Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 16, 2023 | Jun. 30, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-36305 | ||
Entity Registrant Name | SEMLER SCIENTIFIC, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-1367393 | ||
Entity Address, Address Line One | 2340-2348 Walsh Avenue, Suite 2344 | ||
Entity Address, City or Town | Santa Clara | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95051 | ||
City Area Code | 877 | ||
Local Phone Number | 774-4211 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | SMLR | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 155,160,658 | ||
Entity Common Stock, Shares Outstanding | 6,844,512 | ||
Auditor Name | BDO USA, LLP | ||
Auditor Firm ID | 243 | ||
Auditor Location | New York, NY | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001554859 | ||
Amendment Flag | false |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 23,014 | $ 37,323 |
Short-term investments | 20,073 | |
Trade accounts receivable, net of allowance for doubtful accounts of $109 and $61, respectively | 3,884 | 3,619 |
Inventory, net | 469 | 550 |
Prepaid expenses and other current assets | 1,468 | 4,044 |
Total current assets | 48,908 | 45,536 |
Assets for lease, net | 2,478 | 1,643 |
Property and equipment, net | 667 | 394 |
Long-term investments | 821 | 821 |
Long-term notes receivable | 4,679 | |
Other non-current assets | 2,842 | 332 |
Long-term deferred tax assets | 2,298 | 1,946 |
Total assets | 62,693 | 50,672 |
Current liabilities: | ||
Accounts payable | 835 | 443 |
Accrued expenses | 4,748 | 3,436 |
Deferred revenue | 1,160 | 921 |
Other short-term liabilities | 114 | 80 |
Total current liabilities | 6,857 | 4,880 |
Long-term liabilities: | ||
Other long-term liabilities | 160 | 245 |
Total long-term liabilities | 160 | 245 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 50,000,000 shares authorized; 6,906,544, and 6,824,380 shares issued, and 6,692,122, and 6,758,458 shares outstanding (treasury shares of 214,422 and 65,922), respectively | 7 | 7 |
Additional paid-in capital | 16,449 | 20,645 |
Retained earnings | 39,220 | 24,895 |
Total stockholders' equity | 55,676 | 45,547 |
Total liabilities and stockholders' equity | $ 62,693 | $ 50,672 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Condensed Balance Sheets | ||
Allowance for doubtful accounts on trade accounts receivable (in dollars) | $ 109 | $ 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 | 6,906,544 | 6,824,380 |
Common stock, shares outstanding | 6,692,122 | 6,758,458 |
Treasury stock, shares | 214,422 | 65,922 |
Condensed Statements of Income
Condensed Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Statements of Income | ||
Revenues | $ 56,686 | $ 53,027 |
Operating expenses: | ||
Cost of revenues | 4,252 | 6,122 |
Engineering and product development | 4,809 | 3,780 |
Sales and marketing | 17,685 | 14,445 |
General and administrative | 12,737 | 9,235 |
Total operating expenses | 39,483 | 33,582 |
Income from operations | 17,203 | 19,445 |
Interest income | 494 | 10 |
Other expenses | 5 | |
Other income | 489 | 10 |
Pre-tax net income | 17,692 | 19,455 |
Income tax provision | 3,367 | 2,233 |
Net income | $ 14,325 | $ 17,222 |
Net income per share, basic | $ 2.13 | $ 2.56 |
Weighted average number of shares used in computing basic income per share | 6,726,687 | 6,731,693 |
Net income per share, diluted | $ 1.79 | $ 2.12 |
Weighted average number of shares used in computing diluted income per share | 7,999,750 | 8,138,608 |
Statements of Stockholders Equi
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 | ||||
Balance (in shares) at Dec. 31, 2020 | (25,000) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of put option in SYNAPS Dx | (2,230) | (2,230) | |||
Exercise of put option in SYNAPS Dx (in Shares) | (40,922) | ||||
Employee stock grants | 512 | 512 | |||
Employee stock grants (in shares) | 5,516 | ||||
Stock option exercises | 58 | $ 58 | |||
Stock option exercises (in shares) | 93,442 | 95,175 | |||
Stock-based compensation | 192 | $ 192 | |||
Net income | 17,222 | 17,222 | |||
Balance at Dec. 31, 2021 | $ 7 | 20,645 | 24,895 | $ 45,547 | |
Balance (in shares) at Dec. 31, 2021 | 6,824,380 | ||||
Balance (in shares) at Dec. 31, 2021 | (65,922) | (65,922) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Treasury stock acquired | (4,991) | $ (4,991) | |||
Treasury stock acquired (Shares) | (148,500) | (148,500) | |||
Exercise of put option in SYNAPS Dx (in Shares) | (40,922) | ||||
Employee stock grants | 723 | $ 723 | |||
Employee stock grants (in shares) | 11,131 | ||||
Taxes paid related to settlement of equity awards | (114) | (114) | |||
Taxes paid related to settlement of equity awards (in shares) | (1,710) | ||||
Stock option exercises | 168 | $ 168 | |||
Stock option exercises (in shares) | 72,743 | 73,398 | |||
Stock-based compensation | 18 | $ 18 | |||
Net income | 14,325 | 14,325 | |||
Balance at Dec. 31, 2022 | $ 7 | $ 16,449 | $ 39,220 | $ 55,676 | |
Balance (in shares) at Dec. 31, 2022 | 6,906,544 | ||||
Balance (in shares) at Dec. 31, 2022 | (214,422) | (214,422) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 14,325 | $ 17,222 |
Reconciliation of Net Income to Net Cash Provided by Operating Activities: | ||
Depreciation | 589 | 628 |
Deferred tax (income) expense | (351) | 408 |
Loss on disposal of assets for lease | 463 | 362 |
Gain on short-term investments | (77) | |
Loss on disposal of inventory | 1,202 | |
Allowance for doubtful accounts | 103 | 63 |
Stock-based compensation | 741 | 749 |
Changes in Operating Assets and Liabilities: | ||
Trade accounts receivable | (367) | (874) |
Inventory | 81 | (1,412) |
Prepaid expenses and other current assets | 2,576 | (2,657) |
Other non-current assets | (2,510) | 86 |
Accounts payable | 392 | (234) |
Accrued expenses | 1,310 | 638 |
Other current and non-current liabilities | 188 | (125) |
Net Cash Provided by Operating Activities | 17,463 | 16,056 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (476) | (318) |
Purchase of short-term investments | (19,996) | |
Purchase of notes held for investment | (4,679) | |
Purchase of assets for lease | (1,684) | (507) |
Net Cash Used in Investing Activities | (26,835) | (825) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Taxes paid related to net settlement of equity awards | (114) | (45) |
Treasury stock acquired | (4,991) | |
Proceeds from exercise of stock options | 168 | 58 |
Net Cash (Used in) Provided by Financing Activities | (4,937) | 13 |
(DECREASE) INCREASE IN CASH | (14,309) | 15,244 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 37,323 | 22,079 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 23,014 | 37,323 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for taxes | $ 2,400 | 2,647 |
Exercised put option of 211,928 common stock in SYNAPS Dx for 40,922 common stock of the company | $ 2,230 |
Statements of Cash Flows (Paren
Statements of Cash Flows (Parenthetical) | 12 Months Ended |
Dec. 31, 2022 shares | |
Condensed Statements of Cash Flows | |
Exercised put option of common stock in SYNAPS Dx (in shares) | 211,928 |
Exercised put option for number of common stock of the company (in shares) | 40,922 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2022 | |
The Company | |
The Company | 1. The Company We are a company providing technology solutions to improve the clinical effectiveness and efficiency of healthcare providers. The Company’s mission is to develop, manufacture and market innovative products and services that assist our customers in evaluating and treating chronic diseases. The Company’s patented and U.S. Food and Drug Administration, or FDA, cleared product, QuantaFlo, measures arterial blood flow in the extremities to aid in the diagnosis of peripheral arterial disease, or PAD, and serves as an aid to measure hemodynamics related to heart dysfunction. In April 2021, the Company entered into an agreement, as amended in December 2022, with Mellitus Health, Inc, or Mellitus, a private company to exclusively market and distribute Insulin Insights, an FDA-cleared software product that recommends optimal insulin dosing for diabetic out-patients in the United States, including Puerto Rico, except for selected accounts. In December 2022 certain clauses of this agreement were amended, including an additional prepayment of $500 for licenses, making a total prepayment of $2,500 for licenses. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Estimates | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies and Estimates | |
