Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 26, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-36305 | ||
Entity Registrant Name | Semler Scientific, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 26-1367393 | ||
Entity Address, Address Line One | 2340-2348 Walsh Avenue, Suite 2344 | ||
Entity Address, City or Town | Santa Clara | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95051 | ||
City Area Code | 877 | ||
Local Phone Number | 774-4211 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | smlr | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 193,177,552 | ||
Entity Common Stock, Shares Outstanding | 6,708,672 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001554859 | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | false |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash | $ 22,079 | $ 7,741 |
Trade accounts receivable, net of allowance for doubtful accounts of $61 and $36, respectively | 2,808 | 3,486 |
Prepaid expenses and other current assets | 1,376 | 216 |
Total current assets | 26,263 | 11,443 |
Assets for lease, net | 2,281 | 2,079 |
Property and equipment, net | 261 | 249 |
Other non-current assets | 418 | 15 |
Long-term Investments | 3,051 | |
Long-term deferred tax assets | 2,365 | 4,501 |
Total assets | 34,639 | 18,287 |
Current liabilities: | ||
Accounts payable | 677 | 338 |
Accrued expenses | 2,798 | 3,914 |
Deferred revenue | 963 | 955 |
Other short-term liabilities | 76 | |
Total current liabilities | 4,514 | 5,207 |
Long-term liabilities: | ||
Other long-term liabilities | 332 | 7 |
Total long-term liabilities | 332 | 7 |
Stockholders' equity: | ||
Common stock, $0.001 par value; 50,000,000 shares authorized; 6,725,422, and 6,556,221 shares issued, and 6,700,422 and 6,531,221 shares outstanding (treasury shares of 25,000 and 25,000, respectively) | 7 | 7 |
Additional paid-in capital | 22,113 | 19,400 |
Retained earnings (accumulated deficit) | 7,673 | (6,334) |
Total stockholders' equity | 29,793 | 13,073 |
Total liabilities and stockholders' equity | $ 34,639 | $ 18,287 |
Balance Sheets (Parentheticals)
Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Balance Sheets | ||
Allowance for doubtful accounts on trade accounts receivable (in dollars) | $ 61 | $ 36 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 6,725,422 | 6,556,221 |
Common stock, shares outstanding | 6,700,422 | 6,531,221 |
Treasury stock, shares | 25,000 | 25,000 |
Statements of Income
Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statements of Income | ||
Revenues | $ 38,603 | $ 32,767 |
Operating expenses: | ||
Cost of revenues | 3,356 | 3,661 |
Engineering and product development | 2,938 | 2,479 |
Sales and marketing | 9,942 | 8,965 |
General and administrative | 6,406 | 6,954 |
Total operating expenses | 22,642 | 22,059 |
Income from operations | 15,961 | 10,708 |
Interest income | 19 | 2 |
Other income (expense) | 506 | (9) |
Other income (expense) | 525 | (7) |
Pre-tax net income | 16,486 | 10,701 |
Income tax provision (benefit) | 2,479 | (4,383) |
Net income | $ 14,007 | $ 15,084 |
Net income per share, basic | $ 2.13 | $ 2.34 |
Weighted average number of shares used in computing basic income per share | 6,584,441 | 6,440,724 |
Net income per share, diluted | $ 1.74 | $ 1.88 |
Weighted average number of shares used in computing diluted income per share | 8,066,561 | 8,029,909 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Total |
Balance at Dec. 31, 2018 | $ 6 | $ 25,608 | $ (21,418) | $ 4,196 | |
Balance (in shares) at Dec. 31, 2018 | 6,349,985 | (25,000) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Warrant repurchases | (6,633) | (6,633) | |||
Warrant exercises (in shares) | 36,197 | ||||
Stock option exercises | $ 1 | 60 | $ 61 | ||
Stock option exercises (in shares) | 170,039 | 179,865 | |||
Stock-based compensation | 365 | $ 365 | |||
Net income | 15,084 | 15,084 | |||
Balance at Dec. 31, 2019 | $ 7 | 19,400 | (6,334) | 13,073 | |
Balance (in shares) at Dec. 31, 2019 | 6,556,221 | (25,000) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Employee stock grant (in shares) | 641 | ||||
Investment in Private company #2 (Note 6) | 2,230 | 2,230 | |||
Investment in Private company #2 (Note 6) (shares) | 40,922 | ||||
Stock option exercises | 230 | $ 230 | |||
Stock option exercises (in shares) | 127,638 | 130,162 | |||
Stock-based compensation | 253 | $ 253 | |||
Net income | 14,007 | 14,007 | |||
Balance at Dec. 31, 2020 | $ 7 | $ 22,113 | $ 7,673 | $ 29,793 | |
Balance (in shares) at Dec. 31, 2020 | 6,725,422 | (25,000) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 14,007 | $ 15,084 |
Reconciliation of Net Income to Net Cash Provided by Operating Activities: | ||
Depreciation | 576 | 632 |
Deferred tax expense (benefit) | 2,136 | (4,501) |
Loss on disposal of assets for lease | 271 | 206 |
Allowance for doubtful accounts | 55 | 48 |
Non-cash interest income | (12) | |
Gain on sale of Private company #3 securities | (442) | |
Stock-based compensation expense | 253 | 365 |
Changes in Operating Assets and Liabilities: | ||
Trade accounts receivable | 623 | (734) |
Prepaid expenses and other assets | (1,160) | (63) |
Other non-current assets | (403) | |
Accounts payable | 339 | 58 |
Accrued expenses | (1,235) | 1,113 |
Deferred revenue | 8 | 520 |
Other current and non-current liabilities | 401 | |
Net Cash Provided by Operating Activities | 15,417 | 12,728 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (149) | (174) |
Payment for long-term note receivable from Private company #2 | (457) | |
Payment for long-term note receivable from Private company #3 | (59) | |
Purchase of shares of preferred stock from Private company #3 | (250) | |
Payment for long-term note receivable from Private company #3 | (1,424) | |
Proceeds from sale of Private company #3 securities | 1,942 | |
Purchase of assets for lease | (912) | (1,524) |
Net Cash Used in Investing Activities | (1,309) | (1,698) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase of warrants | (6,633) | |
Proceeds from exercise of stock options | 230 | 60 |
Net Cash Provided by (Used) in Financing Activities | 230 | (6,573) |
INCREASE IN CASH | 14,338 | 4,457 |
CASH, BEGINNING OF PERIOD | 7,741 | 3,284 |
CASH, END OF PERIOD | 22,079 | 7,741 |
Cash paid for taxes | 285 | $ 123 |
Supplemental Disclosure of Cash Flow Information: | ||
Long-term note receivable from Private company #2 settled by stock issuance | 512 | |
Exchange of SMLR common stock for preferred stock of Private company #2 | 2,230 | |
Long-term note receivable from Private company #3 settled by stock issuance | $ 59 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2020 | |
The Company | |
The Company | 1. The Company Semler Scientific, Inc. (the “Company”) was incorporated in the State of Oregon on August 9, 2007, established C-corporation status in 2012, and reincorporated as a Delaware corporation during 2013. The Company provides technology solutions to improve the clinical effectiveness and efficiency of healthcare providers. In 2011, the Company began commercializing its first patented and U.S. Food and Drug Administration (“FDA”) cleared product, which measured arterial blood flow in the extremities to aid in the diagnosis of peripheral arterial disease (“PAD”). In March 2015, the Company received FDA 510(k) clearance for the next generation version of its product, QuantaFlo ® , which the Company commercially launched in August 2015. The Company has one operating segment and generates revenues domestically primarily through direct licensing to direct customers. The Company is based in Santa Clara, California. On January 30, 2020, the World Health Organization (“WHO”) declared the recent novel coronavirus (COVID-19) outbreak a global health emergency, which prompted national, state and local governments to begin putting actions in place to slow the spread of COVID-19. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic. The outbreak of COVID-19 resulted in travel restrictions, quarantines, “stay-at-home” and “shelter-in-place” orders and extended shutdown of certain businesses around the world. While restrictions began to ease in the second quarter and activities began to resume, recent outbreaks could lead to restrictions being reimplemented. In the first half of 2020, the Company’s revenues, primarily from variable-fee licenses, were negatively impacted by the COVID-19 pandemic. However, in the third and fourth quarters of 2020, the Company’s revenues, primarily from variable-fee licenses, rebounded to and even exceeded pre-COVID-19 levels. The extent and duration of the pandemic is unknown, and the future effects on the Company’s business are uncertain and difficult to predict. The Company is continuing to monitor the events and circumstances surrounding the COVID-19 pandemic, which may require adjustments to the Company’s estimates and assumptions in the future. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Estimates | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies and Estimates | |
