0001104659-21-033887 | 10-K | XBRL Viewer

As of December 31,

Private company #1

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2020	Feb. 26, 2021	Jun. 30, 2020
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
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, $0.001 par value
Trading Symbol	smlr
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
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 Public Float			$ 193,177,552
Entity Common Stock, Shares Outstanding		6,708,672
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0001554859
Amendment Flag	false
ICFR Auditor Attestation Flag	false

Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current Assets:
Cash	$ 22,079	$ 7,741
Trade accounts receivable, net of allowance for doubtful accounts of $61 and $36, respectively	2,808	3,486
Prepaid expenses and other current assets	1,376	216
Total current assets	26,263	11,443
Assets for lease, net	2,281	2,079
Property and equipment, net	261	249
Other non-current assets	418	15
Long-term Investments	3,051
Long-term deferred tax assets	2,365	4,501
Total assets	34,639	18,287
Current liabilities:
Accounts payable	677	338
Accrued expenses	2,798	3,914
Deferred revenue	963	955
Other short-term liabilities	76
Total current liabilities	4,514	5,207
Long-term liabilities:
Other long-term liabilities	332	7
Total long-term liabilities	332	7
Stockholders' equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 6,725,422, and 6,556,221 shares issued, and 6,700,422 and 6,531,221 shares outstanding (treasury shares of 25,000 and 25,000, respectively)	7	7
Additional paid-in capital	22,113	19,400
Retained earnings (accumulated deficit)	7,673	(6,334)
Total stockholders' equity	29,793	13,073
Total liabilities and stockholders' equity	$ 34,639	$ 18,287

Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Balance Sheets
Allowance for doubtful accounts on trade accounts receivable (in dollars)	$ 61	$ 36
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	6,725,422	6,556,221
Common stock, shares outstanding	6,700,422	6,531,221
Treasury stock, shares	25,000	25,000

Statements of Income - USD ($) $ in Thousands	12 Months Ended
Statements of Income - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Statements of Income
Revenues	$ 38,603	$ 32,767
Operating expenses:
Cost of revenues	3,356	3,661
Engineering and product development	2,938	2,479
Sales and marketing	9,942	8,965
General and administrative	6,406	6,954
Total operating expenses	22,642	22,059
Income from operations	15,961	10,708
Interest income	19	2
Other income (expense)	506	(9)
Other income (expense)	525	(7)
Pre-tax net income	16,486	10,701
Income tax provision (benefit)	2,479	(4,383)
Net income	$ 14,007	$ 15,084
Net income per share, basic	$ 2.13	$ 2.34
Weighted average number of shares used in computing basic income per share	6,584,441	6,440,724
Net income per share, diluted	$ 1.74	$ 1.88
Weighted average number of shares used in computing diluted income per share	8,066,561	8,029,909

Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Total
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 repurchases			(6,633)		(6,633)
Warrant exercises (in shares)	36,197
Stock option exercises	$ 1		60		$ 61
Stock option exercises (in shares)	170,039				179,865
Stock-based compensation			365		$ 365
Net income				15,084	15,084
Balance at Dec. 31, 2019	$ 7		19,400	(6,334)	13,073
Balance (in shares) at Dec. 31, 2019	6,556,221	(25,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Employee stock grant (in shares)	641
Investment in Private company #2 (Note 6)			2,230		2,230
Investment in Private company #2 (Note 6) (shares)	40,922
Stock option exercises			230		$ 230
Stock option exercises (in shares)	127,638				130,162
Stock-based compensation			253		$ 253
Net income				14,007	14,007
Balance at Dec. 31, 2020	$ 7		$ 22,113	$ 7,673	$ 29,793
Balance (in shares) at Dec. 31, 2020	6,725,422	(25,000)

Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 14,007	$ 15,084
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Depreciation	576	632
Deferred tax expense (benefit)	2,136	(4,501)
Loss on disposal of assets for lease	271	206
Allowance for doubtful accounts	55	48
Non-cash interest income	(12)
Gain on sale of Private company #3 securities	(442)
Stock-based compensation expense	253	365
Changes in Operating Assets and Liabilities:
Trade accounts receivable	623	(734)
Prepaid expenses and other assets	(1,160)	(63)
Other non-current assets	(403)
Accounts payable	339	58
Accrued expenses	(1,235)	1,113
Deferred revenue	8	520
Other current and non-current liabilities	401
Net Cash Provided by Operating Activities	15,417	12,728
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment	(149)	(174)
Payment for long-term note receivable from Private company #2	(457)
Payment for long-term note receivable from Private company #3	(59)
Purchase of shares of preferred stock from Private company #3	(250)
Payment for long-term note receivable from Private company #3	(1,424)
Proceeds from sale of Private company #3 securities	1,942
Purchase of assets for lease	(912)	(1,524)
Net Cash Used in Investing Activities	(1,309)	(1,698)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of warrants		(6,633)
Proceeds from exercise of stock options	230	60
Net Cash Provided by (Used) in Financing Activities	230	(6,573)
INCREASE IN CASH	14,338	4,457
CASH, BEGINNING OF PERIOD	7,741	3,284
CASH, END OF PERIOD	22,079	7,741
Cash paid for taxes	285	$ 123
Supplemental Disclosure of Cash Flow Information:
Long-term note receivable from Private company #2 settled by stock issuance	512
Exchange of SMLR common stock for preferred stock of Private company #2	2,230
Long-term note receivable from Private company #3 settled by stock issuance	$ 59

The Company

12 Months Ended

Dec. 31, 2020

The Company

The Company

1. The Company

Semler Scientific, Inc. (the “Company”) was incorporated in the State of Oregon on August 9, 2007, established C-corporation status in 2012, and reincorporated as a Delaware corporation during 2013. The Company provides technology solutions to improve the clinical effectiveness and efficiency of healthcare providers. In 2011, the Company began commercializing its first patented and U.S. Food and Drug Administration (“FDA”) cleared product, which measured arterial blood flow in the extremities to aid in the diagnosis of peripheral arterial disease (“PAD”). In March 2015, the Company received FDA 510(k) clearance for the next generation version of its product, QuantaFlo^®, which the Company commercially launched in August 2015. The Company has one operating segment and generates revenues domestically primarily through direct licensing to direct customers. The Company is based in Santa Clara, California.

On January 30, 2020, the World Health Organization (“WHO”) declared the recent novel coronavirus (COVID-19) outbreak a global health emergency, which prompted national, state and local governments to begin putting actions in place to slow the spread of COVID-19. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic. The outbreak of COVID-19 resulted in travel restrictions, quarantines, “stay-at-home” and “shelter-in-place” orders and extended shutdown of certain businesses around the world. While restrictions began to ease in the second quarter and activities began to resume, recent outbreaks could lead to restrictions being reimplemented. In the first half of 2020, the Company’s revenues, primarily from variable-fee licenses, were negatively impacted by the COVID-19 pandemic. However, in the third and fourth quarters of 2020, the Company’s revenues, primarily from variable-fee licenses, rebounded to and even exceeded pre-COVID-19 levels. The extent and duration of the pandemic is unknown, and the future effects on the Company’s business are uncertain and difficult to predict. The Company is continuing to monitor the events and circumstances surrounding the COVID-19 pandemic, which may require adjustments to the Company’s estimates and assumptions in the future.

