What changed in Semler Scientific, Inc.'s 2024 10-K compared to 2023?

Across the narrative sections we track, Semler Scientific, Inc. (SMLR) added 624 paragraphs, removed 254, and edited 201 between the 2023 and 2024 10-K filings. The biggest movers are Item 1A. Risk Factors (+324/−109), Item 1. Business (+218/−80), Item 7. Management's Discussion & Analysis (+69/−55).

Did Semler Scientific, Inc. add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 324 new/edited paragraphs and 109 removed paragraphs versus the 2023 10-K.

What changed in Semler Scientific, Inc.'s MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 69 new/edited paragraphs and 55 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did Semler Scientific, Inc. update its Cybersecurity disclosure (Item 1C) in 2024?

Item 1C Cybersecurity has 3 paragraph-level changes between the 2023 and 2024 filings.

Did Semler Scientific, Inc.'s Legal Proceedings (Item 3) change in 2024?

Item 3 shows 5 added/edited paragraphs and 1 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this SMLR 10-K diff come from?

The source filings are Semler Scientific, Inc.'s official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in Semler Scientific, Inc.'s 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of Semler Scientific, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+624 added−254 removedSource: 10-K (2025-02-28) vs 10-K (2024-03-07)

Top changes in Semler Scientific, Inc.'s 2024 10-K

624 paragraphs added · 254 removed · 201 edited across 7 sections

Item 1A. Risk Factors+324 / −109 · 97 edited
Item 1. Business+218 / −80 · 65 edited
Item 7. Management's Discussion & Analysis+69 / −55 · 30 edited
Item 3. Legal Proceedings+5 / −1 · 1 edited
Item 5. Market for Registrant's Common Equity+4 / −4 · 4 edited

Item 1. Business

Business — how the company describes what it does

65 edited+153 added−15 removed131 unchanged

2023 filing

2024 filing

Biggest changeThe SAGE Group has estimated that as many as 20 million people are affected with PAD in the United States alone and A.T. Hirsch et al. in a JAMA published article further estimate that only 11% have claudication (pain on exertion), a classic symptom of PAD. The spectrum of heart dysfunction includes heart failure.

Biggest changeHirsch et al. in a JAMA published article further estimate that only 11% have claudication (pain on exertion), a classic symptom of PAD. The spectrum of heart dysfunction includes heart failure. Published studies have shown that there are over one million hospitalizations per year in the United States from heart failure and the annual cost of care exceeds $30 billion.

Our intention is to provide a tool to internists and non-cardiovascular experts, for whom it was previously impractical to conduct a blood flow measurement unless in a specialized vascular laboratory.

Among other limitations of the study, the study had a small sample size, was conducted at specialty practices not primary care practices, had a retrospective design with incomplete collection of demographic information and clinical characteristics of the population, was not peer reviewed.

Additionally, the civil False Claims Act prohibits knowingly presenting or causing the presentation of a false, fictitious or fraudulent claim for payment to the U.S. government. Actions under the False Claims Act may be brought by the Attorney General or as a qui tam action by a private individual in the name of the government.

Additionally, the civil False Claims Act prohibits knowingly presenting or causing the presentation of a false, fictitious or fraudulent claim for payment to the U.S. government. Actions under the False Claims Act may be brought by the U.S.Attorney General or as a qui tam action by a private individual in the name of the government.

Our director of human resources and her team are also actively involved in implementing these decisions. We believe our company culture has been a critical component of our success in attracting and retaining personnel. Diversity and Inclusion - We aim to create an inclusive working environment where all employees are respected and treated equally.

Our director of human resources and her team are also actively involved in implementing these decisions. We believe our company culture has been a critical component of our success in attracting and retaining personnel. Inclusion - We aim to create an inclusive working environment where all employees are respected and treated equally.

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: ● untitled letters or warning letters; ● fines, injunctions and civil penalties; ● recall or seizure of our products; ● operating restrictions, partial suspension or total shutdown of production; 15 Table of Contents ● refusing our request for 510(k) clearance or premarket approval or de novo classification of new products; ● withdrawing premarket approvals that are already granted or reclassifying the devices; and ● criminal prosecution.

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: ● untitled letters or warning letters; ● fines, injunctions and civil penalties; ● recall or seizure of our products; ● operating restrictions, partial suspension or total shutdown of production; ● refusing our request for 510(k) clearance or premarket approval or de novo classification of new products; ● withdrawing premarket approvals that are already granted or reclassifying the devices; and ● criminal prosecution.

Class I devices are those for which safety and effectiveness can be reasonably assured by adherence to FDA’s “general controls”, which include compliance with the applicable portions of the FDA’s Quality System 12 Table of Contents Regulation, or QSR, facility registration and product listing, reporting of adverse medical events and malfunctions through the submission of medical device reports, and appropriate, truthful and non-misleading labeling, advertising and promotional materials.

Class I devices are those for which safety and effectiveness can be reasonably assured by adherence to FDA’s “general controls”, which include compliance with the applicable portions of the FDA’s Quality System Regulation, or QSR, facility registration and product listing, reporting of adverse medical events and malfunctions through the submission of medical device reports, and appropriate, truthful and non-misleading labeling, advertising and promotional materials.

Results were that our test showed a significant correlation with Echo (p Patents and Licenses We have been issued one patent for our apparatus, U.S. Patent No. 7,628,760, which expires December 11, 2027. Government Regulation U.S.

Based on U.S. Census data, we believe there are more than 80 million older Americans who could be evaluated for the presence of cardiac and vascular diseases. There are over 400,000 medical professionals practicing primary care in the United States. In addition, based on American Heart Association data, there are over 20,000 cardiologists and 7,500 vascular and cardiovascular surgeons.

Based on U.S. Census data, we believe there are more than 80 million older Americans who could be evaluated for the presence of cardiac and vascular diseases. There are over 400,000 medical professionals practicing primary care in the United States. In addition, based on American Heart Association data, there are over 30,000 cardiologists and 7,000 vascular and cardiovascular surgeons.

After FDA determines that a PMA application is sufficiently complete to permit a substantive review, the FDA begins an in-depth review of the submitted information, which generally takes between one and three years, but may take significantly longer. During this review period, the FDA may request additional information or clarification of information already provided.

After FDA determines that a PMA application is sufficiently complete to permit a substantive review, the FDA begins an in-depth review of the submitted information, which generally takes between one and three years, but may take significantly longer. During this review period, the 21 Table of Contents FDA may request additional information or clarification of information already provided.

One-year all-cause mortality, 1- and 2-year major adverse cardiovascular events (MACE), and major adverse limb events (MALE) in the PAD positive patients were all significantly increased versus those patients who screened negative for PAD (p 11 Table of Contents A February 2023 peer-reviewed study was published assessing the accuracy of our vascular testing product using cardiac echocardiography (Echo) as a gold standard of heart failure.

One-year all-cause mortality, 1- and 2-year major adverse cardiovascular events or MACE, and major adverse limb events or MALE, in the PAD positive patients were all significantly increased versus those patients who screened negative for PAD (p A February 2023 peer-reviewed study was published assessing the accuracy of our vascular testing product using cardiac echocardiography or Echo, as a gold standard of heart failure.

Further analysis of a subset of 26,459 patients for whom clinical characteristics were recorded showed that 95% were 10 Table of Contents asymptomatic. The authors concluded that earlier recognition of PAD may lead to earlier secondary preventive measures and improved outcomes for a population with a high-risk of cardiovascular mortality and morbidity.

Further analysis of a subset of 26,459 patients for whom clinical characteristics were recorded showed that 95% were asymptomatic. The authors concluded that earlier recognition of PAD may lead to earlier secondary preventive measures and improved outcomes for a population with a high-risk of cardiovascular mortality and morbidity.

Failure to comply with the conditions of approval can result in materially adverse enforcement action, including the loss or withdrawal of the approval. New PMA applications or PMA application supplements are required for significant modifications to the 13 Table of Contents manufacturing process, labeling and design of a device that is approved through the PMA process.

Failure to comply with the conditions of approval can result in materially adverse enforcement action, including the loss or withdrawal of the approval. New PMA applications or PMA application supplements are required for significant modifications to the manufacturing process, labeling and design of a device that is approved through the PMA process.

Specifically, we believe there are more than 400,000 physicians and other potential customers in the United States alone, many of whom care for patients will be more than 50 years old and at increased risk of developing PAD and other cardiovascular diseases. Based on U.S.

Specifically, we believe there are more than 400,000 physicians and other potential customers in the United States alone, many of whom care for patients older than 50 years old and at increased risk of developing PAD and other cardiovascular diseases. Based on U.S.

If the time of an office visit will need to be reduced to maintain a profitable business, a provider may decide to eliminate certain services or conducting certain procedures, such as deciding not to use a thermometer, take someone’s blood pressure or use a QuantaFlo to run an ABI test.

If the time of an office 24 Table of Contents visit will need to be reduced to maintain a profitable business, a provider may decide to eliminate certain services or conducting certain procedures, such as deciding not to use a thermometer, take someone’s blood pressure or use a QuantaFlo to run an ABI test.

If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin a specific number of investigational sites with a specific number of patients, as approved by the FDA. 14 Table of Contents If the device is considered a “non-significant risk,” an IDE application to the FDA is not required.

If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin a specific number of investigational sites with a specific number of patients, as approved by the FDA. If the device is considered a “non-significant risk,” an IDE application to the FDA is not required.

Our goal is to provide cost-effective wellness solutions for our growing, established customer base, achieve a reputation for outstanding service, all while leveraging our gains in the marketplace for such product and service offerings. ● Exploring additional product and service offerings through arrangements or potential acquisitions.

An IDE supplement must be submitted to, and approved by, the FDA before a sponsor or investigator may make a change to the investigational plan that may affect its scientific soundness, study plan or the rights, safety or welfare of human subjects.

An IDE supplement must be submitted to, and approved by, the 22 Table of Contents FDA before a sponsor or investigator may make a change to the investigational plan that may affect its scientific soundness, study plan or the rights, safety or welfare of human subjects.

FDA regulations govern, among other things, the following activities that we or our partners perform and will continue to perform: ● product design and development; ● product testing; ● product manufacturing; ● product safety; ● post-market adverse event reporting; ● post-market surveillance; ● product labeling; ● product storage; ● record keeping; ● premarket clearance or approval; ● post-market approval studies; ● advertising and promotion; and ● product sales and distribution.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. We use different incentive plans such as annual cash bonuses, no-cost healthcare for employees and their families, paid vacation for employees ranked below director and generous referral bonuses to attract, retain and motivate our employees.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. We use different incentive plans such as annual cash bonuses, no-cost healthcare for employees and their families, paid vacation for employees ranked below director and generous referral 27 Table of Contents bonuses to attract, retain and motivate our employees.

For example, several executive orders were issued along with other directives designed to delay the implementation of certain provisions of the Health Care Reform Law or otherwise circumvent some of the requirements for health 18 Table of Contents insurance mandated by the Health Care Reform Law.

The study analyzed screening tests using QuantaFlo for Medicare Advantage beneficiaries aged ≥65 years participating in the Optum HouseCalls program in the U.S. between April 1, 2017 and February 1, 2019. Of the 192,500 patients tested in their homes, 27.7% had a positive result for PAD.

The study analyzed screening tests using QuantaFlo for Medicare Advantage beneficiaries aged ≥65 years participating in the Optum HouseCalls program in the United States between April 1, 2017 and February 1, 2019. Of the 192,500 patients tested in their homes, 27.7% had a positive result for PAD.

We value diversity of backgrounds and perspectives and our policy is that we do not discriminate based on race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, military and veteran status, sexual orientation or any other protected characteristics established by federal, state or local laws.

Our policy is that we do not discriminate based on race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, military and veteran status, sexual orientation or any other protected characteristics established by federal, state or local laws.

Such information is now made publicly available in a searchable format, and device manufacturers are now required to report 17 Table of Contents and disclose any investment interests held by physicians and their family members during the preceding calendar year.

Such information is now made publicly available in a searchable format, and device manufacturers are now required to report and disclose any investment interests held by physicians and their family members during the preceding calendar year.

While our current independent contract manufacturers source some supplies from China, we believe QuantaFlo is relatively easy to manufacture, and should we encounter issues due to supply chain disruptions as a result of a global health emergency, such as the COVID-19 pandemic or any other global supply chain constraints, we believe alternative sources should be available.