Summary of Significant Accounting Policies and Estimates | 2. Summary of Significant Accounting Policies and Estimates Basis for Presentation The Company’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses, and related disclosures during the reporting period. Significant items subject to such estimates include revenue recognition, allowance for doubtful accounts, valuation of equipment on lease, deferred tax asset valuation allowance, stock-based compensation and valuation of warrants. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates. Revenue Recognition The Company generates revenues primarily from the rental or license of its vascular testing product, or providing diagnostic testing service to its customers. The Company recognizes revenues from the licensing of its vascular testing product pursuant to agreements that automatically renew each month with revenue recognized on a daily convention basis. The Company’s arrangements with customers for its vascular testing product are normally on a month-to-month basis with fees billed at the rates established in the customer agreement. The Company recognizes revenues for providing diagnostic testing services on a per test basis to customers, as earned. The Company also recognizes revenue for hardware and supplies sales as of the date of shipment. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of this allowance for doubtful accounts by considering historical experience, the age of the accounts receivable balances, the credit quality of the customers, current economic conditions, and other factors that may affect customers’ ability to pay to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. Assets for Lease Assets for lease are recorded at cost. At December 31, 2020 and 2019, assets for lease consisted of vascular testing devices, which are leased to customers. The cost of such assets for lease is depreciated on a straight-line basis over 36 months for the units outstanding and recorded as cost of revenues. The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected undiscounted net cash flows associated with the related assets over their estimated remaining lives against their respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its assets for lease in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. At December 31, 2020 and 2019, there were no impairment indicators. Property and Equipment Capital assets are recorded at cost. The cost of such capital assets is depreciated on a straight-line basis over a term depending on the assigned category (described below) and recorded as depreciation for capital assets recorded in engineering and product development, sales and marketing and general and administrative expenses. At December 31, 2020 and 2019, capital assets are classified into one of the following categories: Category Name Description Machinery & Equipment Manufacturing, R&D, or other non-office equipment Computer Equipment & Software Software, computers, monitors, printers and other related equipment. Furniture & Fixtures Office equipment and furniture owned by the company At December 31, 2020 and 2019, capital assets are depreciated based on the following estimated useful life for each category: Account Name Useful Life Machinery & Equipment Five years Computer Equipment & Software Three years Furniture & Fixtures Five years The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of capital assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected fair value of the related asset over the estimated remaining life against the respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its capital assets in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. The Company did not have any impairments to record during either the years ended December 31, 2020 or 2019. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy under Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, are described as follows: Level 1 Level 2 Level 3 The financial instruments of the Company consist primarily of cash, accounts receivable, and accounts payable. These items are considered Level 1 due to their short-term nature and their market interest rates and are therefore considered a reasonable estimate of fair value at December 31, 2020 and 2019. The Company invested in the debt and equity securities of two privately held companies, which was recorded on cost basis. See Note 6 to the financial statements for more information. Deferred Revenue Deferred revenue represents amounts billed to or collected from customers for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. The full amount is expected to be recognized as revenues within one year from the balance sheet date and, therefore, such deferred amounts have been classified as current liabilities in the balance sheets presented. The Company generally invoices its clients in advance of a rental period with payment due upon receipt of the invoice. Research and Development The Company expenses costs related to the research and development associated with the design, development, testing and enhancement of its products and services. Such expenses include salaries and related employee benefits, and fees paid to external service providers. Stock-Based Compensation Stock-based compensation expense is measured based on the grant-date fair value of the stock-based awards. The Company recognizes stock-based compensation expense for the portion of each option grant or stock award that is expected to vest over the estimated period of service and vesting. The Company uses the Black-Scholes option pricing model as the method for determining the estimated grant-date fair value of stock options. The Black-Scholes option pricing model requires the use of subjective assumptions which determine the fair value of stock-based awards, including the option’s expected volatility. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the grant. Employee Benefit Plan The Company has a savings plan that qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). There were no matching or discretionary employer contributions made to this plan during the years ended December 31, 2020 and 2019. Income Taxes The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the expected tax consequences attributable to the differences between financial reporting and the tax bases of existing assets and liabilities and net operating loss (“NOL”) carryforwards, and they are measured using enacted tax rates expected to be in effect when differences are expected to reverse. The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) reduced the U.S. corporate income tax rate to 21%, effective January 1, 2018. In addition, NOLs generated after December 31, 2017 are carried forward indefinitely with yearly NOL utilization limited to 80% of taxable income. A valuation allowance is recorded for loss carryforwards and other deferred tax assets where it is more likely than not that such loss carry-forward and deferred tax assets will not be realized. The estimate for the valuation allowance for deferred tax assets requires management to make significant estimates and judgments about projected future operating results. If actual results differ from these projections or if management’s expectations of future results change, it may be necessary to adjust the valuation allowance. Recently Issued Accounting Pronouncements Accounting Pronouncements Recently Adopted In November 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-08 – Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customer (Topic 606) . The amendments on this update require that an entity measure and classify share-based payment awards granted to a customer by applying the guidance in Topic 718. The amount recorded as a reduction in the transaction price should be based on the grant-date fair value of the share-based payment award. This standard is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the new standard on January 1, 2020 and determined that the adoption of this new accounting guidance did not have a material impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“Topic 326”) In December 2019, the FASB issued ASU No. 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) In March 2020, FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In August 2020, the FASB issued ASU No. 2020-06, Debt--Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity's Own Equity (Subtopic 815-40) In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements. Codification Improvements In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848). |
Assets for Lease, net
Assets for Lease, net | 12 Months Ended |
Dec. 31, 2020 | |
Assets for Lease, net | |