Summary of Significant Accounting Policies and Estimates

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies and Estimates

Summary of Significant Accounting Policies and Estimates

2. Summary of Significant Accounting Policies and Estimates

Basis for Presentation

The Company’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses, and related disclosures during the reporting period. Significant items subject to such estimates include revenue recognition, allowance for doubtful accounts, valuation of equipment on lease, deferred tax asset valuation allowance, stock-based compensation and valuation of warrants. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates.

Revenue Recognition

The Company generates revenues primarily from the rental or license of its vascular testing product, or providing diagnostic testing service to its customers. The Company recognizes revenues from the licensing of its vascular testing product pursuant to agreements that automatically renew each month with revenue recognized on a daily convention basis. The Company’s arrangements with customers for its vascular testing product are normally on a month-to-month basis with fees billed at the rates established in the customer agreement. The Company recognizes revenues for providing diagnostic testing services on a per test basis to customers, as earned. The Company also recognizes revenue for hardware and supplies sales as of the date of shipment.

Accounts Receivable and Allowance for Doubtful Accounts

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

Assets for Lease

Assets for lease are recorded at cost. At December 31, 2020 and 2019, assets for lease consisted of vascular testing devices, which are leased to customers. The cost of such assets for lease is depreciated on a straight-line basis over 36 months for the units outstanding and recorded as cost of revenues.

The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected undiscounted net cash flows associated with the related assets over their estimated remaining lives against their respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its assets for lease in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. At December 31, 2020 and 2019, there were no impairment indicators.

Property and Equipment

Capital assets are recorded at cost. The cost of such capital assets is depreciated on a straight-line basis over a term depending on the assigned category (described below) and recorded as depreciation for capital assets recorded in engineering and product development, sales and marketing and general and administrative expenses.

At December 31, 2020 and 2019, capital assets are classified into one of the following categories:


Category Name		Description
Machinery & Equipment		Manufacturing, R&D, or other non-office equipment
Computer Equipment & Software		Software, computers, monitors, printers and other related equipment.
Furniture & Fixtures		Office equipment and furniture owned by the company

At December 31, 2020 and 2019, capital assets are depreciated based on the following estimated useful life for each category:


Account Name		Useful Life
Machinery & Equipment		Five years
Computer Equipment & Software		Three years
Furniture & Fixtures		Five years

The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of capital assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected fair value of the related asset over the estimated remaining life against the respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its capital assets in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. The Company did not have any impairments to record during either the years ended December 31, 2020 or 2019.

Fair Value of Financial Instruments

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 Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“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, accounts receivable, and accounts payable. These items are considered Level 1 due to their short-term nature and their market interest rates and are therefore considered a reasonable estimate of fair value at December 31, 2020 and 2019. The Company invested in the debt and equity securities of two privately held companies, which was recorded on cost basis. See Note 6 to the financial statements for more information.

Deferred Revenue

Deferred revenue represents amounts billed to or collected from customers for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. The full amount is expected to be recognized as revenues within one year from the balance sheet date and, therefore, such deferred amounts have been classified as current liabilities in the balance sheets presented. The Company generally invoices its clients in advance of a rental period with payment due upon receipt of the invoice.

Research and Development

The Company expenses costs related to the research and development associated with the design, development, testing and enhancement of its products and services. Such expenses include salaries and related employee benefits, and fees paid to external service providers.

Stock-Based Compensation

Stock-based compensation expense is measured based on the grant-date fair value of the stock-based awards. The Company recognizes stock-based compensation expense for the portion of each option grant or stock award that is expected to vest over the estimated period of service and vesting. The Company uses the Black-Scholes option pricing model as the method for determining the estimated grant-date fair value of stock options. The Black-Scholes option pricing model requires the use of subjective assumptions which determine the fair value of stock-based awards, including the option’s expected volatility. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the grant.

Employee Benefit Plan

The Company has a savings plan that qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). There were no matching or discretionary employer contributions made to this plan during the years ended December 31, 2020 and 2019.

Income Taxes

The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the expected tax consequences attributable to the differences between financial reporting and the tax bases of existing assets and liabilities and net operating loss (“NOL”) carryforwards, and they are measured using enacted tax rates expected to be in effect when differences are expected to reverse. The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) reduced the U.S. corporate income tax rate to 21%, effective January 1, 2018. In addition, NOLs generated after December 31, 2017 are carried forward indefinitely with yearly NOL utilization limited to 80% of taxable income. A valuation allowance is recorded for loss carryforwards and other deferred tax assets where it is more likely than not that such loss carry-forward and deferred tax assets will not be realized. The estimate for the valuation allowance for deferred tax assets requires management to make significant estimates and judgments about projected future operating results. If actual results differ from these projections or if management’s expectations of future results change, it may be necessary to adjust the valuation allowance.

Recently Issued Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In November 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-08 – Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customer (Topic 606). The amendments on this update require that an entity measure and classify share-based payment awards granted to a customer by applying the guidance in Topic 718. The amount recorded as a reduction in the transaction price should be based on the grant-date fair value of the share-based payment award. This standard is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the new standard on January 1, 2020 and determined that the adoption of this new accounting guidance did not 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. 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 adopted the new standard on January 1, 2020 and determined that the adoption of this this new accounting guidance did not 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 adopted the new standard on January 1, 2020 and determined that the adoption of this this new accounting guidance did not have a material impact on its financial statements.

Accounting Pronouncements Not Yet Adopted

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 ASU No. 2019-04, 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 No. 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, 2022, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2023. The Company does not anticipate this new standard will have a material impact on its financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles for income taxes. This update is effective for the Company’s annual periods beginning after December 15, 2020, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2021. The Company does not anticipate this update to have a material impact on its financial statements.

In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments in this ASU clarify the interaction between the accounting for investments in equity securities, investment in equity method and certain derivatives instruments. The ASU is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. This ASU is effective for fiscal years beginning after December 15, 2020. The adoption of this ASU is not expected to have any impact on the Company's results of operations, cash flows or financial position.

In March 2020, FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments. This ASU improves and clarifies various financial instruments topics, including the current expected credit losses standard issued in 2016 (ASU No. 2016-13). The ASU includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments have different effective dates. The Company is evaluating the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company's financial statements.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (IBORs) and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. The ASU can be adopted no later than December 1, 2022, with early adoption permitted. The Company has not yet adopted this ASU and is evaluating the effect of adopting this new accounting guidance.

