0001554859-22-000014 | 10-Q | XBRL Viewer

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Stock Incentive Plan - Stock-based compensation - Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 628	$ 589
Engineering and Product Development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	45	32
Sales and Marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	172	105
General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 411	$ 452

Property and Equipment, net (Tables)

3 Months Ended

Mar. 31, 2022

Property and Equipment, net

Schedule of capital assets


	March 31,		December 31,
	2022		2021
Capital assets	$	1,005	$	882
Less: accumulated depreciation		(535)		(488)
Capital assets, net	$	470	$	394

Concentration of Credit Risk (Details)	3 Months Ended		12 Months Ended
Concentration of Credit Risk (Details)	Mar. 31, 2022 customer item	Mar. 31, 2021 customer	Dec. 31, 2021 customer item
Customer concentration risk \| Revenue
Concentration of Credit Risk
Number of customers	2	2
Customer concentration risk \| Revenue \| Customer one
Concentration of Credit Risk
Concentration risk percentage	35.40%	38.30%
Customer concentration risk \| Revenue \| Customer two
Concentration of Credit Risk
Concentration risk percentage	31.70%	30.40%
Customer concentration risk \| Accounts receivable
Concentration of Credit Risk
Number of customers	3		3
Customer concentration risk \| Accounts receivable \| Customer one
Concentration of Credit Risk
Concentration risk percentage	30.20%		21.90%
Customer concentration risk \| Accounts receivable \| Customer two
Concentration of Credit Risk
Concentration risk percentage	26.80%		20.10%
Customer concentration risk \| Accounts receivable \| Customer three
Concentration of Credit Risk
Concentration risk percentage	22.50%		16.60%
Vendor concentration risk \| Accounts payable
Concentration of Credit Risk
Number of vendors \| item	3		1
Vendor concentration risk \| Accounts payable \| Vendor one
Concentration of Credit Risk
Concentration risk percentage	18.00%		14.00%
Vendor concentration risk \| Accounts payable \| Vendor two
Concentration of Credit Risk
Concentration risk percentage	17.10%
Vendor concentration risk \| Accounts payable \| Vendor three
Concentration of Credit Risk
Concentration risk percentage	10.60%

Long-Term Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Equity Securities without Readily Determinable Fair Value [Line Items]
Long-term investments	$ 821	$ 821
Investments in SYNAPS Dx
Equity Securities without Readily Determinable Fair Value [Line Items]
Long-term investments	512	512
Investments in Mellitus Health Inc.
Equity Securities without Readily Determinable Fair Value [Line Items]
Long-term investments	$ 309	$ 309

Stock Incentive Plan - Additional information (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Oct. 31, 2015 shares	Mar. 31, 2022 USD ($) item shares	Mar. 31, 2021 USD ($) item shares	Jan. 01, 2022 shares	Sep. 30, 2014 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense \| $		$ 628	$ 589
Number of stock option granted		0	0
Aggregate of shares granted fully vested stock awards		8,406	5,400
Number of non-employees \| item		1	1
Fair value of stock awards on grant date \| $		$ 628	$ 537
Taxes paid on stock awards \| $		$ 106
Net shares issued after deducting taxes paid on granted shares		6,988
2014 Stock Incentive Plan \| Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future stock-based compensation grants		1,479,103
Maximum number of shares issued pursuant to awards granted under plan		3,315,203			450,000
Maximum term of stock option grants		10 years
Number of share reserve approved	1,500,000
Number of shares increase in Share Reserve				270,338
Percentage of shares reserve increased	4.00%
Total number of unvested shares		3,315,203
2007 Key Person Stock Option Plan \| Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future stock-based compensation grants		0

Leases

3 Months Ended

Mar. 31, 2022

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 March 31, 2022, the remaining lease term is three years and six months with no options to renew. The Company recognized facilities lease expenses of $22 and $44 for the three months ended March 31, 2022 and 2021, respectively.

The following table summarizes the future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms greater than one year as of March 31, 2022:


	Total
2022 Remaining period	$	66
2023		90
2024		93
2025		71
Thereafter		—
Total undiscounted future minimum lease payments		320
Less: present value discount		(15)
Total lease liabilities		305
Lease expense in excess cash payment		(11)
Total ROU asset	$	294

As of March 31, 2022, the Company’s right-of-use (“ROU”) asset was $294, which was recorded on the Company’s balance sheet as other noncurrent assets, and the Company’s current and noncurrent lease liabilities were $81 and $224, 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, 2021, the Company’s ROU asset was $314, which was recorded on the Company’s balance sheet as other noncurrent assets, and the Company’s current and noncurrent lease liabilities were $80 and $245, 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.

