0001554859-21-000011 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2021	Aug. 02, 2021
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
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	N/A
Trading Symbol	smlr
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		6,753,382
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001554859
Amendment Flag	false

Condensed Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Condensed Statements of Income - USD ($) $ in Thousands	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Condensed Statements of Income
Revenues	$ 14,311	$ 6,373	$ 27,494	$ 15,803
Operating expenses:
Cost of revenues	996	700	2,575	1,550
Engineering and product development	947	762	1,640	1,605
Sales and marketing	3,622	2,473	6,439	5,168
General and administrative	2,282	1,478	4,358	3,069
Total operating expenses	7,847	5,413	15,012	11,392
Income from operations	6,464	960	12,482	4,411
Interest income	3	1	6	3
Other income	6	29	5	26
Other income	9	30	11	29
Pre-tax net income	6,473	990	12,493	4,440
Income tax (benefit) provision	(215)	(85)	928	692
Net income	$ 6,688	$ 1,075	$ 11,565	$ 3,748
Net income per share, basic	$ 1.00	$ 0.16	$ 1.72	$ 0.57
Weighted average number of shares used in computing basic income per share	6,702,258	6,548,215	6,706,678	6,540,755
Net income per share, diluted	$ 0.83	$ 0.13	$ 1.42	$ 0.47
Weighted average number of shares used in computing diluted income per share	8,092,459	8,035,048	8,130,971	8,050,394

Condensed Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Current Assets:
Cash	$ 28,511	$ 22,079
Trade accounts receivable, net of allowance for doubtful accounts of $61 and $61, respectively	4,751	2,808
Inventory	1,715	340
Prepaid expenses and other current assets	5,756	1,376
Total current assets	40,733	26,603
Assets for lease, net	1,731	1,941
Property and equipment, net	411	261
Other non-current assets	373	418
Long-term investments	821	3,051
Long-term deferred tax assets	1,920	2,365
Total assets	45,989	34,639
Current liabilities:
Accounts payable	500	677
Accrued expenses	4,421	2,798
Deferred revenue	896	963
Other short-term liabilities	78	76
Total current liabilities	5,895	4,514
Long-term liabilities:
Other long-term liabilities	286	332
Total long-term liabilities	286	332
Commitments and contingencies (Note 10)
Stockholders' equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 6,819,304, and 6,725,422 shares issued, and 6,753,382 and 6,700,422 shares outstanding (treasury shares of 65,922 and 25,000, respectively)	7	7
Additional paid-in capital	20,563	22,113
Retained earnings	19,238	7,673
Total stockholders' equity	39,808	29,793
Total liabilities and stockholders' equity	$ 45,989	$ 34,639

Condensed Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Condensed Balance Sheets
Allowance for doubtful accounts on trade accounts receivable (in dollars)	$ 61	$ 61
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	6,819,304	6,725,422
Common stock, shares outstanding	6,753,382	6,700,422
Treasury stock, shares	65,922	25,000

Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Total
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]
Stock option exercises			70		70
Stock option exercises (in shares)	31,955
Stock-based compensation			128		128
Net income				3,748	3,748
Balance at Jun. 30, 2020	$ 7		19,598	(2,586)	17,019
Balance (in shares) at Jun. 30, 2020	6,588,176	(25,000)
Balance at Mar. 31, 2020	$ 7		19,470	(3,661)	15,816
Balance (in shares) at Mar. 31, 2020	6,559,076	(25,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises			67		67
Stock option exercises (in shares)	29,100
Stock-based compensation			61		61
Net income				1,075	1,075
Balance at Jun. 30, 2020	$ 7		19,598	(2,586)	17,019
Balance (in shares) at Jun. 30, 2020	6,588,176	(25,000)
Balance at Dec. 31, 2020	$ 7		22,113	7,673	29,793
Balance (in shares) at Dec. 31, 2020	6,725,422	(25,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of put option in private Company #2 (Note 6)			(2,230)		$ (2,230)
Exercise of put option in private Company #2 (Note 6) (in Shares)		(40,922)			40,922
Employee stock grant			537		$ 537
Employee stock grant (in shares)	5,400
Stock option exercises			45		$ 45
Stock option exercises (in shares)	88,482				90,200
Stock-based compensation			98		$ 98
Net income				11,565	11,565
Balance at Jun. 30, 2021	$ 7		20,563	19,238	39,808
Balance (in shares) at Jun. 30, 2021	6,819,304	(65,922)
Balance at Mar. 31, 2021	$ 7		22,711	12,550	35,268
Balance (in shares) at Mar. 31, 2021	6,745,806	(25,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of put option in private Company #2 (Note 6)			(2,230)		(2,230)
Exercise of put option in private Company #2 (Note 6) (in Shares)		(40,922)
Stock option exercises			35		35
Stock option exercises (in shares)	73,498
Stock-based compensation			47		47
Net income				6,688	6,688
Balance at Jun. 30, 2021	$ 7		$ 20,563	$ 19,238	$ 39,808
Balance (in shares) at Jun. 30, 2021	6,819,304	(65,922)