In August 2020, the FASB issued ASU No. 2020-06, Debt--Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity's Own Equity (Subtopic 815-40). The amendments in this update affect entities that issue convertible instruments and/or contracts in an entity's own equity. For contracts in an entity's own equity, the contracts primarily affected are freestanding instruments and embedded features that are accounted for as derivatives under the current guidance because of failure to meet the settlement conditions of the derivatives scope exception related to certain requirements of the settlement assessment. The Board simplified the settlement assessment by removing the requirements (1) to consider whether the contract would be settled in registered shares, (2) to consider whether collateral is required to be posted, and (3) to assess shareholder rights. Those amendments also affect the assessment of whether an embedded conversion feature in a convertible instrument qualifies for the derivatives scope exception. Additionally, the amendments in this update affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments. The ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock by eliminating the beneficial conversion feature model and cash conversion model. As compared with current GAAP, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument. The interest rate of more convertible debt instruments will be closer to the coupon interest rate. This ASU is effective for the Company’s fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has not yet adopted this ASU and is evaluating the effect of adopting this new accounting guidance.

In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements. This ASU is the final update of the 2019 proposed ASU, Codification Improvements, of which various Topics in the Codification are amended, clarified, simplified, or otherwise modified to improve the Codification. The amendments in Section B of this update improve the Codification by ensuring that all guidance that requires or provides an option for an entity to provide information in the notes to financial statements is codified in the Disclosure Section of the Codification. The amendments in Section C of this update are varied in nature and may affect the application of the guidance in cases which the original guidance may have been unclear. The amendments in Section B and C of this update are effective for the Company’s annual periods beginning after December 15, 2020, and the amendments should be applied retrospectively, and entity should apply the amendments at the beginning of the period that includes the adoption date. The Company has not yet adopted this ASU and is evaluating the effect of adopting this new accounting guidance.

In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848). This ASU clarifies the scope of Topic 848 so that derivatives affected by the discounting transition due to reference rate reform initiatives are explicitly eligible for certain optional expedients and exceptions in Topic 84. In addition, to efficiently address another emerging issue related reference rate reform and respond to stakeholder feedback on the proposed feedback on the proposed update on this project, the Board decided to clarify that a receive-variable-rate, pay-variable-rate cross-currency interest rate swap may be considered an eligible hedging instrument in a net investment hedge if both legs of the swap do not have the same repricing intervals and dates as of the result of reference rate reform. The amendments in this update are elective and apply to all entities that have derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. The amendments also optionally apply to all entities that designate receive-variable-rate, pay-variable-rate cross-currency interest rate swaps as hedging instruments in net investment hedges that are modified as a result of reference rate reform. An entity may elect to apply the amendments in this update on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued. The amendments in this update do not apply to contract modifications made after December 31, 2022, new hedging relationships entered into after December 31, 2022, and existing hedging relationships evaluated for effectiveness in periods after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship (including periods after December 31, 2022). The Company has not yet adopted this ASU and is evaluating the effect of adopting this new accounting guidance.

Assets for Lease, net

12 Months Ended

Dec. 31, 2020

Assets for Lease, net

Assets for Lease, net

3. Assets for Lease, net

The Company provides financing of certain equipment through operating leases (see Note 9 to the financial statements). Assets for lease consist of the following:


	As of December 31,
	2020		2019
Assets for lease	$	3,747	$	3,374
Less: accumulated depreciation		(1,466)		(1,295)
Assets for lease, net	$	2,281	$	2,079

Depreciation expense amounted to $439 and $483 for the years ended December 31, 2020 and 2019, respectively. Reduction to accumulated depreciation for returned items was $268 and $163 for the years ended December 31, 2020 and December 31, 2019, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $271 and $206 for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, total assets for lease, net, in use at customer locations were $736 and $849, respectively.

Other Product Inventory

12 Months Ended

Dec. 31, 2020

Other Product Inventory

Other Product Inventory

4. Other Product Inventory

In September 2020, the Company entered into an agreement with Private company #1 to exclusively market and distribute a new product line. Product inventory under this agreement was as follows for the periods presented:

Under this agreement, the Company has committed to purchase $1,200 of product inventory. The Company prepaid for $900 of product inventory and has received $72 of product inventory. The balance of prepaid inventory was $828 as of December 31, 2020. Product inventory was $68 and $0 for the years ended December 31, 2020 and 2019, respectively.

The Company also agreed to make royalty payments ranging from 0% to 10% of net sales depending on the average net sales price of the distributed products. Unless early terminated in accordance with its terms, this exclusive distribution agreement will remain in full force and effect until December 31, 2024, and thereafter there is an option for this agreement to be automatically renewed for additional 4-year terms.

Property and Equipment, net

12 Months Ended

Dec. 31, 2020

Property and Equipment, net

Property and Equipment, net

5. Property and Equipment, net

Capital assets consist of the following:


	As of December 31,
	2020		2019
Capital assets	$	786	$	636
Less: accumulated depreciation		(525)		(387)
Capital assets, net	$	261	$	249

Depreciation expense amounted to $138 and $149 for the years ended December 31, 2020 and 2019, respectively.

Long Term Investments

12 Months Ended

Dec. 31, 2020

Long Term Investments

Long Term Investments

6. Long Term Investments

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


	As of December 31,
	2020		2019
Investments in Private company #2	$	2,742	$	—
Investments in Private company #3		309		—
Total	$	3,051	$	—

Private company #2:

In October 2020, the Company purchased 211,928 shares of common stock of Private company #2 from certain sellers in exchange for 40,922 shares of the Company’s common stock. The total fair value of the purchase consideration as of December 31, 2020 was approximately $2,230. The Company has the right to, in various circumstances, sell any or all of these shares of common stock back to the sellers in exchange for the shares of the Company’s common stock originally issued to the sellers. These rights are tied to (a) Private company #2 completing a bona fide equity financing, (b) the share price in such financing, (c) the timing of delivery of certain documents to the Company or (d) at the Company’s sole option, at any time between March 31, 2021 and October 8, 2021.

In September 2020, the Company acquired a promissory note from Private company #2 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 Private company #2 as repayment in full of the promissory note. The value of the note exchanged for the shares of preferred stock of Private company #2 held by the Company as of December 31, 2020 was approximately $512.

Private company #3:

In October 2020, the Company acquired from a seller a convertible promissory note previously issued by Private company #3 to such seller for a purchase price of $59, which represented the $50 principal amount of the note and all accrued and unpaid interest thereon.

Subsequently, in October 2020, the Company purchased $250 of shares of preferred stock of Private company #3, and in connection with such transaction, the convertible promissory note, together with all accrued interest thereon, also converted pursuant to its terms into shares of preferred stock of Private company #3 as repayment in full of such convertible promissory note. The value of consideration exchanged for the shares of preferred stock of Private company #3 held by the Company as of December 31, 2020 was approximately $309.

