Good afternoon, everyone. Thank you for joining us on our first quarter 2023 results call.

Q1 2023 performance represents the highest quarterly revenue and pre-tax net income that Semler has ever achieved. Now, I would like to introduce to you, Renae Cormier, please [ph] take it away.

Thank you, Doug. Good afternoon and thank you for joining us today.

In addition to Doug with me are Andy Weinstein, SVP, Finance and Accounting; and Dennis Rosenberg, Chief Marketing Officer. Doug, Andy, Dennis and I will be available for Q&A following today’s prepared remarks.

Last month, we appointed two new independent directors to our board, Eric Semler and William Chang. Both are longstanding large stockholders, who bring deep expertise in capital allocation, corporate governance, strategic planning and investment management to our board.

We are very pleased to have them taking a more active role at Semler. They plan on working together with the board and management, while intently focusing on seeking to unlock stakeholder value.

To this end, the board has appointed Doug as our Interim CEO. We are delighted that he has changed his near-term plans in order to return to our company until a search for his successor can be started and completed.

Now, I will turn it over to Andy to describe our financial performance for the first quarter 2023. Andy?

Thanks, Renae. Please refer to the financial results described in the press release that was distributed at market close today.

We reported record high quarterly revenues and pre-tax net income in the first quarter of 2023. We are pleased to see revenue growth at both our fixed fee and variable fee customers in the first quarter of 2023 compared to the first quarter of 2022.

For the first quarter ended March 31, 2023, revenue was $18.2 million, that’s an increase of 30% compared to the corresponding quarter in 2022. In Q1 2023, fixed fee revenues were $9.3 million, an increase of 18% period-over-period.

We continue to grow revenues at our largest fixed fee customer as well as at other existing and new customers. We saw increased interest in our products from hospitals, major pharmaceutical and other retail chains, and delegated medical groups.

In Q1 2023, variable fee revenues were $8.6 million, which represents a 46% increase period-over-period. In Q1 2023, equipment and other revenue was $340,000, an increase of 19% period-over-period.

Because the majority of equipment sales are to variable fee customers, we believe it is a sign of strength in the fee per test market. In the first quarter of 2023, our 2 largest customers, including their related affiliates, comprised 40.9% and 33.5% of quarterly revenues.

These same customers represented 31.7% and 39.2% respectively of quarterly revenue in Q1 2022. In Q1 2023, operating expenses which includes cost of revenue were $12 million, an increase of 18% period-over-period.

Operating expenses increased primarily due to increased headcount, wage inflation and increased professional fees. In Q1 2023, our pre-tax net income was $6.6 million, an increase of $2.7 million, or 68% period-over-period.

In Q1 2023, net income was $5 million, or $0.74 per basic share and $0.63 per fully diluted share, which is an increase of 48% period-over-period. Weighted average basic share count was 6.7 million for Q1 2023 and weighted average diluted share count was 7.9 million.

There were no shares repurchased this quarter. We have $15 million remaining under the Board authorized stock repurchase program.

We had cash, cash equivalents and short-term investments at March 31, 2023 of $43 million, approximately $37.7 million of which is held in short-term U.S. treasury bills.

At March 31, 2023, headcount was 134 employees compared to 127 at the end of the fourth quarter, 2022. We expect to file our annual report on Form 10-Q on or around May 12, 2023.

Now, I will ask Dennis to provide more Color about factors at play in our market and our business activities. Dennis?

Thanks, Andy. I first want to reiterate our continuing strong belief in the clinical benefit and importance of the early diagnosis of chronic diseases as a standard of care.

As you know, last year, two large independently conducted peer-reviewed studies by QuantaFlo customers were published that strongly underscore the clinical benefit of identifying asymptomatic peripheral arterial disease, or PAD, patients in order to put preventive measures in place. Separately, there is an additional future revenue opportunity for Semler using QuantaFlo as an aid to assess heart dysfunction, or HD.

A clinical study was published in late February 2023 in the Journal of Preventive Medicine using QuantaFlo as an aid to assess heart dysfunction. Healthcare providers now have a point of care low cost accurate means for detecting potential heart dysfunction in the primary care setting before overt signs or symptoms present.

A medical assistant performs the test in a primary care setting, similar to how one uses QuantaFlo for PAD. Results were that our test showed a statistically significant correlation with a p-value of less than 0.01, using transthoracic echocardiography as a gold standard to diagnose heart failure.

The spectrum of heart dysfunction includes heart failure. Heart failure affects about 6.5 million adults in the U.S.

And the lifetime risk of heart failure is estimated to be 1 in 5 at 40 years of age. Published studies have shown there are over 1 million hospitalizations per year in the United States from heart failure, and the annual cost of care exceeds $30 billion.

Mortality rates after hospitalization for heart failure are 31% within 1-year after diagnosis. The number of patients with asymptomatic heart disease exceeds the number of patients with symptomatic heart disease.