While our current independent contract manufacturers source some supplies from China, we believe QuantaFlo is relatively easy to manufacture, and should we encounter issues due to supply chain disruptions as a result of the recent tariff proposals of the current U.S. administration, or a global health emergency, such as the COVID-19 pandemic or any other global supply chain constraints, we believe alternative sources should be available.

Federal Food, Drug, and Cosmetic Act, or FDCA, that may present a risk to health; and ● requirements to conduct post-market surveillance studies to establish continued safety data. The FDA enforces these requirements by inspection and market surveillance.

Federal Food, Drug, and Cosmetic Act, or FDCA, that may present a risk to health; and ● requirements to conduct post-market surveillance studies to establish continued safety data. 23 Table of Contents The FDA enforces these requirements by inspection and market surveillance.

Our Products and Services We currently market a patented and FDA-cleared, vascular testing product, QuantaFlo, to our customers, who include insurance plans, physician groups, risk assessment groups, hospitals and retailers. 4 Table of Contents QuantaFlo QuantaFlo is a four-minute in-office blood flow test.

Our Healthcare Technology Solutions Products and Services We currently market a patented and FDA-cleared, vascular testing product, QuantaFlo, to our customers, who include insurance plans, physician groups, risk assessment groups, hospitals and retailers. 11 Table of Contents QuantaFlo QuantaFlo is a four-minute in-office blood flow test.

A February 2022 published peer-reviewed study analyzed screening tests using QuantaFlo for undetected and asymptomatic heart failure in a Medicare Advantage population between January 2016 and December 2016. In this study, 13,971 patients were tested and 31.6% had a positive result for PAD. Almost 60% had lower socio-economic income level with 15.1% living under the poverty level.

A February 2022 published peer-reviewed study analyzed point-of-care tests using QuantaFlo for asymptomatic patients in a Medicare Advantage population between January 2016 and December 2016. In this study, 13,971 patients were tested and 31.6% had a positive result for PAD. Almost 60% had lower socio-economic income level with 15.1% living under the poverty level.

If a governmental authority were to conclude that we are not in compliance with applicable fraud and abuse laws and regulations, we and our officers and employees could be subject to severe penalties including, for example, civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from participation as a supplier of product to beneficiaries covered by Medicare or Medicaid, additional reporting obligations and oversight if subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of operations, any of which could adversely affect our ability to operate our business and the results of our operations.

Moreover, governmental authorities can ban or request the recall, repair, replacement or refund of the cost of devices we distribute. 26 Table of Contents If a governmental authority were to conclude that we are not in compliance with applicable fraud and abuse laws and regulations, we and our officers and employees could be subject to severe penalties including, for example, civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from participation as a supplier of product to beneficiaries covered by Medicare or Medicaid, additional reporting obligations and oversight if subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of operations, any of which could adversely affect our ability to operate our business and the results of our operations.

Persons with cardiac and vascular diseases may become disabled and not be able to work. Risk factors for developing cardiac and vascular diseases include: • Age (over 50 years) • Race (African-American) • History of smoking • Diabetes • High blood pressure • High blood cholesterol • Personal history of vascular disease, heart attack, or stroke. We believe medical personnel and insurance plans who care for those older than 50 years are the target market for QuantaFlo.

Persons with cardiac and vascular diseases may become disabled and not be able to work. 13 Table of Contents Risk factors for developing cardiac and vascular diseases include: • Age (over 50 years) • Race (African-American) • History of smoking • Diabetes • High blood pressure • High blood cholesterol • Personal history of vascular disease, heart attack, or stroke. We believe medical personnel and insurance plans who deliver care for individuals over the age of 50 represent the target market for QuantaFlo.

Our two largest customers are U.S. diversified healthcare companies and affiliated plans, and in the year ended December 31, 2023, they accounted for 36.0% and 34.9% of our revenues, respectively, compared to 40.4% and 29.0%, respectively, in the prior year. 5 Table of Contents Other Blood Flow Testing Methods Blood flow is the amount of blood delivered to a given region per unit time, whereas blood pressure is the force exerted by circulating blood on the walls of arteries.

Our two largest customers are U.S. diversified healthcare companies and affiliated plans, and in the year ended December 31, 2024, they accounted for 43.1% and 27.6% of our revenues, respectively, compared to 36.0% and 34.9%, respectively, in the prior year. 12 Table of Contents Other Blood Flow Testing Methods Blood flow is the amount of blood delivered to a given region per unit time, whereas blood pressure is the force exerted by circulating blood on the walls of arteries.

In the year ended December 31, 2023, we had total revenues of $68.2 million and net income of $20.6 million compared to total revenues of $56.7 million and net income of $14.3 million in 2022.

In the year ended December 31, 2024, we had total revenues of $56.3 million and net income of $40.9 million compared to total revenues of $68.2 million and net income of $20.6 million in 2023.

To enforce compliance with the federal laws, the U.S. Department of Justice, or DOJ, has increased its scrutiny of interactions between healthcare companies and healthcare providers, which has led to an unprecedented level of investigations, prosecutions, convictions and settlements in the healthcare industry. Dealing with investigations can be time- and resource-consuming.

To enforce compliance with the federal laws, the DOJ has also increased its scrutiny of interactions between healthcare companies and healthcare providers, which has led to an unprecedented level of investigations, prosecutions, convictions and settlements in the healthcare industry (including our company). Dealing with investigations can be time- and resource-consuming.

For cardiovascular specialists, QuantaFlo does not require the use of blood pressure cuffs (which should not be used on some breast cancer patients), and measures without blood pressure in obese patients and patients with non-compressible, hard, calcified arteries.

Additionally, there has been increasing legislative and enforcement interest in the United States with respect to cost-containment initiatives within the health care industry. We cannot predict what healthcare reform initiatives may be adopted in the future, particularly in light of the new presidential administration.

Our patented and FDA cleared product, QuantaFlo, measures arterial blood flow in the extremities to aid in the diagnosis of PAD. We are currently seeking a new 510(k) clearance from the FDA for the expanded use of QuantaFlo, which is intended to enable expanded labeling as an aid in the diagnosis of other cardiovascular diseases in addition to PAD.

We are currently seeking a new 510(k) clearance from the FDA for the expanded use of QuantaFlo, which is intended to enable expanded labeling as an aid in the diagnosis of other cardiovascular diseases in addition to PAD.

We upgrade QuantaFlo operating systems as appropriate by direct shipments or electronically. In addition to the license model with a fixed monthly fee, we also have contracts that charge a variable monthly fee, in which we invoice based on the number of tests performed with QuantaFlo. In addition to licensing the QuantaFlo software, we have sold QuantaFlo equipment and accessories.

In addition to the license model with a fixed monthly fee, we also have contracts that charge a variable monthly fee, in which we invoice based on the number of tests performed with QuantaFlo. In addition to licensing the QuantaFlo software, we have sold QuantaFlo equipment and accessories.

Jackson, et al, heart failure affects ~approximately 6.5 million adults in the United States and the lifetime risk of heart failure is estimated to be one in five at 40 years of age.

According to a study published in AHA Journals by S.L. Jackson, et al, heart failure affects ~approximately 6.5 million adults in the United States and the lifetime risk of heart failure is estimated to be one in five at 40 years of age.

In March 2015, we received FDA 510(k) clearance of our product, QuantaFlo, reflecting several updates and modifications to the original model that were developed in conjunction with our consultant engineering groups. In January 2024, we announced that we are seeking a new 510(k) clearance for the expanded use of QuantaFlo following correspondence with the FDA.

The cleared device reflected several updates and modifications to the original model that were developed in conjunction with our consultant engineering groups. We are seeking a new 510(k) clearance for the expanded use of QuantaFlo following correspondence with the FDA.

Women may lack early detection programs and have inadequate preventive disease management. A study was compiled and published in a peer reviewed journal in 2019 that presented a retrospective analysis of 68,402 female patients tested with our product at primary care medical practices in the United States.

A study was compiled and published in a peer reviewed journal in 2019 that presented a retrospective analysis of 68,402 female patients tested with our product at primary care medical practices in the United States.

Currently, these patients often are unable to be measured with traditional devices. 9 Table of Contents Competitors are marketing competing digital devices seeking to provide fast results that may be used outside of a specialized vascular laboratory. Given the potential size of the market, we expect competitors to continue to enter the space.

Competitors are marketing competing digital devices seeking to provide fast results that may be used outside of a specialized vascular laboratory. Given the potential size of the market, we expect competitors to continue to enter the space.

CMS, the agency responsible for administering Medicare and Medicaid, and the National Center for Health Statistics, are jointly responsible for overseeing changes and modifications to billing codes used by hospitals for reporting inpatient procedures, and many private payors use coverage decisions and payment amounts determined by CMS as guidelines in setting their coverage and reimbursement policies.

CMS, the agency responsible for administering Medicare and Medicaid, and the National Center for Health Statistics, are jointly responsible for overseeing changes and modifications to billing codes used by hospitals for reporting inpatient procedures, and many private payors rely on coverage decisions and reimbursement rates established by CMS as benchmarks for determining their own coverage and reimbursement policies.

We have also made cash investments in Mellitus. Due to slow uptake of the product despite our marketing efforts, we wrote off our prepaid licenses and a portion of our investment. 7 Table of Contents In October 2020, we invested in SYNAPS , whose product, Discern, is a test for early Alzheimer’s disease.

Due to slow uptake of the product despite our marketing efforts, we wrote off our prepaid licenses and a portion of our investment as of December 31, 2023. In October 2020, we invested in SYNAPS , whose product, Discern, is a test for early Alzheimer’s disease.

Most of our employees work remotely, with the exception of a few employees who work in the office. These employees are generally in fulfillment and sales support roles. Our human resources department coordinates on- 19 Table of Contents line training programs with the help of outside consultants.

Most of our employees work remotely, with the exception of a few employees who work in the office. These employees are generally in fulfillment and sales support roles. Our human resources department coordinates on-line training programs with the help of outside consultants. We believe that this model of training better fits our business operations and needs.

In some cases, customers prefer an annual or quarterly license paid in advance. We provide technical support daily, coupled directly to the manufacturing operation so that replacement products, if needed, can be shipped overnight directly to the customer. The majority of the support is over the telephone and focuses on software and connectivity issues, rather than hardware.

Many managed care programs are paying their providers on a capitated basis, which puts the providers at financial risk for the services provided to their patients by 16 Table of Contents paying them a predetermined amount per member per month.

Many managed care programs are paying their providers on a capitated basis, which puts the providers at financial risk for the services provided to their patients by paying them a predetermined amount per member per month. The percentage of individuals covered by managed care programs is expected to grow in the United States over the next decade.

Approximately 62% of our customers are on the fixed-fee software licensing model, whereas 38% are on the variable fee model based on usage. We have placed our QuantaFlo product with healthcare insurance plans, integrated delivery networks, independent physician groups, hospitals and companies contracting with the healthcare industry such as risk assessment groups and retailers in addition to doctors’ offices.

We have placed our QuantaFlo product with healthcare insurance plans, integrated delivery networks, independent physician groups, hospitals and companies contracting with the healthcare industry such as risk assessment groups and retailers in addition to doctors’ offices.

In addition, off-label promotion has been pursued as a violation of the federal False Claims Act. Pursuant to FDA regulations, we can only market our products for cleared or approved uses.

A civil suit by DOJ also exposes us to risk of other litigation.” for more information. In addition, off-label promotion has been pursued as a violation of the federal False Claims Act. Pursuant to FDA 25 Table of Contents regulations, we can only market our products for cleared or approved uses.

CMS uses risk adjustment to adjust capitation payments to health plans, either higher or lower, to account for the differences in expected health costs of individuals.

Under Medicare Advantage, CMS uses risk adjustment to adjust capitated payments to MAOs, either higher or lower, to account for the differences in underlying health status and expected healthcare costs of individuals.

Currently, these patients often are unable to be measured satisfactorily with traditional devices. ● Developing additional product and service offerings that allow healthcare providers to deliver cost-effective wellness and receive increased compensation for their services. In March 2015, we received FDA 510(k) clearance of our product, QuantaFlo, to aid clinicians in the diagnosis and monitoring of PAD.

Clinical Experience Several studies of our blood flow measurement products have been conducted by our customers or authors facilitated by access to our database. Other studies were conducted by our customers using their own independently generated datasets.