Summary of Significant Accounting Policies and Estimates | 2. Summary of Significant Accounting Policies and Estimates Basis for Presentation The Company’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses, and related disclosures during the reporting period. Significant items subject to such estimates include revenue recognition, allowance for doubtful accounts, valuation of equipment on lease, recognition and measurement of current and deferred income taxes, valuation and recognition of investments and valuation of inventory. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents, accounts receivable and trade payables. The Company maintains its cash with major financial institutions. The Company’s cash consists of bank deposits held with banks that, at times, exceed federally insured limits. The cash and cash equivalents also include short term treasury bills with original maturities of three months or less. The Company manages its accounts receivable credit risk through ongoing credit evaluation of its customers' financial conditions. The Company generally does not require collateral from its customers. For information regarding the Company’s significant customers and vendors, see Note 11 to financial statements. Revenue Recognition The Company generates revenues primarily from the rental or license of its vascular testing product. The Company recognizes revenues from the licensing of its product primarily pursuant to agreements that automatically renew each month with revenue recognized on a daily convention basis. The Company’s arrangements with customers for its vascular testing product are normally on a month-to-month basis with fees billed at the rates established in the customer agreement, either on a fixed or variable (e.g. fee per test) basis, as earned. The Company also recognizes revenue for hardware and supplies sales as of the date of shipment. Cash and Cash Equivalents Cash and cash equivalents are comprised of highly liquid investments purchased with an initial maturity date of three months or less. Funds held as investments in money market funds are included within cash and cash equivalents. Short-Term Investments Short-term investments are those that can be readily converted into cash and also any investment instruments that will mature within one year or which are expected to be liquidated within one year. As of December 31, 2022, short-term investments represented a T-Bill that matured on March 2, 2023 and subsequently reinvested in similar instruments. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of this allowance for doubtful accounts by considering historical experience, the age of the accounts receivable balances, the credit quality of the customers, current economic conditions, and other factors that may affect customers’ ability to pay to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. As of December 31, 2021, the allowance for doubtful accounts was $61. Net change due to credit losses during the year was $48. Allowance balance as of December 31, 2022 was $109. 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. Assets for Lease Assets for lease are recorded at cost. At December 31, 2022 and 2021, assets for lease consisted of vascular testing devices, which are leased to customers. The cost of such assets for lease is depreciated on a straight-line basis over 36 months for the units outstanding and recorded as cost of revenues. The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected undiscounted net cash flows associated with the related assets over their estimated remaining lives against their respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its assets for lease in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. At December 31, 2022 and 2021, there were no impairment indicators. Property and Equipment Capital assets are recorded at cost. The cost of such capital assets is depreciated on a straight-line basis over a term depending on the assigned category (described below) and recorded as depreciation for capital assets recorded in engineering and product development, sales and marketing and general and administrative expenses. At December 31, 2022 and 2021, capital assets are classified into one of the following categories: Category Name Description Machinery & Equipment Manufacturing, R&D, or other non-office equipment Computer Equipment & Software Software, computers, monitors, printers and other related equipment. Furniture & Fixtures Office equipment and furniture owned by the company At December 31, 2022 and 2021, capital assets are depreciated based on the following estimated useful life for each category: Account Name Useful Life Machinery & Equipment Five years Computer Equipment & Software Three years Furniture & Fixtures Five years The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of capital assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected fair value of the related asset over the estimated remaining life against the respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its capital assets in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. The Company did not have any impairments to record during either the years ended December 31, 2022, or 2021. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy under Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, are described as follows: Level 1 Level 2 Level 3 The financial instruments of the Company consist primarily of cash, money market accounts, receivable, and accounts payable. These items are considered Level 1 due to their short-term nature and their market interest rates and are therefore considered a reasonable estimate of fair value at December 31, 2022 and 2021. The Company classifies short-term investments within Level 1 in the fair value hierarchy, be are used to determine fair value. The Company also invested in non-convertible promissory note, prepayment for inventory and equity securities of two privately held companies, which were recorded on cost basis. See Note 6,8 and 9 to the financial statements for more information. Investment Valuation The Company’s investments in equity in privately held companies without readily determinable fair values, which are generally recorded at cost, plus or minus subsequent observable price changes in orderly transactions for identical or similar investments, less impairments. As part of its 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 its qualitative assessment indicates the investments are impaired, the fair value of these equity securities would be estimated, which would involve a significant degree of judgment and subjectivity. No impairment charges were recorded during the year ended December 31, 2022 and 2021. Deferred Revenue Deferred revenue represents amounts billed to or collected from customers for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. The full amount is expected to be recognized as revenues within one year from the balance sheet date and, therefore, such deferred amounts have been classified as current liabilities in the balance sheets presented. The Company generally invoices its clients in advance of a rental period with payment due upon receipt of the invoice. Revenue recognized for the year ended December 31, 2022 from amounts included in deferred revenue as of December 31, 2021 was $921. Revenue recognized for the year ended December 31, 2021 from amounts included in deferred revenue as of December 31, 2020 was $963. Research and Development The Company expenses costs related to the research and development associated with the design, development, testing and enhancement of its products and services. Such expenses include salaries and related employee benefits, and fees paid to external service providers. Stock-Based Compensation Stock-based compensation expense is measured based on the grant-date fair value of the stock-based awards. The Company recognizes stock-based compensation expense for the portion of each option grant or stock award that is expected to vest over the estimated period of service and vesting. The Company uses the Black-Scholes option pricing model as the method for determining the estimated grant-date fair value of stock options. The Black-Scholes option pricing model requires the use of subjective assumptions which determine the fair value of stock-based awards, including the option’s expected volatility. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the grant. Employee Benefit Plan The Company has a savings plan that qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). 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. Income Taxes The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the expected tax consequences attributable to the differences between financial reporting and the tax bases of existing assets and liabilities and net operating loss (“NOL”) carryforwards, and they are measured using enacted tax rates expected to be in effect when differences are expected to reverse. 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 In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments . 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 . 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 Financial Instruments – Credit Losses (Topic 326); In March 2020, FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments Financial instruments – credit losses (Topic 326): measurement of credit losses on financial statements In October 2021, the FASB issued ASU No.2021-08, Business Combinations (Topic 805): ccounting for Contract Assets and Contract Liabilities from Contracts with Customers In March 2022, the FASB issued ASU No.2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, |
Assets for Lease, net
Assets for Lease, net | 12 Months Ended |
Dec. 31, 2022 | |
Assets for Lease, net | |
Assets for Lease, net | 3. Assets fo r The Company provides financing of certain equipment through operating leases (see Note 12 to the financial statements). Assets for lease consist of the following: As of December 31, 2022 2021 Assets for lease $ 3,702 $ 3,241 Less: accumulated depreciation (1,224) (1,598) Assets for lease, net $ 2,478 $ 1,643 Depreciation expense amounted to $386 and $442 for the years ended December 31, 2022 and 2021, respectively. Reduction to accumulated depreciation for returned items was $352 and $310 for the years ended December 31, 2022 and December 31, 2021, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $463 and $362 for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, total assets for lease, net, in use at customer locations were $518 and $631, respectively. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2022 | |
Inventory | |
Inventory | 4. Inventory As of December 31, 2022 and 2021, the inventory balance was $469 and $550 , respectively. Inventory includes finished goods of light blocking bags and heel warmers. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment, net | |