Also in October 2020, the Company acquired another convertible promissory note directly from Private company #3 in the principal amount of $1,500, $100 of which was retained for expense reimbursement, and warrants to purchase common stock of Private company #3. In November 2020, this convertible promissory note, together with all accrued interest thereon, converted pursuant to its terms into shares of preferred stock of Private company #3. In December 2020, the Company transferred and sold such shares of preferred stock and the common stock warrants of Private company #3 to a significant stockholder of the Company for a cash purchase price of $1,942. As of December 31, 2020, the Company no longer held the shares acquired in connection with the conversion of such convertible promissory note. The Company recorded $442 in Other income associated with the sale during the year ended December 31, 2020.

The investments in Private company #2 and #3 securities that were retained by the Company as of December 31, 2020 were recorded in accordance with ASC 321, Investments – equity securities, 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.

Accrued Expenses

12 Months Ended

Dec. 31, 2020

Accrued Expenses

Accrued Expenses

7. Accrued Expenses

Accrued expenses consist of the following:


	As of December 31,
	2020		2019
Compensation	$	1,524	$	2,803
Accrued Taxes		861		66
Miscellaneous Accruals		413		1,045
Total Accrued Expenses	$	2,798	$	3,914

Concentration of Credit Risk

12 Months Ended

Dec. 31, 2020

Concentration of Credit Risk

Concentration of Credit Risk

8. 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 year ended December 31, 2020, two customers accounted for 47.2% and 22.8% of the Company’s revenue. For the year ended December 31, 2019, three customers accounted for 49.4%, 13.2% and 12.5% of the Company’s revenue. As of December 31, 2020, four customers accounted for 31.2%, 19.4%, 15.7% and 10.4% of the Company’s accounts receivable, respectively. As of December 31, 2019, three customers accounted for 55.9%, 17.6% and 12.0% of the Company’s accounts receivable, respectively.

As of December 31, 2020 and 2019 the allowance for doubtful accounts was $61 and $36, respectively

As of December 31, 2020, two vendors accounted for 15.9% and 24.3% of the Company’s accounts payable, respectively. As of December 31, 2019, two vendors accounted for 15.9% and 14.1% of the Company’s accounts payable, respectively.

Leases

12 Months Ended

Dec. 31, 2020

Leases

Leases

9. 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 December 31, 2020, the remaining lease term is four years and nine months with no options to renew. Upon adoption of ASC 2016-02, in accordance with the elected practical expedient transition rules, the right of use (“ROU”) asset and liability related to this lease were immaterial as of December 31, 2020. The Company recognized facilities lease expenses of $97 and $68 for the years ended December 31, 2020 and 2019, 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 December 31, 2020:


	Total
2021	$	85
2022		87
2023		90
2024		93
2025		71
Thereafter		—
Total undiscounted future minimum lease payments		426
Less: present value discount		(19)
Total lease liabilities		407
Lease expense in excess cash payment		(8)
Total ROU asset	$	399

As of December 31, 2020, the Company’s ROU asset was $399, which is recorded on the Company’s balance sheet as other current assets, and the Company’s current and noncurrent lease liabilities were $75 and $332, respectively, which were recorded on the Company’s balance sheet as other short-term liabilities and other long-term liabilities, respectively.

The Company also has $18 in remaining payments due on its expiring facilities lease payable in the first quarter of 2021.

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). The Company allocates the consideration in a bundled contract with its customers based on relative standalone selling prices of the lease and non-lease components. 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 separately identified in the Balance Sheet as Assets for Lease and separately disclosed in Note 3 to the financial statements. During the year ended December 31, 2020, the Company recognized approximately $25,743 in lease revenue related to these arrangements, which is included in revenue on the Statements of Income.

Variable-fee Revenue

The Company recognizes revenues from variable-fee licenses (i.e., fee per test) and sales of hardware equipment and accessories in accordance with Topic 606. Total revenues from variable-fee licenses were approximately $11,610 and $8,927 for the years ended December 31, 2020 and 2019, respectively. Total revenues from sales of hardware and equipment accessories were approximately $1,250 and $927 for the years ended December 31, 2020 and 2019, respectively. Essentially all of the variable-fee licenses are with large healthcare organizations. The remainder of the revenue is earned from leasing the Company’s testing product for a fixed fee, which is not subject to Topic 606.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies

Commitments and Contingencies

10. Commitments and Contingencies

In September 2020, the Company entered into an agreement with Private company #1 to exclusively market and distribute a new product line. See Note 4 to the financial statements for more information.

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.

Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Stockholders' Equity

Stockholders' Equity

11. Stockholders’ Equity

The Company has 50,000,000 authorized shares of capital stock, all of which are designated as common stock with par value of $0.001 per share.

Each holder of shares of common stock is entitled to one vote for each share held.

For the years ended December 31, 2020 and 2019, a total of 1,528,295 and 1,658,457 shares of common stock, respectively, were reserved for issuance upon (i) exercise of common stock warrants, and (ii) the exercise of outstanding stock options, as follows:


	Year ended December 31,
	2020	2019
Common stock warrants	76,875	76,875
Stock options	1,451,420	1,581,582
Total	1,528,295	1,658,457

Related Party Transactions

12 Months Ended

Dec. 31, 2020

Related Party Transactions

Related Party Transactions

12. Related Party Transactions

On May 3, 2019, the Company entered into a warrant purchase agreement (the “May Repurchase Agreement”), with the Murphy-Chutorian Family Trust U/D/T dated January 13, 1997 (the “Murphy-Chutorian Family Trust”), of which Dr. Murphy-Chutorian, the Company’s director and chief executive officer is co-Trustee with his spouse and of which he is a beneficiary. Pursuant to the May Repurchase Agreement, the Company repurchased a warrant to acquire 65,542 shares of its common stock (the “May Repurchase Warrant”), held by the Murphy-Chutorian Family 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 May Repurchase Warrant and the aggregate fair market value of the shares underlying the May Repurchase Warrant, based on the last trade price of the Company’s common stock on May 3, 2019, the date of the May Repurchase Agreement. Following this repurchase, the May Repurchased Warrant was cancelled and is no longer issued and outstanding.

On November 6, 2019, the Company entered into a warrant purchase agreement (the “November Repurchase Agreement”), with the Murphy-Chutorian Family Trust. Pursuant to the November Repurchase Agreement, the Company repurchased warrants to acquire an aggregate of 93,797 shares of its common stock (collectively, the “November Repurchase Warrants”), held by the Murphy-Chutorian Family Trust, which warrants had exercise prices ranging from $2.00 to $4.50 per share and an expiration date of July 31, 2023, at an aggregate purchase price of $3,946. The purchase price reflects the difference between the aggregate exercise price of the November Repurchase Warrants and the aggregate fair market value of the shares underlying the November Repurchase Warrants, based on the last trade price of the Company’s common stock on November 6, 2019, the date of the November Repurchase Agreement. Following this repurchase, the November Repurchased Warrants were cancelled and are no longer issued and outstanding.

Following these repurchases, the Murphy-Chutorian Family Trust holds warrants to acquire 16,875 shares of the Company’s common stock at an exercise price of $4.00 per share, and 60,000 shares of the Company’s common stock at an exercise price of $4.50 per share, all of which are exercisable and expire on July 31, 2023.