We are also directing much of our activity to building our trade secrets and protecting proprietary positions. 16 Table of Contents Clinical Experience Several studies of our blood flow measurement products have been conducted by our customers or authors facilitated by access to our database. Other studies were conducted by our customers using their own independently generated datasets.

A study was compiled and published in a peer reviewed journal in 2018 that presented a retrospective analysis of 1,901 patients tested with our product at 22 medical practices that serve predominately lower-income, non-white populations. The author concluded that our product can be effectively utilized by primary care clinicians in poor and underserved communities to identify PAD.

A study was compiled and published in a peer reviewed journal in 2018 that presented a retrospective 17 Table of Contents analysis of 1,901 patients tested with our product at 22 medical practices that serve predominately lower-income, non-white populations.

Market Opportunity QuantaFlo Fee-for-service is a payment model where services are unbundled and paid for separately. In health care, it gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality of care. For Medicare Advantage patients CMS pays a fee per patient, also known as capitation.

Market Opportunity QuantaFlo Fee-for-service is a payment model where services are unbundled and paid for separately. Fee-for-service reimbursement may incentivize physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality of care.

Published studies have shown that persons with PAD are four times more likely to die of heart attack, and two to three times more likely to die of stroke. According to a study by P.G. Steg published in the JAMA, patients with PAD have a 21% event rate of cardiovascular death, heart attack, stroke or cardiovascular hospitalization within 12 months.

As with clogged arteries in the heart, clogged arteries in the legs place patients at an increased risk of heart attack and stroke. Published studies have shown that persons with PAD are four times more likely to die of heart attack, and two to three times more likely to die of stroke. According to a study by P.G.

The new products and service offerings under development or that may be developed may incorporate some of our current technology or new technology. We are also directing much of our activity to building our trade secrets and protecting proprietary positions.

The new products and service offerings under development or that may be developed may incorporate some of our current technology or new technology.

We will continue our marketing and selling efforts of the product. Manufacturing We manufacture our product, QuantaFlo, in the United States through independent contractors whom we pay for finished goods. Our contracts provide for subassemblies, product final assembly, test, serialization, finished goods, inventory and shipping operations.

Manufacturing We manufacture our product, QuantaFlo, in the United States through independent contractors whom we pay for finished goods. Our contracts provide for subassemblies, product final assembly, test, serialization, finished goods, inventory and shipping operations. Our current contracts will remain in force until terminated by us upon three months written notice, or until terminated by either party for cause.

In December 2022, we purchased a senior secured convertible promissory note of Monarch, maker of EndoTool, a technology-enabled approach to inpatient glycemic management. We do not have a distribution agreement for Discern or EndoTool. Strategy Our mission is to develop, manufacture and market products and services that assist healthcare providers in evaluating and treating chronic diseases.

In December 2022, we purchased a senior secured convertible promissory note of Monarch Medical Technologies, LLC, or Monarch, (as amended in December 2024 and January 2025), maker of EndoTool, a technology-enabled approach to inpatient glycemic management. We do not have a distribution agreement for Discern or EndoTool.

While it is standard practice to ask about symptoms of cardiac and vascular diseases and to look for signs on physical exam, we believe that it is often the case in busy practices that the questions go unasked. Generally speaking, individual products are not specifically approved by name under a third-party payor code.

While it is standard practice to ask about symptoms of cardiac and vascular diseases and to look for signs on physical exam, we believe that it is often the case in busy practices that the questions go unasked. Other Products and Services In addition to our internal research and development efforts, from time to time, we may make investments in, or distribute products from other companies that we believe are complementary to QuantaFlo.

Capitation is a payment arrangement that pays a physician or group of physicians a set amount for each enrolled person assigned to them, per period of time, whether or not that person seeks care. The amount of remuneration is based on the average expected healthcare utilization of that patient, with greater payment for patients with significant medical history.

Capitation is a payment arrangement where a managed care organization, physician or group of physicians, receives a fixed payment amount for each enrolled person assigned to them, per period of time, regardless of whether that individual seeks care.

We deliver our QuantaFlo testing product directly to our customers, and in-service training to the customers is provided either on-line or in person.

Sales and Marketing We provide our QuantaFlo product and any other products for which we have distribution rights to our customers through our salespersons, who have experience selling products and services to our anticipated market. We deliver QuantaFlo directly to our customers, and in-service training to the customers is provided either on-line or in person.

The author posited that identifying PAD earlier in the disease process can be an important step towards filling the unmet need of higher intensity vascular care for minority populations. Limitations of the study include that it was a retrospective analysis and that there was no protocol to unveil the identity or ethnicity of any of the individual patients.

The author concluded that our product can be effectively utilized by primary care clinicians in poor and underserved communities to identify PAD. The author posited that identifying PAD earlier in the disease process can be an important step towards filling the unmet need of higher intensity vascular care for minority populations.

Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic or other global pandemics. Human Capital Management As of December 31, 2023, we had 92 employees, all of which were full-time. None of our employees are represented by a labor union, and we consider our relationship with our employees to be positive.

Human Capital Management As of December 31, 2024, we had 79 employees, all of which were full-time. None of our employees are represented by a labor union, and we consider our relationship with our employees to be positive. We also regularly engage consultants and subcontractors on an as-needed basis.

Beginning February 1, 2023, due to a change in policy, we no longer accrue vacation for employee ranked director or higher, which included all of our executive officers. Governance and Culture - Our board of directors, including committees thereof, and executive management team are actively involved in overseeing our employee-related strategies and practices as well as our company culture.

From time to time, we may also provide equity incentives, such as stock option grants. Governance and Culture - Our board of directors, including committees thereof, and executive management team are actively involved in overseeing our employee-related strategies and practices as well as our company culture.

Because QuantaFlo is relatively easy to use, training can generally be accomplished in less than one day. 8 Table of Contents Customers who have licensed our QuantaFlo product may pay by credit card or check generally on the 15 th of each month as an advance for usage during the next 30 days.

We do not currently have any material revenues from these initial test marketing efforts, which will inform our sales and marketing strategy. Customers who have licensed our QuantaFlo product may pay by credit card or check generally on the 15 th of each month as an advance for usage during the next 30 days.

ITEM 1. BUSINESS General We are a company providing technology solutions to improve the clinical effectiveness and efficiency of healthcare providers. Our mission is to develop, manufacture and market innovative products and services that assist our customers in evaluating and treating chronic diseases.

ITEM 1. BUSINESS General We are a company developing and marketing technology products and services that assist our customers in evaluating and treating chronic diseases. Our patented and FDA cleared product, QuantaFlo, measures arterial blood flow in the extremities to aid in the diagnosis of PAD.

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Accordingly, under CMS guidelines, risk factor adjustments per patient will provide payment that is higher for sicker patients who have conditions that are codified. The current coding system used by CMS for the Medicare Advantage program is a hierarchical condition category, or HCC, diagnostic classification system that began by classifying over 14,000 diagnosis codes into approximately 1,500 diagnostic groups, or DXGs.

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We also invest in bitcoin and have adopted bitcoin as our primary treasury reserve asset. As an operating business, we use cash flows as well as proceeds from equity and debt financings to accumulate bitcoin. Our healthcare technology solutions business is our predominant operational focus, providing cash flows and enabling us to pursue our bitcoin strategy.

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Each code maps to exactly one DXG, which represents a well-specified medical condition, such as DXG 96.01 pre-cerebral or cerebral arterial occlusion with infarction. DXGs are further aggregated into 204 condition categories, or CCs. CCs describe a broader set of similar diseases. Diseases within a CC are related clinically and with respect to cost.

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Our Bitcoin Treasury Strategy WE ARE NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940 AND STOCKHOLDERS DO NOT HAVE THE PROTECTIONS ASSOCIATED WITH OWNERSHIP OF SHARES IN A REGISTERED INVESTMENT COMPANY NOR THE PROTECTIONS AFFORDED BY THE COMMODITIES EXCHANGE ACT.

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An example is CC100 Ischemic or Unspecified Stroke, which includes DXG 95.02 iatrogenic cerebrovascular infarction or hemorrhage (e.g., postoperative stroke), DXG 96.01 precerebral or cerebral arterial occlusion with infarction, DXG 96.02 acute but ill-defined cerebrovascular disease (ICD-9), and DXG 170.59 neonatal cerebral infarction. Undiagnosed cardiac and vascular diseases are major under-diagnosed health problems in the United States.

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In May 2024, we adopted bitcoin as our primary treasury reserve asset on an ongoing basis, subject to market conditions and our anticipated cash needs.

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These conditions are common and deadly cardiovascular disease is often undiagnosed. As with clogged arteries in the heart, clogged arteries in the legs place patients at an increased risk of heart attack and stroke.

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Our strategy includes acquiring and holding bitcoin using cash flows from operations that exceed working capital requirements, and from time to time, subject to market conditions, issuing equity or debt securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase bitcoin.

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Published studies have shown that there are over one million hospitalizations per year in the United States from heart failure and the annual cost of care exceeds $30 billion. 6 Table of Contents According to a study published in AHA Journals by S.L.

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For example, we began issuing shares under an “at-the-market” offering program in the second half of 2024, and in January 2025 issued convertible bonds, and used proceeds from both of these capital market transactions to acquire additional bitcoin along with cash generated from operations, as well as proceeds from monetization of a minority investment.

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Physicians who seek reimbursement for testing procedures are likely to use codes that describe non-invasive physiologic testing.

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We view our bitcoin holdings as long term holdings and expect to continue to accumulate bitcoin. We have not set any specific target for the amount of bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional bitcoin purchases.

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We do not track directly how physicians code for and receive payment for such procedures. Other Products and Services In addition to our internal research and development efforts, in April 2021, we entered into an agreement with Mellitus Health, Inc, or Mellitus to exclusively market and distribute Insulin Insights, a FDA-cleared software product that recommends optimal insulin dosing for diabetic outpatients in the United States, including Puerto Rico, except for selected accounts.

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We may also consider opportunistically acquiring additional products if we believe they fit within our strategy. Sales and Marketing We provide our QuantaFlo product to our customers through our salespersons, who have experience selling products and services to our anticipated market.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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2023 filing

2024 filing

Biggest changeWe cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors in such an offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.

Biggest changeWe cannot assure you that we will be able to sell shares or other securities with conversion prices in any other offering at a price per share that is equal to or greater than the price per share paid by investors in such an offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. 60 Table of Contents The price per share at which we sell or issue additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price at which you purchased your shares. ITEM 1B.

The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock. Our stock price has been and is likely to continue to be volatile.

The price of our common stock has been and may continue to be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock . Our stock price has been and is likely to continue to be volatile.

QuantaFlo is licensed by healthcare providers. They may bill various third-party payors, including governmental healthcare programs, such as Medicare and Medicaid, private insurance plans and managed care programs for procedures in which our testing product is used. Reimbursement is a significant factor considered by healthcare providers in determining whether to license medical devices or systems such as QuantaFlo.

They may bill various third-party payors, including governmental healthcare programs, such as Medicare and Medicaid, private insurance plans and managed care programs for procedures in which our testing product is used. Reimbursement is a significant factor considered by healthcare providers in determining whether to license medical devices or systems such as QuantaFlo.

Our future financial performance will depend in part on our ability to influence, anticipate, identify and respond to changing user preferences and needs and the technologies relating to the care and treatment of vascular problems. We can provide no assurances that QuantaFlo will achieve significant commercial success and that it will gain meaningful market share.

Our future financial performance will depend in part on our ability to anticipate, identify and respond to changing user preferences and needs and the technologies relating to the care and treatment of vascular problems. We can provide no assurances that QuantaFlo will achieve significant commercial success and that it will gain meaningful market share.

Our pricing is based on data collected on use rates and third-party payment rates to physicians and facilities for the use of our product. We require no down payment, long-term commitment or maintenance contract or fees from our customers and replace damaged products free of charge in the service model.

Our pricing is based on data collected on use rates and third-party payment rates to physicians and facilities for the use of our product. We require no down payment, long-term commitment or maintenance contract or fees from our customers and may replace damaged products free of charge in the service model.

Further, the Health Care Reform Law encourages hospitals and physicians to work collaboratively through shared savings programs, such as accountable care organizations, as well as other bundled payment initiatives, which may ultimately result in the reduction of medical device acquisitions and the consolidation of medical device suppliers used by hospitals.