Condensed Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
Condensed Statements of Cash Flows - USD ($) $ in Thousands	Jun. 30, 2021	Jun. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 11,565	$ 3,748
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Depreciation	310	235
Deferred tax expense	445	596
Loss on disposal of assets for lease	124	125
Allowance for doubtful accounts	9	36
Stock-based compensation expense	635	128
Changes in Operating Assets and Liabilities:
Trade accounts receivable	(1,952)	2,468
Inventory	(1,375)	(24)
Prepaid expenses and other current assets	(4,381)	(408)
Other non-current assets	45
Accounts payable	(177)	(131)
Accrued expenses	1,625	(573)
Other current and non-current liabilities	(44)
Deferred revenue	(67)	(142)
Net Cash Provided by Operating Activities	6,762	6,058
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment	(237)	(100)
Purchase of assets for lease	(138)	(123)
Net Cash Used in Investing Activities	(375)	(223)
CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of stock options	45	70
Net Cash Provided by Financing Activities	45	70
INCREASE IN CASH	6,432	5,905
CASH, BEGINNING OF PERIOD	22,079	7,741
CASH, END OF PERIOD	28,511	$ 13,646
Supplemental Disclosure of Cash Flow Information:
Exercised put option of 211,928 common stock in private Company #2 for 40,922 common stock of the Company	$ 2,230

Condensed Statements of Cash Flows (Parentheticals)	6 Months Ended
Condensed Statements of Cash Flows (Parentheticals)	Jun. 30, 2021 shares
Condensed Statements of Cash Flows
Exercised put option of common stock in private Company #2 (in shares)	211,928
Exercised put option for number of common stock of the Company (in shares)	40,922

Basis of Presentation

6 Months Ended

Jun. 30, 2021

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, 2020 filed with the SEC on March 9, 2021 (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.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

COVID-19

In the first quarter of 2020, the World Health Organization (“WHO”) declared the novel coronavirus (“COVID-19”) outbreak 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 of 2020 and activities began to resume, continued outbreaks both in the United States and globally 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. In the second half of 2020 and the first half of 2021, 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.

Recently Issued Accounting Pronouncements

Accounting Pronouncements Recently Adopted

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 adopted the new standard on January 1, 2021 and determined that the adoption of this new accounting guidance did not 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 Company adopted the new standard on January 1, 2021 and determined that the adoption of this new accounting guidance did not have a material impact on its financial statements.

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 ASU 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 ASU 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 Sections B and C of this ASU are effective for the Company’s annual periods beginning after December 15, 2020, and the amendments should be applied retrospectively, and should be applied at the beginning of the period that includes the adoption date. The Company adopted the new standard on January 1, 2021 and determined that the adoption of 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 March 2020, the 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 and, particularly, the risk of cessation of the London Interbank Offered Rate, 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 ASU 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 FASB 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 ASU 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 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.

In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This update provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. This update is effective for the Company’s fiscal years beginning after December 15, 2021. 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.

Variably-Priced Revenue

6 Months Ended

Jun. 30, 2021

Variably-Priced Revenue

Variably-Priced Revenue

2.Variably-Priced Revenue

The Company recognizes variable-fee licenses (i.e., fee per test) and sales of hardware equipment and accessories in accordance with Topic 606. Total fees from variable-fee licenses represent approximately $6,504 and $290 for the three months ended June 30, 2021 and 2020, respectively. Total fee from variable-fee licenses represents approximately $12,162 and $2,992 for the six months ended June 30, 2021 and 2020, respectively. Total sales of hardware and equipment accessories represent approximately $188 and $129 of revenues for the three months ended June 30, 2021 and 2020, respectively. Total sales of hardware and equipment accessories represent approximately $520 and $400 of revenues for the six months ended June 30, 2021 and 2020, 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.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Inventory

6 Months Ended

Jun. 30, 2021

Inventory

Inventory

3. Inventory

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

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 committed to purchase $1,200 of product inventory. The Company prepaid for $1,200 of product inventory and has received $917 of product inventory as of June 30, 2021. The balance of prepaid inventory was $283 as of June 30, 2021.

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. There were no sales of this product through June 30, 2021.