In December 2020, the Company transferred and sold its shares of preferred stock and common stock warrants of a private company to one of the Company’s significant stockholders, for a cash purchase price of $1,942. See Note 6 to the financial statements for more information.

Stock Option Plan

12 Months Ended

Dec. 31, 2020

Stock Option Plan

Stock Option Plan

13. 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. The Share Reserve is currently 2,783,616 shares for the year ending December 31, 2020.

In light of stockholder approval of the 2014 Plan, the Company no longer grants equity awards under the 2007 Plan. As of December 31, 2020, there were no shares available for future stock-based compensation grants under the 2007 Plan and 1,260,469 shares of an aggregate total of 2,783,616 shares available for future stock-based compensation grants under the 2014 Plan.

Aggregate intrinsic value represents the difference between the closing market value as of December 31, 2020 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 2020 and 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, December 31, 2018	1,761,447	$	3.18	6.84	$	55,000
Options exercised	(179,865)		2.72
Balance, December 31, 2019	1,581,582	$	3.23	5.86	$	70,827
Options exercised	(130,162)		2.95
Balance, December 31, 2020	1,451,420	$	3.25	4.91	$	131,714
Exercisable as of December 31, 2019	1,477,020	$	3.06	5.73	$	66,389
Exercisable as of December 31, 2020	1,420,368	$	3.15	4.87	$	129,039

The total compensation cost related to unvested stock option awards not yet recognized was $181 as of December 31, 2020. The weighted average period over which the total unrecognized compensation cost related to these unvested stock awards will be recognized is 0.44 years. The total number of unvested shares was 31,052 and 104,563 as of December 31, 2020 and 2019, respectively. The total estimated grant date fair value of options vested during the years ended December 31, 2020 and 2019 was $253 and $365, respectively. There were no options granted or forfeited during the years ended December 31, 2020 or 2019.

The Company has recorded an expense of $253 and $365 as it relates to stock-based compensation for the years ended December 31, 2020 and 2019, respectively, which was allocated as follows based on the role and responsibility of the recipient in the Company:


	Year ended December 31,
	2020		2019
Cost of Revenues	$	—	$	1
Engineering and Product Development		—		16
Sales and Marketing		—		46
General and Administrative		253		302
Total	$	253	$	365

Restricted Stock

The Company granted 641 shares of restricted stock to an employee in the year ended December 31, 2020.

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes

Income Taxes

14. Income Taxes

The components of the provision (benefit) for income taxes are as follows:


	2020		2019
Current tax provision:
Federal	$	—	$	—
State		343		118
Total current tax provision		343		118
Deferred tax provision:
Federal		2,052		(3,645)
State		84		(856)
Total deferred tax provision (benefit)		2,136		(4,501)
Total income tax provision (benefit)	$	2,479	$	(4,383)

A summary of the differences between the Company’s effective income tax rate and the federal statutory income tax rate for the years ended December 31, 2020 and 2019 are as follows:


	2020		2019
Federal statutory rate	21.00	%	21.00	%
State income tax rate, net of federal benefit	2.19	%	1.83	%
Change in valuation allowance	(0.00)	%	(49.89)	%
Deferred tax adjustments	0.73	%	0.00	%
Stock-based compensation	(8.44)	%	(13.12)	%
Permanent items	(0.44)	%	0.4	%
Other	0.00	%	(1.18)	%
Effective income tax rate	15.04	%	(40.96)	%

The decrease in the effective tax rate was primarily related to a windfall deduction from stock option exercise and the California law changes on the net operating loss utilization.

Deferred tax assets are comprised of the following at December 31:


	2020		2019
Net operating loss carryforwards	$	492	$	2,646
Deferred revenue		233		233
Depreciation and amortization		—		14
Stock based compensation		605		751
Accrual and reserves		209		145
Research and development credits, net of tax reserve		818		711
Other		18		1
Lease liability		98		—
Total gross deferred tax assets		2,473		4,501
Less valuation allowance		—		—
Net deferred tax assets		2,473		4,501
Deferred tax liabilities:
Depreciation and amortization		(12)		—
Right of use assets		(96)		—
Total deferred tax liabilities		(108)		—
Net deferred tax assets	$	2,365	$	4,501

Federal and California tax laws impose significant restrictions on the utilization of net operating loss (“NOL”) carryforwards in the event of a change in ownership of the Company, as defined by Section 382 of the Code (“Section 382”). The Company has completed a formal 382 study for the period from January 1, 2012 through June 30, 2019 and believes a change in ownership has occurred. The Company has NOL carryforwards for federal and California income tax purposes of approximately $310 and $5,746, respectively, as of December 31, 2020. The federal NOL carryforwards, if not utilized, will expire beginning in 2033. The state NOL carryforwards, if not utilized, will expire beginning in 2036. Under the Tax Act, NOLs generated after December 31, 2017 will be carried forward indefinitely with the yearly NOL utilization limited to 80% of taxable income. However, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) temporarily removes the taxable income limitation to allow NOL carryforwards to fully offset 100% of taxable income. The Company has research and development tax credit carryforwards for federal income tax purposes of approximately $876 for the year ended December 31, 2020. The federal research and development carryforward, if not utilized, will expire beginning in 2033.

Additionally, 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 January 1, 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. As of December 31, 2020, the Company has claimed $466 in this retention credit.

As of December 31, 2020 and 2019, the Company had $341 and $295, respectively, of unrecognized tax benefits, excluding interest and penalties. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits:


		Gross Unrecognized Tax Benefits 2020		Gross Unrecognized Tax Benefits 2019
Unrecognized tax benefits – January 1	$	295	$	218
Gross increases related to prior tax positions		1		—
Gross increases related to current tax positions		45		77
Unrecognized tax benefits – December 31	$	341	$	295

The Company’s policy is to recognize interest and penalty expenses related to uncertain tax positions in income tax expense, which was zero for the years ended December 31, 2020 and 2019. The Company files income tax returns in the U.S. federal and various state tax jurisdictions.

The Company’s tax years beginning in 2016 remain open for examination by the state tax authorities for four years. The Company’s tax years beginning in 2017 remain open for examination by the federal tax authorities for three years. Tax years beginning in 2013 will remain open for examination from the date of utilization of any NOL or credits. The Company does not have any tax positions for which it is reasonably possible the total amount of gross unrecognized tax benefits will increase or decrease within 12 months of the year-ended December 31, 2020.

- 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 + Details

Net Income Per Share, Basic and Diluted

12 Months Ended

Dec. 31, 2020

Net Income Per Share, Basic and Diluted

Net Income Per Share, Basic and Diluted

15. Net Income Per Share, Basic and Diluted

Basic earnings per share (“EPS”) represent net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents net income attributable to common shareholders 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. As of December 31, 2020, there are no warrants or options outstanding that are antidilutive.