Income Taxes

3 Months Ended

Mar. 31, 2022

Income Taxes

Income Taxes

12. Income Taxes

The Company’s income tax provision for the three months ended March 31, 2022 and March 31, 2021 was $583 and $1,143, respectively. The income tax provision reflects its estimate of the effective tax rates expected to be applicable for the full year, adjusted for any discrete events that are recorded in the period in which they occurred. The estimates are re-evaluated each quarter based on the estimated tax expense for the full year.

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

The effective tax rate for the three months ended March 31, 2022 was 14.79%, compared to 18.99% for the three months ended March 31, 2021. The decrease in the effective tax rate for the three months ended March 31, 2022 is primarily related to tax benefits associated with employee share-based compensation plans and federal and state research and development credits net of reserves for uncertain tax positions related to these credits.

The effective tax rate for the three months ended March 31, 2022 differed from the U.S. federal statutory rate of 21% primarily due to state income taxes (net of federal benefit) partially offset by tax benefits associated with employee 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 of 18.99% for the three months ended March 31, 2021 was state income taxes (net of federal benefit) partially offset by tax benefit associated with employee share-based compensation plans and federal and state R&D credit benefit.

As of March 31, 2022, and December 31, 2021, the Company had $419 and $476, 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, 2021 and three months ended March 31, 2022.

- 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.

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+ Details

Stock Incentive Plan

3 Months Ended

Mar. 31, 2022

Stock Option Plan

Stock Option 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. In the fourth quarter of 2020, the Board of Directors agreed not to increase the Share Reserve, and accordingly, the Share Reserve did not increase on January 1, 2021. On January 1, 2022, the Share Reserve increased by 270,338. The Share Reserve is currently 3,315,203 shares as of March 31, 2022.

In light of stockholder approval of the 2014 Plan, the Company no longer grants equity awards under the 2007 Plan. As of March 31, 2022, there were no shares available for future stock-based compensation grants under the 2007 Plan and 1,479,103 shares of an aggregate total of 3,315,203 shares were available for future stock-based compensation grants under the 2014 Plan.

Treasury Stock Acquired

On March 14, 2022, the Company’s Board of Directors authorized a share repurchase program under which it may repurchase up to $20.0 million of its outstanding common stock. Under this program the Company may purchase shares on a discretionary basis from time to time through open market purchases, privately negotiated transactions or other means, including through Rule 10b5-1 trading plans or through the use of other techniques such as accelerated share repurchases. The timing and amount of any transactions will be subject to the discretion of the Company based upon market conditions and other opportunities that it may have for the use or investment of its cash balances. The repurchase program has no expiration date, does not require the purchase of any minimum number of shares and may be suspended, modified or discontinued at any time without prior notice. The Company purchased 2,030 shares at a cost of approximately $99 during the three months ended March 31, 2022.

Stock Awards

The Company granted fully vested stock awards of 8,406 shares of common stock to the non-employee members of the board of directors, employees and one non-employee as compensation during the three months ended March 31, 2022. Net shares issued after deducting taxes paid on these grants were 6,988. Fair value of these stock awards on grant date was $628. The Company granted fully vested stock awards of 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 three months ended March 31, 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 March 31, 2022 of the underlying common stock and the exercise price of outstanding, in-the-money options. A summary of the Company’s stock option activity and related information for the three months ended March 31, 2022 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, 2021	1,356,245	$	3.30	3.97	$	119,830
Options exercised	(23,800)		2.58	—		—
Balance, March 31, 2022	1,332,445	$	3.31	3.73	$	61,627
Exercisable as of March 31, 2022	1,332,445	$	3.31	3.73	$	61,627

There were no options granted during the three months ended March 31, 2022 or 2021.