The Company had other hardware inventory of $808 purchased from other vendors as of June 30, 2021. Total inventory, which includes inventory from Private company #1, was $1,715 and $340 as of June 30, 2021 and December 31, 2020, respectively.

Assets for Lease, net

6 Months Ended

Jun. 30, 2021

Assets for Lease, net

Assets for Lease, net

4. Assets for Lease, net

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. Operating leases are short-term in nature (monthly, quarterly or one year), and all of which have renewal options. The assets that may be associated with these leasing arrangements are identified below as assets for lease. Upon shipment under operating leases, assets for lease are depreciated. Upon shipment under variable-fee license contracts, these assets for lease are sold to the customers, and the asset is recognized as cost of revenue under Accounting Standards Codification or ASC 606, Revenue from Contracts with Customers. During the three months ended June 30, 2021 and 2020, the Company recognized approximately $7,618 and $5,954, respectively, in lease revenues related to these arrangements. During the six months ended June 30, 2021 and 2020, the Company recognized approximately $14,812 and $12,411, respectively, in lease revenues related to these arrangements, which is included in Revenues on the Condensed Statements of Income.

Assets for lease consist of the following:


	June 30,		December 31,
	2021		2020
Assets for lease	$	3,230	$	3,407
Less: accumulated depreciation		(1,499)		(1,466)
Assets for lease, net	$	1,731	$	1,941

Depreciation expense amounted to $110 and $44 for the three months ended June 30, 2021 and 2020, respectively. Depreciation expense amounted to $223 and $172 for the six months ended June 30, 2021 and 2020, respectively. Reduction to accumulated depreciation for returned items was $50 and $22 for the three months ended June 30, 2021 and 2020, respectively. Reduction to accumulated depreciation for returned items was $191 and $87 for the six months ended June 30, 2021 and 2020, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $41 and $59 for the three months ended June 30, 2021 and 2020, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $124 and $125 for the six months ended June 30, 2021 and 2020, respectively.

Property and Equipment, net

6 Months Ended

Jun. 30, 2021

Property and Equipment, net

Property and Equipment, net

5. Property and Equipment, net

Capital assets consist of the following:


	June 30,		December 31,
	2021		2020
Capital assets	$	1,023	$	786
Less: accumulated depreciation		(612)		(525)
Capital assets, net	$	411	$	261

Depreciation expense amounted to $44 and $32 for the three months ended June 30, 2021 and 2020, respectively. Depreciation expense amounted to $87 and $63 for the six months ended June 30, 2021 and 2020, respectively.

Long-Term Investments

6 Months Ended

Jun. 30, 2021

Long-Term Investments

Long-Term Investments

6.Long-Term Investments

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


	June 30,		December 31,
	2021		2020
Investments in Private company #2	$	512	$	2,742
Investments in Private company #3		309		309
Total	$	821	$	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 had 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 were 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. On April 1, 2021, the Company exercised its option to “put” 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.

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 June 30, 2021 and 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 June 30, 2021 and December 31, 2020 was approximately $309.

In April 2021, the Company entered into an agreement with Private company #3 to exclusively market and distribute its product line in the United States, including Puerto Rico, except for selected accounts. The Company is currently developing a marketing plan. Under this distribution agreement, the Company agreed to purchase $2,000 of product licenses. Unless terminated early in accordance with its terms, the exclusive distribution agreement will remain in full force and effect until April 1, 2026, and thereafter there is an option for this agreement to be automatically renewed for additional one-year terms. Revenue from these product licenses will be recognized in accordance with ASC 606, Revenue from Contracts with Customers. The Company did not generate any revenue from these product licenses during the three and six months ended June 30, 2021.

The investments in Private company #2 and #3 securities that were retained by the Company as of December 31, 2020 and June 30, 2021 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. No impairment was recorded during the three and six months ended June 30, 2021.

Accrued Expenses

6 Months Ended

Jun. 30, 2021

Accrued Expenses

Accrued Expenses

7. Accrued Expenses

Accrued expenses consist of the following:


	June 30,		December 31,
	2021		2020
Compensation	$	2,995	$	1,524
Accrued Taxes		989		861
Miscellaneous Accruals		437		413
Total Accrued Expenses	$	4,421	$	2,798

Concentration of Credit Risk

6 Months Ended

Jun. 30, 2021

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 three months ended June 30, 2021, two customers accounted for 37.6% and 33.0% of the Company’s revenues, respectively. For the six months ended June 30, 2021, two customers accounted for 38.0% and 31.8% of the Company’s revenues, respectively. For the three months ended June 30, 2020, one customer accounted for 62.1% of the Company’s revenues. For the six months ended June 30, 2020, two customers accounted for 52.5% and 14.0%, of the Company’s revenues, respectively. 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 June 30, 2021, three customers accounted for 34.6%, 21.6% and 14.3% of the Company’s accounts receivable, respectively. The Company’s largest customer in terms of both revenues and accounts receivable in the six months ended June 30, 2021 is a U.S. diversified healthcare company and its affiliated plans.

