10-Q 1 smlr-20240930x10q.htm 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the quarterly period ended September 30, 2024

or

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☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the transition period from ___ to ___

Commission File Number: 001-36305

SEMLER SCIENTIFIC, INC.

(Exact name of registrant as specified in its charter)

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Delaware

26-1367393

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

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2340-2348 Walsh Avenue, Suite 2344

Santa Clara, CA

95051

(Address of principal executive offices)

(Zip Code)

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(877) 774-4211

(Registrant’s telephone number, including area code)

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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $0.001 per share

 

SMLR

 

The Nasdaq Stock Market LLC

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232,405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

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Large accelerated filer

☐

 

Accelerated filer

☐

Non-accelerated filer

☒

 

Smaller reporting company

☒

 

 

Emerging growth company

☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒

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As of October 31, 2024, there were 7,266,242 shares of the issuer’s common stock, $0.001 par value per share, outstanding.

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TABLE OF CONTENTS

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Page

Part I.

Financial Information

1

 

 

Item 1.

Condensed Financial Statements (Unaudited)

1

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

23

Item 4.

Controls and Procedures

23

 

 

Part II.

Other Information

23

 

 

Item 1.

Legal Proceedings

23

Item 1A.

Risk Factors

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

50

Item 3.

Defaults upon Senior Securities

50

Item 4.

Mine Safety Disclosures

50

Item 5.

Other Information

50

Item 6.

Exhibits

51

 

 

Signatures

52

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In this report, unless otherwise stated or as the context otherwise requires, references to “Semler Scientific,” “the Company,” “we,” “us,” “our” and similar references refer to Semler Scientific, Inc. The Semler Scientific logo, QuantaFlo and other trademarks or service marks of Semler Scientific, Inc. appearing in this report are the property of Semler Scientific, Inc. This report also contains registered marks, trademarks and trade names of other companies. All other trademarks, registered marks and trade names appearing in this report are the property of their respective holders.

i

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements. Such forward-looking statements include those that express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. In some cases, you can identify forward-looking statements by terminology, such as “expects,” “anticipates,” “intends,” “estimates,” “plans,” “believes,” “seeks,” “may,” “should,” “continue,” “could,” or the negative of such terms or other similar expressions. The forward-looking statements in this report include, but are not limited to, statements regarding:

●implementation of our bitcoin treasury strategy and its effects on our business;

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●our seeking to obtain a new U.S. Food and Drug Administration, or FDA, 510(k) clearance for expanded use of QuantaFlo; and

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●the effects of the 2024 Medicare Advantage and Part D Final Rate Announcement issued by the Centers for Medicare and Medicaid Services, or CMS, on our revenues.

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Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this report. These forward-looking statements are based on our current expectations and projections about future events and they are subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements throughout this quarterly report on Form 10-Q.

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You should read this quarterly report on Form 10-Q and the documents that we reference herein and therein and have filed as exhibits, completely and with the understanding that our actual future results may be materially different from what we expect. You should assume that the information appearing in this quarterly report on Form 10-Q is accurate as of the date we file this report only. Because the risk factors referred to herein could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. These risks and uncertainties, along with others, are described under the heading “Risk Factors” in Part II, Item 1A, as well as under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this quarterly report on Form 10-Q, and particularly our forward-looking statements, by these cautionary statements.

This quarterly report on Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data.

RISK FACTOR SUMMARY

Our business involves significant risks. Below is a summary of the material risks that our business faces, which makes an investment in our common stock speculative and risky. This summary does not address all these risks. These risks are more fully described below under the heading “Risk Factors” in Part II, Item 1A of this quarterly report on Form 10-Q. Before making investment decisions regarding our common stock, you should carefully consider these risks. The occurrence of any of the events or developments described below could have a material adverse effect on our business, results of operations, financial condition, prospects and stock price. In such event, the market price of our common stock could decline, and you could lose all or part of your investment. In addition, there are also additional risks not described below that are either not presently known to us or that we currently deem immaterial, and these additional risks could also materially impair our business, operations or market price of our common stock.

●If we do not successfully implement our business strategy, including our bitcoin treasury strategy, our business and results of operations will be adversely affected.