Property and Equipment, net | 5. Property and Equipment, net Capital assets consist of the following: As of December 31, 2022 2021 Capital assets $ 1,206 $ 882 Less: accumulated depreciation (539) (488) Capital assets, net $ 667 $ 394 Depreciation expense amounted to $203 and $180 for the years ended December 31, 2022 and 2021, respectively. |
Long Term Investments
Long Term Investments | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Investments. | |
Long-Term Investments | 6. Long-Term Investments Carrying value of non-marketable securities is measured as the total initial cost plus the cumulative net gain (loss). Carrying value of non-marketable equity investments consist of the following for the periods presented: As of December 31, 2022 2021 Investments in SYNAPS Dx $ 512 $ 512 Investments in Mellitus Health Inc. 309 309 Total initial cost $ 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, $100 of which was retained for expense reimbursement. Subsequently, in December 2020, the Company agreed to convert the promissory note, together with all accrued interest thereon, into shares of preferred stock of SYNAPS Dx as repayment in full of the promissory note. The value of the note exchanged for the shares of preferred stock of SYNAPS Dx held by the Company as of December 31, 2022 and 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 December 31, 2022 and 2021 was approximately $309. The investments in SYNAPS Dx and Mellitus securities that were retained by the Company as of December 31, 2022 were recorded in accordance with ASC 321, Investments – equity securities, The Company qualitatively assessed both investments for impairment in accordance with ASC 321. As of December 31, 2022, the Company determined that there was no impairment for the investment in SYNAPS Dx and the investment in Mellitus. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 7. Fair Value Measurements Fair Value Hierarchy Level 1 Level 2 Level 3 Total As of December 31,2022 U.S. Treasury bill $ 20,073 $ — $ — $ 20,073 (Included in short-term investments) Investment in debt Security — — 3,679 3,679 (Included in notes held for investment) Total Assets $ 20,073 $ — $ 3,679 $ 23,752 Treasury bill was purchased on November 30, 2022 at a cost of $19,996 and fair value accretes to maturity date at an interest rate of 4.245% . As of December 31, 2022, the interest income recorded on this bill was $77 . The fair value of the investments in the debt securities were determined by the Company to be equivalent to the initial purchase price, as the transactions were negotiated with an unrelated third parties. There were no material changes in the fair value of the debt securities identified between the acquisition date of securities, and the year end of December 31, 2022, the reporting date. |
Notes held for investment
Notes held for investment | 12 Months Ended |
Dec. 31, 2022 | |
Notes held for investment | |
Notes held for investment | 8. Notes held for investment Notes receivable consist of the following for the periods presented: As of December 31, 2022 2021 Senior secured promissory notes $ 1,000 $ — Secured convertible promissory notes 3,679 — Total notes held for investment $ 4,679 $ — In June 2022, the Company loaned Mellitus an aggregate of $1,000 through the purchase of two senior secured promissory notes that bear interest at a rate of 5% per annum, and mature in three years unless accelerated due to an event of default as provided in the notes. Repayment of notes is secured by a first priority interest in all of Mellitus’ assets. In May 2022, to facilitate the subordination of such notes in connection with the purchase of the senior secured notes, the Company acquired $179 aggregate principal amount of outstanding convertible notes of Mellitus, which, as amended, mature July 5, 2025, if not automatically converted into preferred stock prior thereto. This note bears an interest rate of 10% per annum. providing Monarch with up to $5,000 in available funding, of which $3,500, in principle was drawn on the issuance date (the “Debt Security”). The remaining $1.5 million is available to be drawn at any time unless there is an Event of Default that is continuing. The Debt Security accrues interest at 10% per annum, payable monthly commencing January 5, 2023, and the principal balance is due December 6, 2024. The note along with up to $100 of transaction expenses is due and payable on the occurrence of an event of default or change of control unless accelerated due to the conversion into preferred stock prior thereto at the option of the Company. The Company has the option to extend the maturity date for two consecutive one-year terms. The Debt Security can be converted into Monarch’s shares at the Company’s option upon (a) an equity financing at Monarch, (b) upon a change of control at Monarch, or (c) at the Company’s option at any time prior to the maturity date. If converted upon a change of control, the Company has the right to receive a cash payment equal to the balance of the Debt Security or the amount payable upon conversion into Monarch’s shares. The Debt Security is redeemable at any time at Monarch’s option or automatically upon an Event of Default. Financial Instruments |
Other Non-current assets
Other Non-current assets | 12 Months Ended |
Dec. 31, 2022 | |
Other Non-current assets | |
Other Non-current assets | 9. Other non-current assets Other non-current assets consist of the following for the periods presented: As f December 31, 2022 2021 Prepaid licenses $ 2,490 $ — Other 352 332 Total other non-current assets $ 2,842 $ 332 In April 2021, the Company entered into a five-year agreement, as amended in December 2022, 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, including hiring dedicated sales and marketing personnel, conducting webinars and attending trade shows and etc. Under this distribution agreement and its amendments, the Company agreed to purchase $2,500 of product licenses and prepaid $2,500 for the license purchases. This prepayment, which was reclassed to a long-term asset in 2022 due to the change in the estimation of the recoverability period is expected to be more than one year. The long-term portion of the prepaid licenses are included in the Other non-current assets. Unless early terminated in accordance with its terms, the exclusive distribution agreement will remain in full force and effect until April 1, 2026, and for renewal periods of one year each upon its anniversary date, unless terminated by at least 60 days written notice prior to such an anniversary date. Either party may terminate the agreement by written notice to the other party upon or after the breach of any material provision of this agreement by the other party, if the other party has not cured such breach within 60 days after written notice thereof from the non-breaching party. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses | |
Accrued Expenses | 10. Accrued Expenses Accrued expenses consist of the following: As of December 31, 2022 2021 Compensation $ 2,467 $ 1,754 Accrued Taxes 1,923 1,159 Miscellaneous Accruals 358 523 Total Accrued Expenses $ 4,748 $ 3,436 |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2022 | |
Concentration of Credit Risk | |
Concentration of Credit Risk | 11. Concentration of Credit Risk Credit risk is the risk of loss from amounts owed by the financial counterparties. Credit risk can occur at multiple levels; as a result of broad economic conditions, challenges within specific sectors of the economy, or from issues affecting individual companies. Financial instruments that potentially subject the Company to credit risk consist of cash and accounts receivable. The Company maintains cash with major financial institutions. The Company’s cash consists of bank deposits held with banks that, at times, exceed federally insured limits. The cash and cash equivalents also include short term treasury bills with original maturities of three months or less. As of December 31,2022, the Company held deposits of $12,960 , which exceeded federal deposit corporation limits. The Company also invested in U.S. treasury bills in the amount of $30,127 Management periodically monitors the creditworthiness of its customers and believes that it has adequately provided for any exposure to potential credit loss. For the year ended December 31, 2022, two customers accounted for 40.4% and 29.0% of the Company’s revenue. For the year ended December 31, 2021, two customers accounted for 40.8%, and 28.6% of the Company’s revenue. As of December 31, 2022, three customers accounted for 26.8%, 25.9% and 16.8% of the Company’s accounts receivable. As of December 31, 2021, three customers accounted for 21.9%, 20.1% and 16.6% of the Company’s accounts receivable. As of December 31, 2022 and 2021 the allowance for doubtful accounts was $109 and $61, respectively. As of December 31, 2022, two vendors accounted for 25.8% and $10.8% of the Company’s accounts payable. As of December 31, 2021, one vendor accounted for 14.0% of the Company’s accounts payable. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 12. Leases Lessee Arrangements On July 31, 2020, the Company entered into a 61-month lease agreement for office space to use, as necessary, for office administration, lab space and assembly and storage purposes, located in Santa Clara, California. The Company took possession of the leased office space in September 2020, and the lease is effective through September 30, 2025. As of December 31, 2022, the remaining lease term is three years and nine months with no options to renew. The Company recognized facilities lease expenses of $88 and $112 for the years ended December 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 December 31, 2022: Total 2023 90 2024 93 2025 71 Total undiscounted future minimum lease payments 254 Less: present value discount (9) Total lease liabilities 245 Lease expense in excess cash payment (12) Total ROU asset $ 233 As of December 31, 2022, the Company’s ROU asset current noncurrent Lessor Arrangements The Company enters into contracts with customers for the Company’s QuantaFlo ® Variable-fee Revenue The Company recognizes revenues from variable-fee licenses (e.g., fee per test) and sales of hardware equipment and accessories in accordance with Topic 606. Total revenues from variable-fee licenses were approximately $21,277 and $21,510 for the years ended December 31, 2022 and 2021, respectively. Total revenues from sales of hardware and equipment accessories were approximately $1,358 and $956 for the years ended December 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. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 13. Commitments and Contingencies Senior Secured Convertible Note In December 2022, the Company committed a loan of $5,000 to Monarch through the purchase of a senior secured convertible promissory note that bears interest at a rate of 10% per annum and matures on the second anniversary from the issue date, which can be extended for up to two additional consecutive one-year terms in the Company’s sole discretion. The note along with up to $100 of transaction expenses is due and payable on the occurrence of an event of default or change of control unless accelerated due to the conversion into preferred stock prior thereto at the option of the Company. Monarch borrowed $3,500 out of the committed amount of $5,000 as of December 31, 2022 and has agreed to reimburse the Company for up to $100 of transaction expense. Repayment of the note is secured by a first priority interest in all of Monarchs’ assets. In January 2023, Monarch borrowed an additional $500 leaving a balance of $1,000 available to be borrowed in the future. See Note 8 to financial statements. Indemnification Obligations The Company enters into agreements with customers, partners, lenders, consultants, lessors, contractors, sales representatives and parties to certain transactions in the ordinary course of the Company’s business. These agreements may require the Company to indemnify the other party against third party claims alleging that its product infringes a patent or copyright. Certain of these agreements require the Company to indemnify the other party against losses arising from: a breach of representations or covenants, claims relating to property damage, personal injury or acts or omissions of the Company, its employees, agents or representatives. The Company has also agreed to indemnify the directors and certain of the officers and employees in accordance with the by-laws of the Company. These indemnification provisions will vary based upon the nature and terms of the agreements. In many cases, these indemnification provisions do not contain limits on the Company’s liability, and the occurrence of contingent events that will trigger payment under these indemnities is difficult to predict. As a result, the Company cannot estimate its potential liability under these indemnities. The Company believes that the likelihood of conditions arising that would trigger these indemnities is remote and, historically, the Company had not made any significant payment under such indemnification provisions. Accordingly, the Company has not recorded any liabilities relating to these agreements. In certain cases, the Company has recourse against third parties with respect to the aforesaid indemnities, and the Company believes it maintains adequate levels of insurance coverage to protect the Company with respect to potential claims arising from such agreements. 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 claimed $1.24 million in this retention credit. No credit was claimed for the year ended December 31, 2022. Legal Matter From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. The Company is not currently a party to any 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 business, operating results, cash flows or financial condition. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 14. Stockholders’ Equity The Company has 50,000,000 authorized shares of capital stock, all of which are designated as common stock with par value of $0.001 per share. Each holder of shares of common stock is entitled to one vote for each share held. 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 148,500 shares at a cost of approximately $4,991 during the year ended December 31, 2022. For the years ended December 31, 2022 and 2021, a total of 1,548,545 and 1,433,120 shares of common stock, respectively, were reserved for issuance upon (i) exercise of common stock warrants, and (ii) the exercise of outstanding stock options, as follows: Year ended December 31, 2022 2021 Common stock warrants 76,875 76,875 Stock options 1,471,670 1,356,245 Total 1,548,545 1,433,120 |
Stock Option Plan
Stock Option Plan | 12 Months Ended |
Dec. 31, 2022 | |
Stock Option Plan | |
Stock Option Plan | 15. Stock Option Plan The Company’s stock-based compensation program is designed to attract and retain employees while also aligning employees’ interests with the interests of its stockholders. Stock options have been granted to employees under the stockholder-approved 2007 Key Person Stock Option Plan (“2007 Plan”) or the stockholder-approved 2014 Stock Incentive Plan (“2014 Plan”). Stockholder approval of the 2014 Plan became effective in September 2014. The 2014 Plan originally provided that the aggregate number of shares of common stock that may be issued pursuant to awards granted under the 2014 Plan may not exceed 450,000 shares (the “Share Reserve”), however in October 2015, the stockholders approved a 1,500,000 increase to the Share Reserve. In addition, the Share Reserve automatically increases on January 1st of each year, for a period of not more than 10 years, beginning on January 1st of the year following the year in which the 2014 Plan became effective and ending on (and including) January 1, 2024, in an amount equal to 4% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year. The Company’s board of directors may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of shares of common stock than would otherwise occur. The Share Reserve is currently 3,315,203 shares for the year ending December 31, 2022. In light of stockholder approval of the 2014 Plan, the Company no longer grants equity awards under the 2007 Plan. As of December 31, 2022, there were no shares available for future stock-based compensation grants under the 2007 Plan and 1,471,670 shares of an aggregate total of 3,315,203 shares available for future stock-based compensation grants under the 2014 Plan. Aggregate intrinsic value represents the difference between the closing market value as of December 31, 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 2022 and 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, December 31, 2020 1,451,420 $ 3.25 4.91 $ 131,714 Options exercised (95,175) 2.55 — — Balance, December 31, 2021 1,356,245 $ 3.30 3.97 $ 119,830 Options exercised (73,398) 2.58 — — Options granted 5,000 30.48 4.00 — Balance, December 31, 2022 1,287,847 $ 3.44 3.03 $ 38,053 Exercisable as of December 31, 2021 1,356,245 $ 3.30 3.97 $ 119,830 Exercisable as of December 31, 2022 1,282,847 $ 3.34 3.00 $ 38,053 On May 17, 2022 the Company awarded 5,000 options to an employee as compensation pursuant to the 2014 Plan with an exercise price of $30.48 and Black-Scholes options pricing model value of $22.27 . In applying the Black-Scholes options pricing model, the following assumptions were used: 1) expected price volatility of 78.6% ; risk-free interest rate of 2.884% ; weighted average expected life of 7 years ; zero forfeiture rate and no dividend yield; 1/4th of these options is vested one year after the grant date and 1/48th for each month thereafter contingent upon the participant’s continued service beginning on the initial vesting date and ending when the Vested Ratio equals 1/1. unrecognized stock-based compensation expense of $94 is expected to be recorded over a weighted average period of 3.4 years. There were no options granted or forfeited during the year ended December 31, 2021. Stock grants The Company granted 9,421 and 5,516 shares of fully vested stock to a consultant, employees and board of directors in the year ended December 31, 2022 and 2021, respectively. Grant date fair value of the stock was $723 and $557 for the year ended December 31, 2022 and 2021, respectively. The Company has recorded an expense of $741 and $749 as it relates to stock-based compensation for the years ended December 31, 2022 and 2021, respectively, which was allocated as follows based on the role and responsibility of the recipient in the Company: December 31 December 31 2022 2021 Engineering and Product Development $ 45 $ 32 Sales and Marketing 173 125 General and Administrative 523 592 Total $ 741 $ 749 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | 16. Income Taxes The components of the provision for income taxes are as follows: 2022 2021 Current tax provision: Federal $ 3,201 $ 1,397 State 517 428 Total current tax provision 3,718 1,825 Deferred tax provision: Federal (373) 456 State 22 (48) Total deferred tax provision (351) 408 Total income tax provision $ 3,367 $ 2,233 A summary of the differences between the Company’s effective income tax rate and the federal statutory income tax rate for the years ended December 31, 2022 and 2021 are as follows: 2022 2021 Federal statutory rate 21.00 % 21.00 % State income tax rate, net of federal benefit 2.57 % 1.55 % Stock-based compensation (4.03) % (10.62) % Permanent items (0.93) % (1.16) % Other 0.35 % 0.68 % Effective income tax rate 18.96 % 11.45 % Deferred tax assets are comprised of the following at December 31: 2022 2021 Net operating loss carryforwards $ 303 $ 446 Deferred revenue 278 220 Stock based compensation 529 556 Accrual and reserves 297 529 Research and development credits 254 228 Other 2 14 Depreciation and amortization 633 — Lease liability 59 77 Total gross deferred tax assets 2,355 2,070 Less valuation allowance — — Net deferred tax assets 2,355 2,070 Deferred tax liabilities: Depreciation and amortization — (49) Right of use assets (56) (75) Total deferred tax liabilities (56) (124) Net deferred tax assets $ 2,299 $ 1,946 Federal and California tax laws imposes significant restrictions on the utilization of net operating loss (“NOL”) carryforwards in the event of a change in ownership of the Company, as defined by Section 382 of the Code (“Section 382”). The Company has completed a formal 382 study for the period from January 1, 2012 through June 30, 2019 and believes a change in ownership has occurred. The Company has no NOL carryforwards for Federal income tax purposes and approximately $4,234 for California income tax purposes as of December 31, 2022. The state NOL carryforwards, if not utilized, will expire beginning in 2036. As of December 31, 2022 and 2021, the Company had $401 and $476, respectively, of unrecognized tax benefits, excluding interest and penalties. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits: Gross Unrecognized Tax Benefits 2022 Gross Unrecognized Tax Benefits 2021 Unrecognized tax benefits – January 1 $ 476 $ 341 Gross increases related to prior tax positions — 41 Gross decreases related to prior tax positions (120) — Gross increases related to current tax positions 45 94 Unrecognized tax benefits – December 31 $ 401 $ 476 The Company’s policy is to recognize interest and penalty expenses related to uncertain tax positions in income tax expense, which was $30 and none for the years ended December 31, 2022 and 2021, respectively. The Company files income tax returns in the U.S. federal and various state tax jurisdictions. The Company’s tax years beginning in 2018 remain open for examination by the state tax authorities for four years. The Company’s tax years beginning in 2019 remain open for examination by the federal tax authorities for three years. Tax years beginning in 2016 will remain open for examination from the date of utilization of any NOL or credits. The Company does not have any tax positions for which it is reasonably possible the total amount of gross unrecognized tax benefits will increase or decrease within 12 months of the year-ended December 31, 2022. On August 16, 2022, the CHIPS and Science Act of 2022 or Creating Helpful Incentives to Produce Semiconductors for America Act, and Inflation Reduction Act (IRA Act) was signed into law in the United States. Among other things, CHIPS and Science Act provides incentives and tax credits for the global chip manufacturers who choose to set-up or expand existing operations in the United States. The IRA Act imposes a 15% corporate alternative minimum tax for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. This act is primarily applicable to large corporations with an annual revenue of $1 billion or over. Implementation of this act has no impact on the Company’s financial statements as of December 31, 2022. |
Net Income Per Share, Basic and
Net Income Per Share, Basic and Diluted | 12 Months Ended |
Dec. 31, 2022 | |
Net Income Per Share, Basic and Diluted | |
Net Income Per Share, Basic and Diluted | 17. Net Income Per Share, Basic and Diluted Basic earnings per share (“EPS”) represent net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period using the treasury stock method. 5,000 options related to stock awards were granted and unvested. As of December 31, 2022, these options were considered anti-dilutive for the computation of diluted net income per share. Basic and diluted net EPS is calculated as follows: For the year ended December 31, 2022 2021 Shares Net Income EPS Shares Net Income EPS Basic EPS 6,726,687 $ 14,325 $ 2.13 6,731,693 $ 17,222 $ 2.56 Common stock warrants 68,588 — — 73,767 — — Common stock options 1,204,475 — — 1,333,148 — — Diluted EPS 7,999,750 $ 14,325 $ 1.79 8,138,608 $ 17,222 $ 2.12 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Estimates (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies and Estimates | |
Basis of Presentation | Basis for Presentation The Company’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses, and related disclosures during the reporting period. Significant items subject to such estimates include revenue recognition, allowance for doubtful accounts, valuation of equipment on lease, recognition and measurement of current and deferred income taxes, valuation and recognition of investments and valuation of inventory. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents, accounts receivable and trade payables. The Company maintains its cash with major financial institutions. The Company’s cash consists of bank deposits held with banks that, at times, exceed federally insured limits. The cash and cash equivalents also include short term treasury bills with original maturities of three months or less. The Company manages its accounts receivable credit risk through ongoing credit evaluation of its customers' financial conditions. The Company generally does not require collateral from its customers. For information regarding the Company’s significant customers and vendors, see Note 11 to financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are comprised of highly liquid investments purchased with an initial maturity date of three months or less. Funds held as investments in money market funds are included within cash and cash equivalents. |
Short-Term Investments | Short-Term Investments Short-term investments are those that can be readily converted into cash and also any investment instruments that will mature within one year or which are expected to be liquidated within one year. As of December 31, 2022, short-term investments represented a T-Bill that matured on March 2, 2023 and subsequently reinvested in similar instruments. |
Revenue Recognition | Revenue Recognition The Company generates revenues primarily from the rental or license of its vascular testing product. The Company recognizes revenues from the licensing of its product primarily pursuant to agreements that automatically renew each month with revenue recognized on a daily convention basis. The Company’s arrangements with customers for its vascular testing product are normally on a month-to-month basis with fees billed at the rates established in the customer agreement, either on a fixed or variable (e.g. fee per test) basis, as earned. The Company also recognizes revenue for hardware and supplies sales as of the date of shipment. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of this allowance for doubtful accounts by considering historical experience, the age of the accounts receivable balances, the credit quality of the customers, current economic conditions, and other factors that may affect customers’ ability to pay to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. As of December 31, 2021, the allowance for doubtful accounts was $61. Net change due to credit losses during the year was $48. Allowance balance as of December 31, 2022 was $109. |
Inventory | 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. |
Assets for Lease | Assets for Lease Assets for lease are recorded at cost. At December 31, 2022 and 2021, assets for lease consisted of vascular testing devices, which are leased to customers. The cost of such assets for lease is depreciated on a straight-line basis over 36 months for the units outstanding and recorded as cost of revenues. The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected undiscounted net cash flows associated with the related assets over their estimated remaining lives against their respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its assets for lease in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. At December 31, 2022 and 2021, there were no impairment indicators. |
Property and Equipment | Property and Equipment Capital assets are recorded at cost. The cost of such capital assets is depreciated on a straight-line basis over a term depending on the assigned category (described below) and recorded as depreciation for capital assets recorded in engineering and product development, sales and marketing and general and administrative expenses. At December 31, 2022 and 2021, capital assets are classified into one of the following categories: Category Name Description Machinery & Equipment Manufacturing, R&D, or other non-office equipment Computer Equipment & Software Software, computers, monitors, printers and other related equipment. Furniture & Fixtures Office equipment and furniture owned by the company At December 31, 2022 and 2021, capital assets are depreciated based on the following estimated useful life for each category: Account Name Useful Life Machinery & Equipment Five years Computer Equipment & Software Three years Furniture & Fixtures Five years The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of capital assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected fair value of the related asset over the estimated remaining life against the respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its capital assets in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. The Company did not have any impairments to record during either the years ended December 31, 2022, or 2021. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy under Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, are described as follows: Level 1 Level 2 Level 3 The financial instruments of the Company consist primarily of cash, money market accounts, receivable, and accounts payable. These items are considered Level 1 due to their short-term nature and their market interest rates and are therefore considered a reasonable estimate of fair value at December 31, 2022 and 2021. The Company classifies short-term investments within Level 1 in the fair value hierarchy, be are used to determine fair value. The Company also invested in non-convertible promissory note, prepayment for inventory and equity securities of two privately held companies, which were recorded on cost basis. See Note 6,8 and 9 to the financial statements for more information. |