As of December 31, 2020, two vendors accounted for 15.9% and 24.3% of the Company’s accounts payable, respectively. As of June 30, 2021, three vendors accounted for 23.2%, 10.9% and 10.7% of the Company’s accounts payable, respectively.

Leases

6 Months Ended

Jun. 30, 2021

Leases

Leases

9. Leases

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 June 30, 2021, the remaining lease term is four years and three months with no options to renew. The Company recognized facilities lease expenses of $28 and $18 for the three months ended June 30, 2021 and June 30, 2020, respectively. The Company recognized facilities lease expenses of $68 and $35 for the six months ended June 30, 2021 and June 30, 2020, 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 June 30, 2021:


	Total
2021 Remaining period	$	43
2022		87
2023		90
2024		93
2025		71
Thereafter		—
Total undiscounted future minimum lease payments		384
Less: present value discount		(20)
Total lease liabilities		364
Lease expense in excess cash payment		(11)
Total ROU asset	$	353

As of June 30, 2021, the Company’s right-of-use (“ROU”) asset was $353, which was recorded on the Company’s balance sheet as other noncurrent assets, and the Company’s current and noncurrent lease liabilities were $78 and $286, respectively, which were recorded on the Company’s balance sheet as other short-term liabilities and other long-term liabilities, respectively. As of December 31, 2020, the Company’s ROU asset was $399, which was recorded on the Company’s balance sheet as other noncurrent 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.

Lease 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 4 to the Unaudited Condensed Financial Statements.

Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies.

Commitments and Contingencies

10. Commitments and Contingencies

Facilities Leases

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 has not made any significant payment under such indemnification provisions. Accordingly, the Company has not recorded any liabilities relating to these agreements. In certain cases, the Company has recourse against third parties with respect to the aforesaid indemnities, and the Company believes it maintains adequate levels of insurance coverage to protect the Company with respect to potential claims arising from such agreements.

Stock Incentive Plan

6 Months Ended

Jun. 30, 2021

Stock Incentive Plan

Stock Incentive Plan

11. Stock Incentive Plan

The Company’s stock-based compensation program is designed to attract and retain employees while also aligning employees’ interests with the interests of its stockholders. Stock options have been granted to employees under the stockholder-approved 2007 Key Person Stock Option Plan (“2007 Plan”) and stock options and restricted stock have been granted to employees under the stockholder-approved 2014 Stock Incentive Plan (“2014 Plan”). Stockholder approval of the 2014 Plan became effective in September 2014. The 2014 Plan originally provided that the aggregate number of shares of common stock that may be issued pursuant to awards granted under the 2014 Plan may not exceed 450,000 shares (the “Share Reserve”), however in October 2015, the stockholders approved a 1,500,000 increase to the Share Reserve. In addition, the Share Reserve automatically increases on January 1st of each year, for a period of not more than 10 years, beginning on January 1st of the year following the year in which the 2014 Plan became effective and ending on (and including) January 1, 2024, in an amount equal to 4% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year. The Company’s Board of Directors may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of shares of common stock than would otherwise occur. On January 1, 2021, the Share Reserve increased by 268,017 shares due to the automatic 4% increase. The Share Reserve is currently 3,312,882 shares as of June 30, 2021.

In light of stockholder approval of the 2014 Plan, the Company no longer grants equity awards under the 2007 Plan. As of June 30, 2021, there were no shares available for future stock-based compensation grants under the 2007 Plan and 1,525,210 shares of an aggregate total of 3,312,882 shares were available for future stock-based compensation grants under the 2014 Plan.

Stock Awards

The Company granted fully vested stock awards for an aggregate 5,400 shares of common stock to the non-employee members of the board of directors, employees and one non-employee as compensation during the six months ended June 30, 2021. Fair value of these stock awards on grant date was $537.

Stock Options

Aggregate intrinsic value represents the difference between the closing market value as of June 30, 2021 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 six months ended June 30, 2021 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, 2021	1,451,420	$	3.25	4.91	$	131,714
Options exercised	(90,200)		2.52	—		—
Balance, June 30, 2021	1,361,220	$	3.30	4.47	$	147,686
Exercisable as of June 30, 2021	1,346,984	$	3.25	4.45	$	146,208

The total compensation cost related to unvested stock option awards not yet recognized was $85 as of June 30, 2021. The weighted average period over which the total unrecognized compensation cost related to these unvested stock awards will be recognized is 0.46 years. There were no options granted during the six months ended June 30, 2021 or 2020.