The Company has recorded an expense of $628 and $589 as it relates to stock-based compensation for the three months ended March 31, 2022 and 2021, respectively:


	Three months ended March 31,
	2022		2021
Cost of Revenues	$	—	$	—
Engineering and Product Development		45		32
Sales and Marketing		172		105
General and Administrative		411		452
Total	$	628	$	589

Property and Equipment, net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Property and Equipment, net
Depreciation expense	$ 46	$ 43

Stock Incentive Plan (Tables)

3 Months Ended

Mar. 31, 2022

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, 2021	1,356,245	$	3.30	3.97	$	119,830
Options exercised	(23,800)		2.58	—		—
Balance, March 31, 2022	1,332,445	$	3.31	3.73	$	61,627
Exercisable as of March 31, 2022	1,332,445	$	3.31	3.73	$	61,627

Schedule of stock-based compensation expense


	Three months ended March 31,
	2022		2021
Cost of Revenues	$	—	$	—
Engineering and Product Development		45		32
Sales and Marketing		172		105
General and Administrative		411		452
Total	$	628	$	589

Assets for Lease, net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Assets for Lease, net
Lease revenue	$ 7,889	$ 7,194
Depreciation expense	108	113
Reduction to accumulated depreciation for returned items	90	141
Loss on disposal of assets for lease	$ (74)	$ (83)

- 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.

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+ Details

Condensed Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current Assets:
Cash and cash equivalents	$ 38,426	$ 37,323
Trade accounts receivable, net of allowance for doubtful accounts of $71 and $61, respectively	5,416	3,619
Inventory	595	550
Prepaid expenses and other current assets	6,033	4,044
Total current assets	50,470	45,536
Assets for lease, net	1,594	1,643
Property and equipment, net	470	394
Other non-current assets	313	332
Long-term investments	821	821
Long-term deferred tax assets	1,767	1,946
Total assets	55,435	50,672
Current liabilities:
Accounts payable	375	443
Accrued expenses	4,383	3,436
Deferred revenue	980	921
Other short-term liabilities	81	80
Total current liabilities	5,819	4,880
Long-term liabilities:
Other long-term liabilities	224	245
Total long-term liabilities	224	245
Commitments and contingencies (Note 10)
Stockholders' equity:
Common stock, $0.001 par value; 50,000,000 shares authorized; 6,855,168, and 6,824,380 shares issued, and 6,787,216 and 6,758,458 shares outstanding (treasury shares of 67,952 and 65,922, respectively)	7	7
Additional paid-in capital	21,130	20,645
Retained earnings	28,255	24,895
Total stockholders' equity	49,392	45,547
Total liabilities and stockholders' equity	$ 55,435	$ 50,672

Net Income Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Net Income Per Share, Basic and Diluted
Basic shares (in shares)	6,777,950	6,710,990
Common stock warrants (in shares)	71,839	73,497
Common stock options (in shares)	1,266,667	1,384,888
Diluted shares (in shares)	8,116,456	8,169,375
Net Income - Basic EPS	$ 3,360	$ 4,877
Net Income - Common stock warrants	0	0
Net Income - Common stock options	0	0
Net Income - Diluted EPS	$ 3,360	$ 4,877
Basic EPS (in dollars per share)	$ 0.50	$ 0.73
Diluted EPS (in dollars per share)	$ 0.41	$ 0.60

Condensed Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
Condensed Statements of Cash Flows - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 3,360	$ 4,877
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Depreciation	155	155
Deferred tax expense	179	626
Loss on disposal of assets for lease	74	83
Allowance for doubtful accounts	21	5
Stock-based compensation expense	628	589
Changes in Operating Assets and Liabilities:
Trade accounts receivable	(1,818)	(1,595)
Inventory	(45)	(299)
Prepaid expenses and other current assets	(1,988)	(393)
Other non-current assets	19	26
Accounts payable	(68)	(207)
Accrued expenses	946	679
Other current and non-current liabilities	(20)	(26)
Deferred revenue	59	86
Net Cash Provided by Operating Activities	1,502	4,606
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment	(122)	(133)
Purchase of assets for lease	(134)	(83)
Net Cash Used in Investing Activities	(256)	(216)
CASH FLOWS FROM FINANCING ACTIVITIES:
Taxes paid related to net settlement of equity awards	(106)
Treasury stock acquired	(99)
Proceeds from exercise of stock options	62	9
Net Cash (Used in) Provided by Financing Activities	(143)	9
INCREASE IN CASH	1,103	4,399
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	37,323	22,079
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 38,426	$ 26,478

Leases (Tables)

3 Months Ended

Mar. 31, 2022

Leases

Schedule of future minimum rental payments required under operating leases


	Total
2022 Remaining period	$	66
2023		90
2024		93
2025		71
Thereafter		—
Total undiscounted future minimum lease payments		320
Less: present value discount		(15)
Total lease liabilities		305
Lease expense in excess cash payment		(11)
Total ROU asset	$	294