More specifically, if FDA concludes that we are not in compliance with applicable laws or regulations, or that our vascular testing product or any future medical device we develop is ineffective or poses an unreasonable health risk, the FDA could: ● require us to notify health professionals and others that our devices present unreasonable risk of substantial harm to public health; ● order us to recall, repair, replace or refund the cost of any medical device that we manufactured or distributed; ● detain, seize or ban adulterated or misbranded medical devices; ● refuse to provide us with documents necessary to export our product; ● refuse requests for 510(k) clearance or premarket approval of new products or new intended uses; ● withdraw 510(k) premarket approvals we may receive or reclassify our device; ● impose operating restrictions, including requiring a partial or total shutdown of production; ● enjoin or restrain conduct resulting in violations of applicable law pertaining to medical devices; and/or ● assess criminal or civil penalties against our officers, employees or us.

More specifically, if FDA concludes that we are not in compliance with applicable laws or regulations, or that our vascular testing product or any future medical device we develop is ineffective or poses an unreasonable health risk, the FDA could: ● require us to notify health professionals and others that our devices present unreasonable risk of substantial harm to public health; 35 Table of Contents ● order us to recall, repair, replace or refund the cost of any medical device that we manufactured or distributed; ● detain, seize or ban adulterated or misbranded medical devices; ● refuse to provide us with documents necessary to export our product; ● refuse requests for 510(k) clearance or premarket approval of new products or new intended uses; ● withdraw the premarket approvals we may receive or reclassify our device; ● impose operating restrictions, including requiring a partial or total shutdown of production; ● enjoin or restrain conduct resulting in violations of applicable law pertaining to medical devices; and/or ● assess criminal or civil penalties against our officers, employees or us.

Our amended and restated bylaws provide that a state or federal court located within the State of Delaware is the sole and exclusive forum for: ● any derivative action or proceeding brought on our behalf; ● any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee or stockholder of our company to us or our stockholders; 32 Table of Contents ● any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, our charter or our bylaws, as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Court of Chancery of the State of Delaware; and ● any action asserting a claim governed by the internal affairs doctrine.

Our amended and restated bylaws provide that a state or federal court located within the State of Delaware is the sole and exclusive forum for: 55 Table of Contents ● any derivative action or proceeding brought on our behalf; ● any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee or stockholder of our company to us or our stockholders; ● any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, our charter or our bylaws, as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Court of Chancery of the State of Delaware; and ● any action asserting a claim governed by the internal affairs doctrine.

New hires and independent contractors require training, supervision and take time to achieve full productivity. If we fail to train and supervise new hires adequately, or if we experience high turnover in our sales force or trained professionals in the future, we cannot be certain that we will maintain or increase our sales.

New hires and independent distributors require training, supervision and take time to achieve full productivity. If we fail to train and supervise new hires adequately, or if we experience high turnover in our sales force or trained professionals in the future, we cannot be certain that we will maintain or increase our sales.

Moreover, even if insurance plans, home health care providers and physicians understand the benefits of cardiovascular and other risk assessment testing, they still may elect not to use our products for a variety of reasons, such as familiarity with other devices and approaches, or the impact of CMS regulatory revisions, which revised the regulatory landscape for HCC codes and could impact the perceived profitability of using QuantaFlo to aid diagnosis of cardiovascular diseases.

Moreover, even if insurance plans, home health care providers and physicians understand the benefits of cardiovascular and other risk assessment testing, they still may elect not to use our products for a variety of reasons, such as familiarity with other devices and approaches, or the impact of CMS regulatory revisions, which revised the regulatory landscape for HCC codes and has impacted the perceived profitability of using QuantaFlo to aid diagnosis of cardiovascular diseases.

For example, in December 2023, we wrote off the $2.5 million prepayment for Insulin Insights software licenses as we were not able to generate meaningful revenues, and also took at $0.6 million impairment charge on our investment in Mellitus.

For example, in December 2023, we wrote off the $2.5 million prepayment for Insulin Insights software licenses as we were not able to generate meaningful revenues, and also took a $0.6 million impairment charge on our investment in Mellitus.

If we are unable to expand our sales and marketing capabilities, we may not be able to effectively commercialize QuantaFlo or our other products and service offerings in development, which would adversely affect our business, results of operations and financial condition.

If we are unable to expand our sales and marketing capabilities, we may not be able to effectively commercialize QuantaFlo or our other products and service offerings in development or that we distribute, which would adversely affect our business, results of operations and financial condition.

FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. 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.

FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. 36 Table of Contents 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.

We believe that physicians and other customers will not widely adopt our vascular testing product or our other products in development or products we distribute unless they determine, based on experience, long-term clinical data 21 Table of Contents and published peer reviewed journal articles, that the use of such product provides a safe and effective alternative to other existing ABI devices.

We believe that physicians and other customers will not widely adopt our vascular testing product or our other products in development or products we distribute unless they determine, based on experience, long-term clinical data and published peer reviewed journal articles, that the use of such product provides a safe and effective alternative to other existing ABI devices.

Accordingly, we expect that revenues from our vascular testing product will account for the vast majority of our revenues for at least the next several years. QuantaFlo, and any other products we may be offering in the future, may not gain broad market acceptance unless we continue to educate physicians and plans of their benefits.

Accordingly, we expect that revenues from our vascular testing product will account for the vast majority of our revenues for at least the next several years. 29 Table of Contents QuantaFlo, and any other products we may be offering in the future, may not gain broad market acceptance unless we continue to educate physicians and plans of their benefits.

The existence of coverage and adequate reimbursement for the procedures or patient care performed with QuantaFlo by third-party payors is central to the acceptance of QuantaFlo and any future products. During the past several years, third-party payors have undertaken cost-containment initiatives including different payment methods, monitoring healthcare expenditures, and anti-fraud initiatives.

The existence of coverage and adequate reimbursement for the procedures or patient care performed with QuantaFlo by third-party payors 30 Table of Contents is central to the acceptance of QuantaFlo and any future products. During the past several years, third-party payors have undertaken cost-containment initiatives including different payment methods, monitoring healthcare expenditures, and anti-fraud initiatives.

We are currently exploring other sales models to generate revenues from our products in addition to the leasing model, such as our fee per test model. We also may in the future acquire rights to other complementary products.

We are currently exploring other sales models to generate revenues from our products in addition to the leasing model, such as our fee per test model. We have and also may in the future acquire rights to other complementary products.

We cannot control whether or not providers who use QuantaFlo will seek reimbursement. Therefore, our ability to successfully commercialize our vascular testing product could depend on the coverage and adequacy of reimbursement from these third-party payors. Currently, our QuantaFlo is generally but not specifically approved for any particular reimbursement code.

We cannot control whether or not providers who use QuantaFlo will seek reimbursement. Therefore, our ability to successfully commercialize our vascular testing product could depend on the coverage and adequacy of reimbursement from these third-party payors. Currently, our QuantaFlo device is not specifically approved for any particular reimbursement code.

One of our business strategies is developing additional products and service offerings that allow healthcare providers to deliver cost-effective wellness programs and receive increased compensation for their services. The development of new products and service offerings involves time and expense and we may never realize the benefits of this investment.

One of our business strategies is developing or distributing additional products and service offerings that allow healthcare providers to deliver cost-effective wellness programs and receive increased compensation for their services. The development or distribution of new products and service offerings involves time and expense and we may never realize the benefits of this investment.

The 2024 model does not include risk adjusted payments for PAD without complications, which payments many health insurers have previously relied upon for their Medicare Advantage patients under the previous 2020 model.

The 2024 model did not include risk adjusted payments for PAD without complications, which payments many health insurers have previously relied upon for their Medicare Advantage patients under the previous 2020 model.

If our sales grow more slowly than we anticipate or if our operating expenses exceed our expectations, our financial performance will likely be adversely affected. Our future financial performance will depend in part on the successful improvements and software updates to QuantaFlo on a cost-effective basis.

If our sales decline or grow more slowly than we anticipate or if our operating expenses exceed our expectations, our financial performance from our operating business will likely be adversely affected. Our future financial performance will depend in part on the successful improvements and software updates to QuantaFlo on a cost-effective basis .

Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. The defense and prosecution of intellectual property suits, USPTO proceedings and related legal and administrative proceedings are both costly and time consuming.

We rely heavily upon the talents of a small number of key personnel, the loss of whom could severely damage our business. Our performance depends to a large extent on a small number of key scientific, technical, managerial and marketing personnel. We do not maintain key man insurance for any of our personnel.

We rely heavily upon the talents of a small number of key personnel, the loss of whom could severely damage our business. 31 Table of Contents Our performance depends to a large extent on a small number of key scientific, technical, managerial and marketing personnel. We do not maintain key man insurance for any of our personnel.

Our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled direct sales representatives, independent sales representatives or distributors with significant technical knowledge about our product, in addition to coordinating networks of contract medical assistants and other personnel to staff health and wellness fairs and physicians’ offices in fee-for-service models.

Our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled direct sales representatives, or independent distributors with significant technical knowledge about our product and complementary products we distribute, in addition to coordinating networks of contract medical assistants and other personnel to staff health and wellness fairs and physicians’ offices in fee-for-service models.

Even if we receive necessary regulatory approvals, there is no guarantee that such approved products or any new service offerings will achieve market acceptance and we may never realize the benefits of any investment in this strategy.

Even if we receive necessary regulatory approvals, there is no guarantee that such approved products or any new service offerings or any third-party products that we distribute will achieve market acceptance and we may never realize the benefits of any investment in this strategy.

We also may need to undertake a recall of any modified product that has been distributed. 26 Table of Contents The FDA may change its policies, adopt additional regulations, or revise existing regulations, in particular relating to the 510(k) clearance process.

We also may need to undertake a recall of any modified product that has been distributed. The FDA may change its policies, adopt additional regulations, or revise existing regulations, in particular relating to the 510(k) clearance process.

Our amended and restated bylaws further provide that a federal district court of the United State is the sole and exclusive forum for any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

Our amended and restated bylaws further provide that a federal district court of the United States is the sole and exclusive forum for any complaint asserting a cause of action arising under the Securities Act of 1933, as amended or the Securities Act.

Further any product recall, voluntary market withdrawal or shipment stoppage of our product could significantly increase our costs and have a material adverse effect on our business. If we fail to properly manage our anticipated growth, our business could suffer.

For example, these persons, if they choose to act together, can impact the election of directors 31 Table of Contents and approval of any merger, consolidation or sale of all or substantially all of our assets.

For example, these persons, if they choose to act together, can impact the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets.

We may not correctly anticipate or identify trends in user preferences or needs or may identify them later than competitors do. In addition, difficulties in manufacturing or in obtaining regulatory approvals may delay or prohibit improvements to QuantaFlo or our other products in development.

We may not correctly anticipate or identify trends in user preferences or needs or may identify them later than competitors do. In addition, difficulties in manufacturing or in obtaining regulatory approvals may delay or prohibit 33 Table of Contents improvements to QuantaFlo or our other products in development.

For example, in January 2024, we announced that we are seeking a new 510(k) clearance from the FDA for the expanded use of QuantaFlo intended to enable expanded labeling as an aid in the diagnosis of other cardiovascular diseases in addition to PAD.

For example, we are seeking a new 510(k) clearance from the FDA for the expanded use of QuantaFlo intended to enable expanded labeling as an aid in the diagnosis of other cardiovascular diseases in addition to PAD.

Our growth has placed, and will continue to place, a significant strain on our management and on our operational and financial resources and systems. Failure to manage our growth effectively could cause us to over-invest or under-invest and result in losses or weaknesses.

Our operations have placed, and will continue to place, a significant strain on our management and on our operational and financial resources and systems. Failure to manage our operations effectively could cause us to over-invest or under-invest and result in losses or weaknesses.

For example, there could be changes in the valuation of our deferred tax assets and liabilities or changes in the relevant tax, accounting, and other laws, regulations, principles and interpretations.

In addition, there could be changes in the valuation of our deferred tax assets and liabilities or changes in the relevant tax, accounting, and other laws, regulations, principles and interpretations.

We will need to generate significant sales to maintain profitability and we might not be able to do so. Even if we do generate significant sales, we might not be able to sustain or increase profitability on a quarterly or annual basis in the future.

We will need to generate significant sales to maintain profitability in our healthcare solutions business and we might not be able to do so. Even if we do generate significant sales, we might not be able to sustain or increase profitability on a quarterly or annual basis in the future.