Investment Valuation | Investment Valuation The Company’s investments in equity in privately held companies without readily determinable fair values, which are generally recorded at cost, plus or minus subsequent observable price changes in orderly transactions for identical or similar investments, less impairments. As part of its 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 its qualitative assessment indicates the investments are impaired, the fair value of these equity securities would be estimated, which would involve a significant degree of judgment and subjectivity. No impairment charges were recorded during the year ended December 31, 2022 and 2021. |
Deferred Revenue | Deferred Revenue Deferred revenue represents amounts billed to or collected from customers for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. The full amount is expected to be recognized as revenues within one year from the balance sheet date and, therefore, such deferred amounts have been classified as current liabilities in the balance sheets presented. The Company generally invoices its clients in advance of a rental period with payment due upon receipt of the invoice. Revenue recognized for the year ended December 31, 2022 from amounts included in deferred revenue as of December 31, 2021 was $921. Revenue recognized for the year ended December 31, 2021 from amounts included in deferred revenue as of December 31, 2020 was $963. |
Research and Development | Research and Development The Company expenses costs related to the research and development associated with the design, development, testing and enhancement of its products and services. Such expenses include salaries and related employee benefits, and fees paid to external service providers. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is measured based on the grant-date fair value of the stock-based awards. The Company recognizes stock-based compensation expense for the portion of each option grant or stock award that is expected to vest over the estimated period of service and vesting. The Company uses the Black-Scholes option pricing model as the method for determining the estimated grant-date fair value of stock options. The Black-Scholes option pricing model requires the use of subjective assumptions which determine the fair value of stock-based awards, including the option’s expected volatility. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the grant. |
Employee Benefit Plan | Employee Benefit Plan The Company has a savings plan that qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). 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. |
Income Taxes | Income Taxes The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the expected tax consequences attributable to the differences between financial reporting and the tax bases of existing assets and liabilities and net operating loss (“NOL”) carryforwards, and they are measured using enacted tax rates expected to be in effect when differences are expected to reverse. |
Recent 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 In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments . 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 . 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 Financial Instruments – Credit Losses (Topic 326); In March 2020, FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments Financial instruments – credit losses (Topic 326): measurement of credit losses on financial statements In October 2021, the FASB issued ASU No.2021-08, Business Combinations (Topic 805): ccounting for Contract Assets and Contract Liabilities from Contracts with Customers In March 2022, the FASB issued ASU No.2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Estimates (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies and Estimates | |
Schedule of estimated useful lives of property and equipment | At December 31, 2022 and 2021, capital assets are depreciated based on the following estimated useful life for each category: Account Name Useful Life Machinery & Equipment Five years Computer Equipment & Software Three years Furniture & Fixtures Five years |
Assets for Lease, net (Tables)
Assets for Lease, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Assets for Lease, net | |
Summary of assets for lease, net | As of December 31, 2022 2021 Assets for lease $ 3,702 $ 3,241 Less: accumulated depreciation (1,224) (1,598) Assets for lease, net $ 2,478 $ 1,643 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment, net | |
Schedule of capital assets | As of December 31, 2022 2021 Capital assets $ 1,206 $ 882 Less: accumulated depreciation (539) (488) Capital assets, net $ 667 $ 394 |
Long-Term Investments (Tables)
Long-Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Investments. | |
Schedule of carrying value of non-marketable equity investments | As of December 31, 2022 2021 Investments in SYNAPS Dx $ 512 $ 512 Investments in Mellitus Health Inc. 309 309 Total initial cost $ 821 $ 821 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Schedule of financial assets measured at fair value on a recurring basis | Fair Value Hierarchy Level 1 Level 2 Level 3 Total As of December 31,2022 U.S. Treasury bill $ 20,073 $ — $ — $ 20,073 (Included in short-term investments) Investment in debt Security — — 3,679 3,679 (Included in notes held for investment) Total Assets $ 20,073 $ — $ 3,679 $ 23,752 |
Notes held for investment (Tabl
Notes held for investment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Notes held for investment | |
Schedule of notes receivable | As of December 31, 2022 2021 Senior secured promissory notes $ 1,000 $ — Secured convertible promissory notes 3,679 — Total notes held for investment $ 4,679 $ — |
Other Non-current assets (Table
Other Non-current assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Non-current assets | |
Schedule of other non-current assets | As f December 31, 2022 2021 Prepaid licenses $ 2,490 $ — Other 352 332 Total other non-current assets $ 2,842 $ 332 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses | |
Schedule of accrued expenses | As of December 31, 2022 2021 Compensation $ 2,467 $ 1,754 Accrued Taxes 1,923 1,159 Miscellaneous Accruals 358 523 Total Accrued Expenses $ 4,748 $ 3,436 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of future minimum rental payments required under operating leases | Total 2023 90 2024 93 2025 71 Total undiscounted future minimum lease payments 254 Less: present value discount (9) Total lease liabilities 245 Lease expense in excess cash payment (12) Total ROU asset $ 233 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Schedule of common stock reserved for issuance | Year ended December 31, 2022 2021 Common stock warrants 76,875 76,875 Stock options 1,471,670 1,356,245 Total 1,548,545 1,433,120 |
Stock Option Plan (Tables)
Stock Option Plan (Tables) | 12 Months Ended |
Dec. 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, 2020 1,451,420 $ 3.25 4.91 $ 131,714 Options exercised (95,175) 2.55 — — Balance, December 31, 2021 1,356,245 $ 3.30 3.97 $ 119,830 Options exercised (73,398) 2.58 — — Options granted 5,000 30.48 4.00 — Balance, December 31, 2022 1,287,847 $ 3.44 3.03 $ 38,053 Exercisable as of December 31, 2021 1,356,245 $ 3.30 3.97 $ 119,830 Exercisable as of December 31, 2022 1,282,847 $ 3.34 3.00 $ 38,053 |
Schedule of stock-based compensation expense | December 31 December 31 2022 2021 Engineering and Product Development $ 45 $ 32 Sales and Marketing 173 125 General and Administrative 523 592 Total $ 741 $ 749 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of components of the (benefit) provision for income taxes | 2022 2021 Current tax provision: Federal $ 3,201 $ 1,397 State 517 428 Total current tax provision 3,718 1,825 Deferred tax provision: Federal (373) 456 State 22 (48) Total deferred tax provision (351) 408 Total income tax provision $ 3,367 $ 2,233 |
Schedule of differences between the Company's effective income tax rate and the federal statutory income tax rate | 2022 2021 Federal statutory rate 21.00 % 21.00 % State income tax rate, net of federal benefit 2.57 % 1.55 % Stock-based compensation (4.03) % (10.62) % Permanent items (0.93) % (1.16) % Other 0.35 % 0.68 % Effective income tax rate 18.96 % 11.45 % |
Schedule of deferred tax assets | 2022 2021 Net operating loss carryforwards $ 303 $ 446 Deferred revenue 278 220 Stock based compensation 529 556 Accrual and reserves 297 529 Research and development credits 254 228 Other 2 14 Depreciation and amortization 633 — Lease liability 59 77 Total gross deferred tax assets 2,355 2,070 Less valuation allowance — — Net deferred tax assets 2,355 2,070 Deferred tax liabilities: Depreciation and amortization — (49) Right of use assets (56) (75) Total deferred tax liabilities (56) (124) Net deferred tax assets $ 2,299 $ 1,946 |
