Semler Scientific

Kurta Law is investigating recommendations of Semler Scientific (SMLR) stock for their potential unsuitability for investors. Brokers must tailor their investment recommendations to an investor’s risk profile, and recommending an unsuitably risky stock violates securities regulations.

Brokerage firms frequently require investors to pursue FINRA arbitration rather than a suit in civil court. If you have concerns about your investment in Semler Scientific, contact (877) 600-0098 or email info@kurtalawfirm.com today to speak to a securities attorney for free.

What is Semler Scientific?

According to the prospectus, Semler Scientific, Inc. (SMLR) is a medical risk-assessment company that develops products for the early detection of health conditions. The prospectus states that these products also help healthcare providers more accurately identify a patient’s risk profile and “capture full reimbursement potential for their services.”

Per the company’s stock prospectus, it had a single product cleared by the FDA and on the market: FloChec, a blood flow test designed to help physicians identify blood flow obstructions, a sign of peripheral artery disease.

Semler Scientific was delisted from the Nasdaq Stock Market in November 2016.

What are the Risks Associated with Semler Scientific?

Semler Scientific describes many notable risks in its prospectus, ranging from its financial condition and business plan to the influences of market conditions. Investors should be aware that there may also be risks associated with its stock that are not disclosed in the prospectus.

Financial History and Uncertainty

Semler Scientific discloses that it has a history of operating losses since its inception, with losses exceeding $2.2 million and $2.7 million in 2013 and 2012, respectively. The company also held an accumulated deficit of more than $9.35 million as of December 31, 2013.

Further, the company has funded its operations “primarily through private placements of our equity securities and, to a limited extent, bank financing.” It notes that, because its profitability currently hinges on its single product, there is no guarantee that the company will become profitable.

Reliance on FloChec

Since the FloChec is the only product Semler Scientific had on the market at the time of the prospectus, its potential revenue depended entirely on its success. The company identifies several challenges in commercializing the FloChec:

• Differences between demographic and industry-related information and actual demand for the FloChec
• Expanding sales force in current and new territories, and achieving compliance with relevant regulations for these new areas
• Educating healthcare providers on the benefits of the product
• Demonstrating FloChec’s safety and efficacy as compared to existing alternatives

The company also notes that it will need to regularly provide software updates and other improvements to FloChec in order to gain and maintain acceptance by physicians.

Share Price Volatility and Limited Market

The prospectus notes that Semler Scientific’s stock price is “likely to be volatile,” influenced by factors related to the company’s performance as well as changes in the medical device market and healthcare payment systems.

Notably, the company also states that there was no public market for its stock before this offering, and an active trading market may never develop. This, along with the potential for price volatility, could make it difficult for investors to sell their shares for a profit and could limit their liquidity in general.

Aegis Capital Corp. Underwriting    

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

What Can I Do If I Suffered Losses?

If you lost money on your investment in Semler Scientific, consider contacting one of our experienced securities attorneys.  Kurta Law attorneys have 5-star reviews on Google and experience taking on cases of broker misconduct and unsuitable investment recommendations. Call (877) 600-0098 or email info@kurtalawfirm.com.