It is possible that our development efforts will not be 25 Table of Contents successful and that we will not be able to develop new products or service offerings, either alone or in partnership with others, or if developed that we will obtain the necessary regulatory approvals for commercialization.

It is possible that our development or distribution efforts will not be successful and that we will not be able to develop new products or service offerings, either alone or in partnership with others, or if developed that we will obtain the necessary regulatory approvals for commercialization.

We are subject to various healthcare fraud and abuse laws and regulations, as described “Business—Government Regulation—Healthcare Fraud and Abuse.” We may be subject to liability under such laws and may also be subject to liability for any future conduct that is deemed by the government or the courts to violate these laws, including significant administrative, criminal and civil penalties, damages, fines, disgorgement, imprisonment, exclusion from participation as a supplier of product to beneficiaries covered by Medicare or Medicaid, additional reporting obligations and oversight if subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of operations.

We may be subject to liability under such laws and may also be subject to liability for any future conduct that is deemed by the government or the courts to violate these laws, including significant administrative, criminal and civil penalties, damages, fines, disgorgement, imprisonment, exclusion from participation as a supplier of product to beneficiaries covered by Medicare or Medicaid, additional reporting obligations and oversight if subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of operations.

We continually assess these threats and make investments 34 Table of Contents to increase internal protection, detection, and response capabilities, as well as ensure our third-party providers have required capabilities and controls, to address this risk.

We continually assess these threats and make investments to increase internal protection, detection, and response capabilities, as well as ensure our third-party providers have required capabilities and controls, to address this risk.

As of December 31, 2023, we have been issued, or have rights to, one U.S. patent. The patent we hold may be successfully challenged, invalidated or circumvented, or we may otherwise be unable to rely on this patent. These risks are also present for the process we use for manufacturing our product.

As of December 31, 2024, we have been issued, or have rights to, one U.S. patent (which expires on December 11, 2027). The patent we hold may be successfully challenged, invalidated or circumvented, or we may otherwise be unable to rely on this patent. These risks are also present for the process we use for manufacturing our product.

For example, CMS revised the HCC codes for vascular disease and created uncertainty in the future whether identifying patients with PAD will qualify for an increased capitated payment.

For example, CMS revised the hierarchical condition category, or HCC, codes for vascular disease and created uncertainty in the future whether identifying patients with PAD will qualify for an increased capitated payment.

The results of an audit or litigation, or the effects of a change in tax policy in the United States, could have a material effect on our operating results in the period or periods for which that determination is made.

The results of an audit or litigation, or the effects of a change in tax policy in the United States or a particular state, could have a material effect on our operating results in the period or periods for which that 59 Table of Contents determination is made.

If some investors find our 36 Table of Contents common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

The market price for our common stock may be influenced by many factors, including: ● the success of competitive products, services or technologies; ● regulatory or legal developments in the United States and other countries; ● developments or disputes concerning patent applications, issued patents or other proprietary rights; ● the recruitment or departure of key personnel; ● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; ● variations in our financial results or those of companies that are perceived to be similar to us; ● changes in the structure of healthcare payment systems; ● market conditions in the medical device sector; ● general economic, industry and market conditions; and ● the other factors described in this “Risk Factors” section.

The market price for our common stock may be influenced by many factors, including: ● our bitcoin treasury strategy; ● the success of competitive products, services or technologies; ● regulatory or legal developments in the United States and other countries; ● developments or disputes concerning patent applications, issued patents or other proprietary rights; ● the recruitment or departure of key personnel; ● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; ● variations in our financial results or those of companies that are perceived to be similar to us; ● changes in the structure of healthcare payment systems; ● market conditions in the medical device sector; ● general economic, industry and market conditions; and 56 Table of Contents ● the other factors described in this “Risk Factors” section, including the risk that DOJ will file a complaint against our company.

For a discussion of the relevant regulatory regime, see “Business—Government Regulation.” We cannot assure that any new medical devices or new uses or modifications for QuantaFlo that we develop, including our planned 510(k) for the use of QuantaFlo to enable expanded labeling as an aid in the diagnosis of other cardiovascular diseases in addition to PAD, will be cleared or approved in a timely or cost-effective manner, if cleared or approved at all.

We cannot assure that any new medical devices or new uses or modifications for QuantaFlo that we develop, including our planned 510(k) for the use of QuantaFlo to enable expanded labeling as an aid in the diagnosis of other cardiovascular diseases in addition to PAD, will be cleared or approved in a timely or cost-effective manner, if cleared or approved at all.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Due to the potential volatility of our stock price, we may be the target of securities litigation in the future.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Due to the potential volatility of our stock price, including the risk that DOJ will file a complaint against our company, we may be the target of securities litigation in the future.

Securities litigation could result in substantial costs and divert management’s attention and resources from our business. 33 Table of Contents Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

Securities litigation could result in substantial costs and divert management’s attention and resources from our business. Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain. We have never declared or paid cash dividends on our capital stock.

We have never declared or paid cash dividends on our capital stock. We anticipate that we will retain our earnings, if any, for future growth and therefore do not anticipate paying cash dividends in the future. As a result, only appreciation of the price of our common stock will provide a return to stockholders.

We anticipate that we will retain our earnings, if any, for future growth and therefore do not anticipate paying cash dividends in the future. As a result, only appreciation of the price of our common stock will provide a return to stockholders.

Although we had a distribution agreement for Insulin Insights from Mellitus, we were not able to generate significant revenue and wrote off the entire balance of our $2.5 million investment in December 2023. We will continue our marketing and selling efforts of the product.

For example, although we had a distribution agreement for Insulin Insights from Mellitus, we were not able to generate significant revenue and wrote off the entire balance of our $2.5 million investment in December 2023.

There is no guarantee that we would be successful in our efforts to find independent sales representatives or a large distributor, or that we would be able to negotiate contract terms favorable to us.

There is no guarantee that we would be successful in our efforts to find an independent distributor, or that we would be able to negotiate contract terms favorable to us.

Our current contractor manufacturers source some supplies from China and should these outside vendors encounter 24 Table of Contents issues due to supply chain disruptions as a result of the global health emergency such as COVID-19 pandemic or otherwise, we believe alternative suppliers should be available.

Our current contractor manufacturers source some supplies from China and should these outside vendors encounter issues due to supply chain disruptions as a result of the recent tariff proposals of the current U.S. administration, or a global health emergency such as COVID-19 pandemic or otherwise, we believe alternative suppliers should be available.

Our executive officers, directors and significant stockholders beneficially own in the aggregate shares representing approximately 32.0% of our common stock as of March 1, 2024. If these stockholders choose to act together, they are able to substantially influence the outcome of all matters submitted to our stockholders for approval, as well as our management and affairs.

Our executive officers, directors and significant stockholders beneficially own in the aggregate shares representing approximately 22.3% of our common stock as of January 31, 2025. If these stockholders choose to act together, they are able to substantially influence the outcome of all matters submitted to our stockholders for approval, as well as our management and affairs.

Notably, we recently wrote-off our $2.5 million prepayment for Insulin Insights software licenses as we were not able to generate meaningful revenues, and also took at $0.6 million impairment charge on our investment in Mellitus.

Notably, in the year ended December 31, 2023, we wrote-off our $2.5 million prepayment for Insulin Insights software licenses as we were not able to generate meaningful revenues, and also took a $0.6 million impairment charge on our investment in Mellitus.

If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory clearance or approval or commercialize our products, and our business could be substantially harmed.

We may rely on third parties to support certain aspects of our clinical trials and regulatory processes. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory clearance or approval or commercialize our products, and our business could be substantially harmed .

Although we have procedures in place to limit usage of our device if it has not synchronized for a period of time, there is no guarantee that our customers will act in compliance with their terms of service and we may not appropriately capture all per-test fees to which we are entitled. 32 Table of Contents We are exposed to risk as a significant portion of our revenues and accounts receivables are with a limited number of customers.

These changes will be phased in as follows: in calendar year 2023, full payment under the 2020 model will continue; in calendar year 2024, 67% of the 2020 model is available; in calendar year 2025, 33% of the 2020 model is available .

These 28 Table of Contents changes are being phased in as follows: in calendar year 2023, full payment under the 2020 model continued; in calendar year 2024, 67% of the 2020 model is available; in calendar year 2025, 33% of the 2020 model will be available .

We had 56 sales and marketing employees as of December 31, 2023. If any of our sales or marketing force were to resign, our sales could be adversely affected. We may need to seek out alternatives, such as increasing our direct sales and marketing force or contracting with external independent sales representatives or enter another distributor relationship.

We had 45 sales and marketing employees as of December 31, 2024. If any of our sales or marketing force were to resign, our sales could be adversely affected. We may need to seek out alternatives, such as increasing our direct sales and marketing force or contracting with an independent distributor.

The market for medical systems, equipment and other devices and services is highly competitive. We compete with many medical service companies in the United States and internationally in connection with our vascular testing product and products under development. We face competition from numerous companies in the diagnostic area, as well as competition from academic institutions, government agencies and research institutions.

We compete with many medical service companies in the United States and internationally in connection with our vascular testing product and products under development. We face competition from numerous companies in the diagnostic area, as well as competition from academic institutions, government agencies and research institutions.

Although most of our customers report being covered and reimbursed by third-party payors consistently for procedures using a variety of different reimbursement codes, there is a risk that third-party payors may disagree with the reimbursement under a particular code. In addition, some potential customers have deferred renting our product given the uncertainty regarding reimbursement.

Although some of our customers report being covered and reimbursed by third-party payors for procedures, we have not offered any reimbursement guidance, therefore there is a risk that third-party payors may disagree with the reimbursement under a particular code. In addition, some of our potential customers might have deferred renting our product given the uncertainty regarding reimbursement.

For example, in September and October 2020, we made investments in Mellitus and SYNAPS Dx, two private companies working in other product areas, Insulin Insights (for which we have an exclusive distribution agreement) and Discern, and in December 2022, we extended a loan to Monarch, maker of the software product EndoTool.

For example, in September and October 2020, we made investments in Mellitus and SYNAPS Dx, two private companies working in other product areas, Insulin Insights and Discern, and in December 2022, we extended a loan to Monarch, maker of the software product EndoTool and such loan as amended in December 2024 and January 2025.

If healthcare providers are unable to obtain adequate coverage and reimbursement either for procedures performed using our product or patient care incorporating the use of our product, it is unlikely that our product will gain widespread acceptance.

If healthcare providers are unable to obtain adequate coverage and reimbursement either for procedures performed using our product or patient care incorporating the use of our product, our product might have difficulty gaining widespread acceptance.

An information security incident, including a cybersecurity breach, could have a negative impact on our business or reputation. To meet business objectives, we rely on both internal information technology systems and networks, and those of third parties and their vendors, to process and store sensitive data, including confidential research and patient data that may be subject to legal protection.

To meet business objectives, we rely on both internal information technology systems and networks, and those of third parties and their vendors, to process and store sensitive data, including confidential research and patient data that may be subject to legal protection.

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.

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. Although we have the right from time to time to distribute other third-party products, there is no guarantee that we will be successful.

We may decide to alter or discontinue aspects of our business strategy and may adopt 20 Table of Contents different strategies due to business or competitive factors not currently foreseen, such as new medical technologies that would make our products obsolete or changes in the regulatory landscape that may undermine the economic rationale for QuantaFlo.

We may decide to alter or discontinue aspects of our business strategy and may adopt different strategies due to business or competitive factors not currently foreseen, such as new medical technologies that would make our products obsolete or changes in the regulatory landscape that may undermine the economic rationale for QuantaFlo or difficulties in obtaining a new 510(k) clearance, which could cause us to cease efforts to expand the indications for QuantaFlo.

If our largest customers were to cease using or stop payment for our vascular testing devices, it would have a material adverse effect on our revenues and/or our accounts receivable. Our efforts to diversify and potentially expand our product offering such as by distributing licenses to Insulin Insights, are preliminary in nature.

If our largest customers were to cease using or stop payment for our vascular testing devices or leverage their market share to negotiate reduced pricing terms, it would have a material adverse effect on our revenues and/or our accounts receivable. Our efforts to diversify and potentially expand our product offering are preliminary in nature.

Further, we may need to divest our investments or increase our investment to become a controlling interest sooner than we may like in order to comply with regulations regarding the amount of our assets represented by minority investments. These regulatory requirements may not always coincide with our business objectives and could adversely affect our investments and strategy.