The Company has recorded an expense of $47 and $61 as it relates to stock-based compensation for the three months ended June 30, 2021 and 2020, respectively. The Company has recorded an expense of $635 and $128 as it relates to stock-based compensation for the six months ended June 30, 2021 and 2020, respectively:


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Cost of Revenues	$	—	$	—	$	—	$	—
Engineering and Product Development		—		—		32		—
Sales and Marketing		—		—		105		—
General and Administrative		47		61		498		128
Total	$	47	$	61	$	635	$	128

Income Taxes

6 Months Ended

Jun. 30, 2021

Income Taxes

Income Taxes

12. Income Taxes

The Company’s income tax provision for the three and six months ended June 30, 2021 and June 30, 2020 reflect its estimate of the effective tax rates expected to be applicable for the full year, adjusted for any discrete events that are recorded in the period in which they occurred. The estimates are re-evaluated each quarter based on the estimated tax expense for the full year.

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

The effective tax rate for the three and six months ended June 30, 2021 was (3.32%) and 7.43%, respectively, compared to (8.59%) and 15.59%, respectively, in the same periods of the prior year. The decrease in the effective tax rate for the six months ended June 30, 2021 is primarily related to increase of tax benefits associated with share-based compensation plans. The increase in the

effective tax rate for the three months ended June 30, 2021 is primarily related to higher income before incomes taxes for the three months ended June 30, 2021, as well as a decrease of income tax benefit from discrete events that occurred during the quarter.

The effective tax rate for the three months and six months ended June 30, 2021 differed from the U.S. federal statutory rate of 21% primarily due to state income taxes (net of federal benefit), tax benefits associated with share-based compensation plans, and federal and state research and development (“R&D”) credit benefit. The difference between the U.S. federal statutory rate of 21% and the Company’s effective tax rate for the three months and six months ended June 30, 2020 was primarily due to current state taxes that have no net operating loss to offset such taxes.

As of June 30, 2021, and December 31, 2020, the Company had $331 and $341, respectively of unrecognized tax benefits, excluding interest and penalties. The Company’s practice is to recognize interest and penalty expenses related to uncertain tax positions in income tax expense, which was zero for the year ended December 31, 2020 and six months ended June 30, 2021.

- 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

6 Months Ended

Jun. 30, 2021

Net Income Per Share, Basic and Diluted

Net Income Per Share, Basic and Diluted

13. 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 June 30,
	2021					2020
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic	6,702,258	$	6,688	$	1.00	6,548,215	$	1,075	$	0.16
Common stock warrants	73,789		—			69,039		—
Common stock options	1,316,412		—			1,417,794		—
Diluted	8,092,459	$	6,688	$	0.83	8,035,048	$	1,075	$	0.13


	Six months ended June 30,
	2021					2020
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic	6,706,678	$	11,565	$	1.72	6,540,755	$	3,748	$	0.57
Common stock warrants	73,643		—			69,377		—
Common stock options	1,350,650		—			1,440,262		—
Diluted	8,130,971	$	11,565	$	1.42	8,050,394	$	3,748	$	0.47

The were no weighted average shares outstanding of common stock equivalents excluded from the computation of diluted net income per share for the six months ended June 30, 2021 and 2020.

Basis of Presentation (Policies)	6 Months Ended
Basis of Presentation (Policies)	Jun. 30, 2021
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, 2020 filed with the SEC on March 9, 2021 (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.
Reclassification of Prior Year Presentation	Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.
COVID-19	COVID-19 In the first quarter of 2020, the World Health Organization (“WHO”) declared the novel coronavirus (“COVID-19”) outbreak 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 of 2020 and activities began to resume, continued outbreaks both in the United States and globally 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. In the second half of 2020 and the first half of 2021, 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.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements Accounting Pronouncements Recently Adopted In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 adopted the new standard on January 1, 2021 and determined that the adoption of this new accounting guidance did not 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 Company adopted the new standard on January 1, 2021 and determined that the adoption of this new accounting guidance did not have a material impact on its financial statements. 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 ASU 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 ASU 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 Sections B and C of this ASU are effective for the Company’s annual periods beginning after December 15, 2020, and the amendments should be applied retrospectively, and should be applied at the beginning of the period that includes the adoption date. The Company adopted the new standard on January 1, 2021 and determined that the adoption of 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 March 2020, the 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 and, particularly, the risk of cessation of the London Interbank Offered Rate, 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 ASU 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 FASB 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 ASU 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 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. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This update provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. This update is effective for the Company’s fiscal years beginning after December 15, 2021. 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.