Like PAD, asymptomatic HD patients are not routinely tested in the current standard of care, because echocardiography is not a screening test. This test is performed by referral and a specialized lab requires a trained ultrasonographer to perform the test, takes about an hour and must be interpreted by a cardiologist.

As a specialized procedure echocardiography is not practical to be performed in primary care offices or in the home setting. The sensitivity, specificity and accuracy of QuantaFlo HD all were greater than 88% compared to using echocardiography as a gold standard as the methodology for identifying heart failure.

The goal is for healthcare providers to have a better chance of encouraging patients to adopt healthier lifestyles and optimize proven guideline directed medical therapies earlier with the potential of improving long-term health outcomes. Patients that have been identified as positive with QuantaFlo HD will need to have additional diagnostic tests to determine the underlying type of heart dysfunction.

Currently, there are CPT reimbursements for echocardiography and HCC diagnostic codes for heart dysfunction. For those of you who have been with Semler for a long time, you may recall the prolonged lead times for many of our current customers with the initial adoption of QuantaFlo for PAD.

We continue to remain in discussion with customers of all sizes and expect the market uptake process for HD will take time. Our sales and marketing goals are to focus on growing our business.

These goals include further establish our QuantaFlo for PAD product as a standard of care in the industry, given the proven clinical benefits of early diagnosis and preventive treatment. To make new additions to our customer base, including diversifying our customer base further to hospitals, including the VA, value-based care providers and major pharmaceutical and other retailers, to expand orders from existing customers, to introduce QuantaFlo as an aid to assess heart dysfunction or HD to our customers.

And finally, we aim to begin to more broadly market and install Insulin Insights. Now, I will turn it back over to Renae.

Thank you, Dennis. As many of you are aware, CMS issued the 2024 final rate announcement in late March 2023, essentially HCC payments for vascular disease without complications is being phased out over a period of 3 years.

This decision might have an effect on our PAD testing business, because many of our customers rely on HCC payments to support PAD testing programs for Medicare Advantage patients, which includes asymptomatic patients. We believe that QuantaFlo provides important clinical value to our customers in terms of better patient care and potential for future cost savings in identifying positive PAD patients.

We believe that earlier diagnosis will lead to earlier initiation of preventative interventions and treatment that may save lives and consequently lower healthcare expenditures. To date, our customers continue using our product for PAD testing unabated, but it’s too early to make any predictions about future customer behavior.

Moving on, our R&D goals continue to be to upgrade the existing products and data services to commercialize other internally developed services and products, and find other potential investments to diversify our products pipeline, such as the recent investments we have made in the diabetes space in Mellitus and Monarch Medical. As you know, diabetes is a large market with over 35 million people diagnosed in the United States, growing at 4% to 5% per year.

In addition, 96 million people have pre-diabetes. Mellitus’ platform Insulin Insight offers an algorithm that helps primary care physicians titrate insulin for type 2 diabetic patients.

We have exclusive marketing rights in the United States and Puerto Rico. Type 2 diabetes on insulin represented a difficult patient population to manage as these patients have found oral therapy alone has not been enough to adequately control their blood glucose.

Insulin, if incorrectly dosed, can cause complications that can lead to emergency room visits and unplanned hospitalization. Primary care physicians find value with Insulin Insights, because by appropriately easily adjusting insulin levels in type 2 diabetic patients, patients who have less risk of adverse complications with insulin use.

Have improved control of their blood glucose levels, which leads to fewer complications from diabetes and overall better clinical outcomes. In addition, plans have the potential to save on total cost of care and medication costs, as well as achieve higher [3-star] [ph] quality measures as patients have improved HbA1c levels demonstrating that their diabetes is under good control.

And initial installations and new sales continue to make progress. Revenues have started, but are not yet material to date.

In closing, I want to emphasize that despite policy changes in market forces beyond our control, our customers have always valued the clinical benefits of our products, such as earlier diagnosis of chronic cardiovascular conditions and simplified diabetes management. As healthcare continues to evolve, our technology remains a valuable asset for patients, physicians, facilities and payers.

Because we’ve developed technology that is portable and accessible, we are also part of the solution to reduce health inequities that currently exist in cardiovascular disease. Our management team has the experience and resilience to make appropriate adjustments to our ongoing growth strategy as market conditions change.

We are confident that our mission to improve clinical outcomes and reduce total cost of care in patients with cardiovascular disease and diabetes will remain relevant to our stakeholders. We are enthusiastic about the future and the growth potential of our QuantaFlo and Insulin Insights product line.

Thank you for your interest in the company and your continuing support. Now, operator, please open the line.

Doug, Andy, Dennis and I will be happy to address your question.

Yes, okay. Well, thank you.

Sorry, we don’t have questions for you today. Please reach out to us if you do have questions.

And thank you for your time.