Net Income Per Share, Basic and Diluted (Tables)

3 Months Ended

Mar. 31, 2022

Net Income Per Share, Basic and Diluted

Schedule of basic and diluted EPS


	Three months ended March 31,
	2022					2021
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic	6,777,950	$	3,360	$	0.50	6,710,990	$	4,877	$	0.73
Common stock warrants	71,839		—			73,497		—
Common stock options	1,266,667		—			1,384,888		—
Diluted	8,116,456	$	3,360	$	0.41	8,169,375	$	4,877	$	0.60

Accrued Expenses

3 Months Ended

Mar. 31, 2022

Accrued Expenses

Accrued Expenses

7. Accrued Expenses

Accrued expenses consist of the following:


	March 31,		December 31,
	2022		2021
Compensation	$	2,522	$	1,754
Accrued Taxes		1,339		1,159
Miscellaneous Accruals		522		523
Total Accrued Expenses	$	4,383	$	3,436

Stock Incentive Plan - Common Stock Repurchase (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 14, 2022
Stock Option Plan
Shares authorized under Share Repurchase Program		$ 20,000
Number of share repurchased	2,030
Cost of share repurchased	$ 99

Condensed Statements of Income - USD ($) $ in Thousands	3 Months Ended
Condensed Statements of Income - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
Condensed Statements of Income
Revenues	$ 14,016	$ 13,183
Operating expenses:
Cost of revenues	970	1,579
Engineering and product development	1,126	693
Sales and marketing	4,676	2,816
General and administrative	3,302	2,076
Total operating expenses	10,074	7,164
Income from operations	3,942	6,019
Interest income	1	3
Other expenses		(2)
Other income	1	1
Pre-tax net income	3,943	6,020
Income tax provision	583	1,143
Net income	$ 3,360	$ 4,877
Net income per share, basic	$ 0.50	$ 0.73
Weighted average number of shares used in computing basic income per share	6,777,950	6,710,990
Net income per share, diluted	$ 0.41	$ 0.60
Weighted average number of shares used in computing diluted income per share	8,116,456	8,169,375

Assets for Lease, net (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets for Lease, net
Assets for lease	$ 3,210	$ 3,241
Less: accumulated depreciation	(1,616)	(1,598)
Assets for lease, net	$ 1,594	$ 1,643

Basis of Presentation (Policies)	3 Months Ended
Basis of Presentation (Policies)	Mar. 31, 2022
Summary of Significant Accounting Policies and Estimates
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, 2021 filed with the SEC on March 4, 2022 (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.
COVID-19	COVID-19 In 2021, variable fee license revenues (fee-per-test), which grew strongly in the first half of 2021, decreased subsequently in the second half of 2021. The Company believes this new pattern in the home-testing market is due to a COVID-19 related timing change in the behavior of insurance plans when ordering QuantaFlo testing from its health risk assessment customers. The first quarter results of 2022 support this pattern of testing earlier in the year, as the home-testing market had higher volume of sequential revenues, which grew 67% compared to the fourth quarter of 2021. However, the Company does not know if this newly observed pattern will continue in 2022 or in future years. The Company believes that the relatively slower growth in the period-over-period comparison, was due to the COVID-19 pandemic. The Company's staff and many of its customers and prospects experienced a higher-than-normal rate of employee absence due to illness, which can have a slowing effect on its sales cycle. 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 May 2021, the financial Accounting Standards Board(“FASB”) issued Accounting Standards Update (“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 adopted this ASU prospectively effective January 1, 2022 and determined that the adoption of this new accounting standard did not have a material impact on its financial statements. In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments. This update addresses stakeholders’ concerns by amending the lease classification requirements for lessors to align them with practice under Topic 840. Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if both of the following criteria are met: i) The lease would have been classified as a sales-type lease or a direct financing lease in accordance with the classification criteria in paragraphs 842-10-25-2 through 25-3, ii) the lessor would have otherwise recognized a day-one loss. This update is effective for the Company’s fiscal years beginning after December 15, 2021. The Company adopted this ASU prospectively to the leases that commence or modified on or after January 1, 2022 and determined that the adoption of this new accounting standard did not have a material impact on its financial statements. In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This ASU increases the transparency of government assistance to include the disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an entity's financial statements. The guidance in ASU 2021-10 is effective for financial statements of all entities, including private companies, for annual periods beginning after December 15, 2021, with early application permitted. Entities are required to provide the new disclosures prospectively for all transactions with a government entity that are accounted for under either a grant or a contribution accounting model and are reflected in the financial statements at the date of initially applying the new amendments, and to new transactions entered into after that date. The Company adopted ASU No. 2021-10 prospectively to the government assistance received after January 1, 2022 and determined that the adoption of this new accounting standard 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 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, 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 issues 1-5 are conforming amendments, which are effective upon issuance of this final update. The Company determined that issues 1-5 have no impact on its financials. The amendments related to issue 6 and 7 effect ASU No. 2016-13, Financial instruments – credit losses (Topic 326): measurement of credit losses on financial statements. Effective dates of issue 6 and 7 are the same as the effective date of ASU No. 2016-13. The Company will adopt the new standard in the first quarter of fiscal year 2023.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 October 2021, the FASB issued ASU No.2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. For public business entities, this guidance will be effective for fiscal years beginning after December 15, 2022 and for interim periods within those fiscal years. For all other entities, this guidance is effective for fiscal years beginning after December 15, 2023 and for interim periods within those fiscal years. This ASU should be applied prospectively to all business combinations in the year of adoption. The Company will adopt the new standard in the first quarter of fiscal year 2023. The Company does not expect the adoption of this standard will have a material impact on its financial statements.