Assets for Lease, net (Tables)

6 Months Ended

Jun. 30, 2021

Assets for Lease, net

Schedule of assets for lease


	June 30,		December 31,
	2021		2020
Assets for lease	$	3,230	$	3,407
Less: accumulated depreciation		(1,499)		(1,466)
Assets for lease, net	$	1,731	$	1,941

Property and Equipment, net (Tables)

6 Months Ended

Jun. 30, 2021

Property and Equipment, net

Schedule of capital assets


	June 30,		December 31,
	2021		2020
Capital assets	$	1,023	$	786
Less: accumulated depreciation		(612)		(525)
Capital assets, net	$	411	$	261

Long-Term Investments (Tables)

6 Months Ended

Jun. 30, 2021

Long-Term Investments

Schedule of long term investments


	June 30,		December 31,
	2021		2020
Investments in Private company #2	$	512	$	2,742
Investments in Private company #3		309		309
Total	$	821	$	3,051

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2021

Accrued Expenses

Schedule of accrued expenses


	June 30,		December 31,
	2021		2020
Compensation	$	2,995	$	1,524
Accrued Taxes		989		861
Miscellaneous Accruals		437		413
Total Accrued Expenses	$	4,421	$	2,798

Leases (Tables)

6 Months Ended

Jun. 30, 2021

Leases

Schedule of future minimum rental payments required under operating leases


	Total
2021 Remaining period	$	43
2022		87
2023		90
2024		93
2025		71
Thereafter		—
Total undiscounted future minimum lease payments		384
Less: present value discount		(20)
Total lease liabilities		364
Lease expense in excess cash payment		(11)
Total ROU asset	$	353

Stock Incentive Plan (Tables)

6 Months Ended

Jun. 30, 2021

Stock Incentive 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, 2021	1,451,420	$	3.25	4.91	$	131,714
Options exercised	(90,200)		2.52	—		—
Balance, June 30, 2021	1,361,220	$	3.30	4.47	$	147,686
Exercisable as of June 30, 2021	1,346,984	$	3.25	4.45	$	146,208

Schedule of stock-based compensation expense


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Cost of Revenues	$	—	$	—	$	—	$	—
Engineering and Product Development		—		—		32		—
Sales and Marketing		—		—		105		—
General and Administrative		47		61		498		128
Total	$	47	$	61	$	635	$	128

Net Income Per Share, Basic and Diluted (Tables)

6 Months Ended

Jun. 30, 2021

Net Income Per Share, Basic and Diluted

Schedule of basic and diluted EPS


	Three months ended June 30,
	2021					2020
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic	6,702,258	$	6,688	$	1.00	6,548,215	$	1,075	$	0.16
Common stock warrants	73,789		—			69,039		—
Common stock options	1,316,412		—			1,417,794		—
Diluted	8,092,459	$	6,688	$	0.83	8,035,048	$	1,075	$	0.13


	Six months ended June 30,
	2021					2020
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic	6,706,678	$	11,565	$	1.72	6,540,755	$	3,748	$	0.57
Common stock warrants	73,643		—			69,377		—
Common stock options	1,350,650		—			1,440,262		—
Diluted	8,130,971	$	11,565	$	1.42	8,050,394	$	3,748	$	0.47

Variably-Priced Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Variably-Priced Revenue (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Variably-Priced Revenue
Revenue from variable-fee licenses	$ 6,504	$ 290	$ 12,162	$ 2,992
Revenue from sales of hardware and equipment accessories	$ 188	$ 129	$ 520	$ 400

Inventory (Details) - USD ($) $ in Thousands	1 Months Ended	10 Months Ended
Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2021	Dec. 31, 2020
Inventory
Sales of product		$ 0
Other hardware inventory		808
Total inventory		1,715	$ 340
Private Company #1
Inventory
Purchase of product inventory	$ 1,200
Prepayment for product inventory		1,200
Products inventory received		917
Balance of prepaid inventory		$ 283
Renewal term (in years)	4 years
Private Company #1 \| Minimum
Inventory
Royalty on net sales (in percent)	0.00%
Private Company #1 \| Maximum
Inventory
Royalty on net sales (in percent)	10.00%

Assets for Lease, net (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Assets for Lease, net
Assets for lease	$ 3,230	$ 3,407
Less: accumulated depreciation	(1,499)	(1,466)
Assets for lease, net	$ 1,731	$ 1,941