ii

●We predominantly market only one FDA-cleared vascular testing product; it may not achieve broad market acceptance or be commercially successful. Recent changes in the regulatory reimbursement landscape, such as the final 2024 rate announcement with payment changes for the Medicare Advantage and Part D prescription drug programs issued by CMS has impacted the perceived profitability of using our products to aid diagnosis of peripheral arterial disease, or PAD.
●We have ceased marketing of QuantaFlo as an aid in the diagnosis of heart dysfunction and there is no guarantee that we will obtain a new FDA 510(k) clearance for the expanded use.
●If healthcare providers are unable to obtain adequate coverage and reimbursement, it is unlikely that our product will gain widespread acceptance. QuantaFlo is not specifically approved for reimbursement under any third-party payor codes.
●We rely heavily upon the talents of a small number of key personnel, the loss of whom could severely damage our business.
●We do not require our customers to enter into long-term licenses or maintenance contracts for our products or services and may therefore lose customers on short notice; and a significant portion of our revenues and accounts receivables are with a limited number of customers.
●We rely on a small number of independent suppliers and facilities for the manufacturing of QuantaFlo. Any delay or disruption in the supply of the product or facility may negatively impact our operations.
●We may not be sufficiently insured against product liability risk and may be subject to substantial claims.
●We may implement a product recall or voluntary market withdrawal or stop shipment of our product due to product defects or product enhancements and modifications, which would significantly increase our costs.
●An information security incident, including a cybersecurity breach, could have a negative impact on our business or reputation.
●Our future financial performance will depend in part on the successful improvements and software updates to our vascular testing product on a cost-effective basis, as well as our ability to develop new products and service offerings, and expand the indications for QuantaFlo.
●We operate in an intensely competitive and rapidly changing business environment, and there is a substantial risk our products or service offerings could become obsolete or uncompetitive.
●Our business is subject to many laws and government regulations governing the manufacture and sale of medical devices, including the FDA’s 510(k) clearance process, and laws and regulations governing patient data and information, along with more general tax rules and regulations among others, all of which are subject to change.
●Although part of our business strategy is based on payment provisions enacted under government healthcare reform, we also face significant uncertainty in the industry regarding the implementation, transformation or repeal and replacement of the Health Care Reform Law.
●The applicable healthcare fraud and abuse laws and regulations, along with the increased enforcement environment, may lead to an enforcement action targeting us, which could adversely affect our business.
●We have had material weaknesses in our internal control over financial reporting. Although we have remediated our prior material weaknesses, if we identify additional material weaknesses in the future, or if our former material weaknesses recur, it could have an adverse effect on our company.
●Our bitcoin treasury strategy exposes us to various risks associated with bitcoin.
●Bitcoin is a highly volatile asset, and fluctuations in the price of bitcoin are likely to influence our financial results and the market price of our common stock.
●Bitcoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty.
●Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to our bitcoin holdings.
●The availability of spot bitcoin exchange traded products, or ETPs may adversely affect the market price of our common stock.
●Our bitcoin treasury strategy subjects us to enhanced regulatory oversight.
●Due to the currently unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues, bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in bitcoin trading venues and adversely affect the value of our bitcoin.
●The concentration of our bitcoin holdings enhances the risks inherent in our bitcoin treasury strategy.
●The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of bitcoin and adversely affect our financial condition and results of operations.
●Our bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

iii

●If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our bitcoin, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our bitcoin and our financial condition and results of operations could be materially adversely affected.
●We face risks relating to the custody of our bitcoin, including the loss or destruction of private keys required to access our bitcoin and cyberattacks or other data loss relating to our bitcoin.
●Regulatory change reclassifying bitcoin as a security could lead to our classification as an “investment company” under the Investment Company Act of 1940, as amended, or the 1940 Act, and could adversely affect the market price of bitcoin and the market price of our common stock.
●We may be subject to regulatory developments related to crypto assets and crypto asset markets, which could adversely affect our business, financial condition, and results of operations.
●Our bitcoin treasury strategy exposes us to risk of non-performance by counterparties.
●Our custodially-held bitcoin may become part of the custodian’s insolvency estate if one or more of our custodians enters bankruptcy, receivership or similar insolvency proceedings.
●A blockchain “fork” to bitcoin or other crypto assets could adversely affect our business.
●The due diligence procedures conducted by us and our liquidity provider to mitigate transaction risk may fail to prevent transactions with a sanctioned entity.
●Our executive officers, directors and significant stockholders, if they choose to act together, have the ability to significantly influence all matters submitted to stockholders for approval.
●Provisions in our corporate charter documents and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

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iv

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Semler Scientific, Inc.

Condensed Statements of Income

Unaudited

(In thousands of U.S. Dollars, except share and per share data)

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For the three months ended September 30, 

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For the nine months ended September 30, 

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2024

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2023

      

2024

      

2023

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​

​

​

​

​

​

​

​

​

​

​

Revenues

​

$

13,512

​

$

16,316

​

$

43,881

​

$

53,127

Operating expenses:

​

​

​

​

​

​

​

 

​

​

 

​

Cost of revenues

​

​

1,156

​

​

1,111

​

 

3,657

​

 

3,599

Engineering and product development

​

​

1,186

​

​

1,174

​

 

3,764

​

 

4,566

Sales and marketing

​

​

2,976

​

​

3,423

​

 

10,107

​

 

13,601

General and administrative

​

​

3,129

​

​

3,710

​

 

8,962

​

 

11,028

Strategic streamlining

​

​

—

​

​

599

​

​

—

​

​

599

Total operating expenses

​

​

8,447

​

​

10,017

​

 

26,490

​

 

33,393

Income from operations

​

​

5,065

​

​

6,299

​

 

17,391

​

 

19,734

Interest and dividend income

​

​

168

​

​

692

​

 

1,699

​

 

1,772

Change in fair value of notes held for investment

​

 

—

​

 

—

​

 

128

​

 

(217)

Change in fair value of digital assets

​

​

1,137

​

​

—

​

​

(3,918)

​

​

—

Other income (expense)

​

​

5

​

​

(3)

​

​

8

​

​

(3)

Other income (expense), net

​

​

1,310

​

​

689

​

 