Assets for Lease, net

3 Months Ended

Mar. 31, 2022

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 March 31, 2022 and 2021, the Company recognized approximately $7,889 and $7,194, respectively, in lease revenues related to these arrangements.

Assets for lease consist of the following:


	March 31,		December 31,
	2022		2021
Assets for lease	$	3,210	$	3,241
Less: accumulated depreciation		(1,616)		(1,598)
Assets for lease, net	$	1,594	$	1,643

Depreciation expense amounted to $108 and $113 for the three months ended March 31, 2022 and 2021, respectively. Reduction to accumulated depreciation for returned items was $90 and $141 for the three months ended March 31, 2022 and 2021, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $74 and $83 for the three months ended March 31, 2022 and 2021, respectively.

Leases - Future minimum rental payments (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Leases
2022 Remaining period	$ 66
2023	90
2024	93
2025	71
Total undiscounted future minimum lease payments	320
Less: present value discount	(15)
Total lease liabilities	305
Lease expense in excess cash payment	(11)
Total ROU asset	$ 294	$ 314

Long-Term Investments

3 Months Ended

Mar. 31, 2022

Long-Term Investments.

Long-Term Investments

6.Long-Term Investments

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


	March 31,		December 31,
	2022		2021
Investments in SYNAPS Dx	$	512	$	512
Investments in Mellitus Health Inc.		309		309
Total	$	821	$	821

In September 2020, the Company acquired a promissory note from NeuroDiagnostics Inc., which is doing business as SYNAPS Dx, in the principal amount of $500. Subsequently, in December 2020, the Company agreed to convert the promissory note, together with all accrued interest thereon, into shares of preferred stock of SYNAPS Dx as repayment in full of the promissory note. The value of the note exchanged for the shares of preferred stock of SYNAPS Dx held by the Company as of March 31, 2022 and December 31, 2021 was approximately $512.

In October 2020, the Company acquired from a seller a convertible promissory note previously issued by Mellitus Health Inc., (“Mellitus”) 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 Mellitus, 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 Mellitus as repayment in full of such convertible promissory note. The value of consideration exchanged for the shares of preferred stock of Mellitus held by the Company as of March 31, 2022 and December 31, 2021 was approximately $309.

In April 2021, the Company entered into an agreement with Mellitus 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 and prepaid $2,000 for the license purchases. This prepayment is included in ‘Prepaid expenses and other current assets’ in the balance sheet. 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. Revenue from these product licenses during the three months ended March 31, 2022 was not significant.

The investments in SYNAPS Dx and Mellitus securities that were retained by the Company as of March 31, 2022 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. In accordance with ASC 321, the Company assessed qualitatively for impairment and determined that there was no impairment for these investments as of March 31, 2022 and December 31, 2021.