Assets for Lease, net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Assets for Lease, net
Lease revenue	$ 7,618	$ 5,954	$ 14,812	$ 12,411
Depreciation expense	110	44	223	172
Reduction to accumulated depreciation for returned items	50	22	191	87
Loss on disposal of assets for lease	$ (41)	$ (59)	$ (124)	$ (125)

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Property and Equipment, net (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Property and Equipment, net
Capital assets	$ 1,023	$ 786
Less: accumulated depreciation	(612)	(525)
Capital assets, net	$ 411	$ 261

Property and Equipment, net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Property and Equipment, net
Depreciation expense	$ 44	$ 32	$ 87	$ 63

Long-Term Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Equity Securities without Readily Determinable Fair Value [Line Items]
Long-term investments	$ 821	$ 3,051
Investments in Private company #2
Equity Securities without Readily Determinable Fair Value [Line Items]
Long-term investments	512	2,742
Investments in Private company #3
Equity Securities without Readily Determinable Fair Value [Line Items]
Long-term investments	$ 309	$ 309

Long-Term Investments - Investment in Private company #2 (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended	12 Months Ended
	Oct. 31, 2020	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Equity Securities without Readily Determinable Fair Value [Line Items]
Shares purchased		211,928
Promissory note from Private company #2
Equity Securities without Readily Determinable Fair Value [Line Items]
Principal amount				$ 500
Expense reimbursement				$ 100
Conversion value		$ 512	$ 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		3 Months Ended	6 Months Ended	12 Months Ended
	Apr. 30, 2021	Oct. 31, 2020	Jun. 30, 2021	Jun. 30, 2021	Dec. 31, 2020
Equity Securities without Readily Determinable Fair Value [Line Items]
Shares purchased				211,928
Impairment			$ 0	$ 0
Private company #3
Equity Securities without Readily Determinable Fair Value [Line Items]
Purchase of product licenses	$ 2,000
Renewal term of purchase agreement (in years)	1 year
Investments in Private company #3
Equity Securities without Readily Determinable Fair Value [Line Items]
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	$ 309

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Accrued Expenses
Compensation	$ 2,995	$ 1,524
Accrued Taxes	989	861
Miscellaneous Accruals	437	413
Total Accrued Expenses	$ 4,421	$ 2,798

Concentration of Credit Risk (Details)	3 Months Ended		6 Months Ended		12 Months Ended
Concentration of Credit Risk (Details)	Jun. 30, 2021 customer	Jun. 30, 2020 customer	Jun. 30, 2021 customer item	Jun. 30, 2020 customer	Dec. 31, 2020 customer item
Customer concentration risk \| Revenue
Concentration of Credit Risk
Number of customers	2	1	2	2
Customer concentration risk \| Revenue \| Customer one
Concentration of Credit Risk
Concentration risk percentage	37.60%	62.10%	38.00%	52.50%
Customer concentration risk \| Revenue \| Customer two
Concentration of Credit Risk
Concentration risk percentage	33.00%		31.80%	14.00%
Customer concentration risk \| Accounts receivable
Concentration of Credit Risk
Number of customers			3		4
Customer concentration risk \| Accounts receivable \| Customer one
Concentration of Credit Risk
Concentration risk percentage			34.60%		31.20%
Customer concentration risk \| Accounts receivable \| Customer two
Concentration of Credit Risk
Concentration risk percentage			21.60%		19.40%
Customer concentration risk \| Accounts receivable \| Customer three
Concentration of Credit Risk
Concentration risk percentage			14.30%		15.70%
Customer concentration risk \| Accounts receivable \| Customer four
Concentration of Credit Risk
Concentration risk percentage					10.40%
Customer concentration risk \| Accounts payable \| Vendor three
Concentration of Credit Risk
Concentration risk percentage			10.70%
Vendor concentration risk \| Accounts payable
Concentration of Credit Risk
Number of vendors \| item			3		2
Vendor concentration risk \| Accounts payable \| Vendor one
Concentration of Credit Risk
Concentration risk percentage			23.20%		15.90%
Vendor concentration risk \| Accounts payable \| Vendor two
Concentration of Credit Risk
Concentration risk percentage			10.90%		24.30%

Leases - Future minimum rental payments (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Leases
2021 Remaining period	$ 43
2022	87
2023	90
2024	93
2025	71
Total undiscounted future minimum lease payments	384
Less: present value discount	(20)
Total lease liabilities	364
Lease expense in excess cash payment	(11)
Total ROU asset	$ 353	$ 399