Basic and diluted net EPS is calculated as follows:


	For the year ended December 31,
	2020					2019
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic EPS	6,584,441	$	14,007	$	2.13	6,440,724	$	15,084	$	2.34
Common stock warrants	70,281		—		—	69,068		—		—
Common stock options	1,411,839		—		—	1,520,117		—		—
Diluted EPS	8,066,561	$	14,007	$	1.74	8,029,909	$	15,084	$	1.88

Summary of Significant Accounting Policies and Estimates (Policies)

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies and Estimates

Basis of Presentation

Basis for Presentation

The Company’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

Revenue Recognition

Accounts Receivable and Allowance for Doubtful Accounts

Assets for Lease

Property and Equipment

At December 31, 2020 and 2019, capital assets are classified into one of the following categories:


Category Name		Description
Machinery & Equipment		Manufacturing, R&D, or other non-office equipment
Computer Equipment & Software		Software, computers, monitors, printers and other related equipment.
Furniture & Fixtures		Office equipment and furniture owned by the company

At December 31, 2020 and 2019, capital assets are depreciated based on the following estimated useful life for each category:


Account Name		Useful Life
Machinery & Equipment		Five years
Computer Equipment & Software		Three years
Furniture & Fixtures		Five years

Fair Value of Financial Instruments

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

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

Deferred Revenue

Research and Development

Stock-Based Compensation

Employee Benefit Plan

Income Taxes

Recently Issued Accounting Pronouncements

Accounting Pronouncements Recently Adopted

Accounting Pronouncements Not Yet Adopted

Assets for Lease, net (Tables)

12 Months Ended

Dec. 31, 2020

Assets for Lease, net

Schedule of assets for lease


	As of December 31,
	2020		2019
Assets for lease	$	3,747	$	3,374
Less: accumulated depreciation		(1,466)		(1,295)
Assets for lease, net	$	2,281	$	2,079

Other Product Inventory (Tables)

12 Months Ended

Dec. 31, 2020

Other Product Inventory

Schedule of other product inventory

Property and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2020

Property and Equipment, net

Schedule of capital assets


	As of December 31,
	2020		2019
Capital assets	$	786	$	636
Less: accumulated depreciation		(525)		(387)
Capital assets, net	$	261	$	249

Long Term Investments (Tables)

12 Months Ended

Dec. 31, 2020

Long Term Investments

Schedule of long term investments


	As of December 31,
	2020		2019
Investments in Private company #2	$	2,742	$	—
Investments in Private company #3		309		—
Total	$	3,051	$	—

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Accrued Expenses

Schedule of accrued expenses


	As of December 31,
	2020		2019
Compensation	$	1,524	$	2,803
Accrued Taxes		861		66
Miscellaneous Accruals		413		1,045
Total Accrued Expenses	$	2,798	$	3,914

Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases

Schedule of future minimum rental payments required under operating leases


	Total
2021	$	85
2022		87
2023		90
2024		93
2025		71
Thereafter		—
Total undiscounted future minimum lease payments		426
Less: present value discount		(19)
Total lease liabilities		407
Lease expense in excess cash payment		(8)
Total ROU asset	$	399

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2020

Stockholders' Equity

Schedule of common stock reserved for issuance


	Year ended December 31,
	2020	2019
Common stock warrants	76,875	76,875
Stock options	1,451,420	1,581,582
Total	1,528,295	1,658,457

Stock Option Plan (Tables)

12 Months Ended

Dec. 31, 2020

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, 2018	1,761,447	$	3.18	6.84	$	55,000
Options exercised	(179,865)		2.72
Balance, December 31, 2019	1,581,582	$	3.23	5.86	$	70,827
Options exercised	(130,162)		2.95
Balance, December 31, 2020	1,451,420	$	3.25	4.91	$	131,714
Exercisable as of December 31, 2019	1,477,020	$	3.06	5.73	$	66,389
Exercisable as of December 31, 2020	1,420,368	$	3.15	4.87	$	129,039

Schedule of stock-based compensation


	Year ended December 31,
	2020		2019
Cost of Revenues	$	—	$	1
Engineering and Product Development		—		16
Sales and Marketing		—		46
General and Administrative		253		302
Total	$	253	$	365

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes

Schedule of components of the (benefit) provision for income taxes


	2020		2019
Current tax provision:
Federal	$	—	$	—
State		343		118
Total current tax provision		343		118
Deferred tax provision:
Federal		2,052		(3,645)
State		84		(856)
Total deferred tax provision (benefit)		2,136		(4,501)
Total income tax provision (benefit)	$	2,479	$	(4,383)

Schedule of differences between the Company's effective income tax rate and the Federal statutory income tax rate


	2020		2019
Federal statutory rate	21.00	%	21.00	%
State income tax rate, net of federal benefit	2.19	%	1.83	%
Change in valuation allowance	(0.00)	%	(49.89)	%
Deferred tax adjustments	0.73	%	0.00	%
Stock-based compensation	(8.44)	%	(13.12)	%
Permanent items	(0.44)	%	0.4	%
Other	0.00	%	(1.18)	%
Effective income tax rate	15.04	%	(40.96)	%

Schedule of deferred tax assets


	2020		2019
Net operating loss carryforwards	$	492	$	2,646
Deferred revenue		233		233
Depreciation and amortization		—		14
Stock based compensation		605		751
Accrual and reserves		209		145
Research and development credits, net of tax reserve		818		711
Other		18		1
Lease liability		98		—
Total gross deferred tax assets		2,473		4,501
Less valuation allowance		—		—
Net deferred tax assets		2,473		4,501
Deferred tax liabilities:
Depreciation and amortization		(12)		—
Right of use assets		(96)		—
Total deferred tax liabilities		(108)		—
Net deferred tax assets	$	2,365	$	4,501

Schedule of activity related to unrecognized tax benefits


		Gross Unrecognized Tax Benefits 2020		Gross Unrecognized Tax Benefits 2019
Unrecognized tax benefits – January 1	$	295	$	218
Gross increases related to prior tax positions		1		—
Gross increases related to current tax positions		45		77
Unrecognized tax benefits – December 31	$	341	$	295

Net Income Per Share, Basic and Diluted (Tables)

12 Months Ended

Dec. 31, 2020

Net Income Per Share, Basic and Diluted

Schedule of basic and diluted net EPS


	For the year ended December 31,
	2020					2019
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic EPS	6,584,441	$	14,007	$	2.13	6,440,724	$	15,084	$	2.34
Common stock warrants	70,281		—		—	69,068		—		—
Common stock options	1,411,839		—		—	1,520,117		—		—
Diluted EPS	8,066,561	$	14,007	$	1.74	8,029,909	$	15,084	$	1.88

Summary of Significant Accounting Policies and Estimates (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Depreciation method	straight-line basis
Description of assets for lease	assets for lease is depreciated on a straight-line basis over 36 months for the units outstanding and recorded as cost of revenues.
Capital assets depreciated assumed useful life	P36M
Federal statutory rate	21.00%	21.00%
Carried forward NOL utilization limit	80%
Machinery & Equipment
Property, Plant and Equipment [Line Items]
Capital assets depreciated assumed useful life	P5Y
Computer Equipment & Software
Property, Plant and Equipment [Line Items]
Capital assets depreciated assumed useful life	P3Y
Furniture & Fixtures
Property, Plant and Equipment [Line Items]
Capital assets depreciated assumed useful life	P5Y