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Income Taxes
Income tax provision	$ 583	$ 1,143
Effective income tax rate	14.79%	18.99%
Federal statutory rate	21.00%
Unrecognized tax benefits	$ 419		$ 476
Interest and penalty expenses related to uncertain tax positions	$ 0		$ 0

- Definition

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

+ References + Details

Long-Term Investments (Tables)

3 Months Ended

Mar. 31, 2022

Long-Term Investments.

Schedule of long term investments


	March 31,		December 31,
	2022		2021
Investments in SYNAPS Dx	$	512	$	512
Investments in Mellitus Health Inc.		309		309
Total	$	821	$	821

Basis of Presentation

3 Months Ended

Mar. 31, 2022

Summary of Significant Accounting Policies and Estimates

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, 2021 filed with the SEC on March 4, 2022 (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.

COVID-19

In 2021, variable fee license revenues (fee-per-test), which grew strongly in the first half of 2021, decreased subsequently in the second half of 2021. The Company believes this new pattern in the home-testing market is due to a COVID-19 related timing change in the behavior of insurance plans when ordering QuantaFlo testing from its health risk assessment customers.

The first quarter results of 2022 support this pattern of testing earlier in the year, as the home-testing market had higher volume of sequential revenues, which grew 67% compared to the fourth quarter of 2021. However, the Company does not know if this newly observed pattern will continue in 2022 or in future years.

The Company believes that the relatively slower growth in the period-over-period comparison, was due to the COVID-19 pandemic. The Company's staff and many of its customers and prospects experienced a higher-than-normal rate of employee absence due to illness, which can have a slowing effect on its sales cycle.

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 May 2021, the financial Accounting Standards Board(“FASB”) issued Accounting Standards Update (“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 adopted this ASU prospectively effective January 1, 2022 and determined that the adoption of this new accounting standard did not have a material impact on its financial statements.

In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments. This update addresses stakeholders’ concerns by amending the lease classification requirements for lessors to align them with practice under Topic 840. Lessors should classify and account for a lease with variable lease payments that do not depend on a reference index or a rate as an operating lease if both of the following criteria are met: i) The lease would have been classified as a sales-type lease or a direct financing lease in accordance with the classification criteria in paragraphs 842-10-25-2 through 25-3, ii) the lessor would have otherwise recognized a day-one loss. This update is effective for the Company’s fiscal years beginning after

December 15, 2021. The Company adopted this ASU prospectively to the leases that commence or modified on or after January 1, 2022 and determined that the adoption of this new accounting standard did not have a material impact on its financial statements.

In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This ASU increases the transparency of government assistance to include the disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an entity's financial statements. The guidance in ASU 2021-10 is effective for financial statements of all entities, including private companies, for annual periods beginning after December 15, 2021, with early application permitted. Entities are required to provide the new disclosures prospectively for all transactions with a government entity that are accounted for under either a grant or a contribution accounting model and are reflected in the financial statements at the date of initially applying the new amendments, and to new transactions entered into after that date. The Company adopted ASU No. 2021-10 prospectively to the government assistance received after January 1, 2022 and determined that the adoption of this new accounting standard 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 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, 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 issues 1-5 are conforming amendments, which are effective upon issuance of this final update. The Company determined that issues 1-5 have no impact on its financials. The amendments related to issue 6 and 7 effect ASU No. 2016-13, Financial instruments – credit losses (Topic 326): measurement of credit losses on financial statements. Effective dates of issue 6 and 7 are the same as the effective date of ASU No. 2016-13. The Company will adopt the new standard in the first quarter of fiscal year 2023.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 October 2021, the FASB issued ASU No.2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. For public business entities,

this guidance will be effective for fiscal years beginning after December 15, 2022 and for interim periods within those fiscal years. For all other entities, this guidance is effective for fiscal years beginning after December 15, 2023 and for interim periods within those fiscal years. This ASU should be applied prospectively to all business combinations in the year of adoption. The Company will adopt the new standard in the first quarter of fiscal year 2023. The Company does not expect the adoption of this standard will have a material impact on its financial statements.

Concentration of Credit Risk

3 Months Ended

Mar. 31, 2022

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 and cash equivalents consist of bank deposits and money market funds 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 March 31, 2022, two customers accounted for 35.4% and 31.7% of the Company’s revenues, respectively. For the three months ended March 31, 2021, two customers accounted for 38.3% and 30.4% of the Company’s revenues. As of March 31, 2022, three customers accounted for 30.2%, 26.8%, and 22.5% of the Company’s accounts receivable, respectively. As of December 31, 2021, three customers accounted for 21.9%, 20.1%, and 16.6% of the Company’s accounts receivable, respectively. The Company’s largest customer in terms of both revenues and accounts receivable in the three months ended March 31, 2022 is a U.S. diversified healthcare company and its affiliated plans.