Leases - Lessee Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Jul. 31, 2020
Leases
Lease agreement term						61 months
Remaining lease term	4 years 3 months		4 years 3 months
Options to renew			false
Lease expenses	$ 28	$ 18	$ 68	$ 35
ROU asset	$ 353		$ 353		$ 399
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other Assets, Noncurrent		Other Assets, Noncurrent		Other Assets, Noncurrent
Current lease liabilities	$ 78		$ 78		$ 75
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current		Other Liabilities, Current		Other Liabilities, Current
Noncurrent lease liabilities	$ 286		$ 286		$ 332
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent		Other Liabilities, Noncurrent		Other Liabilities, Noncurrent

Commitments and Contingencies (Details)	Jul. 31, 2020
Commitments and Contingencies.
Lease agreement term	61 months

Stock Incentive Plan (Details) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares
Number of Stock Options Outstanding
Balance, Beginning \| shares	1,451,420
Options exercised \| shares	(90,200)
Balance, Ending \| shares	1,361,220	1,451,420
Exercisable, Ending \| shares	1,346,984
Weighted Average Exercise Price
Balance, Beginning \| $ / shares	$ 3.25
Options exercised \| $ / shares	2.52
Balance, Ending \| $ / shares	3.30	$ 3.25
Exercisable, Ending \| $ / shares	$ 3.25
Weighted Average Remaining Contractual Term, Options Outstanding (in years)	4 years 5 months 19 days	4 years 10 months 28 days
Weighted Average Remaining Contractual Term, Options Exercisable (in years)	4 years 5 months 12 days
Aggregate Intrinsic Value, Options Outstanding \| $	$ 147,686	$ 131,714
Aggregate Intrinsic Value, Options Exercisable \| $	$ 146,208

Stock Incentive Plan - Stock-based compensation - Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 47	$ 61	$ 635	$ 128
Engineering and Product Development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense			32
Sales and Marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense			105
General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 47	$ 61	$ 498	$ 128

Stock Incentive Plan - Additional information (Details) $ in Thousands		1 Months Ended	3 Months Ended		6 Months Ended
	Jan. 01, 2021 shares	Oct. 31, 2015 shares	Jun. 30, 2021 USD ($) shares	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) item shares	Jun. 30, 2020 USD ($) shares	Sep. 30, 2014 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost related to non-vested stock options \| $			$ 85		$ 85
Weighted average period of unvested stock awards					5 months 15 days
Stock-based compensation expense \| $			$ 47	$ 61	$ 635	$ 128
Number of stock option granted					0	0
Aggregate of shares granted fully vested stock awards					5,400
Number of non-employees \| item					1
Fair value of stock awards on grant date \| $					$ 537
2014 Stock Incentive Plan \| Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future stock-based compensation grants			1,525,210		1,525,210
Maximum number of shares issued pursuant to awards granted under plan			3,312,882		3,312,882		450,000
Maximum term of stock option grants					10 years
Number of share reserve increased	268,017	1,500,000
Percentage of shares reserve increased	4.00%	4.00%
Total number of unvested shares			3,312,882		3,312,882
2007 Key Person Stock Option Plan \| Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future stock-based compensation grants			0		0

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Income Taxes
Effective income tax rate	(3.32%)	(8.59%)	7.43%	15.59%
Federal statutory rate	21.00%	21.00%	21.00%	21.00%
Unrecognized tax benefits	$ 331		$ 331		$ 341
Interest and penalty expenses related to uncertain tax positions			$ 0		$ 0

Net Income Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Net Income Per Share, Basic and Diluted
Basic shares (in shares)	6,702,258	6,548,215	6,706,678	6,540,755
Common stock warrants (in shares)	73,789	69,039	73,643	69,377
Common stock options (in shares)	1,316,412	1,417,794	1,350,650	1,440,262
Diluted shares (in shares)	8,092,459	8,035,048	8,130,971	8,050,394
Net Income - Basic EPS	$ 6,688	$ 1,075	$ 11,565	$ 3,748
Net Income - Common stock warrants	0	0	0	0
Net Income - Common stock options	0	0	0	0
Net Income - Diluted EPS	$ 6,688	$ 1,075	$ 11,565	$ 3,748
Basic EPS (in dollars per share)	$ 1.00	$ 0.16	$ 1.72	$ 0.57
Diluted EPS (in dollars per share)	$ 0.83	$ 0.13	$ 1.42	$ 0.47

Net Income Per Share, Basic and Diluted - Additional Information (Details) - shares	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Net Income Per Share, Basic and Diluted
Weighted average shares outstanding excluded from the computation of diluted net income per share	0	0