(2,083)

​

 

1,552

Pre-tax income

​

​

6,375

​

​

6,988

​

​

15,308

​

​

21,286

Income tax provision

​

​

766

​

​

1,474

​

 

3,615

​

 

4,924

Net income

​

$

5,609

​

$

5,514

​

$

11,693

​

$

16,362

Net income per share, basic

​

$

0.80

​

$

0.82

​

$

1.68

​

$

2.44

Weighted average number of shares used in computing basic net income per share

​

​

7,045,108

​

​

6,717,301

​

 

6,961,095

​

 

6,708,675

Net income per share, diluted

​

$

0.72

​

$

0.71

​

$

1.50

​

$

2.09

Weighted average number of shares used in computing diluted net income per share

​

​

7,771,088

​

​

7,818,236

​

​

7,783,350

​

​

7,847,390

​

​

​

See accompanying notes to unaudited condensed financial statements.

​

1

Semler Scientific, Inc.

Condensed Balance Sheets

(In thousands of U.S. Dollars, except share and per share data)

​

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31, 

​

​

2024

    

2023

​

​

​

Unaudited

​

​

​

Assets

​

​

​

​

​

​

Current Assets:

​

​

​

 

​

  

Cash and cash equivalents

​

$

6,568

​

$

57,200

Restricted cash

​

​

133

​

​

132

Trade accounts receivable, net of allowance for credit losses of $266 and $287, respectively

​

 

6,667

​

 

6,125

Short-term notes held for investment

​

​

6,100

​

​

—

Inventory, net

​

​

380

​

​

445

Prepaid expenses and other current assets

​

 

1,646

​

 

2,042

Total current assets

​

 

21,494

​

 

65,944

Assets for lease, net

​

 

1,737

​

 

2,285

Property and equipment, net

​

 

548

​

 

720

Long-term investments

​

 

512

​

 

512

Notes held for investment

​

​

—

​

​

5,372

Intangible digital assets

​

​

64,482

​

​

—

Other non-current assets

​

​

106

​

​

270

Deferred tax assets, net of valuation allowance of $936 and $0, respectively

​

​

3,315

​

​

2,962

Total assets

​

$

92,194

​

$

78,065

​

​

​

​

​

​

​

Liabilities and Stockholders’ Equity

​

 

​

​

 

​

Current liabilities:

​

​

​

​

​

​

Accounts payable

​

$

545

​

$

402

Accrued expenses

​

 

5,258

​

 

4,502

Deferred revenue

​

 

805

​

 

1,120

Other short-term liabilities

​

​

231

​

​

176

Total current liabilities

​

 

6,839

​

 

6,200

​

​

​

​

​

​

​

Long-term liabilities:

​

 

  

​

 

  

Other long-term liabilities

​

​

—

​

​

70

Total long-term liabilities

​

 

—

​

 

70

Commitments and contingencies (Note 15)

​

​

​

​

​

​

Stockholders’ equity:

​

 

​

​

 

​

Common stock, $0.001 par value; 50,000,000 shares authorized; 7,334,600 and 7,099,441 shares issued, and 7,120,178 and 6,885,019 shares outstanding (treasury shares of 214,422 and 214,422), respectively

​

 

7

​

 

7

Additional paid-in capital

​

 

13,852

​

 

11,985

Retained earnings

​

 

71,496

​

 

59,803

Total stockholders’ equity

​

 

85,355

​

 

71,795

​

​

​

​

​

​

​

Total liabilities and stockholders’ equity

​

$

92,194

​

$

78,065

​

​

​

See accompanying notes to unaudited condensed financial statements.

​

2

Semler Scientific, Inc.

Condensed Statements of Stockholders’ Equity

Unaudited

(In thousands of U.S. Dollars, except share and per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Three Months Ended September 30, 2023

​

​

Common Stock

​

Treasury Stock

​

Additional

​

​

​

​

Total

​

​

​

​

Common Stock

​

​

​

Paid-In

​

Retained

​

Stockholders'

​

    

Shares Issued

    

Amount

    

Shares

    

Capital

    

Earnings

    

Equity

Balance at June 30, 2023

    

6,923,446

​

$

7

​

(214,422)

​

$

15,188

​

$

50,068

​

$

65,263

Employee stock grants

​

1,945

​

​

—

​

—

​

​

—

​

​

—

​

​

—

Taxes paid related to net share settlement of equity awards

​

(3,618)

​

​

—

​

—

​

​

(75)

​

​

—

​

​

(75)

Stock option exercises

 

19,781

​

​

—

​

—

​

​

24

​

​

—

​

​

24

Stock-based compensation

 

—

​

​

—

​

—

​

​

47

​

​

—

​

​

47

Net income

 

—

​

​

—

​

—

​

​

—

​

​

5,514

​

​

5,514

Balance at September 30, 2023

 

6,941,554

​

$

7

​

(214,422)

​

$

15,184

​

$

55,582

​

$

70,773

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Nine Months Ended September 30, 2023

​

​

Common Stock

​

Treasury Stock

​

Additional

​

​

​

Total

​

​

​

​

Common Stock

​

​

​

Paid-In

​

Retained

​

Stockholders'