Significant judgment is required in evaluating our provision for income taxes or in claiming tax credits or taking other tax positions. During the ordinary course of business, there are many transactions for which the ultimate tax determination is uncertain or if we were to be audited, the Internal Revenue Service may not agree with our tax positions.

During the ordinary course of business, there are many transactions for which the ultimate tax determination is uncertain or if we were to be audited, the Internal Revenue Service, or state tax authorities may not agree with our tax positions.

Risks Related to Our Legal and Regulatory Environment 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, among others.

These regulatory requirements may not always coincide with our business objectives and could adversely affect our investments and strategy. 34 Table of Contents Risks Related to Our Legal and Regulatory Environment 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, among others.

If the FDA concludes that we failed to comply with any regulatory requirement during an inspection or otherwise, it could have a material adverse effect on our business and financial condition.

If the FDA concludes that we failed to comply with any regulatory requirement during an inspection or otherwise, it could have a material adverse effect on our business and financial condition. We could incur substantial expense and harm to our reputation, and our ability to introduce new or enhanced products in a timely manner could be adversely affected.

In order to raise additional capital or pursue strategic acquisition opportunities, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock. For example, we entered into an “at-the-market” offering program in June 2024 and issued convertible notes in January 2025.

Furthermore, the healthcare industry in the United States has experienced a trend toward cost containment as government and private insurers seek to control healthcare costs by imposing lower payment rates and negotiating reduced contract rates with service providers. Therefore, we cannot be certain that the procedures or patient care performed with our product will be reimbursed at a cost-effective level.

If we are not able to convince potential customers of their benefits, these rights and potential future rights may not generate any meaningful revenues for our company.

Moreover, for any complementary products for which we have (or acquire) exclusive distribution rights, we may not be able to convince potential customers of their benefits, and these rights and potential future rights may not generate any meaningful revenues for our company.

We may also fail to generate meaningful revenues from our Insulin Insights distribution arrangement, which includes prepaid licenses, or benefit from our recent investments in other companies developing complementary products. We currently actively market only one vascular testing product, QuantaFlo.

We may also fail to generate meaningful benefit from our recent investments in other companies developing complementary products or distribution agreements for complementary products. We currently actively market only one vascular testing product, QuantaFlo and have a distribution agreement for a third-party product.

For a discussion of healthcare reform activity, see “Business—Government Regulation—Healthcare Reform.” We believe that the Health Care Reform Law measures are mainly positive for our business given the ability of QuantaFlo to measure blood flow in an in-office setting, which can assist doctors and other providers to suspect PAD and other vascular diseases.

We believe that the Health Care Reform Law measures are mainly positive for our business given the ability of QuantaFlo to measure blood flow in an in-office setting, which can assist doctors and other providers to suspect PAD and other vascular diseases. However, we cannot predict what changes will now be made, and if these features will be repealed.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face as described below and elsewhere in this annual report on Form 10-K. Risks Related to Our Business If we do not successfully implement our business strategy, our business and results of operations will be adversely affected.

See “Cautionary Note Regarding Forward-Looking Statements and Industry Data.” Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face as described below and elsewhere in this annual report on Form 10-K.

Although we have an exclusive marketing and distribution agreement for Insulin Insights, a software product line, in the United States, including Puerto Rico, for which we prepaid an aggregate of $2.5 million of software licenses, we did not generate meaningful revenues from distribution of our prepaid licenses, and we wrote off our prepaid licenses and a portion of our investment in December 2023.

Although we had an exclusive marketing and distribution agreement for another product (Insulin Insights), we did not generate meaningful distribution revenues and we wrote off our prepaid licenses and a portion of our investment in December 2023.

Accordingly, there is a risk that our products may not be adopted by many physicians, which would negatively impact our business, financial condition and results of operations. Moreover, we acquired exclusive distribution rights to a new product area and may in the future acquire rights to other complementary products.

Accordingly, there is a risk that our products may not be adopted by many physicians, which would negatively impact our business, financial condition and results of operations.

If we operate our business without insurance, we could be responsible for paying claims or judgments against us that would have otherwise been covered by insurance, which could adversely affect our results of operations or financial condition. 35 Table of Contents 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.

If we operate our business without 58 Table of Contents insurance, we could be responsible for paying claims or judgments against us that would have otherwise been covered by insurance, which could adversely affect our results of operations or financial condition.

The Health Care Reform law also provided for higher risk factor adjustment payments for sicker patients who have conditions that are codified, as well as economic benefits for achieving certain quality of care measurements. For a discussion of healthcare reform activity, see “Business—Government Regulation—Healthcare Reform” in Item 1 of this annual report on Form 10-K.

Failure to hire or retain qualified direct sales and marketing personnel or independent distributors would prevent us from expanding our business and generating revenues, which would have a material adverse effect on our ability to achieve or maintain profitability. 23 Table of Contents To adequately commercialize our products and any new products we add, we may need to increase our sales and marketing network, which will require us to hire, train, retain and supervise employees and other independent contractors.

It is possible that a review of our business practices or those of our customers by courts or government authorities could result in a determination with an adverse effect on our business. We cannot predict the effect of possible future enforcement actions on our business.

In addition, to the extent that our customers, many of whom are providers, may be affected by this increased enforcement environment, our business could correspondingly be affected. It is possible that a review of our business practices or those of our customers by courts or government authorities could result in a determination with an adverse effect on our business.

Additionally, the government has continued to pursue an increasing number of enforcement actions. This increased enforcement environment may increase scrutiny of us, directly or indirectly, and could increase the likelihood of an enforcement action targeting us. These customers include parties that bill Federal healthcare programs for use of our product, all of whom may be subject to government scrutiny.

Additionally, the government has continued to pursue an increasing number of enforcement actions. This increased enforcement environment may increase scrutiny of us, directly or indirectly, and could increase the likelihood of an enforcement action targeting us, either due to our actions, those of any distributor (including our former distributor), or our customers or those of our distributors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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2024 filing

Biggest changeOur chief technology officer, or CTO, is responsible for the establishment and maintenance of our cybersecurity program, as well as the assessment and management of cybersecurity risks. Our current CTO has over 30 years of experience in information technology and possesses the requisite education, skills, experience, and industry certifications expected of an individual assigned to these duties.

Biggest changeOur CTO is responsible for the establishment and maintenance of our cybersecurity program, as well as the assessment and management of cybersecurity risks. Our current CTO has over 30 years of experience in information technology and possesses the requisite education, skills, experience, and industry certifications expected of an individual assigned to these duties.

Audit committee meetings include discussions of specific risk areas throughout the year, including, among others, those relating to cybersecurity threats, and reports from the chief financial officer on our enterprise risk profile on an annual basis. The audit committee reviews our cybersecurity risk profile with management on a periodic basis using key performance and/or risk indicators.

Audit committee meetings include discussions of specific risk areas throughout the year, including, among others, those relating to cybersecurity threats, and reports from the chief technology officer or CTO on our enterprise risk profile on an annual basis. The audit committee reviews our cybersecurity risk profile with management on a periodic basis using key performance and/or risk indicators.

The CTO provides periodic updates on our cybersecurity risk profile to management and the audit committee of our board of directors.

The CTO provides periodic updates on our cybersecurity risk profile to management and the audit committee of our board of directors. 61 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Because we outsource our manufacturing to “turn-key” manufacturers and have a geographically dispersed sales force and distributor arrangement, we have minimal needs for office space to conduct our day-to-day business operations. Our headquarters are located in Santa Clara, CA, where we lease an operations fulfillment space that also serves as our corporate headquarters address.

Removed

Our headquarters are located in Santa Clara, CA, where we lease an operations fulfillment space that also serves as our corporate headquarters address. 38 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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2024 filing

Biggest changeWe are not currently a party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows or financial condition. In July 2017, we received an initial civil investigative demand, or CID, from the DOJ pursuant to the federal False Claims Act investigating whether we and others may have violated the False Claims Act by marketing tests on devices that use photoplethysmography technology as reimbursable by Medicare in alleged contravention of applicable laws and regulations.

Added

We cooperated with the investigation, along with subsequent CIDs received in February 2019, December 2021, April 2022 and April 2023 addressed to our company or individual current or former employees related to the same investigation. In September 2024, DOJ shared certain information to which we responded in January and February 2025.

Added

On February 6, 2025, DOJ asked if we wished to engage in settlement discussions to resolve any potential claims by February 11, 2025 and if so that we make a settlement offer by such deadline. Prior to February 6, 2025, DOJ had not stated an intention to pursue a claim of wrongdoing against our company.

Added

On February 11, 2025, we began initial settlement discussions with DOJ, but ceased initial discussions on that date. Accordingly, there is a risk that DOJ will file a complaint or complaint in intervention in a civil False Claims Act lawsuit seeking damages. We do not believe the amount of loss can be reasonably estimated.

Added

We intend to vigorously defend ourselves in any such action. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Part III, Item 12 of this annual report on Form 10-K. Recent Sales of Unregistered Securities Not applicable. Issuer Purchases of Equity Securities Not applicable. 39 Table of Contents ITEM 6. Reserved Not applicable.

On that date, our shares of common stock were held by approximately 30 stockholders of record. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of our common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

On that date, our shares of common stock were held by approximately eight stockholders of record. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of our common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

Any future determination as to the payment of cash dividends on our common stock will be at our board of directors’ discretion and will depend on our financial condition, operating results, capital requirements and other factors that our board of directors considers to be relevant.

Any future determination as 62 Table of Contents to the payment of cash dividends on our common stock will be at our board of directors’ discretion and will depend on our financial condition, operating results, capital requirements and other factors that our board of directors considers to be relevant.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been trading on the Nasdaq Stock Market LLC under the symbol “SMLR” since September 27, 2021. Holders On March 1, 2024, the closing sale price of a share of our common stock was $47.49 per share and there were 7,031,083 shares of our common stock outstanding.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been trading on the Nasdaq Stock Market LLC under the symbol “SMLR” since September 27, 2021. Holders On January 31, 2025, the closing sale price of a share of our common stock was $51.96 per share and there were 9,596,486 shares of our common stock outstanding.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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2024 filing

Biggest changeChanges in operating assets and liabilities used $3.7 million of net cash. These changes in operating assets and liabilities included an increase in trade receivable of $2.5 million, prepaid expenses and other assets of $0.6 million and a decrease in trade payables of $0.4 million and accrued expenses of $0.2 million .

Biggest changeThese changes in operating assets and liabilities included a decrease in accounts receivable of $1.8 million, an increase of accrued expenses of $0.7 million, a decrease in other noncurrent assets of $0.1 million and decrease in inventory of $0.1 million, partially offset by an increase in prepaid expenses and other current assets of $0.9 million, decrease in other current liabilities of $0.3 million and decrease in trade payable of $0.3 million. 69 Table of Contents Investing Activities We used $190.0 million of net cash for investing activities for the year ended December 31, 2024, compared to generating $18.4 million of net cash from investing activities for the year ended December 31, 2023.

Total other income and expense Our total other income and expense primarily reflects other taxes and fees, interest and dividend income, as well as changes in value and impairments of our investments. Critical Accounting Policies and Estimates Our accounting policies are more fully described in Note 2 of the financial statements.

Total other income and expense Our total other income and expense primarily reflects other taxes and fees, interest and dividend income, as well as changes in value and impairments of our investments and digital assets. Critical Accounting Policies and Estimates Our accounting policies are more fully described in Note 2 of the financial statements.

Each vascular testing product 41 Table of Contents unit has a depreciation schedule based on the cost of the unit. The cost of each unit is depreciated on a straight-line basis over 36 months. Each unit has its own cost of production, which varies from time to time.

Each vascular testing product unit has a depreciation schedule based on the cost of the unit. The cost of each unit is depreciated on a straight-line basis over 36 months. Each unit has its own cost of production, which varies from time to time.

The remainder was from other equipment/supply sales of accessories, which were $1.9 million in 2023 as compared to $1.4 million in 2022. Revenues from fees for products are recognized monthly, usually billed as a fixed monthly fee or as a variable monthly fee dependent on usage.

The remainder was from other equipment/supply sales of accessories, which were $2.9 million in 2024 as compared to $1.9 million in 2023. Revenues from fees for products are recognized monthly, usually billed as a fixed monthly fee or as a variable monthly fee dependent on usage.

Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues We had revenues of $68.2 million for the year ended December 31, 2023, compared to $56.7 million in 2022. Our revenues are primarily from fees charged to customers for use of our products and from sale of accessories used with these products.

Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenues We had revenues of $56.3 million for the year ended December 31, 2024, compared to $68.2 million in 2023. Our revenues are primarily from fees charged to customers for use of our products and from sale of accessories used with these products.

As a percentage of revenues, engineering and product development expense was unchanged at 9% in both 2023 and in 2022. Sales and Marketing Expense We had sales and marketing expense of $18.1 million for the year ended December 31, 2023, compared to $17.7 million in 2022.

As a percentage of revenues, engineering and product development expense was unchanged at 9% in both 2024 and in 2023. Sales and Marketing Expense We had sales and marketing expense of $13.1 million for the year ended December 31, 2024, compared to $18.1 million in 2023.

Sources of Revenues and Expenses Revenues We generate revenues primarily from the rental or license of our vascular testing product. We recognize revenues from the licensing of our vascular testing product pursuant to agreements that normally automatically renew each month with revenues recognized on a daily convention basis.

(b) Cash from operations and proceeds from ATM offering. Sources of Revenues and Expenses Revenues We generate revenues primarily from the rental or license of our vascular testing product. We recognize revenues from the licensing of our vascular testing product pursuant to agreements that normally automatically renew each month with revenues recognized on a daily convention basis.

Liquidity and Capital Resources We had cash, cash equivalents, restricted cash and short-term investments of $57.3 million at December 31, 2023, compared to $43.1 million at December 31, 2022, and total current liabilities of $6.2 million at December 31, 2023, compared to $6.9 million at December 31, 2022.

Liquidity and Capital Resources We had cash, cash equivalents, restricted cash and short-term investments of $9.0 million at December 31, 2024, compared to $57.3 million at December 31, 2023, and total current liabilities of $6.3 million at December 31, 2024, compared to $6.2 million at December 31, 2023.

As disclosed in Note 2, the preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ significantly from those estimates.

In the year ended December 31, 2023, we had total revenues of $68.2 million and net income of $20.6 million compared to total revenues of $56.7 million and net income of $14.3 million in 2022. We had an income tax expense of $3.5 million in 2023, compared to $3.4 million in 2022.

In the year ended December 31, 2024, we had total revenues of $56.3 million and net income of $40.9 million compared to total revenues of $68.2 million and net income of $20.6 million in 2023. We had an income tax expense of $7.0 million in 2024, compared to $3.5 million in 2023.

Engineering and Product Development Expense We had engineering and product development expense of $5.8 million for the year ended December 31, 2023, compared to $4.8 million in 2022. The increase was primarily due to personnel costs, consulting fees and other costs associated with our product development and customization efforts, which were partially offset by lower dues and subscriptions.

Engineering and Product Development Expense We had engineering and product development expense of $4.8 million for the year ended December 31, 2024, compared to $5.8 million in 2023. The decrease was primarily due to lower personnel costs, consulting fees and other costs associated with our product development and customization efforts, which were partially offset by higher clinical studies expenses.

At December 31, 2023, we held approximately $10.5 million of U.S. Treasury bills and $41.4 million in government money market fund accounts and the remaining cash was held in non-interest bearing bank accounts. Our investment guidelines allow for holdings in U.S. government and agency securities, corporate securities, taxable municipal bonds, commercial paper, money market accounts and treasury bills.

At December 31, 2024, we held approximately $3.6 million in government money market fund accounts and the remaining cash was held in non-interest bearing bank accounts. Our investment guidelines allow for holdings in bitcoins, U.S. government and agency securities, corporate securities, taxable municipal bonds, commercial paper, money market accounts and treasury bills.

Net Income For the foregoing reasons, we had a net income of $20.6 million for the year ended December 31, 2023, compared to a net income of $14.3 million for the year ended December 31, 2022.

Net Income For the foregoing reasons, we had a net income of $40.9 million for the year ended December 31, 2024, compared to a net income of $20.6 million for the year ended December 31, 2023.

Sales and marketing expense Our sales and marketing expense consists primarily of sales commissions and support costs, salaries and related employee benefits, travel, education, trade show and marketing costs. General and administrative expense Our general and administrative expense consists primarily of salaries and related employee benefits, professional service fees, associated travel costs and depreciation and amortization expense.

General and administrative expense Our general and administrative expense consists primarily of salaries and related employee benefits, professional service fees, associated travel costs and depreciation and amortization expense.

Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this annual report on Form 10-K. Overview We are a company providing technology solutions to improve the clinical effectiveness and efficiency of healthcare providers.

We recognized revenues of $66.3 million from fees for our products in 2023, consisting of $37.3 million from fixed-fee licenses and $29.0 million from variable-fee licenses, compared to $55.3 million in 2022, consisting of $34.0 million from fixed-fee licenses and $21.3 million from variable-fee licenses.

We recognized revenues of $53.4 million from fees for our products in 2024, consisting of $27.5 million from fixed-fee licenses and $25.9 million from variable-fee licenses, compared to $66.3 million in 2023, consisting of $37.3 million from fixed-fee licenses and $29.0 million from variable-fee licenses.

Non-cash adjustments to reconcile net income to net cash from operating activities provided net cash of $4.5 million and were primarily due to prepaid licenses write-off of $2.5 million, stock-based compensation expense of $0.9 million, depreciation of $0.6 million, loss on disposal of assets 44 Table of Contents for lease of $0.4 million, impairment of long-term investments of $0.3 million, change in fair value of notes of $0.3 million and allowance for credit losses of $0.3 million, partially offset by deferred tax income of $0.7 million and gain on treasury bills of $0.1 million.

Non-cash adjustments to reconcile net income to net cash from operating activities used net cash of $17.7 million and were primarily due to, an unrealized gain in fair value of bitcoin of $24.9 million, change in the fair value of notes held for investments of $0.1 million, allowance for credit losses of $0.1 million, partially offset by deferred tax income of $5.8 million, stock-based compensation expense of $0.9 million, depreciation of $0.6 million, and loss on disposal of assets for lease of $0.3 million.

Provision for Taxes In 2023, we recorded income tax expense of $3.5 million, compared to $3.4 million in 2022. In 2023 income tax expenses were partially offset by tax benefits related to employee stock option exercises and the $2.5 million write-off of the Insulin Insights prepaid licenses.

In 2024, income tax expenses were partially offset by tax benefits related to employee stock option exercises. I n 2023 lower income tax expense was due to tax benefits from employee stock option exercises and the $2.5 million write-off of the Insulin Insights prepaid licenses.

Operating Activities We generated $21.3 million of net cash from operating activities for the year ended December 31, 2023, compared to $17.5 million of net cash from operating activities for the same period of the prior year. The change was primarily due to the generation of additional net income from operating activities.

Operating Activities We generated $24.4 million of net cash from operating activities for the year ended December 31, 2024, compared to $21.3 million of net cash from operating activities for the same period of the prior year.

Strategic Operational Streamlining During the year ended December 31, 2023, we incurred severance cost of $0.7 million consisting of one-time termination benefits, which we have reported on the statement of income under “strategic streamlining”. We did not incur any strategic streamlining expenses during the year ended December 31, 2022.

As a percentage of revenues, general and administrative expense increased to 22% in 2024, compared to 21% in 2023. Strategic Operational Streamlining During the year ended December 31, 2023, we incurred severance cost of $0.7 million consisting of one-time termination benefits, which we have reported on the statement of income under “strategic streamlining”.

Significant changes to these estimates may result in an increase or decrease in our tax provision in the current period or subsequent periods. 42 Table of Contents Factors Affecting Future Results We have not identified any other factors that have a recurring effect that are necessary to understand period to period comparisons as appropriate, nor any one-time events that have an effect on the financials.

Factors Affecting Future Results We have not identified any other factors that have a recurring effect that are necessary to understand period to period comparisons as appropriate, nor any one-time events that have an effect on the financials.

Engineering and product development expense Our engineering and product development expense consists of costs associated with the design, development, testing and enhancement of QuantaFlo and other products in development. We also include salaries and related employee benefits, research-related overhead expenses and fees paid to external service providers in our engineering and product development expense.

We also include salaries and related employee benefits, research-related overhead expenses and fees paid to external service providers in our engineering and product development expense. Sales and marketing expense Our sales and marketing expense consists primarily of sales commissions and support costs, salaries and related employee benefits, travel, education, trade show and marketing costs.

Our mission is to develop, manufacture and market innovative proprietary products and services that assist our customers in evaluating and treating chronic diseases. Our patented and FDA cleared product, QuantaFlo measures arterial blood flow in the extremities to aid in the diagnosis of PAD.

Overview We are a company developing and marketing technology products and services that assist our customers in evaluating and treating chronic diseases. Our patented and FDA cleared product, QuantaFlo measures arterial blood flow in the extremities to aid in the diagnosis of PAD. We also invest in bitcoin and have adopted bitcoin as our primary treasury reserve asset.

The cost of hardware or supplies sold are the cost of production for the item sold. The other costs of revenue vary primarily as a function of the aggregate number of vascular testing units rented and changes in operations such as manufacturing, delivery or maintenance.

The other costs of revenue vary primarily as a function of the aggregate number of vascular testing units rented and changes in operations such as manufacturing, delivery or maintenance. 66 Table of Contents Engineering and product development expense Our engineering and product development expense consists of costs associated with the design, development, testing and enhancement of QuantaFlo and other products in development.

As a percentage of revenues, operating expenses, including cost of revenues, decreased to 67% in 2023, as compared to 70% in 2022. The changes in the various components of our operating expenses are described below. Cost of Revenues We had cost of revenues of $7.0 million for the year ended December 31, 2023, compared to $4.3 million for 2022.

The changes in the various components of our operating expenses are described below. Cost of Revenues We had cost of revenues of $4.8 million for the year ended December 31, 2024, compared to $7.0 million for 2023. The primary reasons for this change were the lower personnel costs and lower scrap write-off expenses, partially offset by higher material cost.

The primary reasons for this change were the $2.5 million write-off of prepayment for Insulin Insights licenses, as well as increased personnel costs due to annual salary increases and increased shipping costs. As a percentage of revenues, cost of revenues increased to 10% in 2023, as compared to 8% in 2022.

In 2023, there was a one-time write-off of $2.5 million related to the prepayment for Insulin Insights licenses. As a percentage of revenues, cost of revenues was at 8% in 2024, compared to 10% in 2023.

The increase was primarily due to higher dues and subscriptions, professional expenses and legal expenses, partially offset by lower insurance costs. As a percentage of revenues, general and administrative expense decreased to 21% in 2023, compared to 23% in 2022.

General and Administrative Expense We had general and administrative expense of $12.7 million for the year ended December 31, 2024, compared to $14.3 million in 2023. The decrease was primarily due to lower personnel costs, legal and professional and bad debt expenses, partially offset by higher insurance and dues and subscriptions expenses.

As of December 31, 2023, we had working capital of approximately $59.7 million. We believe that our current sources of funds will provide us with adequate liquidity during the 12-month period following December 31, 2023. Our cash is held in a variety of non-interest bearing bank accounts, interest bearing money market accounts and treasury bills.

We believe that our current sources of funds will provide us with adequate liquidity during the 12-month period following December 31, 2024, as well as in the long-term.

Financing Activities We used $5.4 million of net cash in financing activities during the year ended December 31, 2023, compared to $4.9 during the year ended December 31, 2022, primarily due to taxes paid related to equity awards of $3.5 million, and warrant repurchase for $1.9 million. ITEM 7A.

Financing Activities We generated $117.2 million of net cash in financing activities during the year ended December 31, 2024, compared to net cash used of $5.4 million during the year ended December 31, 2023, primarily due to proceeds from the issuance of common stock of $119.6 million under our ATM offering program and proceeds from the exercise of stock options of $1.5 million, partially offset by taxes paid related to equity awards of $0.9 million, and the payment of stock issuance expenses of $3.0 million. Description of Indebtedness As discussed above in “—Recent Developments—Offering of 4.25% Convertible Senior Notes,” in January 2025, we issued $100.0 million aggregate principal amount of 4.25% convertible senior notes due 2030.

As a percentage of revenues, sales and marketing expense decreased to 27% in 2023 compared to 31% in 2022. 43 Table of Contents General and Administrative Expense We had general and administrative expense of $14.3 million for the year ended December 31, 2023, compared to $12.7 million in 2022.

