend rate	—	%	—	%	—	%	—	%

The assumptions are based on the following for each of the periods presented:

Valuation Method — The Company estimates the fair value of its stock options using the Black-Scholes option pricing model.

Expected Term — The Company estimates the expected term consistent with the simplified method identified by the SEC. The Company elected to use the simplified method because of its limited history of stock option exercise activity and its stock options meet the criteria of the “plain-vanilla” options as defined by the SEC. The simplified method calculates the expected term as the average of the vesting and contractual terms of the award.

Volatility — The Company derives this number from the historical stock volatilities of the Company’s stock over a period approximately equal to the expected term of the options.

Risk-free Interest Rate — The risk-free interest rate is based on median U.S. Treasury zero coupon issues with remaining terms similar to the expected term on the options.

Expected Dividend — The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, used an expected dividend yield of zero in the valuation model.

Forfeiture — Beginning in the first quarter of 2017, the Company implemented ASU 2016‑09, and elected to true-up calculations at the time of forfeiture, rather than creating an estimate at the time of option issuance.

The Company has recorded an expense of $86 and $139 as it relates to stock-based compensation for the three months ended September 30, 2019 and 2018, respectively. The Company has recorded an expense of $282 and $470 as it relates to stock-based compensation for the nine months ended September 30, 2019 and 2018, respectively:


	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Cost of Revenue	$	1	$	1	$	1	$	1
Engineering and Product Development		2		9		14		26
Sales and Marketing		7		23		39		74
General and Administrative		76		106		228		369
Total	$	86	$	139	$	282	$	470

Net Income Per Share, Basic and Diluted

9 Months Ended

Sep. 30, 2019

Net Income Per Share, Basic and Diluted

Net Income Per Share, Basic and Diluted

9. 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 September 30,
	2019					2018
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic EPS	6,492,501	$	7,779	$	1.20	6,086,489	$	1,468	$	0.24
Common stock warrants	155,490		—			354,420		—
Common stock options	1,460,062		—			1,486,897		—
Diluted EPS	8,108,053	$	7,779	$	0.96	7,927,788	$	1,468	$	0.19


	Nine months ended September 30,
	2019					2018
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic EPS	6,410,588	$	12,251	$	1.91	5,998,460	$	3,626	$	0.60
Common stock warrants	190,144		—			308,529		—
Common stock options	1,521,264		—			1,304,972		—
Diluted EPS	8,121,996	$	12,251	$	1.51	7,611,961	$	3,626	$	0.48

There were no weighted average shares outstanding of common stock equivalents excluded from the computation of diluted net income per share for the three or nine months ended September 30, 2019 and 2018.

Income Tax Benefit	9 Months Ended
Income Tax Benefit	Sep. 30, 2019
Income Tax Benefit
Income Tax Benefit	10. Income Tax Benefit The Company’s income tax provision (benefit) for the three and nine months ended September 30, 2019 and September 30, 2018 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 occur. The estimates are re-evaluated each quarter based on the estimated tax expense for the full year. During the three months ended September 30, 2019, management determined there was sufficient positive evidence that it was more likely than not that the federal and state net operating loss (“NOL”) carryforwards and other related deferred tax assets would be realized and therefore, released the valuation allowance against the deferred tax assets. The Company recorded a tax benefit of approximately $4,671 and a tax provision of $0 for the three months ended September 30, 2019 and 2018, respectively. The Company recorded a tax benefit of approximately $4,594 and a tax provision of $0 for the nine months ended September 30, 2019 and 2018, respectively, representing effective tax rates of (60)% and 0%, respectively. The tax benefit during the three and nine months ended September 30, 2019 was primarily due to the release of valuation allowances of approximately $5,338. The difference between the U.S. federal statutory tax rate of 21% and the Company’s effective tax rate of (60)% for the nine months ended September 30, 2019 is primarily due to the release of the allowance against the deferred tax assets referred to above. In addition, the currently expected annual tax rate takes into account actual year-to-date pre-tax and taxable income as well as expected activity through December 31, 2019. Expected activity for the fourth quarter 2019 does not include certain discrete transactions as deductions for stock options that might be exercised in the fourth quarter, and accordingly the year-end effective tax rate may differ from current expectations. The difference between the U.S. Federal statutory rate of 21% and the Company’s effective tax rate of 0% for the nine months ended September 30, 2018 was due primarily to NOL carryforwards that offset potential current taxes for which a full valuation allowance had been previously provided.