​

    

Shares Issued

    

Amount

    

Shares

    

Capital

    

Earnings

    

Equity

Balance at December 31, 2022

 

6,906,544

​

$

7

 

(214,422)

​

$

16,449

​

$

39,220

​

$

55,676

Common stock warrants acquired

 

—

​

 

—

 

—

​

 

(1,949)

​

 

—

​

 

(1,949)

Employee stock grants

​

23,868

​

​

—

​

—

​

​

846

​

​

—

​

​

846

Taxes paid related to net share settlement of equity awards

​

(8,639)

​

​

—

​

—

​

​

(247)

​

​

—

​

​

(247)

Stock option exercises

 

19,781

​

 

—

 

—

​

 

24

​

 

—

​

 

24

Stock-based compensation

 

—

​

 

—

 

—

​

 

61

​

 

—

​

 

61

Net income

 

—

​

 

—

 

—

​

 

—

​

 

16,362

​

 

16,362

Balance at September 30, 2023

​

6,941,554

​

$

7

 

(214,422)

​

$

15,184

​

$

55,582

​

$

70,773

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Three Months Ended September 30, 2024

​

​

Common Stock

​

Treasury Stock

​

Additional

​

​

​

Total

​

​

​

​

Common Stock

​

​

​

Paid-In

​

Retained

​

Stockholders'

​

    

Shares Issued

    

Amount

    

Shares

    

Capital

    

Earnings

    

Equity

Balance at June 30, 2024

 

7,202,146

​

$

7

​

(214,422)

​

$

12,504

​

$

65,887

​

$

78,398

Stock option exercises

 

79,097

​

​

—

​

—

​

​

26

​

​

—

​

​

26

Issuance of common stock

​

86,734

​

​

—

​

—

​

​

2,536

​

​

​

​

​

2,536

Stock issuance expenses

​

—

​

​

—

​

—

​

​

(588)

​

​

​

​

​

(588)

Taxes paid related to net share settlement of equity awards

​

(33,377)

​

​

—

​

—

​

​

(830)

​

​

​

​

​

(830)

Stock-based compensation

​

—

​

​

—

​

—

​

​

204

​

​

—

​

​

204

Net income

 

—

​

​

—

​

—

​

​

—

​

​

5,609

​

​

5,609

Balance at September 30, 2024

​

7,334,600

​

$

7

​

(214,422)

​

$

13,852

​

$

71,496

​

$

85,355

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Nine Months Ended September 30, 2024

​

​

Common Stock

​

Treasury Stock

​

Additional

​

​

​

Total

​

​

​

​

Common Stock

​

​

​

Paid-In

​

Retained

​

Stockholders'

​

    

Shares Issued

    

Amount

    

Shares

    

Capital

    

Earnings

    

Equity

Balance at December 31, 2023

 

7,099,441

​

$

7

​

(214,422)

​

$

11,985

​

$

59,803

​

$

71,795

Directors stock grants

​

6,546

​

​

—

​

—

​

​

150

​

​

—

​

​

150

Issuance of common stock

​

86,734

​

​

—

​

—

​

​

2,536

​

​

—

​

​

2,536

Stock issuance expenses

​

—

​

​

—

​

—

​

​

(588)

​

​

—

​

​

(588)

Taxes paid related to net share settlement of equity awards

​

(34,406)

​

​

—

​

—

​

​

(874)

​

​

—

​

​

(874)

Stock option exercises

 

176,285

​

​

—

​

—

​

​

295

​

​

—

​

​

295

Stock-based compensation

 

—

​

​

—

​

—

​

​

348

​

​

—

​

​

348

Net income

 

—

​

​

—

​

—

​

​

—

​

​

11,693

​

​

11,693

Balance at September 30, 2024

 

7,334,600

​

$

7

​

(214,422)

​

$

13,852

​

$

71,496

​

$

85,355

​

See accompanying notes to unaudited condensed financial statements

3

Semler Scientific, Inc.

Condensed Statements of Cash Flows

Unaudited

(In thousands of U.S. Dollars)

​

​

​

​

​

​

​

​

​

​

Nine months ended September 30,

​

    

2024

    

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

​

​

​

​

​

​

Net income

​

$

11,693

​

$

16,362

​

​

​

​

​

​

​

Reconciliation of Net Income to Net Cash Provided by Operating Activities:

​

 

​

​

 

​

Depreciation

​

 

480

​

 

439

Deferred tax expense

​

​

(353)

​

​

(478)

Loss on disposal of assets for lease

​

 

323

​

 

355

Loss on disposal of inventory

​

​

—

​

​

171

Gain on short-term investments

​

​

—

​

​

(307)

Allowance for credit losses

​

 

(21)

​

 

203

Change in fair value of notes held for investment

​

​

(128)

​

​

217

Change in fair value of digital assets

​

​

3,918

​

​

—

Stock-based compensation

​

 

498

​

 

907

Changes in Operating Assets and Liabilities:

​

 

​

​

 

​

Trade accounts receivable

​

 

(512)

​

 

(2,284)

Inventory

​

​

65

​

​

30

Prepaid expenses and other current assets

​

 

388

​

 

(478)