Assets for Lease, net | 3. Assets for Lease, net The Company provides financing of certain equipment through operating leases (see Note 9 to the financial statements). Assets for lease consist of the following: As of December 31, 2020 2019 Assets for lease $ 3,747 $ 3,374 Less: accumulated depreciation (1,466) (1,295) Assets for lease, net $ 2,281 $ 2,079 Depreciation expense amounted to $439 and $483 for the years ended December 31, 2020 and 2019, respectively. Reduction to accumulated depreciation for returned items was $268 and $163 for the years ended December 31, 2020 and December 31, 2019, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $271 and $206 for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, total assets for lease, net, in use at customer locations were $736 and $849, respectively. |
Other Product Inventory
Other Product Inventory | 12 Months Ended |
Dec. 31, 2020 | |
Other Product Inventory | |
Other Product Inventory | 4. Other Product Inventory In September 2020, the Company entered into an agreement with Private company #1 to exclusively market and distribute a new product line. Product inventory under this agreement was as follows for the periods presented: As of December 31, 2020 2019 Private company #1 $ 68 $ — Under this agreement, the Company has committed to purchase $1,200 of product inventory. The Company prepaid for $900 of product inventory and has received $72 of product inventory. The balance of prepaid inventory was $828 as of December 31, 2020. Product inventory was $68 and $0 for the years ended December 31, 2020 and 2019, respectively. The Company also agreed to make royalty payments ranging from 0% to 10% of net sales depending on the average net sales price of the distributed products. Unless early terminated in accordance with its terms, this exclusive distribution agreement will remain in full force and effect until December 31, 2024, and thereafter there is an option for this agreement to be automatically renewed for additional 4-year terms. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment, net | |
Property and Equipment, net | 5. Property and Equipment, net Capital assets consist of the following: As of December 31, 2020 2019 Capital assets $ 786 $ 636 Less: accumulated depreciation (525) (387) Capital assets, net $ 261 $ 249 Depreciation expense amounted to $138 and $149 for the years ended December 31, 2020 and 2019, respectively. |
Long Term Investments
Long Term Investments | 12 Months Ended |
Dec. 31, 2020 | |
Long Term Investments | |
Long Term Investments | 6. Long Term Investments Long term investments consist of the following for the periods presented: As of December 31, 2020 2019 Investments in Private company #2 $ 2,742 $ — Investments in Private company #3 309 — Total $ 3,051 $ — Private company #2: In October 2020, the Company purchased 211,928 shares of common stock of Private company #2 from certain sellers in exchange for 40,922 shares of the Company’s common stock. The total fair value of the purchase consideration as of December 31, 2020 was approximately $2,230 . The Company has the right to, in various circumstances, sell any or all of these shares of common stock back to the sellers in exchange for the shares of the Company’s common stock originally issued to the sellers. These rights are tied to (a) Private company #2 completing a bona fide equity financing, (b) the share price in such financing, (c) the timing of delivery of certain documents to the Company or (d) at the Company’s sole option, at any time between March 31, 2021 and October 8, 2021. In September 2020, the Company acquired a promissory note from Private company #2 in the principal amount of $500, $100 of which was retained for expense reimbursement. Subsequently, in December 2020, the Company agreed to convert the promissory note, together with all accrued interest thereon, into shares of preferred stock of Private company #2 as repayment in full of the promissory note. The value of the note exchanged for the shares of preferred stock of Private company #2 held by the Company as of December 31, 2020 was approximately $512. Private company #3: In October 2020, the Company acquired from a seller a convertible promissory note previously issued by Private company #3 to such seller for a purchase price of $59, which represented the $50 principal amount of the note and all accrued and unpaid interest thereon. Subsequently, in October 2020, the Company purchased $250 of shares of preferred stock of Private company #3, and in connection with such transaction, the convertible promissory note, together with all accrued interest thereon, also converted pursuant to its terms into shares of preferred stock of Private company #3 as repayment in full of such convertible promissory note. The value of consideration exchanged for the shares of preferred stock of Private company #3 held by the Company as of December 31, 2020 was approximately $309. Also in October 2020, the Company acquired another convertible promissory note directly from Private company #3 in the principal amount of $1,500, $100 of which was retained for expense reimbursement, and warrants to purchase common stock of Private company #3. In November 2020, this convertible promissory note, together with all accrued interest thereon, converted pursuant to its terms into shares of preferred stock of Private company #3. In December 2020, the Company transferred and sold such shares of preferred stock and the common stock warrants of Private company #3 to a significant stockholder of the Company for a cash purchase price of $1,942 . As of December 31, 2020, the Company no longer held the shares acquired in connection with the conversion of such convertible promissory note. The Company recorded $442 in Other income associated with the sale during the year ended December 31, 2020. The investments in Private company #2 and #3 securities that were retained by the Company as of December 31, 2020 were recorded in accordance with ASC 321, Investments – equity securities, |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses | |
Accrued Expenses | 7. Accrued Expenses Accrued expenses consist of the following: As of December 31, 2020 2019 Compensation $ 1,524 $ 2,803 Accrued Taxes 861 66 Miscellaneous Accruals 413 1,045 Total Accrued Expenses $ 2,798 $ 3,914 |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2020 | |
Concentration of Credit Risk | |
Concentration of Credit Risk | 8. Concentration of Credit Risk Credit risk is the risk of loss from amounts owed by the financial counterparties. Credit risk can occur at multiple levels; as a result of broad economic conditions, challenges within specific sectors of the economy, or from issues affecting individual companies. Financial instruments that potentially subject the Company to credit risk consist of cash and accounts receivable. The Company maintains cash with major financial institutions. The Company’s cash consists of bank deposits held with banks that, at times, exceed federally insured limits. The Company limits its credit risk by dealing with counterparties that are considered to be of high credit quality and by performing periodic evaluations of the relative credit standing of these financial institutions. Management periodically monitors the creditworthiness of its customers and believes that it has adequately provided for any exposure to potential credit loss. For the year ended December 31, 2020, two customers accounted for 47.2% and 22.8% of the Company’s revenue. For the year ended December 31, 2019, three customers accounted for 49.4%, 13.2% and 12.5% of the Company’s revenue. As of December 31, 2020, four customers accounted for 31.2%, 19.4%, 15.7% and 10.4% of the Company’s accounts receivable, respectively. As of December 31, 2019, three customers accounted for 55.9%, 17.6% and 12.0% of the Company’s accounts receivable, respectively. As of December 31, 2020 and 2019 the allowance for doubtful accounts was $61 and $36, respectively As of December 31, 2020, two vendors accounted for 15.9% and 24.3% of the Company’s accounts payable, respectively. As of December 31, 2019, two vendors accounted for 15.9% and 14.1% of the Company’s accounts payable, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | 9. Leases Lessee Arrangements On July 31, 2020, the Company entered into a 61-month lease agreement for office space to use, as necessary, for office administration, lab space and assembly and storage purposes, located in Santa Clara, California. The Company took possession of the leased office space in September 2020, and the lease is effective through September 30, 2025. As of December 31, 2020, the remaining lease term is four years and nine months with no options to renew. Upon adoption of ASC 2016-02, in accordance with the elected practical expedient transition rules, the right of use (“ROU”) asset and liability related to this lease were immaterial as of December 31, 2020. The Company recognized facilities lease expenses of $97 and $68 for the years ended December 31, 2020 and 2019, respectively. The following table summarizes the future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms greater than one year as of December 31, 2020: Total 2021 $ 