Semler Scientific Expands Bitcoin Holdings Significantly to Enhance Treasury Strategy

Semler Scientific, Inc. (Nasdaq: SMLR), a leading innovator in healthcare technology, recently announced a substantial increase in its Bitcoin (BTC) assets. Between December 5 and December 15, 2024, the company acquired an additional 211 bitcoins for a total expenditure of $21.5 million. This acquisition was funded through the proceeds from its at-the-market (ATM) offering, and Semler Scientific's total Bitcoin holdings now stand at 2,084 BTC, representing an aggregate investment of approximately $168.6 million.

The average cost per Bitcoin for these holdings, including fees and expenses, comes to about $80,916. Notably, this strategic move comes during a period where the company reported impressive BTC yields, peaking at 92.8%. This yield indicates a robust return relative to the company's Bitcoin treasury strategy, which aims to create shareholder value by integrating cryptocurrency into its financial assets.

Ongoing ATM Activities

Semler Scientific has been actively using its ATM offering as outlined in its S-3 Shelf registration statement which became effective on August 13, 2024. By entering into a Controlled Equity OfferingSM Sales Agreement with Cantor Fitzgerald & Co., the company has been allowed to periodically sell its common stock through this offering. Recently, on December 16, 2024, Semler filed a second prospectus supplement to offer an additional $50 million in shares under the existing ATM agreement, raising the total cap to $150 million. As of mid-December, the company managed to generate around $100 million in gross proceeds through the ATM offerings.

The Importance of BTC Yield

The BTC Yield has emerged as a crucial performance metric for Semler Scientific. From the beginning of October 2024 through mid-December 2024, the BTC yield was reported at 67.0%, increasing to an astonishing 92.8% when considered for the quarter post-adoption of the Bitcoin treasury strategy. This KPI effectively illustrates the relationship between Bitcoin holdings and the company’s assumed diluted shares outstanding, which include all outstanding stock option awards. Semler Scientific believes that BTC Yield provides investors with substantial insights into their decision to invest in Bitcoin as a part of their broader financial strategy.

Strategic Considerations

Adopting Bitcoin as a primary treasury asset is not without its challenges, as evidenced by market volatility and the intricate dynamics of cryptocurrency investments. However, Semler Scientific remains optimistic about its ability to sustain positive BTC Yield through operational cash flows that exceed fixed charges and other business expenses. The company acknowledges that its success in this area may also hinge upon favorable conditions in equity and debt financing markets.

Furthermore, it's essential to understand that the BTC Yield metric does not equate to traditional yield measures but serves as a narrow insight into how effectively the company uses its equity capital to acquire Bitcoin. Additionally, it's worth noting that ownership of Semler’s common stock does not confer ownership of the Bitcoin itself.

Semler Scientific's overall commitment to innovation, particularly in leveraging technology for healthcare solutions, remains evident. Their flagship product, QuantaFlo®, aims to address significant health issues such as peripheral arterial disease (PAD). With these ongoing developments in both Bitcoin investments and healthcare solutions, Semler Scientific is positioning itself strategically for future growth.

In conclusion, as Semler Scientific continues to navigate and expand its Bitcoin treasury strategy amidst an evolving financial landscape, stakeholders will be keenly observing how this initiative impacts its comprehensive approach to enhancing shareholder value.