As of March 31, 2022, three vendors accounted for 18.0%, 17.1% and 10.6% of the Company’s accounts payable, respectively. As of December 31, 2021, one vendor accounted for 14.0% of the Company’s accounts payable, respectively.

Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

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.

401(K) Plan

Effective January 1, 2022, the Company started to match 50% of employee’s 401(k) deferral up to a maximum of 6% of the employee’s eligible earnings.

Other

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

Litigation

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

Property and Equipment, net

3 Months Ended

Mar. 31, 2022

Property and Equipment, net

Property and Equipment, net

5. Property and Equipment, net

Capital assets consist of the following:


	March 31,		December 31,
	2022		2021
Capital assets	$	1,005	$	882
Less: accumulated depreciation		(535)		(488)
Capital assets, net	$	470	$	394

Depreciation expense amounted to $46 and $43 for the three months ended March 31, 2022 and 2021, respectively.

Net Income Per Share, Basic and Diluted - Additional Information (Details) - shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Net Income Per Share, Basic and Diluted
Weighted average shares outstanding excluded from the computation of diluted net income per share	0	0

Stock Incentive Plan - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Number of Stock Options Outstanding
Balance, Beginning	1,356,245
Options exercised	(23,800)
Balance, Ending	1,332,445	1,356,245
Exercisable, Ending	1,332,445
Weighted Average Exercise Price
Balance, Beginning	$ 3.30
Options exercised	2.58
Balance, Ending	3.31	$ 3.30
Exercisable, Ending	$ 3.31
Weighted Average Remaining Contractual Term, Options Outstanding (in years)	3 years 8 months 23 days	3 years 11 months 19 days
Weighted Average Remaining Contractual Term, Options Exercisable (in years)	3 years 8 months 23 days
Aggregate Intrinsic Value, Options Outstanding	$ 61,627	$ 119,830
Aggregate Intrinsic Value, Options Exercisable	$ 61,627

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2022

Accrued Expenses

Schedule of accrued expenses


	March 31,		December 31,
	2022		2021
Compensation	$	2,522	$	1,754
Accrued Taxes		1,339		1,159
Miscellaneous Accruals		522		523
Total Accrued Expenses	$	4,383	$	3,436

Net Income Per Share, Basic and Diluted

3 Months Ended

Mar. 31, 2022

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 March 31,
	2022					2021
	Shares	Net Income		EPS		Shares	Net Income		EPS
Basic	6,777,950	$	3,360	$	0.50	6,710,990	$	4,877	$	0.73
Common stock warrants	71,839		—			73,497		—
Common stock options	1,266,667		—			1,384,888		—
Diluted	8,116,456	$	3,360	$	0.41	8,169,375	$	4,877	$	0.60

The were no weighted average shares outstanding of common stock equivalents excluded from the computation of diluted net income per share for the three months ended March 31, 2022 and 2021.

Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Inventory
Inventory balance	$ 595	$ 550

Leases - Lessee Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Jul. 31, 2020
Leases
Lease agreement term				61 months
Remaining lease term	3 years 6 months
Options to renew	false
Lease expenses	$ 22	$ 44
ROU asset	$ 294		$ 314
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other Assets, Noncurrent		Other Assets, Noncurrent
Current lease liabilities	$ 81		$ 80
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other Liabilities, Current		Other Liabilities, Current
Noncurrent lease liabilities	$ 224		$ 245
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent		Other Liabilities, Noncurrent

Inventory

3 Months Ended

Mar. 31, 2022

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. Inventory balance was $595 and $550 as of March 31, 2022 and December 31, 2021, respectively.