85 2022 87 2023 90 2024 93 2025 71 Thereafter — Total undiscounted future minimum lease payments 426 Less: present value discount (19) Total lease liabilities 407 Lease expense in excess cash payment (8) Total ROU asset $ 399 As of December 31, 2020, the Company’s ROU asset current noncurrent The Company also has $18 in remaining payments due on its expiring facilities lease payable in the first quarter of 2021. Lessor Arrangements The Company enters into contracts with customers for the Company’s QuantaFlo ® product. The Company has determined these contracts meet the definition of a lease under Topic 842. The lease portfolio primarily consists of operating leases that are short-term in nature (monthly, quarterly or one year, all of which have renewal options). The Company allocates the consideration in a bundled contract with its customers based on relative standalone selling prices of the lease and non-lease components. The Company made an accounting policy election to apply the practical expedient to not separate lease and eligible non-lease components. The lease component is the predominant component and consists of fees charged for use of the equipment over the period of the arrangement. The nature of the eligible non-lease component is primarily software support. The assets associated with these leasing arrangements are separately identified in the Balance Sheet as Assets for Lease and separately disclosed in Note 3 to the financial statements. During the year ended December 31, 2020, the Company recognized approximately $25,743 in lease revenue related to these arrangements, which is included in revenue on the Statements of Income. Variable-fee Revenue The Company recognizes revenues from variable-fee licenses (i.e., fee per test) and sales of hardware equipment and accessories in accordance with Topic 606. Total revenues from variable-fee licenses were approximately $11,610 and $8,927 for the years ended December 31, 2020 and 2019, respectively. Total revenues from sales of hardware and equipment accessories were approximately $1,250 and $927 for the years ended December 31, 2020 and 2019, respectively. Essentially all of the variable-fee licenses are with large healthcare organizations. The remainder of the revenue is earned from leasing the Company’s testing product for a fixed fee, which is not subject to Topic 606. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies In September 2020, the Company entered into an agreement with Private company #1 to exclusively market and distribute a new product line. See Note 4 to the financial statements for more information. Indemnification Obligations The Company enters into agreements with customers, partners, lenders, consultants, lessors, contractors, sales representatives and parties to certain transactions in the ordinary course of the Company’s business. These agreements may require the Company to indemnify the other party against third party claims alleging that its product infringes a patent or copyright. Certain of these agreements require the Company to indemnify the other party against losses arising from: a breach of representations or covenants, claims relating to property damage, personal injury or acts or omissions of the Company, its employees, agents or representatives. The Company has also agreed to indemnify the directors and certain of the officers and employees in accordance with the by-laws of the Company. These indemnification provisions will vary based upon the nature and terms of the agreements. In many cases, these indemnification provisions do not contain limits on the Company’s liability, and the occurrence of contingent events that will trigger payment under these indemnities is difficult to predict. As a result, the Company cannot estimate its potential liability under these indemnities. The Company believes that the likelihood of conditions arising that would trigger these indemnities is remote and, historically, the Company had not made any significant payment under such indemnification provisions. Accordingly, the Company has not recorded any liabilities relating to these agreements. In certain cases, the Company has recourse against third parties with respect to the aforesaid indemnities, and the Company believes it maintains adequate levels of insurance coverage to protect the Company with respect to potential claims arising from such agreements. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity | |
Stockholders' Equity | 11. Stockholders’ Equity The Company has 50,000,000 authorized shares of capital stock, all of which are designated as common stock with par value of $0.001 per share. Each holder of shares of common stock is entitled to one vote for each share held. For the years ended December 31, 2020 and 2019, a total of 1,528,295 and 1,658,457 shares of common stock, respectively, were reserved for issuance upon (i) exercise of common stock warrants, and (ii) the exercise of outstanding stock options, as follows: Year ended December 31, 2020 2019 Common stock warrants 76,875 76,875 Stock options 1,451,420 1,581,582 Total 1,528,295 1,658,457 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | 12. Related Party Transactions On May 3, 2019, the Company entered into a warrant purchase agreement (the “May Repurchase Agreement”), with the Murphy-Chutorian Family Trust U/D/T dated January 13, 1997 (the “Murphy-Chutorian Family Trust”), of which Dr. Murphy-Chutorian, the Company’s director and chief executive officer is co-Trustee with his spouse and of which he is a beneficiary. Pursuant to the May Repurchase Agreement, the Company repurchased a warrant to acquire 65,542 shares of its common stock (the “May Repurchase Warrant”), held by the Murphy-Chutorian Family Trust, which warrant had an exercise price equal to $4.50 per share and an expiration date of July 31, 2023, at an aggregate purchase price of $2,687. The purchase price reflects the difference between the aggregate exercise price of the May Repurchase Warrant and the aggregate fair market value of the shares underlying the May Repurchase Warrant, based on the last trade price of the Company’s common stock on May 3, 2019, the date of the May Repurchase Agreement. Following this repurchase, the May Repurchased Warrant was cancelled and is no longer issued and outstanding. On November 6, 2019, the Company entered into a warrant purchase agreement (the “November Repurchase Agreement”), with the Murphy-Chutorian Family Trust. Pursuant to the November Repurchase Agreement, the Company repurchased warrants to acquire an aggregate of 93,797 shares of its common stock (collectively, the “November Repurchase Warrants”), held by the Murphy-Chutorian Family Trust, which warrants had exercise prices ranging from $2.00 to $4.50 per share and an expiration date of July 31, 2023, at an aggregate purchase price of $3,946. The purchase price reflects the difference between the aggregate exercise price of the November Repurchase Warrants and the aggregate fair market value of the shares underlying the November Repurchase Warrants, based on the last trade price of the Company’s common stock on November 6, 2019, the date of the November Repurchase Agreement. Following this repurchase, the November Repurchased Warrants were cancelled and are no longer issued and outstanding. Following these repurchases, the Murphy-Chutorian Family Trust holds warrants to acquire 16,875 shares of the Company’s common stock at an exercise price of $4.00 per share, and 60,000 shares of the Company’s common stock at an exercise price of $4.50 per share, all of which are exercisable and expire on July 31, 2023. In December 2020, the Company transferred and sold its shares of preferred stock and common stock warrants of a private company to one of the Company’s significant stockholders, for a cash purchase price of $1,942. See Note 6 to the financial statements for more information. |
Stock Option Plan
Stock Option Plan | 12 Months Ended |
Dec. 31, 2020 | |
Stock Option Plan | |