Other non-current assets

​

​

64

​

​

98

Accounts payable

​

 

143

​

 

(535)

Accrued expenses

​

 

756

​

 

2,250

Other current and non-current liabilities

​

​

(16)

​

​

(22)

Deferred revenue

​

​

(315)

​

​

(40)

Net Cash Provided by Operating Activities

​

 

16,983

​

 

16,888

​

​

​

​

​

​

​

CASH FLOWS FROM INVESTING ACTIVITIES:

​

​

​

​

​

​

Additions to property and equipment

​

 

(48)

​

 

(310)

Purchase of notes held for investment

​

​

(500)

​

​

(1,000)

Purchase of digital assets

​

​

(68,400)

​

​

—

Proceeds from maturities of short-term investments

​

​

—

​

​

59,719

Purchase of short-term investments

​

​

—

​

​

(57,869)

Purchase of assets for lease

​

 

(35)

​

 

(773)

Net Cash Used in Investing Activities

​

 

(68,983)

​

 

(233)

​

​

 

​

​

 

​

CASH FLOWS FROM FINANCING ACTIVITIES:

​

 

  

​

 

  

Repurchase of warrants

​

​

—

​

​

(1,949)

Proceeds from issuance of common stock

​

​

2,536

​

​

—

Taxes paid related to net settlement of equity awards

​

​

(874)

​

​

(247)

Stock issuance expenses

​

​

(588)

​

​

—

Proceeds from exercise of stock options

​

 

295

​

 

24

Net Cash Provided by (Used in) Financing Activities

​

 

1,369

​

 

(2,172)

(DECREASE) INCREASE IN CASH

​

​

(50,631)

​

 

14,483

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

​

 

57,332

​

 

23,014

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

​

$

6,701

​

$

37,497

​

​

See accompanying notes to unaudited condensed financial statements

​

​

4

Table of Contents

Semler Scientific, Inc.

Notes to Condensed Financial Statements

Unaudited

(In thousands of U.S. Dollars, except share and per share data)

​

​

1.Basis of Presentation

Semler Scientific, Inc., a Delaware corporation (“Semler” or “the Company”), prepared the unaudited interim financial statements included in this report in accordance with United States generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 7, 2024 (the “Annual Report”). In the opinion of management, these financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the periods presented. The results of operations for the interim periods shown in this report are not necessarily indicative of the results that may be expected for any future period, including the full year.

​

Intangible Digital Assets

​

The Company accounts for its digital assets, which are comprised solely of bitcoin, as indefinite-lived intangible assets in accordance with Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other. The Company has ownership of and control over its bitcoin and uses third-party custodial services at multiple locations that are geographically dispersed to store its bitcoin. The Company’s digital assets are initially recorded at cost and subsequently remeasured to fair value at the end of each reporting period, with changes recognized in net income.

​

The Company purchases bitcoins for long term investment. It intends to hold its digital assets for long term gains and treats them as long term capital assets for tax purposes. Unrealized gains/losses are treated as capital gains/losses for tax purposes. A valuation allowance is recorded for unrealized capital losses. See Note 10 to the Unaudited Condensed Financial Statements for additional information regarding the Company’s purchases and sales of digital assets.

​

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information. In particular, on an annual basis, companies will be required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies will also be required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative threshold. The standard is effective for the Company for annual periods beginning after December 15, 2024 on a prospective basis, with retrospective application permitted for all prior periods presented. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures.

​

Recently Adopted Accounting Pronouncement

​

In December 2023, the FASB issued ASU No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires in-scope crypto assets to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. The standard is effective for the Company for interim and annual periods beginning after December 15, 2024, with a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period in which the Company adopts the guidance. Early adoption is permitted in any interim or annual period for which an entity's financial statements have not been issued as of the beginning of the annual reporting period. The Company early adopted ASU 2023-08 in the

5

Table of Contents

Semler Scientific, Inc.
Notes to Condensed Financial Statements

Unaudited

(In thousands of U.S. Dollars, except share and per share data)

second quarter ended June 30, 2024, effective retroactively as of January 1, 2024 with no cumulative-adjustment to the retained earnings as of the beginning of the annual period of adoption.

​

​

2.Variable-Fee Revenue

The Company recognizes variable-fee licenses (i.e., fee per test) and sales of hardware equipment and accessories in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Total fees from variable-fee licenses represent approximately $6,168 and $6,254 for the three months ended September 30, 2024 and 2023, respectively. Total fees from variable-fee licenses represent approximately $21,157 and $23,191 for the nine months ended September 30, 2024 and 2023, respectively. Total sales of hardware and equipment accessories represent approximately $564 and $523 of revenues for the three months ended September 30, 2024 and 2023, respectively. Total sales of hardware and equipment accessories represent approximately $2,091 and $1,474 of revenues for the nine months ended September 30, 2024 and 2023, respectively. The remainder of the revenue is earned from leasing the Company's testing product for a fixed fee, which is not subject to ASC 606. See Note 14 to the Unaudited Condensed Financial Statements for more information.

​

Upon shipment under variable-fee license contracts, assets for lease are sold to the customers, and the asset is recognized as cost of revenue.