Assets for Lease, net (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Assets for Lease, net
Assets for lease	$ 3,747	$ 3,374
Less: accumulated depreciation	(1,466)	(1,295)
Assets for lease, net	$ 2,281	$ 2,079

Assets for Lease, net - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Assets for Lease, net
Depreciation expense	$ 439	$ 483
Reduction to accumulated depreciation for returned items	268	163
Loss on disposal of assets for lease	(271)	(206)
Total assets for lease, net, in use at customer locations	$ 736	$ 849

Other Product Inventory (Details) - USD ($) $ in Thousands	1 Months Ended
Other Product Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
Other Product Inventory
Product inventory purchases	$ 1,200
Prepayment for inventory	900	$ 828
Purchases of products inventory	$ 72
Renewal term (in years)	4 years
Minimum
Other Product Inventory
Royalty on net sales (in percent)	0.00%
Maximum
Other Product Inventory
Royalty on net sales (in percent)	10.00%
Private Company #1
Other Product Inventory
Product inventory		$ 68	$ 0

Property and Equipment, net (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property and Equipment, net
Capital assets	$ 786	$ 636
Less: accumulated depreciation	(525)	(387)
Capital assets, net	$ 261	$ 249

Property and Equipment, net - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Property and Equipment, net
Depreciation expense	$ 138	$ 149

Long Term Investments (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Equity Securities without Readily Determinable Fair Value [Line Items]
Long-term Investments	$ 3,051
Investments in Private company #2
Equity Securities without Readily Determinable Fair Value [Line Items]
Long-term Investments	2,742
Investments in Private company #3
Equity Securities without Readily Determinable Fair Value [Line Items]
Long-term Investments	$ 309

Long Term Investments - Investment in Private company #2 (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Oct. 31, 2020	Dec. 31, 2020	Sep. 30, 2020
Promissory note from Private company #2
Equity Securities without Readily Determinable Fair Value [Line Items]
Principal amount			$ 500
Expense reimbursement			$ 100
Conversion value		$ 512
Investments in Private company #2
Equity Securities without Readily Determinable Fair Value [Line Items]
Shares purchased	211,928
Common stock issued on Exchange	40,922
Fair value of purchase consideration		$ 2,230

Long Term Investments - Investment in Private company #3 (Details) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Dec. 31, 2020	Oct. 31, 2020	Dec. 31, 2020
Equity Securities without Readily Determinable Fair Value [Line Items]
Cash purchase price	$ 1,942		$ 1,942
Other income			442
Investments in Private company #3
Equity Securities without Readily Determinable Fair Value [Line Items]
Preferred Shares purchased		250
First Promissory note from Private company #3
Equity Securities without Readily Determinable Fair Value [Line Items]
Purchase price		$ 59
Principal amount		50
Conversion value			$ 309
Second Promissory note from Private company #3
Equity Securities without Readily Determinable Fair Value [Line Items]
Principal amount		1,500
Expense reimbursement		$ 100

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accrued Expenses
Compensation	$ 1,524	$ 2,803
Accrued Taxes	861	66
Miscellaneous Accruals	413	1,045
Total Accrued Expenses	$ 2,798	$ 3,914

Concentration of Credit Risk (Details) $ in Thousands	12 Months Ended
Concentration of Credit Risk (Details) $ in Thousands	Dec. 31, 2020 USD ($) customer item	Dec. 31, 2019 USD ($) customer item
Concentration of Credit Risk
Allowance for doubtful accounts \| $	$ 61	$ 36
Customer concentration risk \| Revenue
Concentration of Credit Risk
Number of customers	2	3
Customer concentration risk \| Revenue \| Customer one
Concentration of Credit Risk
Concentration risk percentage	47.20%	49.40%
Customer concentration risk \| Revenue \| Customer two
Concentration of Credit Risk
Concentration risk percentage	22.80%	13.20%
Customer concentration risk \| Revenue \| Customer three
Concentration of Credit Risk
Concentration risk percentage		12.50%
Customer concentration risk \| Accounts receivable
Concentration of Credit Risk
Number of customers	4	3
Customer concentration risk \| Accounts receivable \| Customer one
Concentration of Credit Risk
Concentration risk percentage	31.20%	55.90%
Customer concentration risk \| Accounts receivable \| Customer two
Concentration of Credit Risk
Concentration risk percentage	19.40%	17.60%
Customer concentration risk \| Accounts receivable \| Customer three
Concentration of Credit Risk
Concentration risk percentage	15.70%	12.00%
Customer concentration risk \| Accounts receivable \| Customer four
Concentration of Credit Risk
Concentration risk percentage	10.40%
Vendor concentration risk \| Accounts payable
Concentration of Credit Risk
Number of vendors \| item	2	2
Vendor concentration risk \| Accounts payable \| Vendor one
Concentration of Credit Risk
Concentration risk percentage	15.90%	15.90%
Vendor concentration risk \| Accounts payable \| Vendor two
Concentration of Credit Risk
Concentration risk percentage	24.30%	14.10%

Leases - Future minimum rental payments (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Leases
2021	$ 85
2022	87
2023	90
2024	93
2025	71
Total undiscounted future minimum lease payments	426
Less: present value discount	(19)
Total lease liabilities	407
Lease expense in excess cash payment	(8)
Total ROU asset	$ 399

Leases - Lessee Arrangements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2021	Jul. 31, 2020
Lessee, Lease, Description [Line Items]
Lease agreement term				61 months
Remaining lease term	4 years 9 months
Options to renew	false
Lease expenses	$ 97	$ 68
ROU asset	$ 399
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Prepaid Expense and Other Assets, Current
Current lease liabilities	$ 75
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current
Noncurrent lease liabilities	$ 332
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent
Remaining payments due on leases	$ 426
Expiring facilities lease
Lessee, Lease, Description [Line Items]
Remaining payments due on leases			$ 18

Leases - Lessor Arrangements (Details) $ in Thousands	12 Months Ended
Leases - Lessor Arrangements (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Leases
Lease revenue	$ 25,743

Leases - Variable-fee Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Leases
Revenue from variable-fee licenses	$ 11,610	$ 8,927
Revenues from sales of hardware and equipment accessories	$ 1,250	$ 927

Stockholders' Equity - Summary of exercise of common stock outstanding stock options (Details) - shares	Dec. 31, 2020	Dec. 31, 2019
Stockholders' Equity
Total	1,528,295	1,658,457
Common stock warrants
Stockholders' Equity
Total	76,875	76,875
Stock options
Stockholders' Equity
Total	1,451,420	1,581,582

Stockholders' Equity - Additional Information (Details) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Stockholders' Equity
Common stock, shares authorized	50,000,000	50,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Number of shares in reserve	1,528,295	1,658,457

Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	12 Months Ended
	Nov. 06, 2019	Dec. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	May 03, 2019
Related Party Transaction [Line Items]
Shares of common stock held		6,700,422	6,700,422	6,531,221
Cash purchase price		$ 1,942	$ 1,942
Warrant Repurchase Agreement \| Murphy Chutorian Family Trust
Related Party Transaction [Line Items]
Repurchase of warrant to acquire shares					65,542
Warrant exercise price					$ 4.50
Warrant expiration date					Jul. 31, 2023
Warrant aggregate purchase price	$ 3,946				$ 2,687
Repurchase of warrants to acquire shares	93,797
Warrant Repurchase Agreement \| Murphy Chutorian Family Trust \| Warrants
Related Party Transaction [Line Items]
Warrant exercise price	$ 4.00
Shares of common stock held	16,875
Warrant Repurchase Agreement \| Murphy Chutorian Family Trust \| Common Stock
Related Party Transaction [Line Items]
Warrant exercise price	$ 4.50
Shares of common stock held	60,000
Warrant Repurchase Agreement \| Murphy Chutorian Family Trust \| Minimum
Related Party Transaction [Line Items]
Aggregate purchase price	$ 2.00
Warrant Repurchase Agreement \| Murphy Chutorian Family Trust \| Maximum
Related Party Transaction [Line Items]
Aggregate purchase price	$ 4.50

Stock Option Plan - Summary of the Company's stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Number of Stock Options Outstanding
Balance, Beginning	1,581,582	1,761,447
Options exercised	(130,162)	(179,865)
Balance, Ending	1,451,420	1,581,582	1,761,447
Exercisable, Ending	1,420,368	1,477,020
Weighted Average Exercise Price
Balance, Beginning	$ 3.23	$ 3.18
Options exercised	2.95	2.72
Balance, Ending	3.25	3.23	$ 3.18
Exercisable, Ending	$ 3.15	$ 3.06
Weighted Average Remaining Contractual Term, Options Outstanding (in years)	4 years 10 months 28 days	5 years 10 months 9 days	6 years 10 months 2 days
Weighted Average Remaining Contractual Term, Options Exercisable (in years)	4 years 10 months 13 days	5 years 8 months 23 days
Aggregate Intrinsic Value, Options Outstanding	$ 131,714	$ 70,827	$ 55,000
Aggregate Intrinsic Value, Options Exercisable	$ 129,039	$ 66,389

Stock Option Plan - Stock-based compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 253	$ 365
Cost of Revenues
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		1
Engineering and Product Development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		16
Sales and Marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		46
General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 253	$ 302

Stock Option Plan - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Oct. 31, 2015	Dec. 31, 2020	Dec. 31, 2019	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost related to non-vested awards		$ 181
Weighted average period of unvested stock awards		5 months 8 days
Total number of unvested shares		31,052	104,563
Total estimated grant date fair value of options non-vested		$ 253	$ 365
Stock-based compensation expense		$ 253	$ 365
Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock option granted		641
2014 Stock Incentive Plan \| Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares issued pursuant to awards granted under plan		2,783,616		450,000
Number of share reserve increased	1,500,000
Maximum term of stock option grants		10 years
Percentage of shares reserve increased	4.00%
Number of shares available for future stock-based compensation grants		1,260,469
Total number of unvested shares		2,783,616

Income Taxes - Summary of components of the (benefit) provision for income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Current tax provision:
Federal		$ 0
State	$ 343	118
Total current tax provision	343	118
Deferred tax provision:
Federal	2,052	(3,645)
State	84	(856)
Total deferred tax provision (benefit)	2,136	(4,501)
Total income tax provision (benefit)	$ 2,479	$ (4,383)

- Definition

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

+ References + Details

Income Taxes - Summary of differences between the Company's effective income tax rate and the federal statutory income tax (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Taxes
Federal statutory rate	21.00%	21.00%
State income tax rate, net of federal benefit	2.19%	1.83%
Change in valuation allowance	0.00%	(49.89%)
Deferred tax adjustments	0.73	0.00
Stock-based compensation	(8.44%)	(13.12%)
Permanent Items	(0.44%)	0.40%
Other	0.00%	(1.18%)
Effective income tax rate	15.04%	(40.96%)

Income Taxes - Summary of Deferred tax assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Net operating loss carryforwards	$ 492	$ 2,646
Deferred revenue	233	233
Depreciation and amortization		14
Stock based compensation	605	751
Accrual and reserves	209	145
Research and development credits, net of tax reserve	818	711
Other	18	1
Lease liability	98	0
Total gross deferred tax assets	2,473	4,501
Less valuation allowance		0
Net deferred tax assets	2,473	4,501
Deferred tax liabilities:
Depreciation and amortization	(12)	0
Right of use assets	96	0
Total deferred tax liabilities	(108)	0
Net deferred tax assets	$ 2,365	$ 4,501

Income Taxes - Summary of activity related to the Company's gross unrecognized tax benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Unrecognized tax benefits:
Unrecognized tax benefits - January 1	$ 295	$ 218
Gross increases related to prior tax positions	1	0
Gross increases related to current tax positions	45	77
Unrecognized tax benefits - December 31	$ 341	$ 295

Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Tax Credit Carryforward [Line Items]
Net operating loss carryforwards for federal	$ 310
Net operating loss carryforwards for California	$ 5,746
Effective taxable rate	80%
Research and development tax credit carryforwards for federal income tax	$ 100
Retention credit	466
Unrecognized Tax Benefits	341	$ 295	$ 218
Income penalties expense	$ 0	$ 0
Federal
Tax Credit Carryforward [Line Items]
Operating Loss Carryforwards Expiration Period	2033
Company's tax years beginning for examination	3 years
State
Tax Credit Carryforward [Line Items]
Operating Loss Carryforwards Expiration Period	2036
Company's tax years beginning for examination	4 years
Research tax credit carryforward
Tax Credit Carryforward [Line Items]
Operating Loss Carryforwards Expiration Period	2033
Tax credit carryforward	$ 876

Net Income Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Net Income Per Share, Basic and Diluted
Basic EPS (in shares)	6,584,441	6,440,724
Common stock warrants (in shares)	70,281	69,068
Common stock options (in shares)	1,411,839	1,520,117
Diluted EPS (in shares)	8,066,561	8,029,909
Net Income - Basic EPS	$ 14,007	$ 15,084
Net Income - Common stock warrants	0	0
Net Income - Common stock options	0	0
Net Income - Diluted EPS	$ 14,007	$ 15,084
Basic EPS (in dollars per share)	$ 2.13	$ 2.34
Common stock warrants (in dollars per share)	0
Common stock options (in dollars per share)	0
Diluted EPS (in dollars per share)	$ 1.74	$ 1.88

Net Income Per Share, Basic and Diluted - Additional Information (Details)	12 Months Ended
	Dec. 31, 2020 shares
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average shares outstanding	0
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average shares outstanding	0