Stock Option Plan | 13. Stock Option Plan The Company’s stock-based compensation program is designed to attract and retain employees while also aligning employees’ interests with the interests of its stockholders. Stock options have been granted to employees under the stockholder-approved 2007 Key Person Stock Option Plan (“2007 Plan”) or the stockholder-approved 2014 Stock Incentive Plan (“2014 Plan”). Stockholder approval of the 2014 Plan became effective in September 2014. The 2014 Plan originally provided that the aggregate number of shares of common stock that may be issued pursuant to awards granted under the 2014 Plan may not exceed 450,000 shares (the “Share Reserve”), however in October 2015, the stockholders approved a 1,500,000 increase to the Share Reserve. In addition, the Share Reserve automatically increases on January 1st of each year, for a period of not more than 10 years, beginning on January 1st of the year following the year in which the 2014 Plan became effective and ending on (and including) January 1, 2024, in an amount equal to 4% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year. The Company’s board of directors may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of shares of common stock than would otherwise occur. The Share Reserve is currently 2,783,616 shares for the year ending December 31, 2020. In light of stockholder approval of the 2014 Plan, the Company no longer grants equity awards under the 2007 Plan. As of December 31, 2020, there were no shares available for future stock-based compensation grants under the 2007 Plan and 1,260,469 shares of an aggregate total of 2,783,616 shares available for future stock-based compensation grants under the 2014 Plan. Aggregate intrinsic value represents the difference between the closing market value as of December 31, 2020 of the underlying common stock and the exercise price of outstanding, in-the-money options. A summary of the Company’s stock option activity and related information for 2020 and 2019 is as follows: Options Outstanding Weighted Average Number of Weighted Remaining Aggregate Stock Options Average Contractual Intrinsic Value Outstanding Exercise Price Term (In Years) (In Thousands) Balance, December 31, 2018 1,761,447 $ 3.18 6.84 $ 55,000 Options exercised (179,865) 2.72 Balance, December 31, 2019 1,581,582 $ 3.23 5.86 $ 70,827 Options exercised (130,162) 2.95 Balance, December 31, 2020 1,451,420 $ 3.25 4.91 $ 131,714 Exercisable as of December 31, 2019 1,477,020 $ 3.06 5.73 $ 66,389 Exercisable as of December 31, 2020 1,420,368 $ 3.15 4.87 $ 129,039 The total compensation cost related to unvested stock option awards not yet recognized was $181 as of December 31, 2020. The weighted average period over which the total unrecognized compensation cost related to these unvested stock awards will be recognized is 0.44 years. The total number of unvested shares was 31,052 and 104,563 as of December 31, 2020 and 2019, respectively. The total estimated grant date fair value of options vested during the years ended December 31, 2020 and 2019 was $253 and $365, respectively. There were no options granted or forfeited during the years ended December 31, 2020 or 2019. The Company has recorded an expense of $253 and $365 as it relates to stock-based compensation for the years ended December 31, 2020 and 2019, respectively, which was allocated as follows based on the role and responsibility of the recipient in the Company: Year ended December 31, 2020 2019 Cost of Revenues $ — $ 1 Engineering and Product Development — 16 Sales and Marketing — 46 General and Administrative 253 302 Total $ 253 $ 365 Restricted Stock The Company granted 641 shares of restricted stock to an employee in the year ended December 31, 2020. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | 14. Income Taxes The components of the provision (benefit) for income taxes are as follows: 2020 2019 Current tax provision: Federal $ — $ — State 343 118 Total current tax provision 343 118 Deferred tax provision: Federal 2,052 (3,645) State 84 (856) Total deferred tax provision (benefit) 2,136 (4,501) Total income tax provision (benefit) $ 2,479 $ (4,383) A summary of the differences between the Company’s effective income tax rate and the federal statutory income tax rate for the years ended December 31, 2020 and 2019 are as follows: 2020 2019 Federal statutory rate 21.00 % 21.00 % State income tax rate, net of federal benefit 2.19 % 1.83 % Change in valuation allowance (0.00) % (49.89) % Deferred tax adjustments 0.73 % 0.00 % Stock-based compensation (8.44) % (13.12) % Permanent items (0.44) % 0.4 % Other 0.00 % (1.18) % Effective income tax rate 15.04 % (40.96) % The decrease in the effective tax rate was primarily related to a windfall deduction from stock option exercise and the California law changes on the net operating loss utilization. Deferred tax assets are comprised of the following at December 31: 2020 2019 Net operating loss carryforwards $ 492 $ 2,646 Deferred revenue 233 233 Depreciation and amortization — 14 Stock based compensation 605 751 Accrual and reserves 209 145 Research and development credits, net of tax reserve 818 711 Other 18 1 Lease liability 98 — Total gross deferred tax assets 2,473 4,501 Less valuation allowance — — Net deferred tax assets 2,473 4,501 Deferred tax liabilities: Depreciation and amortization (12) — Right of use assets (96) — Total deferred tax liabilities (108) — Net deferred tax assets $ 2,365 $ 4,501 Federal and California tax laws impose significant restrictions on the utilization of net operating loss (“NOL”) carryforwards in the event of a change in ownership of the Company, as defined by Section 382 of the Code (“Section 382”). The Company has completed a formal 382 study for the period from January 1, 2012 through June 30, 2019 and believes a change in ownership has occurred. The Company has NOL carryforwards for federal and California income tax purposes of approximately . Under the Tax Act, NOLs generated after December 31, 2017 will be carried forward indefinitely with the yearly NOL utilization limited to Additionally, the CARES Act provides for an employee retention payroll tax credit for certain employers, which is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020 and before January 1, 2021. For each employee, wages (including health plan costs) up to $10,000 can be counted to determine the amount of the 50% credit. The Company started claiming this credit on its July 2020 payroll. As of December 31, 2020, the Company has claimed As of December 31, 2020 and 2019, the Company had $341 and $295 , respectively, of unrecognized tax benefits, excluding interest and penalties. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits: Gross Unrecognized Tax Benefits 2020 Gross Unrecognized Tax Benefits 2019 Unrecognized tax benefits – January 1 $ 295 $ 218 Gross increases related to prior tax positions 1 — Gross increases related to current tax positions 45 77 Unrecognized tax benefits – December 31 $ 341 $ 295 The Company’s policy is to recognize interest and penalty expenses related to uncertain tax positions in income tax expense, which was zero for the years ended December 31, 2020 and 2019. The Company files income tax returns in the U.S. federal and various state tax jurisdictions. The Company’s tax years beginning in 2016 remain open for examination by the state tax authorities for four years. The Company’s tax years beginning in 2017 remain open for examination by the federal tax authorities for three years. Tax years beginning in 2013 will remain open for examination from the date of utilization of any NOL or credits. The Company does not have any tax positions for which it is reasonably possible the total amount of gross unrecognized tax benefits will increase or decrease within 12 months of the year-ended December 31, 2020. |
Net Income Per Share, Basic and
Net Income Per Share, Basic and Diluted | 12 Months Ended |
Dec. 31, 2020 | |
Net Income Per Share, Basic and Diluted | |
Net Income Per Share, Basic and Diluted | 15. Net Income Per Share, Basic and Diluted Basic earnings per share (“EPS”) represent net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period using the treasury stock method. As of December 31, 2020, there are no options Basic and diluted net EPS is calculated as follows: For the year ended December 31, 2020 2019 Shares Net Income EPS Shares Net Income EPS Basic EPS 6,584,441 $ 14,007 $ 2.13 6,440,724 $ 15,084 $ 2.34 Common stock warrants 70,281 — — 69,068 — — Common stock options 1,411,839 — — 1,520,117 — — Diluted EPS 8,066,561 $ 14,007 $ 1.74 8,029,909 $ 15,084 $ 1.88 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Estimates (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies and Estimates | |
Basis of Presentation | Basis for Presentation The Company’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses, and related disclosures during the reporting period. Significant items subject to such estimates include revenue recognition, allowance for doubtful accounts, valuation of equipment on lease, deferred tax asset valuation allowance, stock-based compensation and valuation of warrants. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates. |
Revenue Recognition | Revenue Recognition The Company generates revenues primarily from the rental or license of its vascular testing product, or providing diagnostic testing service to its customers. The Company recognizes revenues from the licensing of its vascular testing product pursuant to agreements that automatically renew each month with revenue recognized on a daily convention basis. The Company’s arrangements with customers for its vascular testing product are normally on a month-to-month basis with fees billed at the rates established in the customer agreement. The Company recognizes revenues for providing diagnostic testing services on a per test basis to customers, as earned. The Company also recognizes revenue for hardware and supplies sales as of the date of shipment. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of this allowance for doubtful accounts by considering historical experience, the age of the accounts receivable balances, the credit quality of the customers, current economic conditions, and other factors that may affect customers’ ability to pay to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. |