Schedule of activity related to unrecognized tax benefits | Gross Unrecognized Tax Benefits 2022 Gross Unrecognized Tax Benefits 2021 Unrecognized tax benefits – January 1 $ 476 $ 341 Gross increases related to prior tax positions — 41 Gross decreases related to prior tax positions (120) — Gross increases related to current tax positions 45 94 Unrecognized tax benefits – December 31 $ 401 $ 476 |
Net Income Per Share, Basic a_2
Net Income Per Share, Basic and Diluted (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Net Income Per Share, Basic and Diluted | |
Schedule of basic and diluted EPS | For the year ended December 31, 2022 2021 Shares Net Income EPS Shares Net Income EPS Basic EPS 6,726,687 $ 14,325 $ 2.13 6,731,693 $ 17,222 $ 2.56 Common stock warrants 68,588 — — 73,767 — — Common stock options 1,204,475 — — 1,333,148 — — Diluted EPS 7,999,750 $ 14,325 $ 1.79 8,138,608 $ 17,222 $ 2.12 |
The Company (Details)
The Company (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Prepaid licenses | $ 2,490 |
Agreement with Mellitus Health, Inc | |
Prepaid Licenses, Additional Amount Noncurrent | 500 |
Prepaid licenses | $ 2,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Estimates (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Allowance for doubtful accounts | $ 109 | $ 61 |
Net change due to credit losses | 48 | |
Impairment charges | 0 | 0 |
Deferred revenue recognized | $ 921 | $ 963 |
Employer matching contribution | 50% | |
Maximum contribution of percentage of employee's eligible earnings | 6% | |
Assets for Lease | ||
Property, Plant and Equipment [Line Items] | ||
PPE useful life | 36 months | |
Machinery & Equipment | ||
Property, Plant and Equipment [Line Items] | ||
PPE useful life | 5 years | 5 years |
Computer Equipment & Software | ||
Property, Plant and Equipment [Line Items] | ||
PPE useful life | 3 years | 3 years |
Furniture & Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
PPE useful life | 5 years | 5 years |
Assets for Lease, net (Details)
Assets for Lease, net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets for Lease, net | ||
Assets for lease | $ 3,702 | $ 3,241 |
Less: accumulated depreciation | (1,224) | (1,598) |
Assets for lease, net | $ 2,478 | $ 1,643 |
Assets for Lease, net - Additio
Assets for Lease, net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Assets for Lease, net | ||
Depreciation expense | $ 386 | $ 442 |
Reduction to accumulated depreciation for returned and retired items | 352 | 310 |
Loss on disposal of assets for lease | (463) | (362) |
Total assets for lease, net, in use at customer locations | $ 518 | $ 631 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory | ||
Inventory balance | $ 469 | $ 550 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property and Equipment, net | ||
Capital assets | $ 1,206 | $ 882 |
Less: accumulated depreciation | (539) | (488) |
Capital assets, net | $ 667 | $ 394 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property and Equipment, net | ||
Depreciation expense | $ 203 | $ 180 |
Long-Term Investments (Details)
Long-Term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Total initial cost | $ 821 | $ 821 |
Investments in SYNAPS Dx | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Total initial cost | 512 | 512 |
Investments in Mellitus Health Inc. | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Total initial cost | $ 309 | $ 309 |
Long-Term Investments - Additio
Long-Term Investments - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2020 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Shares purchased | 211,928 | |||
Impairment | $ 0 | $ 0 | ||
Investments in Mellitus Health Inc. | ||||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Amount of shares purchased | $ 250 | |||
Promissory note from SYNAPS Dx | ||||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Principal amount | $ 500 | |||
Expense reimbursement | $ 100 | |||
Conversion value | 512 | 512 | ||
Convertible promissory note previously issued by Mellitus | ||||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Purchase price | 59 | |||
Principal amount | $ 50 | |||
Conversion value | $ 309 | $ 309 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Nov. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities measured at fair value | $ 0 | ||
Purchase cost | $ 19,996 | ||
Interest income | 77 | ||
U.S. Treasury bill | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Purchase cost | $ 19,996 | ||
Interest rate | 4.245% | ||
Interest income | 77 | ||
Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
U.S. Treasury bill | 20,073 | ||
Investment in debt Security | 3,679 | ||
Total Assets | 23,752 | ||
Recurring | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
U.S. Treasury bill | 20,073 | ||
Total Assets | 20,073 | ||
Recurring | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investment in debt Security | 3,679 | ||
Total Assets | $ 3,679 |
Notes held for investment (Deta
Notes held for investment (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 USD ($) item | Jun. 30, 2022 USD ($) item | May 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jan. 31, 2023 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Total notes held for investment | $ 4,679 | $ 4,679 | |||
Aggregate principal amount | 4,679 | ||||
Interest income from promissory notes | 62 | ||||
Changes in fair value | 0 | ||||
Senior secured promissory notes | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Total notes held for investment | 1,000 | 1,000 | |||
Interest rate (as a percent) | 5% | ||||
Number of notes receivable | item | 2 | ||||
Term (in years) | 3 years | ||||
Aggregate principal amount | $ 1,000 | ||||
Secured convertible promissory note | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Total notes held for investment | 3,679 | 3,679 | |||
Secured convertible promissory note | Mellitus | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Interest rate (as a percent) | 10% | ||||
Aggregate principal amount | $ 179 | ||||
Fair value of the Debt Securities | 179 | 179 | |||
Secured convertible promissory note | Monarch | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Aggregate principal amount | 3,500 | 3,500 | |||
Maximum amount of available funding | 5,000 | 5,000 | |||
Transaction fee | 100 | 100 | |||
Remaining amount available to be drawn | $ 1,500 | $ 1,500 | $ 1,000 | ||
Option to extend the maturity date | item | 2 | ||||
Period to extend the maturity date | 1 year | 1 year | |||
Fair value of the Debt Securities | $ 3,500 | $ 3,500 | |||
Interest rate | 10% | 10% |
Other Non-current assets - Sche
Other Non-current assets - Schedule of other non-current assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Non-current assets | ||
Prepaid licenses | $ 2,490 | |
Other | 352 | $ 332 |
Total other non-current assets | $ 2,842 | $ 332 |
Other Non-current assets - Addi
Other Non-current assets - Additional Information Details (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Term of agreement | 5 years | ||
ROU asset | $ 233 | $ 314 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent | |
Miscellaneous receivables | $ 100 | ||
Long-term deposits | $ 19 | ||
Miscellaneous deposits | $ 18 | ||
Mellitus | |||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Purchase of product licenses | $ 2,500 | ||
Renewal term of purchase agreement (in years) | 1 year | ||
Termination upon notice (in days) | 60 days | ||
Mellitus | Prepaid expenses and other current assets | |||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Prepaid license purchases | $ 2,500 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses | ||
Compensation | $ 2,467 | $ 1,754 |
Accrued Taxes | 1,923 | 1,159 |
Miscellaneous Accruals | 358 | 523 |
Total Accrued Expenses | $ 4,748 | $ 3,436 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) customer item | Dec. 31, 2021 USD ($) customer item | |
Concentration of Credit Risk | ||
Deposits exceeded federal deposit corporation limits | $ 12,960 | |
U.S. treasury bills | 30,127 | |
Allowance for doubtful accounts | $ 109 | $ 61 |
Customer concentration risk | Revenue | ||
Concentration of Credit Risk | ||
Number of customers | customer | 2 | 2 |
Customer concentration risk | Revenue | Customer one | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 40.40% | 40.80% |
Customer concentration risk | Revenue | Customer two | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 29% | 28.60% |
Customer concentration risk | Accounts receivable | ||
Concentration of Credit Risk | ||
Number of customers | customer | 3 | 3 |
Customer concentration risk | Accounts receivable | Customer one | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 26.80% | 21.90% |
Customer concentration risk | Accounts receivable | Customer two | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 25.90% | 20.10% |
Customer concentration risk | Accounts receivable | Customer three | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 16.80% | 16.60% |
Vendor concentration risk | Accounts payable | ||
Concentration of Credit Risk | ||
Number of vendors | item | 2 | 1 |
Vendor concentration risk | Accounts payable | Vendor one | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 25.80% | 14% |
Vendor concentration risk | Accounts payable | Vendor two | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 10.80% |
Leases - Future minimum rental
Leases - Future minimum rental payments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
2023 | $ 90 | |
2024 | 93 | |
2025 | 71 | |
Total undiscounted future minimum lease payments | 254 | |
Less: present value discount | (9) | |
Total lease liabilities | 245 | |
Lease expense in excess cash payment | (12) | |
Total ROU asset | $ 233 | $ 314 |
Leases - Lessee Arrangements (D
Leases - Lessee Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Jul. 31, 2020 | |
Leases | |||
Lease agreement term | 61 months | ||