​

3. Accounts Receivable and Allowance for Credit Losses

​

Accounts receivable are recorded at the invoiced amount, net of allowance for credit losses. The allowance for credit losses is based on management’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of this allowance for credit losses by considering historical experience, the age of the accounts receivable balances, the credit quality of the customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect customers’ ability to pay to determine whether a specific reserve is appropriate. Accounts receivable deemed uncollectable are charged against the allowance for credit losses when identified. Accounts receivable, net of $6,667 and $6,125 as of September 30, 2024 and December 31, 2023, respectively, include $4,880 and $5,966, respectively, related to revenue recognized under ASC 606.

​

As of September 30, 2024, the allowance for credit losses was $266. During the three months period ended September 30, 2024, the Company provided an additional reserve of $40 and recovered $17 from customers. During the nine months period ended September 30, 2024, the Company provided an additional reserve of $71 and recovered $92 from customers. The allowance for credit losses as of December 31, 2023, was $287.

​

4. 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. The inventory balance was $380 and $445 as of September 30, 2024 and December 31, 2023, respectively.

​

5.           Assets for Lease, net

The Company provides financing of certain equipment through operating leases (see Note 14 to the Unaudited Condensed Financial Statements).

​

6

Table of Contents

Semler Scientific, Inc.
Notes to Condensed Financial Statements

Unaudited

(In thousands of U.S. Dollars, except share and per share data)

​

Assets for lease consist of the following:

​

​

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31, 

​

​

​

2024

    

2023

    

Assets for lease

​

$

2,865

​

$

3,375

​

Less: accumulated depreciation

​

 

(1,128)

​

 

(1,090)

​

Assets for lease, net

​

$

1,737

​

$

2,285

​

​

Depreciation expense amounted to $71 and $81 for the three months ended September 30, 2024 and 2023, respectively. Depreciation expense amounted to $261 and $228 for the nine months ended September 30, 2024 and 2023, respectively. Reduction to accumulated depreciation for returned and retired items was $80 and $125 for the three months ended September 30, 2024 and 2023, respectively. Reduction to accumulated depreciation for returned and retired items was $184 and $390 for the nine months ended September 30, 2024 and 2023, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $4 and $241 for the three months ended September 30, 2024 and 2023, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $323 and $355 for the nine months ended September 30, 2024 and 2023, respectively.

​

6.            Property and Equipment, net

​

Property and equipment, net consists of the following:

​

​

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31, 

​

​

​

2024

    

2023

    

Property and equipment, gross

​

$

1,464

​

$

1,544

​

Less: accumulated depreciation

​

 

(916)

​

 

(824)

​

Property and equipment, net

​

$

548

​

$

720

​

​

Depreciation expense amounted to $72 and $80 for the three months ended September 30, 2024 and 2023, respectively. Depreciation expense amounted to $219 and $211 for the nine months ended September 30, 2024 and 2023, respectively

​

7.Long-Term Investments

​

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

​

​

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31, 

​

​

​

2024

    

2023

​

Investments in SYNAPS Dx

    

$

512

​

$

512

​

Total long-term investments

​

$

512

​

$

512

​

​

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 September 30, 2024 and December 31, 2023 was approximately $512.

The investments in SYNAPS Dx were recorded in accordance with ASC 321, Investments – Equity Securities (“ASC 321”), which provides that investments in equity securities in privately-held companies without readily determinable fair values are generally recorded at cost, plus or minus subsequent observable price changes in orderly transactions for identical or similar investments, less impairments. The Company elected the practical expedient permitted by ASC 321 and recorded the above investments on a cost basis. As a part of the assessment for impairment indicators, the Company considers significant deterioration in the earnings performance

7

Table of Contents

Semler Scientific, Inc.
Notes to Condensed Financial Statements

Unaudited

(In thousands of U.S. Dollars, except share and per share data)

and overall business prospects of the investee as well as significant adverse changes in the external environment these investments operate. If qualitative assessment indicates the investments are impaired, the fair value of these equity securities would be estimated, which would involve a significant degree of judgement and subjectivity.

The Company qualitatively assessed the investment for impairment in accordance with ASC 321. As of September 30, 2024 and December 31, 2023, the Company determined that there was no impairment for the investment in SYNAPS Dx.

​

8.Fair Value Measurements

​

The following table presents fair value hierarchy of the Company’s financial assets measured at fair value on a recurring basis:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Hierarchy

​

Level 1

​

Level 2

​

Level 3

​

Total

As of September 30, 2024

​

​

​

​

​

​

​

​

​

​

​

U.S. Government money market fund accounts

$

3,596

​

$

—

​

$

—

​

$

3,596

(Included in cash and cash equivalents)

​

​

​

​

​

​

​

​

​

​

​

Bitcoin investments

​

64,482

​

​

—

​

​

—

​

​

64,482

(Included in intangible digital assets)

​

​

​

​

​

​

​

​

​

​

​

Investment in debt securities

​

—

​

​

—

​

​

5,000

​

​

5,000

(Included in short-term notes held for investment)