Assets for Lease | Assets for Lease Assets for lease are recorded at cost. At December 31, 2020 and 2019, assets for lease consisted of vascular testing devices, which are leased to customers. The cost of such assets for lease is depreciated on a straight-line basis over 36 months for the units outstanding and recorded as cost of revenues. The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected undiscounted net cash flows associated with the related assets over their estimated remaining lives against their respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its assets for lease in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. At December 31, 2020 and 2019, there were no impairment indicators. |
Property and Equipment | Property and Equipment Capital assets are recorded at cost. The cost of such capital assets is depreciated on a straight-line basis over a term depending on the assigned category (described below) and recorded as depreciation for capital assets recorded in engineering and product development, sales and marketing and general and administrative expenses. At December 31, 2020 and 2019, capital assets are classified into one of the following categories: Category Name Description Machinery & Equipment Manufacturing, R&D, or other non-office equipment Computer Equipment & Software Software, computers, monitors, printers and other related equipment. Furniture & Fixtures Office equipment and furniture owned by the company At December 31, 2020 and 2019, capital assets are depreciated based on the following estimated useful life for each category: Account Name Useful Life Machinery & Equipment Five years Computer Equipment & Software Three years Furniture & Fixtures Five years The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of capital assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected fair value of the related asset over the estimated remaining life against the respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its capital assets in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. The Company did not have any impairments to record during either the years ended December 31, 2020 or 2019. |
Fair Value of Financial Instruments | Fair Value 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, accounts receivable, and accounts payable. These items are considered Level 1 due to their short-term nature and their market interest rates and are therefore considered a reasonable estimate of fair value at December 31, 2020 and 2019. The Company invested in the debt and equity securities of two privately held companies, which was recorded on cost basis. See Note 6 to the financial statements for more information. |
Deferred Revenue | Deferred Revenue Deferred revenue represents amounts billed to or collected from customers for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. The full amount is expected to be recognized as revenues within one year from the balance sheet date and, therefore, such deferred amounts have been classified as current liabilities in the balance sheets presented. The Company generally invoices its clients in advance of a rental period with payment due upon receipt of the invoice. |
Research and Development | 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”). There were no matching or discretionary employer contributions made to this plan during the years ended December 31, 2020 and 2019. |
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. The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) reduced the U.S. corporate income tax rate to 21%, effective January 1, 2018. In addition, NOLs generated after December 31, 2017 are carried forward indefinitely with yearly NOL utilization limited to 80% of taxable income. A valuation allowance is recorded for loss carryforwards and other deferred tax assets where it is more likely than not that such loss carry-forward and deferred tax assets will not be realized. The estimate for the valuation allowance for deferred tax assets requires management to make significant estimates and judgments about projected future operating results. If actual results differ from these projections or if management’s expectations of future results change, it may be necessary to adjust the valuation allowance. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Accounting Pronouncements Recently Adopted In November 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-08 – Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customer (Topic 606) . The amendments on this update require that an entity measure and classify share-based payment awards granted to a customer by applying the guidance in Topic 718. The amount recorded as a reduction in the transaction price should be based on the grant-date fair value of the share-based payment award. This standard is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the new standard on January 1, 2020 and determined that the adoption of this new accounting guidance did not have a material impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“Topic 326”) In December 2019, the FASB issued ASU No. 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) In March 2020, FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In August 2020, the FASB issued ASU No. 2020-06, Debt--Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity's Own Equity (Subtopic 815-40) In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements. Codification Improvements In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848). |
Assets for Lease, net (Tables)
Assets for Lease, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Assets for Lease, net | |
Schedule of assets for lease | As of December 31, 2020 2019 Assets for lease $ 3,747 $ 3,374 Less: accumulated depreciation (1,466) (1,295) Assets for lease, net $ 2,281 $ 2,079 |
Other Product Inventory (Tables
Other Product Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Product Inventory | |
Schedule of other product inventory | As of December 31, 2020 2019 Private company #1 $ 68 $ — |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment, net | |
Schedule of capital assets | As of December 31, 2020 2019 Capital assets $ 786 $ 636 Less: accumulated depreciation (525) (387) Capital assets, net $ 261 $ 249 |
Long Term Investments (Tables)
Long Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Long Term Investments | |
Schedule of long term investments | As of December 31, 2020 2019 Investments in Private company #2 $ 2,742 $ — Investments in Private company #3 309 — Total $ 3,051 $ — |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses | |
Schedule of accrued expenses | As of December 31, 2020 2019 Compensation $ 1,524 $ 2,803 Accrued Taxes 861 66 Miscellaneous Accruals 413 1,045 Total Accrued Expenses $ 2,798 $ 3,914 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of future minimum rental payments required under operating leases | Total 2021 $ 85 2022 87 2023 90 2024 93 2025 71 Thereafter — Total undiscounted future minimum lease payments 426 Less: present value discount (19) Total lease liabilities 407 Lease expense in excess cash payment (8) Total ROU asset $ 399 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity | |
Schedule of common stock reserved for issuance | Year ended December 31, 2020 2019 Common stock warrants 76,875 76,875 Stock options 1,451,420 1,581,582 Total 1,528,295 1,658,457 |
Stock Option Plan (Tables)
Stock Option Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock Option Plan | |
Schedule of stock option activity | Options Outstanding Weighted Average Number of Weighted Remaining Aggregate Stock Options Average Contractual Intrinsic Value Outstanding Exercise Price Term (In Years) (In Thousands) Balance, December 31, 2018 1,761,447 $ 3.18 6.84 $ 55,000 Options exercised (179,865) 2.72 Balance, December 31, 2019 1,581,582 $ 3.23 5.86 $ 70,827 Options exercised (130,162) 2.95 Balance, December 31, 2020 1,451,420 $ 3.25 4.91 $ 131,714 Exercisable as of December 31, 2019 1,477,020 $ 3.06 5.73 $ 66,389 Exercisable as of December 31, 2020 1,420,368 $ 3.15 4.87 $ 129,039 |
Schedule of stock-based compensation | Year ended December 31, 2020 2019 Cost of Revenues $ — $ 1 Engineering and Product Development — 16 Sales and Marketing — 46 General and Administrative 253 302 Total $ 253 $ 365 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of components of the (benefit) provision for income taxes | 2020 2019 Current tax provision: Federal $ — $ — State 343 118 Total current tax provision 343 118 Deferred tax provision: Federal 2,052 (3,645) State 84 (856) Total deferred tax provision (benefit) 2,136 (4,501) Total income tax provision (benefit) $ 2,479 $ (4,383) |