We did not incur any strategic streamlining expenses during the year ended December 31, 2024. Other Income and Expense We had other income of $27.0 million for 2024, compared to $1.8 million in 2023.

Removed

Our pre-tax net income was $24.1 million in 2023 compared to $17.7 million in 2022. Recent Developments Common Stock Repurchase Program and Repurchase of Common Stock Warrants On March 14, 2022, our board of directors authorized a share repurchase program under which we may repurchase up to $20.0 million of our outstanding common stock.

Added

As an operating business, we are able to use cash flows as well as proceeds from equity and debt financings to accumulate bitcoin. Our healthcare technology solutions business is our predominant operational focus, providing cash flows and enabling us to pursue our bitcoin strategy.

Removed

Under this program, we may purchase shares on a discretionary basis from time to time through open market purchases, privately negotiated transactions or other means, including through Rule 10b5-1 trading plans or through the use of other techniques such as accelerated share repurchases.

Added

Our pre-tax net income was $47.9 million, including unrealized 63 Table of Contents gains from the change in fair value of bitcoin holdings of $24.9 million in 2024 compared to $24.1 million and no gains in 2023.

Removed

The timing and amount of any transactions will be subject to our discretion and based upon market conditions and other opportunities that we may have for the use or investment of our cash balances.

Added

Recent Developments Bitcoin Treasury Strategy In May 2024, we adopted bitcoin as our primary treasury reserve asset on an ongoing basis, subject to market conditions and our anticipated cash needs.

Removed

The repurchase program has no expiration date, does not require the purchase of any minimum number of shares and may be suspended, modified or discontinued at any time without prior notice. We did not purchase any shares of our common stock under this repurchase program in 2023.

Added

As of December 31, 2024, we held an aggregate of 2,298 bitcoins, which we acquired for an aggregate purchase price of $189.7 million and an average purchase price of $82,538 per bitcoin.

Removed

In 2022, we acquired 148,500 shares of our common stock for approximately $5.0 million under the repurchase program. In May 2023, we repurchased outstanding warrants to acquire an aggregate 76,875 shares of our common stock for $1.9 million in cash from our chief executive officer.

Added

From January 1, 2025 through February 14, 2025, we have purchased an additional 894 bitcoins, at an aggregate purchase price of $90.7 million and an average purchase price of $101,532. All purchase amounts include fees and expenses.

Removed

The warrants were originally issued on June 7, 2012 (16,875 shares) with an exercise price of $4.00 per share and on July 31, 2013 (60,000 shares), with an exercise price of $4.50 per share, all of which were amended in September 2015 to set an expiration date of July 31, 2023.

Added

ATM Offering In June 2024, we entered into a Controlled Equity Offering SM Sales Agreement with Cantor Fitzgerald & Co., pursuant to which we may offer and sell from time to time our common stock in an at-the-market, or ATM, offering.

Removed

The repurchase of the 40 Table of Contents warrants for $1.9 million cash reflects the difference between the aggregate exercise price of the warrants and the aggregate fair market value of the shares of common stock underlying the warrants based on the closing price of a share of our common stock on May 16, 2023, the date of the warrant repurchase agreement.

Added

Through December 31, 2024, we have issued and sold a total of 2,197,988 shares of our common stock for aggregate gross proceeds of approximately $119.6 million. Offering of 4.25% Convertible Senior Notes In January 2025, we issued $100.0 million aggregate principal amount of 4.25% convertible senior notes due 2030, or the notes, in a private offering, or the offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act, which included $15.0 million pursuant to the exercise in full of the initial purchasers option.

Removed

Following the warrant repurchase, the warrants were cancelled and we no longer have any warrants issued and outstanding. Strategic Operational Streamlining In July 2023, our board of directors approved a strategic plan to streamline operations and reduce employee headcount by approximately 30% by mid-September 2023.

Added

The offering size was increased from the previously announced offering size of $75.0 million aggregate principal amount of notes. The notes are senior unsecured obligations and accrue interest payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2025, at a rate of 4.25% per year.

Removed

This plan was meant to be proactive and sought to drive operational efficiency, while still providing high quality service to our customers.

Added

The notes will mature on August 1, 2030, unless earlier converted, redeemed or repurchased. The initial conversion rate of the notes is 13.0826 shares of our common stock per $1,000 principal amount of such notes (equivalent to an initial conversion price of approximately $76.44 per share).

Removed

As of December 31, 2023, we incurred severance cost of $0.7 million consisting of one-time termination benefits, which we have reported on the statement of income under “strategic streamlining”. CMS Rate Notice In late March 2023, CMS issued the final 2024 rate announcement with payment changes for the Medicare Advantage and Part D prescription drug programs.

Added

The initial conversion price of the notes represents a premium of approximately 25% over the last reported sale price of our common stock on the Nasdaq Capital Market on January 23, 2025.

Removed

Essentially, CMS is phasing in a new Medicare Advantage risk adjustment model (2024 model) from the previous model (2020 model) over a three-year period. The 2024 model does not include risk adjusted payments for PAD without complications, which payments many health insurers, including our customers, relied upon for their Medicare Advantage patients in the 2020 model.

Added

Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of its common stock, at its election. We received approximately $91.0 million of net proceeds after deducting the initial purchasers’ discount and other offering expenses payable by us.

Removed

The changes will be phased in as follows: in calendar year 2023, full payment under the 2020 model; in calendar year 2024, 67% of the 2020 model; in calendar year 2025, 33% of the 2020 model. It is premature to determine the potential impact to our future revenues of this CMS rate notice.

Added

We used approximately $1.3 million for issuance expenses and approximately $7.7 million of the net proceeds to pay the cost of the capped call transactions that we entered into as described below and the remainder of the net proceeds for general corporate purposes, including the acquisition of bitcoin. In connection with the pricing of the notes, we entered into privately negotiated capped call transactions, or the capped call transactions with certain financial institutions, or the option counterparties.

Removed

Impairment of Mellitus and Insulin Insights Prepaid Licenses We have an agreement with Mellitus to exclusively market and distribute Insulin Insights, a software product line in the United States, including Puerto Rico, for which we prepaid an aggregate of $2.5 million of software licenses.

Added

The capped call transactions cover, subject to customary adjustments, the number of shares of our common stock that will initially underlie the notes. The capped call transactions are expected to offset the potential dilution to our common stock as a result of any conversion of notes, with such reduction subject to a cap.

Removed

Due to slow uptake of the Insulin Insights product despite our marketing efforts, we wrote off the $2.5 million prepayment for the software licenses and took at $0.6 million impairment charge on our investments in Mellitus in the fourth quarter of 2023. Seeking New 510(k) Clearance from the U.S.

Added

The cap price of the capped call transactions relating to the notes will initially be approximately $107.01, which represents a premium of approximately 75% over the last reported sale price of our common stock on the Nasdaq Capital Market on January 23, 2025, and is subject to certain adjustments under the terms of the capped call transactions.

Removed

Food and Drug Administration (FDA) In January 2024, we announced we are seeking a new 510(k) clearance from the FDA for the expanded use of QuantaFlo following correspondence with the FDA. The new 510(k) is intended to enable expanded labeling for QuantaFlo as an aid in the diagnosis of other cardiovascular diseases in addition to PAD.

Added

As the initial purchasers exercised their option to purchase additional notes, we entered into additional capped call transactions with the option counterparties on January 24, 2025.

Removed

We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments.

Added

In connection with establishing their initial hedges of the capped call transactions, we expect the option counterparties and/or their respective affiliates may enter into various derivative transactions with respect to our 64 Table of Contents common stock and/or purchase our common stock in secondary market transactions concurrently with or shortly after the pricing of the notes, including with certain investors in the notes.

Removed

Accounting for income taxes Significant management judgment is required in determining our provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against net deferred tax assets in accordance with GAAP.

Added

This activity could increase (or reduce the size of any decrease in) the market price of our common stock or the notes at that time.

Removed

These estimates and judgments occur in the calculation of tax credits, benefits, and deductions and in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as the interest and penalties related to uncertain tax positions.

Added

In addition, we expect that the option counterparties and/or their respective affiliates may modify or unwind their hedge positions by entering into or unwinding various derivative transactions and/or purchasing or selling our common stock or our other securities in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so on each exercise date of the capped call transactions, which are scheduled to occur during the observation period relating to any conversion of the notes on or after May 1, 2030 that is not in connection with a redemption, or following our election to terminate any portion of the capped call transactions in connection with any repurchase, redemption, exchange or early conversion of the notes).

Removed

The primary reason for the increase in revenues was growth in the usage of our product from both new customers and established customers, which we believe is the result of our sales and marketing efforts. Operating Expenses We had total operating expenses of $45.9 million for the year ended December 31, 2023, compared to $39.5 million in 2022.

Added

This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the notes, which could affect a noteholder’s ability to convert its notes and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect the amount and value of the consideration that a noteholder will receive upon conversion of its notes.

Removed

The primary reason for this change was overall growth in our business, which increased cost of revenues (in addition to the $2.5 million charge related to Insulin Insights), as well as payment of severance in connection with our strategic streamlining.

Added

Neither the notes, nor any shares of our common stock issuable upon conversion of the notes, have been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons, absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.

Removed

The increase was primarily due to higher trade shows expenses, travel expenses and other expenses.

Added

Our Bitcoin Acquisition Strategy In May 2024, we adopted bitcoin as our primary treasury reserve asset on an ongoing basis, subject to market conditions and our anticipated cash needs.

Removed

Other Income and Expense We had other income of $1.8 million for 2023, compared to $0.5 million in 2022. The increase was primarily due to interest and dividend income associated with higher cash balances and interest rates, partially offset by our $0.6 million impairment of our investment in Mellitus.

Added

Removed

Investing Activities We generated $18.4 million of net cash from investing activities for the year ended December 31, 2023, compared to $26.8 million of net cash used in investing activities for the year ended December 31, 2022.

Added

For example, we began issuing shares under our June 2024 “at-the-market” offering program in the second half of 2024, and in January 2025 issued convertible bonds, and used proceeds from both of these capital market transactions to acquire additional bitcoin. We view our bitcoin holdings as long term holdings and expect to continue to accumulate bitcoin.

Removed

The increase was primarily attributable to maturities of short-term treasury bills of $20.2 million, partially offset by purchase of notes held for investment of $1.0 million, purchase of assets for lease of $0.5 million and property, plant and equipment of $0.3 million.

Added

We have not set any specific target for the amount of bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional bitcoin purchases.

Removed

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements and supplementary data required by this item are included in Part IV, Item 15 of this annual report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.

Added

This overall strategy also contemplates that we may periodically sell bitcoin for general corporate purposes or in connection with strategies that generate tax benefits in accordance with applicable law, enter into additional capital raising transactions, including those that could be collateralized by our bitcoin holdings, and consider pursuing strategies to create income streams or otherwise generate funds using our bitcoin holdings. 65 Table of Contents The following table presents a roll-forward of our bitcoin holdings, including additional information related to our bitcoin purchases and change in fair value within the period (in thousands, other than bitcoin and price per bitcoin and unless otherwise noted). Source of Approximate Capital Average Used to Purchase Purchase Digital Assets Change in Digital Assets Approximate Price Per Bitcoin at Cost Fair Value at Fair Value Bitcoin Held Bitcoin (in $) Balance as of December 31, 2023 $ — $ — $ — — $ — Digital assets purchased — — — — — Balance as of March 31, 2024 — — — — — Digital assets purchased (a) 60,000 — 60,000 877 68,436 Change in fair value of the digital assets — (5,055) (5,055) — — Balance as of June 30, 2024 $ 60,000 $ (5,055) $ 54,945 877 $ 68,436 Digital assets purchased (b) 8,400 — 8,400 141 59,372 Change in fair value of the digital assets — 1,137 1,137 — — Balance as of September 30, 2024 $ 68,400 $ (3,918) $ 64,482 1,018 $ 59,372 Digital assets purchased (b) 121,300 — 121,300 1,280 94,755 Change in fair value of the digital assets — 28,851 28,851 — — Balance as of December 31, 2024 $ 189,700 $ 24,933 $ 214,633 2,298 $ 82,538 (a) Cash from operations.

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Other SMLR 10-K year-over-year comparisons

SMLR 10-K 2022 vs 2023