​

​

​

​

​

​

​

​

​

​

​

Total Assets

$

68,078

​

$

—

​

$

5,000

​

$

73,078

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Level 1

​

Level 2

​

Level 3

​

Total

As of December 31, 2023

​

​

​

​

​

​

​

​

​

​

​

U.S. Government money market fund accounts

$

41,373

​

$

—

​

$

—

​

$

41,373

(Included in cash and cash equivalents)

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury bill

​

—

​

​

10,494

​

​

—

​

​

10,494

(Included in cash and cash equivalents)

​

​

​

​

​

​

​

​

​

​

​

Investment in debt securities

​

—

​

​

—

​

​

4,372

​

​

4,372

(Included in notes held for investment)

​

​

​

​

​

​

​

​

​

​

​

Total Assets

$

41,373

​

$

10,494

​

$

4,372

​

$

56,239

​

​

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 FASB ASC 820, Fair Value Measurement, are described as follows:

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

Level 2 — Inputs other than quoted prices included in Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; and

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

8

Table of Contents

Semler Scientific, Inc.
Notes to Condensed Financial Statements

Unaudited

(In thousands of U.S. Dollars, except share and per share data)

The financial instruments of the Company consist primarily of cash, U.S. government money market fund accounts, trade receivables, trade payables, bitcoins, U.S. treasury bill investments and debt securities. Because carrying values of cash, trade receivables, and payables are equal to or approximate their fair value, the Company excluded them from the leveling requirements. U.S. government money market fund accounts are classified as Level 1 due to their short-term nature, their market interest rates and also based on the fact that they are publicly traded. Bitcoins purchased for investments, which are included in Intangible digital assets are classified as Level 1 as the unadjusted quoted prices in active markets are used for the fair valuation. The Company also invested in non-convertible promissory notes and equity securities in a privately held company, which were recorded on cost basis. See Notes 7 and 9 to the Unaudited Condensed Financial Statements for more information.

​

The Company's privately held debt security is recorded at fair value on a recurring basis. The estimation of fair value for these investments requires the use of significant unobservable inputs, and as a result, the Company deems these assets as Level 3 within the fair value measurement framework.

​

As of September 30, 2024, the Company valued the debt security at face value of $5,000 as the issuer of the debt security notified their intention to repay the debt before the maturity date of December 6, 2024. The fair value of the Company’s privately held debt security was estimated at $4,372 as of December 31, 2023.

​

​

​

9.Notes Held for Investment

​

Notes receivable consists of the following for the periods presented:

​

​

​

​

​

​

​

​

​

​

​

September 30, 

​

​

December 31, 

​

​

​

2024

​

​

2023

​

Senior secured promissory notes

​

$

1,000

​

$

1,000

​

Secured convertible promissory notes

​

​

5,100

​

​

4,372

​

Total notes held for investment

​

$

6,100

​

$

5,372

​

​

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, which 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. As of December 31, 2023, the note was classified as long-term note held for investment. As of September 30, 2024, this note was classified as short-term notes held for investment due to the note becoming current.

In December 2022, the Company entered into a senior convertible promissory note arrangement with Monarch, providing Monarch with up to $5,000 in available funding, which was fully drawn down as of September 30, 2024. The Monarch debt security accrues interest at 10% per annum, payable monthly, and the principal balance is due December 6, 2024. The note together with $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 Monarch 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 Monarch debt security or the amount payable upon conversion into Monarch’s shares. The Monarch debt security is redeemable at any time at Monarch’s option or automatically upon an event of default (as defined in the note). Monarch notified the Company of its intention to repay the debt before its maturity. Hence, this note, including transaction fees receivable of $100, was classified as short-term notes held for investment as of September 30, 2024. As of December 31, 2023, the note was classified as long-term note held for investment as the Company had the intent to extend the maturity.

The Company made an irrevocable election to account for the Mellitus and Monarch debt securities using the fair value option under ASC 825 – Financial Instruments (“ASC 825”) and will measure the fair value of such debt securities in accordance with ASC 820. The Company made the fair value option election to present the debt securities in their entirety at fair value, which it

9

Table of Contents

Semler Scientific, Inc.
Notes to Condensed Financial Statements

Unaudited

(In thousands of U.S. Dollars, except share and per share data)

believes to be preferable to recognizing the host instrument at fair value under ASC 320 and potentially separately recognizing certain embedded features as bifurcated derivatives under ASC 815. As of September 30, 2024 and December 31, 2023, the Company estimated the fair value of the Monarch debt security to be $5,100, which includes transaction fees receivable of $100, and $4,372, respectively.

The Company recognizes interest income on the Monarch debt securities, which is included in interest and dividend income in the Unaudited Condensed Statements of Income. For the three months ended September 30, 2024 and 2023, the Company recognized $139 and $120 of interest income from Monarch and Mellitus notes, respectively, which is included in prepaid expenses and other current assets. For the nine months ended September 30, 2024 and 2023, the Company recognized $396 and $347, of interest income from Monarch and Mellitus notes, respectively. Accrued interest is included in prepaid and other current assets. The Company recognizes changes in fair value of the notes in the statements of income separately from the interest income. For the nine months ended September 30, 2024, the Company recorded change in fair value of $128.