Schedule of differences between the Company's effective income tax rate and the Federal statutory income tax rate | 2020 2019 Federal statutory rate 21.00 % 21.00 % State income tax rate, net of federal benefit 2.19 % 1.83 % Change in valuation allowance (0.00) % (49.89) % Deferred tax adjustments 0.73 % 0.00 % Stock-based compensation (8.44) % (13.12) % Permanent items (0.44) % 0.4 % Other 0.00 % (1.18) % Effective income tax rate 15.04 % (40.96) % |
Schedule of deferred tax assets | 2020 2019 Net operating loss carryforwards $ 492 $ 2,646 Deferred revenue 233 233 Depreciation and amortization — 14 Stock based compensation 605 751 Accrual and reserves 209 145 Research and development credits, net of tax reserve 818 711 Other 18 1 Lease liability 98 — Total gross deferred tax assets 2,473 4,501 Less valuation allowance — — Net deferred tax assets 2,473 4,501 Deferred tax liabilities: Depreciation and amortization (12) — Right of use assets (96) — Total deferred tax liabilities (108) — Net deferred tax assets $ 2,365 $ 4,501 |
Schedule of activity related to unrecognized tax benefits | Gross Unrecognized Tax Benefits 2020 Gross Unrecognized Tax Benefits 2019 Unrecognized tax benefits – January 1 $ 295 $ 218 Gross increases related to prior tax positions 1 — Gross increases related to current tax positions 45 77 Unrecognized tax benefits – December 31 $ 341 $ 295 |
Net Income Per Share, Basic a_2
Net Income Per Share, Basic and Diluted (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Net Income Per Share, Basic and Diluted | |
Schedule of basic and diluted net EPS | For the year ended December 31, 2020 2019 Shares Net Income EPS Shares Net Income EPS Basic EPS 6,584,441 $ 14,007 $ 2.13 6,440,724 $ 15,084 $ 2.34 Common stock warrants 70,281 — — 69,068 — — Common stock options 1,411,839 — — 1,520,117 — — Diluted EPS 8,066,561 $ 14,007 $ 1.74 8,029,909 $ 15,084 $ 1.88 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Estimates (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation method | straight-line basis | |
Description of assets for lease | assets for lease is depreciated on a straight-line basis over 36 months for the units outstanding and recorded as cost of revenues. | |
Capital assets depreciated assumed useful life | P36M | |
Federal statutory rate | 21.00% | 21.00% |
Carried forward NOL utilization limit | 80% | |
Machinery & Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Capital assets depreciated assumed useful life | P5Y | |
Computer Equipment & Software | ||
Property, Plant and Equipment [Line Items] | ||
Capital assets depreciated assumed useful life | P3Y | |
Furniture & Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Capital assets depreciated assumed useful life | P5Y |
Assets for Lease, net (Details)
Assets for Lease, net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets for Lease, net | ||
Assets for lease | $ 3,747 | $ 3,374 |
Less: accumulated depreciation | (1,466) | (1,295) |
Assets for lease, net | $ 2,281 | $ 2,079 |
Assets for Lease, net - Additio
Assets for Lease, net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Assets for Lease, net | ||
Depreciation expense | $ 439 | $ 483 |
Reduction to accumulated depreciation for returned items | 268 | 163 |
Loss on disposal of assets for lease | (271) | (206) |
Total assets for lease, net, in use at customer locations | $ 736 | $ 849 |
Other Product Inventory (Detail
Other Product Inventory (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other Product Inventory | |||
Product inventory purchases | $ 1,200 | ||
Prepayment for inventory | 900 | $ 828 | |
Purchases of products inventory | $ 72 | ||
Renewal term (in years) | 4 years | ||
Minimum | |||
Other Product Inventory | |||
Royalty on net sales (in percent) | 0.00% | ||
Maximum | |||
Other Product Inventory | |||
Royalty on net sales (in percent) | 10.00% | ||
Private Company #1 | |||
Other Product Inventory | |||
Product inventory | $ 68 | $ 0 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property and Equipment, net | ||
Capital assets | $ 786 | $ 636 |
Less: accumulated depreciation | (525) | (387) |
Capital assets, net | $ 261 | $ 249 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment, net | ||
Depreciation expense | $ 138 | $ 149 |
Long Term Investments (Details)
Long Term Investments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Equity Securities without Readily Determinable Fair Value [Line Items] | |
Long-term Investments | $ 3,051 |
Investments in Private company #2 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | |
Long-term Investments | 2,742 |
Investments in Private company #3 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | |
Long-term Investments | $ 309 |
Long Term Investments - Investm
Long Term Investments - Investment in Private company #2 (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | |
Promissory note from Private company #2 | |||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Principal amount | $ 500 | ||
Expense reimbursement | $ 100 | ||
Conversion value | $ 512 | ||
Investments in Private company #2 | |||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Shares purchased | 211,928 | ||
Common stock issued on Exchange | 40,922 | ||
Fair value of purchase consideration | $ 2,230 |
Long Term Investments - Inves_2
Long Term Investments - Investment in Private company #3 (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Oct. 31, 2020 | Dec. 31, 2020 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Cash purchase price | $ 1,942 | $ 1,942 | |
Other income | 442 | ||
Investments in Private company #3 | |||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Preferred Shares purchased | 250 | ||
First Promissory note from Private company #3 | |||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Purchase price | $ 59 | ||
Principal amount | 50 | ||
Conversion value | $ 309 | ||
Second Promissory note from Private company #3 | |||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||
Principal amount | 1,500 | ||
Expense reimbursement | $ 100 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Compensation | $ 1,524 | $ 2,803 |
Accrued Taxes | 861 | 66 |
Miscellaneous Accruals | 413 | 1,045 |
Total Accrued Expenses | $ 2,798 | $ 3,914 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)customeritem | Dec. 31, 2019USD ($)customeritem | |
Concentration of Credit Risk | ||
Allowance for doubtful accounts | $ | $ 61 | $ 36 |
Customer concentration risk | Revenue | ||
Concentration of Credit Risk | ||
Number of customers | 2 | 3 |
Customer concentration risk | Revenue | Customer one | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 47.20% | 49.40% |
Customer concentration risk | Revenue | Customer two | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 22.80% | 13.20% |
Customer concentration risk | Revenue | Customer three | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 12.50% | |
Customer concentration risk | Accounts receivable | ||
Concentration of Credit Risk | ||
Number of customers | 4 | 3 |
Customer concentration risk | Accounts receivable | Customer one | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 31.20% | 55.90% |
Customer concentration risk | Accounts receivable | Customer two | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 19.40% | 17.60% |
Customer concentration risk | Accounts receivable | Customer three | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 15.70% | 12.00% |
Customer concentration risk | Accounts receivable | Customer four | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 10.40% | |
Vendor concentration risk | Accounts payable | ||
Concentration of Credit Risk | ||
Number of vendors | item | 2 | 2 |
Vendor concentration risk | Accounts payable | Vendor one | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 15.90% | 15.90% |
Vendor concentration risk | Accounts payable | Vendor two | ||
Concentration of Credit Risk | ||
Concentration risk percentage | 24.30% | 14.10% |
Leases - Future minimum rental
Leases - Future minimum rental payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Leases | |
2021 | $ 85 |
2022 | 87 |
2023 | 90 |
2024 | 93 |
2025 | 71 |
Total undiscounted future minimum lease payments | 426 |
Less: present value discount | (19) |
Total lease liabilities | 407 |
Lease expense in excess cash payment | (8) |
Total ROU asset | $ 399 |
Leases - Lessee Arrangements (D
Leases - Lessee Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | Jul. 31, 2020 | |
Lessee, Lease, Description [Line Items] | ||||
Lease agreement term | 61 months | |||
Remaining lease term | 4 years 9 months | |||
Options to renew | false | |||
Lease expenses | $ 97 | $ 68 | ||
ROU asset | $ 399 | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Prepaid Expense and Other Assets, Current | |||
Current lease liabilities | $ 75 | |||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other Liabilities, Current | |||