Basis of Presentation (Policies)	9 Months Ended
Basis of Presentation (Policies)	Sep. 30, 2019
Basis of Presentation
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, 2018 filed with the SEC on March 7, 2019 (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.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements Accounting Pronouncements Recently Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU No. 2014-09”). The amendment in this ASU provides guidance on the revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The core principle of this update provides guidance to identify the performance obligations under the contract(s) with a customer and how to allocate the transaction price to the performance obligations in the contract. It further provides guidance to recognize revenue when (or as) the entity satisfies a performance obligation. This standard replaced most existing revenue recognition guidance. On August 8, 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU No. 2014-09 by one year, and permits early adoption as long as the adoption date is not before the original public entity effective date. Since the issuance of ASU 2014-09, the FASB has issued several amendments that clarify certain points, including ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing (“Topic 606”), ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 Emerging Issues Task Force Meeting, and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606. The updated revenue standard allows two methods of adoption: (1) retrospectively to each prior period presented (“full retrospective method”), or (2) retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption (“modified retrospective method”). The new standard further requires new disclosures about contracts with customers, including the significant judgments the company has made when applying the guidance. The Company adopted the new standard effective January 1, 2019, using the modified retrospective method. The Company determined that the adoption of this new standard did not have a material impact on its financial statements. Topic 606 affects revenue recognition for the Company’s variable license fee contracts, which represents approximately $2,660 and $1,375 of revenues for the three-month periods ended September 30, 2019 and 2018, respectively, and approximately $6,166 and $3,384 of revenues for the nine-month periods ended September 30, 2019 and 2018, respectively. Essentially all of the variable license fee contracts are with large healthcare organizations. The remainder of the revenue is earned from leasing the Company's testing product for a fixed monthly fee, which is not subject to Topic 606. It was determined that the impact of the new standard has no effect on the way revenue was currently being recognized. Reusable hardware equipment or accessories may be provided to a customer for a set price and then use of the associated software is billed to the customer monthly based on volume of use. Under this scenario, revenue is recognized when and only when the customer uses the product. The Company is rendering a service and recognizes revenue in direct proportion to how much service is rendered. The sale of the equipment or accessories is recognized as hardware sales upon shipment to the customer. The initial contract is for a specified time period with automatic renewal each period thereafter until canceled. In case there is a violation of any term of the contract, the Company may deactivate the service remotely, so that the customer cannot continue to use the product. Accounting Pronouncements Not Yet Adopted In January 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). Under the new guidance in ASU No. 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged, however, certain targeted improvements were made. ASU No. 2016-02 also simplifies the accounting for sale and leaseback transactions. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Lessees and lessors may not apply a full retrospective transition approach. The new standard also requires expanded disclosures regarding leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU No. 2018-11”). ASU No. 2018-11 provides another transition method in addition to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. This ASU also provides further guidance on lessors accounting policy election to not separate non-lease components from the associated lease components and limits this to circumstances in which the non-lease component or components otherwise would be accounted for under the new revenue guidance and both (1) the timing and pattern of transfer are the same for the non-lease component(s) and associated lease component, and (2) the lease component, if accounted for separately, would be classified as a an operating lease. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors. This ASU provide narrow scope improvements for lessor accounting by permitting lessors, as an accounting policy election, to treat certain sales taxes and other similar taxes as lessee costs, to exclude lessor costs paid by lessees directly to third parties from variable payments, and clarify the accounting by lessors for variable payments that related to both a lease component and a non-lease component. In January 2019, the FASB issued ASU No. 2019-01, Leases Codification Improvements, which reinstates the exception for lessors that are not manufacturers or dealers for determining fair value of the leased property as the underlying asset’s cost, clarifies the presentation on the statement of cash flows for sales type and direct financing leases for lessors that are depository and lending institutions and clarifies the transition disclosures related to accounting changes and error corrections in the year of adoption of the ASU. The Company will adopt the new standard on December 31, 2019 upon expiration of their status as an emerging growth company using the modified retrospective approach and the optional transition method under ASU No. 2018-11. The Company evaluated the impact of the new accounting standard on its lease contracts with customers and determined that there will be no impact to the accounting and revenue recognition under these lease contracts with customers. As for leases for which the Company is the lessee, management reviewed its lease obligations and determined that the Company generally does not enter into long-term lease obligations with the exception of its office leases. The Company is a lessee on certain real estate leases that will need to be reported as right of use assets and liabilities related to these leases in the Company’s financial statements on the date of adoption. The Company is in the process of determining the amounts to be recorded on adoption related to these leases and does not anticipate that adoption of this new standard will have a material impact on its financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“Topic 326”). This ASU requires timelier recording of credit losses on loans and other financial instruments held. Instead of reserves based on a current probability analysis, Topic 326 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. All organizations will now use forward-looking information to better inform their credit loss estimates. Topic 326 requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide information about the amounts recorded in the financial statements. In addition, Topic 326 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In April 2019, the FASB issued ASU2019-04 Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments to introduce amendments which will affect the recognition and measurement of financial instruments, including derivatives and hedging. In May 2019, the FASB issued ASU 2019-05, Financial Instruments – Credit Losses (Topic 326); Targeted Transition Relief. The amendments in this ASU provide entities that have certain instruments within the scope of Subtopic 326-20 with an option to irrevocably elect the fair value option in Subtopic 825-10, applied on an instrument-by-instrument basis for eligible instruments upon adoption of Topic 326. This standard and related amendments are effective for the Company’s fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company does not anticipate this new standard will have a material impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of costs. The ASU specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. This standard is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company does not anticipate this new standard will have a material impact on its financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this ASU modify the disclosure requirements on fair value measurements removing the requirements to disclosure amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. In addition, it modified certain disclosures related to Level 3 fair value measurements and added additional disclosures regarding the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period. This update is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company does not anticipate this update to have a material impact on its financial statements.