Remaining lease term | 3 years 9 months | ||
Options to renew | false | ||
Lease expenses | $ 88 | $ 112 | |
ROU asset | $ 233 | $ 314 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets, Noncurrent | Other Assets, Noncurrent | |
Current lease liabilities | $ 85 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | ||
Noncurrent lease liabilities | $ 160 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent |
Leases - Lessor Arrangements (D
Leases - Lessor Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Lease, Practical Expedient, Lessor Single Lease Component [true false] | true | |
Lease revenue | $ 34,039 | $ 30,561 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenue from Contract with Customer, Excluding Assessed Tax | Revenue from Contract with Customer, Excluding Assessed Tax |
Leases - Variable-fee Revenue (
Leases - Variable-fee Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Revenue from variable-fee licenses | $ 21,277 | $ 21,510 |
Revenues from sales of hardware and equipment accessories | $ 1,358 | $ 956 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 USD ($) item | Dec. 31, 2022 USD ($) | Jan. 31, 2023 USD ($) | Dec. 31, 2021 USD ($) | |
Commitments and Contingencies | ||||
Retention credit | $ 0 | $ 0 | $ 1,240 | |
Aggregate principal amount | 4,679 | |||
Senior secured convertible promissory note | Monarch | ||||
Commitments and Contingencies | ||||
Maximum amount of available funding | 5,000 | 5,000 | ||
Aggregate principal amount | 3,500 | 3,500 | ||
Additional borrowing funded | $ 500 | |||
Transaction fee | 100 | 100 | ||
Remaining amount available to be drawn | $ 1,500 | $ 1,500 | $ 1,000 | |
Option to extend the maturity date | item | 2 | |||
Period to extend the maturity date | 1 year | 1 year | ||
Interest rate | 10% | 10% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Vote $ / shares shares | Mar. 14, 2022 USD ($) | Dec. 31, 2021 $ / shares shares | |
Stockholders' Equity | |||
Common stock, shares authorized | 50,000,000 | 50,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Number of votes for each share | Vote | 1 | ||
Number of shares increase in share reserve | 1,548,545 | 1,433,120 | |
Shares authorized under Share Repurchase Program | $ | $ 20,000 | ||
Treasury stock acquired (in shares) | 148,500 | ||
Cost of treasury stock acquired | $ | $ 4,991 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of exercise of common stock outstanding stock options (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Stockholders' Equity | ||
Total | 1,548,545 | 1,433,120 |
Common stock warrants | ||
Stockholders' Equity | ||
Total | 76,875 | 76,875 |
Stock options | ||
Stockholders' Equity | ||
Total | 1,471,670 | 1,356,245 |
Stock Option Plan - Additional
Stock Option Plan - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
May 17, 2022 | Oct. 31, 2015 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total estimated grant date fair value of options non-vested | $ 0 | $ 192 | |||
Number of stock option granted | 5,000 | 0 | |||
Number of stock option forfeited | 0 | ||||
Fully vested stock granted | 9,421 | 5,516 | |||
Grant date fair value of stock | $ 723 | $ 557 | |||
Stock-based compensation expense | $ 741 | $ 749 | |||
2014 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of stock option granted | 5,000 | ||||
2014 Stock Incentive Plan | Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum number of shares issued pursuant to awards granted under plan | 3,315,203 | 450,000 | |||
Number of share reserve approved | 1,500,000 | ||||
Maximum term of stock option grants | 10 years | ||||
Percentage of shares reserve increased | 4% | ||||
Number of shares available for future stock-based compensation grants | 1,471,670 | ||||
Total unrecognized compensation cost related to non-vested awards | $ 94 | ||||
Weighted average period of unvested stock awards | 3 years 4 months 24 days | ||||
Total number of unvested shares | 3,315,203 |
Stock Option Plan - Summary of
Stock Option Plan - Summary of the Company's stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Stock Options Outstanding | |||
Balance, Beginning | 1,356,245 | 1,451,420 | |
Options exercised | (73,398) | (95,175) | |
Options granted | 5,000 | 0 | |
Balance, Ending | 1,287,847 | 1,356,245 | 1,451,420 |
Exercisable, Ending | 1,282,847 | 1,356,245 | |
Weighted Average Exercise Price | |||
Balance, Beginning | $ 3.30 | $ 3.25 | |
Exercise price | 30.48 | ||
Options exercised | 2.58 | 2.55 | |
Options granted | 30.48 | ||
Balance, Ending | 3.44 | 3.30 | $ 3.25 |
Exercisable, Ending | $ 3.34 | $ 3.30 | |
Weighted Average Remaining Contractual Term, Options Outstanding (in years) | 3 years 10 days | 3 years 11 months 19 days | 4 years 10 months 28 days |
Weighted Average Remaining Contractual Term, Options granted (in years) | 4 years | ||
Weighted Average Remaining Contractual Term, Options Exercisable (in years) | 3 years | 3 years 11 months 19 days | |
Aggregate Intrinsic Value, Options Outstanding | $ 38,053 | $ 119,830 | $ 131,714 |
Aggregate Intrinsic Value, Options Exercisable | $ 38,053 | $ 119,830 |
Stock Option Plan -Stock option
Stock Option Plan -Stock option Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
May 17, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted | 5,000 | 0 | |
Exercise price | $ 30.48 | ||
2014 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted | 5,000 | ||
Exercise price | $ 30.48 | ||
Share based compensation, options pricing model value | $ 22.27 | ||
Share based compensation, expected price volatility | 78.60% | ||
Share based compensation, risk-free interest rate | 2.884% | ||
Share based compensation, weighted average expected life (in years) | 7 years | ||
Forfeiture rate | 0% | ||
Share based compensation, expected dividend yield | 0% | ||
2014 Stock Incentive Plan | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of unvested stock options | $ 94 | ||
Weighted average period of unvested stock awards | 3 years 4 months 24 days |
Stock Option Plan - Stock-based
Stock Option Plan - Stock-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 741 | $ 749 |
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 | 173 | 125 |
General and Administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 523 | $ 592 |
Income Taxes - Summary of compo
Income Taxes - Summary of components of the (benefit) provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current tax provision: | ||
Federal | $ 3,201 | $ 1,397 |
State | 517 | 428 |
Total current tax provision | 3,718 | 1,825 |
Deferred tax provision: | ||
Federal | (373) | 456 |
State | 22 | (48) |
Total deferred tax provision | (351) | 408 |
Total income tax provision | $ 3,367 | $ 2,233 |
Income Taxes - Summary of diffe
Income Taxes - Summary of differences between the Company's effective income tax rate and the federal statutory income tax (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | ||
Federal statutory rate | 21% | 21% |
State income tax rate, net of federal benefit | 2.57% | 1.55% |
Stock-based compensation | (4.03%) | (10.62%) |
Permanent Items | (0.93%) | (1.16%) |
Other | 0.35% | 0.68% |
Effective income tax rate | 18.96% | 11.45% |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 303 | $ 446 |
Deferred revenue | 278 | 220 |
Stock based compensation | 529 | 556 |
Accrual and reserves | 297 | 529 |
Research and development credits, net of tax reserve | 254 | 228 |
Other | 2 | 14 |
Depreciation and amortization | 633 | 0 |
Lease liability | 59 | 77 |
Total gross deferred tax assets | 2,355 | 2,070 |
Less valuation allowance | 0 | |
Net deferred tax assets | 2,355 | 2,070 |
Deferred tax liabilities: | ||
Depreciation and amortization | (49) | |
Right of use assets | (56) | (75) |
Total deferred tax liabilities | (56) | (124) |
Net deferred tax assets | $ 2,299 | $ 1,946 |
Income Taxes - Summary of activ
Income Taxes - Summary of activity related to the Company's gross unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Unrecognized tax benefits: | ||
Unrecognized tax benefits - January 1 | $ 476 | $ 341 |
Gross increases related to prior tax positions | 0 | 41 |
Gross decreases related to prior tax positions | (120) | 0 |
Gross increases related to current tax positions | 45 | 94 |
Unrecognized tax benefits - December 31 | $ 401 | $ 476 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards for California | $ 4,234 | ||
Unrecognized Tax Benefits | 401 | $ 476 | $ 341 |
Interest and penalty expenses related to uncertain tax positions | 30 | $ 0 | |
Federal | |||
Tax Credit Carryforward [Line Items] | |||
NOL carryforwards | $ 0 | ||
Company's tax years beginning for examination | 3 years | ||
State | |||
Tax Credit Carryforward [Line Items] | |||
Company's tax years beginning for examination | 4 years |
Net Income Per Share, Basic a_3
Net Income Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net Income Per Share, Basic and Diluted | ||
Basic shares (in shares) | 6,726,687 | 6,731,693 |
Common stock warrants (in shares) | 68,588 | 73,767 |
Common stock options (in shares) | 1,204,475 | 1,333,148 |
Diluted shares (in shares) | 7,999,750 | 8,138,608 |
Net Income - Basic EPS | $ 14,325 | $ 17,222 |
Net Income - Common stock warrants | 0 | 0 |
Net Income - Common stock options | 0 | 0 |
Net Income - Diluted EPS | $ 14,325 | $ 17,222 |
Basic EPS (in dollars per share) | $ 2.13 | $ 2.56 |
Common stock warrants (in dollars per share) | 0 | |
Common stock options (in dollars per share) | 0 | |
Diluted EPS (in dollars per share) | $ 1.79 | $ 2.12 |
Net Income Per Share, Basic a_4
Net Income Per Share, Basic and Diluted - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 shares | |
Net Income Per Share, Basic and Diluted | |
Securities excluded from the computation of diluted net income per share | 5,000 |