Noncurrent lease liabilities | $ 332 | |||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | |||
Remaining payments due on leases | $ 426 | |||
Expiring facilities lease | ||||
Lessee, Lease, Description [Line Items] | ||||
Remaining payments due on leases | $ 18 |
Leases - Lessor Arrangements (D
Leases - Lessor Arrangements (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Leases | |
Lease revenue | $ 25,743 |
Leases - Variable-fee Revenue (
Leases - Variable-fee Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Revenue from variable-fee licenses | $ 11,610 | $ 8,927 |
Revenues from sales of hardware and equipment accessories | $ 1,250 | $ 927 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of exercise of common stock outstanding stock options (Details) - shares | Dec. 31, 2020 | Dec. 31, 2019 |
Stockholders' Equity | ||
Total | 1,528,295 | 1,658,457 |
Common stock warrants | ||
Stockholders' Equity | ||
Total | 76,875 | 76,875 |
Stock options | ||
Stockholders' Equity | ||
Total | 1,451,420 | 1,581,582 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Stockholders' Equity | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Number of shares in reserve | 1,528,295 | 1,658,457 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 06, 2019 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | May 03, 2019 |
Related Party Transaction [Line Items] | |||||
Shares of common stock held | 6,700,422 | 6,700,422 | 6,531,221 | ||
Cash purchase price | $ 1,942 | $ 1,942 | |||
Warrant Repurchase Agreement | Murphy Chutorian Family Trust | |||||
Related Party Transaction [Line Items] | |||||
Repurchase of warrant to acquire shares | 65,542 | ||||
Warrant exercise price | $ 4.50 | ||||
Warrant expiration date | Jul. 31, 2023 | ||||
Warrant aggregate purchase price | $ 3,946 | $ 2,687 | |||
Repurchase of warrants to acquire shares | 93,797 | ||||
Warrant Repurchase Agreement | Murphy Chutorian Family Trust | Warrants | |||||
Related Party Transaction [Line Items] | |||||
Warrant exercise price | $ 4 | ||||
Shares of common stock held | 16,875 | ||||
Warrant Repurchase Agreement | Murphy Chutorian Family Trust | Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Warrant exercise price | $ 4.50 | ||||
Shares of common stock held | 60,000 | ||||
Warrant Repurchase Agreement | Murphy Chutorian Family Trust | Minimum | |||||
Related Party Transaction [Line Items] | |||||
Aggregate purchase price | $ 2 | ||||
Warrant Repurchase Agreement | Murphy Chutorian Family Trust | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Aggregate purchase price | $ 4.50 |
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Stock Options Outstanding | |||
Balance, Beginning | 1,581,582 | 1,761,447 | |
Options exercised | (130,162) | (179,865) | |
Balance, Ending | 1,451,420 | 1,581,582 | 1,761,447 |
Exercisable, Ending | 1,420,368 | 1,477,020 | |
Weighted Average Exercise Price | |||
Balance, Beginning | $ 3.23 | $ 3.18 | |
Options exercised | 2.95 | 2.72 | |
Balance, Ending | 3.25 | 3.23 | $ 3.18 |
Exercisable, Ending | $ 3.15 | $ 3.06 | |
Weighted Average Remaining Contractual Term, Options Outstanding (in years) | 4 years 10 months 28 days | 5 years 10 months 9 days | 6 years 10 months 2 days |
Weighted Average Remaining Contractual Term, Options Exercisable (in years) | 4 years 10 months 13 days | 5 years 8 months 23 days | |
Aggregate Intrinsic Value, Options Outstanding | $ 131,714 | $ 70,827 | $ 55,000 |
Aggregate Intrinsic Value, Options Exercisable | $ 129,039 | $ 66,389 |
Stock Option Plan - Stock-based
Stock Option Plan - Stock-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 253 | $ 365 |
Cost of Revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 1 | |
Engineering and Product Development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 16 | |
Sales and Marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 46 | |
General and Administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 253 | $ 302 |
Stock Option Plan - Additional
Stock Option Plan - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2015 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation cost related to non-vested awards | $ 181 | |||
Weighted average period of unvested stock awards | 5 months 8 days | |||
Total number of unvested shares | 31,052 | 104,563 | ||
Total estimated grant date fair value of options non-vested | $ 253 | $ 365 | ||
Stock-based compensation expense | $ 253 | $ 365 | ||
Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of stock option granted | 641 | |||
2014 Stock Incentive Plan | Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum number of shares issued pursuant to awards granted under plan | 2,783,616 | 450,000 | ||
Number of share reserve increased | 1,500,000 | |||
Maximum term of stock option grants | 10 years | |||
Percentage of shares reserve increased | 4.00% | |||
Number of shares available for future stock-based compensation grants | 1,260,469 | |||
Total number of unvested shares | 2,783,616 |
Income Taxes - Summary of compo
Income Taxes - Summary of components of the (benefit) provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current tax provision: | ||
Federal | $ 0 | |
State | $ 343 | 118 |
Total current tax provision | 343 | 118 |
Deferred tax provision: | ||
Federal | 2,052 | (3,645) |
State | 84 | (856) |
Total deferred tax provision (benefit) | 2,136 | (4,501) |
Total income tax provision (benefit) | $ 2,479 | $ (4,383) |
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, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Federal statutory rate | 21.00% | 21.00% |
State income tax rate, net of federal benefit | 2.19% | 1.83% |
Change in valuation allowance | 0.00% | (49.89%) |
Deferred tax adjustments | 0.73 | 0 |
Stock-based compensation | (8.44%) | (13.12%) |
Permanent Items | (0.44%) | 0.40% |
Other | 0.00% | (1.18%) |
Effective income tax rate | 15.04% | (40.96%) |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 492 | $ 2,646 |
Deferred revenue | 233 | 233 |
Depreciation and amortization | 14 | |
Stock based compensation | 605 | 751 |
Accrual and reserves | 209 | 145 |
Research and development credits, net of tax reserve | 818 | 711 |
Other | 18 | 1 |
Lease liability | 98 | 0 |
Total gross deferred tax assets | 2,473 | 4,501 |
Less valuation allowance | 0 | |
Net deferred tax assets | 2,473 | 4,501 |
Deferred tax liabilities: | ||
Depreciation and amortization | (12) | 0 |
Right of use assets | 96 | 0 |
Total deferred tax liabilities | (108) | 0 |
Net deferred tax assets | $ 2,365 | $ 4,501 |
Income Taxes - Summary of activ
Income Taxes - Summary of activity related to the Company's gross unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Unrecognized tax benefits: | ||
Unrecognized tax benefits - January 1 | $ 295 | $ 218 |
Gross increases related to prior tax positions | 1 | 0 |
Gross increases related to current tax positions | 45 | 77 |
Unrecognized tax benefits - December 31 | $ 341 | $ 295 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards for federal | $ 310 | ||
Net operating loss carryforwards for California | $ 5,746 | ||
Effective taxable rate | 80% | ||
Research and development tax credit carryforwards for federal income tax | $ 100 | ||
Retention credit | 466 | ||
Unrecognized Tax Benefits | 341 | $ 295 | $ 218 |
Income penalties expense | $ 0 | $ 0 | |
Federal | |||
Tax Credit Carryforward [Line Items] | |||
Operating Loss Carryforwards Expiration Period | 2033 | ||
Company's tax years beginning for examination | 3 years | ||
State | |||
Tax Credit Carryforward [Line Items] | |||
Operating Loss Carryforwards Expiration Period | 2036 | ||
Company's tax years beginning for examination | 4 years | ||
Research tax credit carryforward | |||
Tax Credit Carryforward [Line Items] | |||
Operating Loss Carryforwards Expiration Period | 2033 | ||
Tax credit carryforward | $ 876 |
Net Income Per Share, Basic a_3
Net Income Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net Income Per Share, Basic and Diluted | ||
Basic EPS (in shares) | 6,584,441 | 6,440,724 |
Common stock warrants (in shares) | 70,281 | 69,068 |
Common stock options (in shares) | 1,411,839 | 1,520,117 |
Diluted EPS (in shares) | 8,066,561 | 8,029,909 |
Net Income - Basic EPS | $ 14,007 | $ 15,084 |
Net Income - Common stock warrants | 0 | 0 |
Net Income - Common stock options | 0 | 0 |
Net Income - Diluted EPS | $ 14,007 | $ 15,084 |
Basic EPS (in dollars per share) | $ 2.13 | $ 2.34 |
Common stock warrants (in dollars per share) | 0 | |
Common stock options (in dollars per share) | 0 | |
Diluted EPS (in dollars per share) | $ 1.74 | $ 1.88 |
Net Income Per Share, Basic a_4
Net Income Per Share, Basic and Diluted - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2020shares | |
Warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Weighted average shares outstanding | 0 |
Options | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Weighted average shares outstanding | 0 |