Condensed Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Condensed Balance Sheets
Allowance for doubtful accounts on trade accounts receivable (in dollars)	$ 71	$ 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	6,855,168	6,824,380
Common stock, shares outstanding	6,787,216	6,758,458
Treasury stock, shares	67,952	65,922

Assets for Lease, net (Tables)

3 Months Ended

Mar. 31, 2022

Assets for Lease, net

Schedule of assets for lease


	March 31,		December 31,
	2022		2021
Assets for lease	$	3,210	$	3,241
Less: accumulated depreciation		(1,616)		(1,598)
Assets for lease, net	$	1,594	$	1,643

Property and Equipment, net (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Property and Equipment, net.
Capital assets	$ 1,005	$ 882
Less: accumulated depreciation	(535)	(488)
Capital assets, net	$ 470	$ 394

Long-Term Investments - Investments in Mellitus Health Inc., (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended	12 Months Ended
	Apr. 30, 2021	Oct. 31, 2020	Mar. 31, 2022	Dec. 31, 2021
Equity Securities without Readily Determinable Fair Value [Line Items]
Impairment			$ 0	$ 0
Mellitus
Equity Securities without Readily Determinable Fair Value [Line Items]
Purchase of product licenses	$ 2,000
Renewal term of purchase agreement (in years)	1 year
Mellitus \| Prepaid expenses and other current assets
Equity Securities without Readily Determinable Fair Value [Line Items]
Prepaid license purchases	$ 2,000
Investments in Mellitus Health Inc.
Equity Securities without Readily Determinable Fair Value [Line Items]
Shares purchased		250
First Promissory note from Mellitus
Equity Securities without Readily Determinable Fair Value [Line Items]
Purchase price		$ 59
Principal amount		$ 50
Conversion value			$ 309	$ 309

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Jan. 01, 2022	Dec. 31, 2021	Jul. 31, 2020
Defined Contribution Plan Disclosure [Line Items]
Lease agreement term			61 months
Income Taxes Receivable, Cares Act		$ 1,240
Employer matching contribution	50.00%
Maximum
Defined Contribution Plan Disclosure [Line Items]
Maximum contribution of percentage of employee's eligible earnings	6.00%

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accrued Expenses
Compensation	$ 2,522	$ 1,754
Accrued Taxes	1,339	1,159
Miscellaneous Accruals	522	523
Total Accrued Expenses	$ 4,383	$ 3,436

Variably-Priced Revenue

3 Months Ended

Mar. 31, 2022

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 ASC 606. Total fees from variable-fee licenses represent approximately $5,842 and $5,658 for the three months ended March 31, 2022 and 2021, respectively. Total sales of hardware and equipment accessories represent approximately $285 and $331 of revenues for the three months ended March 31, 2022 and 2021, respectively. 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=123351226&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=123351226&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=123351226&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=123351226&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=123351226&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=123351226&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=123351226&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=123351226&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=123351226&loc=SL49130554-203045

+ Details

Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings	Total
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]
Employee stock grants			537		537
Employee stock grants (in shares)	5,400
Stock option exercises			9		9
Stock option exercises (in shares)	14,984
Stock-based compensation			52		52
Net income				4,877	4,877
Balance at Mar. 31, 2021	$ 7		22,711	12,550	35,268
Balance (in shares) at Mar. 31, 2021	6,745,806	(25,000)
Balance at Dec. 31, 2021	$ 7		20,645	24,895	45,547
Balance (in shares) at Dec. 31, 2021	6,824,380	(65,922)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock acquired			(99)		$ (99)
Treasury stock acquired (Shares)		(2,030)			(2,030)
Employee stock grants			628		$ 628
Employee stock grants (in shares)	8,406
Taxes paid related to net share settlement of equity awards			(106)		(106)
Taxes paid related to net share settlement of equity awards, shares	(1,418)
Stock option exercises			62		$ 62
Stock option exercises (in shares)	23,800				23,800
Net income				3,360	$ 3,360
Balance at Mar. 31, 2022	$ 7		$ 21,130	$ 28,255	$ 49,392
Balance (in shares) at Mar. 31, 2022	6,855,168	(67,952)

Long-Term Investments - Investments in SYNAPS Dx (Details) - Promissory note from SYNAPS Dx - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2020
Equity Securities without Readily Determinable Fair Value [Line Items]
Principal amount			$ 500
Conversion value	$ 512	$ 512

Variably-Priced Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
Variably-Priced Revenue (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
Variably-Priced Revenue
Revenue from variable-fee licenses	$ 5,842	$ 5,658
Revenue from sales of hardware and equipment accessories	$ 285	$ 331

Basis of Presentation (Details)	3 Months Ended
Basis of Presentation (Details)	Mar. 31, 2022
Summary of Significant Accounting Policies and Estimates
Percentage of Revenue Growth	67.00%