​

10.Intangible Digital Assets

​

On May 28, 2024, the Company announced that its board of directors adopted bitcoin as its primary treasury reserve asset. Under this new treasury strategy, the Company purchases and holds bitcoins for long term investment purposes. The Company accounts for its bitcoin as an indefinite-lived intangible asset in accordance with ASC 350, Intangibles—Goodwill and Other and has ownership of and control over its bitcoin, which are included in Intangible digital assets in the Unaudited Condensed Balance Sheets. As of September 30, 2024, there were no contractual restrictions on the sale of bitcoins.

Bitcoin Investment

The Company early adopted ASU No. 2023-08 in the second quarter of 2024 effective retroactively as of January 1, 2024. See Recently Adopted Accounting Pronouncement in Note 1 to the Unaudited Condensed Financial Statements.

The Company’s bitcoin purchased for investment purpose are initially recorded at cost, inclusive of transaction costs and fees. Subsequently, the Company remeasures its bitcoin investment at fair value at the end of each reporting period with changes recognized in net income through “Other (expense) income, net” in the Company’s Unaudited Condensed Statements of Income. As of September 30, 2024, the Company held approximately 1,018 bitcoins with a cost basis of $68,400 and a fair value of $64,482.

Reconciliation of fair value

The following table represents a reconciliation of the fair values of the Company’s Intangible digital assets held:

​

​

​

​

​

​

​

​

For the

​

For the

​

Three-Months

​

Nine-Months

​

Period Ended

​

Period Ended

​

September 30, 2024

​

September 30, 2024

​

​

​

​

​

​

Intangible digital assets held:

​

​

​

​

​

Beginning balance at fair value

$

54,945

​

$

—

Additions

​

8,400

​

​

68,400

Dispositions

​

-

​

​

-

Unrealized gain, net

​

1,137

​

​

679

Unrealized loss, net

​

—

​

​

(4,597)

Ending Balance

$

64,482

​

$

64,482

​

​

10

Table of Contents

Semler Scientific, Inc.
Notes to Condensed Financial Statements

Unaudited

(In thousands of U.S. Dollars, except share and per share data)

11. Other Non-current assets

​

Other non-current assets consist of right-of-use assets (“ROU”) of $87 and long-term deposits of $19 as of September 30, 2024. As of December 31, 2023, ROU asset of $150, miscellaneous receivable of $100 and long term deposits balances of $20, respectively.

​

12.Accrued Expenses

Accrued expenses consist of the following:

​

​

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31, 

​

​

​

2024

    

2023

    

Compensation

​

$

3,044

​

$

2,008

​

Accrued Taxes

​

​

1,678

​

​

1,991

​

Miscellaneous Accruals

​

 

536

​

 

503

​

Total Accrued Expenses

​

$

5,258

​

$

4,502

​

​

​

13.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, bitcoins 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. As of September 30, 2024 and December 31, 2023, the Company held deposits of $3,105 and $5,465, respectively. These deposits are largely uninsured. The Company also invested in U.S. government money market funds in the amount of $3,596 as of September 30, 2024. As of December 31, 2023, the Company invested in U.S. treasury bills of $10,494 and U.S. government money markets funds of $41,373. The Company limits its credit risk by dealing with counterparties that are considered to be of high credit quality and by performing periodic evaluations of the relative credit standing of these financial institutions. The Company invested in bitcoins of $68,400 as of September 30, 2024. The fair value of bitcoins as of September 30, 2024 was $64,482.

Management periodically monitors the creditworthiness of its customers and believes that it has adequately provided for exposure to potential credit loss. For the three months ended September 30, 2024, two customers (including affiliates) accounted for 44.0% and 28.8% of the Company’s revenues, respectively. For the three months ended September 30, 2023, three customers (including affiliates) accounted for 36.4%, 28.3% and 11.4% of the Company’s revenues, respectively. For the nine months ended September 30, 2024, two customers accounted for 44.2% and 26.6% of the Company’s revenues, respectively. For the nine months ended September 30, 2023, two customers accounted for 34.4% and 35.7% of the Company’s revenues, respectively. As of September 30, 2024, three customers accounted for 55.9%, 16.2%, and 10.7% of the Company’s accounts receivable, respectively. As of December 31, 2023, three customers accounted for 27.5%, 27.5%, and 23.6% of the Company’s accounts receivable, respectively. The Company’s largest customer in terms of both revenues and accounts receivable in the nine months ended September 30, 2024 is a U.S. diversified healthcare company and its affiliated plans.

As of September 30, 2024, three vendors accounted for 35.8%, 22.7% and 15.4% of the Company’s accounts payable, respectively. As of December 31, 2023, two vendors accounted for 24.0% and 10.1% of the Company’s accounts payable, respectively.

​

11

Table of Contents

Semler Scientific, Inc.
Notes to Condensed Financial Statements

Unaudited

(In thousands of U.S. Dollars, except share and per share data)

14.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 September 30, 2024, the remaining lease term is 12 months with no options to renew. The Company recognized facilities lease expenses of $22 and $22 for the three months ended September 30, 2024 and 2023, respectively. The Company recognized facilities lease expenses of $66 and $66 for the nine months ended September 30, 2024 and 2023, 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 September 30, 2024:

​

​

​

​

​

​

    

Total

2024 Remaining period

​