Assets for Lease, net (Tables)

9 Months Ended

Sep. 30, 2019

Assets for Lease, net

Schedule of assets for lease


	September 30,		December 31,
	2019		2018

Assets for lease	$	3,047	$	2,218
Less: accumulated depreciation		(1,221)		(975)
Assets for lease, net	$	1,826	$	1,243

Property and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2019

Property and Equipment, net

Schedule of capital assets


	September 30,		December 31,
	2019		2018

Capital assets	$	563	$	457
Less: accumulated depreciation		(343)		(234)
Capital assets, net	$	220	$	223

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2019

Accrued Expenses

Schedule of accrued expenses


	September 30,		December 31,
	2019		2018

Compensation	$	2,344	$	2,442
Accrued Taxes		185		81
Miscellaneous accruals		380		274
Total accrued expenses	$	2,909	$	2,797

Stock Option Plan (Tables)

9 Months Ended

Sep. 30, 2019

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, January 1, 2019	1,761,447	$	3.18	6.84	$	55,000
Options exercised	(176,365)		2.72
Balance, September 30, 2019	1,585,082	$	3.23	6.11	$	61,460
Exercisable as of September 30, 2019	1,451,359	$	3.05	5.96	$	56,535

Schedule of assumptions used to determining the fair value of stock options


	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018

Expected term (in years)	—		—		—		5
Risk-free interest rate	—	%	—	%	—	%	2.02	%
Expected volatility	—	%	—	%	—	%	0.99	%
Expected dividend rate	—	%	—	%	—	%	—	%

Schedule of stock-based compensation


	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Cost of Revenue	$	1	$	1	$	1	$	1
Engineering and Product Development		2		9		14		26
Sales and Marketing		7		23		39		74
General and Administrative		76		106		228		369
Total	$	86	$	139	$	282	$	470

Net Income Per Share, Basic and Diluted (Tables)

9 Months Ended

Sep. 30, 2019

Net Income Per Share, Basic and Diluted

Schedule of basic and diluted net EPS


	Three months ended September 30,
	2019					2018
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic EPS	6,492,501	$	7,779	$	1.20	6,086,489	$	1,468	$	0.24
Common stock warrants	155,490		—			354,420		—
Common stock options	1,460,062		—			1,486,897		—
Diluted EPS	8,108,053	$	7,779	$	0.96	7,927,788	$	1,468	$	0.19

Nine months ended September 30,

2019

2018

Net Income

EPS

Net Income

EPS

Basic EPS

6,410,588

Warrant Repurchase - Related Party	9 Months Ended
Warrant Repurchase - Related Party	Sep. 30, 2019
Warrant Repurchase - Related Party
Warrant Repurchase - Related Party	7. Warrant Repurchase – Related Party On May 3, 2019, the Company entered into a Warrant Repurchase Agreement with the Murphy-Chutorian Family Trust U/D/T dated January 13, 1997, of which Douglas Murphy-Chutorian, M.D., the Company’s director and chief executive officer is co-Trustee with his spouse and of which he is a beneficiary. Pursuant to the warrant repurchase agreement, the Company repurchased a warrant to acquire 65,542 shares of the Company’s common stock held by the trust, which warrant had an exercise price equal to $4.50 per share and an expiration date of July 31, 2023, at an aggregate purchase price of $2,687. The purchase price reflects the difference between the aggregate exercise price of the warrant and the aggregate fair market value of the shares underlying the warrant, based on the last trade price of the Company’s common stock on May 3, 2019, the date of the warrant repurchase agreement. Following the warrant repurchase, the warrant was cancelled and is no longer issued and outstanding.