Financial Performance - Total revenues for the year ended December 31, 2024, were $56.3 million, a decrease of 17.5% from $68.2 million in 2023[26]. - Net income for 2024 was $40.9 million, compared to $20.6 million in 2023, representing a significant increase of 98.5%[26]. - In the year ended December 31, 2024, the two largest customers accounted for 43.1% and 27.6% of revenues, compared to 36.0% and 34.9% in the prior year[74]. - Two customers accounted for 43.1% and 27.6% of revenues for the year ended December 31, 2024, indicating a significant revenue concentration risk[194]. - The company is experiencing decreased usage of its products due to the current CMS reimbursement landscape, negatively impacting revenues[173]. - The company needs to generate significant revenues to maintain profitability in its healthcare solutions business, with potential declines in sales adversely affecting financial performance[197]. Bitcoin Holdings and Strategy - As of December 31, 2024, the company held approximately 2,298 bitcoins at an average purchase price of $82,538 per bitcoin, totaling approximately $189.7 million[32]. - By February 14, 2025, the company had acquired a total of approximately 3,192 bitcoins at an aggregate purchase price of $280.4 million, with an average purchase price of approximately $87,854 per bitcoin[33]. - The company adopted bitcoin as its primary treasury reserve asset in May 2024, utilizing cash flows from operations and capital raising transactions to acquire bitcoin[27]. - The company did not sell any bitcoin during 2024, indicating a long-term holding strategy[32]. - The company holds all Bitcoin in custodial accounts with U.S.-based custodians, including Coinbase Custody and NYDIG, as of December 31, 2024[57]. - The company intends to diversify its custodial arrangements to mitigate counterparty risk associated with Bitcoin holdings[60]. - The emergence of other digital assets, including CBDCs, poses risks to Bitcoin's price and the company's financial condition[52]. - Ongoing regulatory scrutiny of digital assets may impact the company's bitcoin acquisition strategy and market participation[115]. Regulatory Environment - The company is subject to extensive regulation by the FDA, governing various aspects of product development and safety[122]. - To commercially distribute QuantaFlo or any future medical device, prior 510(k) clearance or PMA application approval is required from the FDA[124]. - The 510(k) clearance pathway typically takes between three to 12 months, but can take significantly longer, and clearance is not guaranteed[125]. - A PMA application must be supported by extensive data, including technical information, preclinical studies, and clinical trials, and the review process generally takes between one to three years[126][127]. - The FDA is required to classify de novo classification requests within 120 days, although actual review times may be longer[129]. - After a device is marketed, it is subject to numerous regulatory requirements, including establishment registration and device listings with the FDA[137]. - Non-compliance with FDA regulations can result in severe enforcement actions, including fines, recalls, and withdrawal of approvals[142]. - The company is at risk of civil suit by the DOJ related to claims for reimbursement concerning the QuantaFlo device, which could adversely affect its business[149]. - The company has been cooperating with civil investigative demands from the DOJ since 2017, which may lead to significant legal and financial repercussions[149]. - The Department of Justice (DOJ) is investigating improper reimbursement claims related to the company's QuantaFlo device, which could result in civil lawsuits and financial damages[217]. - The company faces ongoing scrutiny from government regulators, which has led to increased investigations and potential penalties in the medical device industry[156]. Product Development and Market Strategy - The company is seeking a new 510(k) clearance from the FDA for expanded use of its product QuantaFlo, aimed at diagnosing additional cardiovascular diseases[25]. - QuantaFlo is a patented and FDA-cleared vascular testing product that provides a four-minute in-office blood flow test, primarily marketed to healthcare providers and insurance plans[71]. - The average routine usage of QuantaFlo ranges from a few tests per week to 10 tests per day, with an expected average lifetime of at least three years[73]. - QuantaFlo aims to provide a cost-effective solution for healthcare providers, with a focus on recurrent revenue models targeting insurance plans and medical personnel[88]. - The company is exploring additional product offerings through marketing, distribution, and licensing arrangements to expand its chronic disease management solutions[88]. - The company is developing several updates and modifications to QuantaFlo, focusing on cost-effective wellness solutions for its growing customer base[95]. - The company is exploring potential new product and service offerings that may incorporate current or new technology[95]. - The company has invested in complementary products, including a test for early Alzheimer's disease and a technology-enabled approach to inpatient glycemic management[84]. Competitive Landscape - The principal competitor for QuantaFlo is the standard blood pressure cuff ABI device, which ranges in price from $2,500 to $20,000[92]. - QuantaFlo is the only actively marketed vascular testing product, expected to account for the vast majority of revenues for the next several years[175]. - The company may not achieve broad market acceptance for QuantaFlo unless it successfully educates healthcare providers on its benefits[176]. - The company faces risks related to reimbursement from third-party payors, which is crucial for the acceptance of QuantaFlo and future products[181]. Compliance and Internal Controls - The company has experienced material weaknesses in its internal control over financial reporting, which could have adverse effects if additional weaknesses are identified in the future[219]. - The company has remediated prior material weaknesses but cannot assure that new weaknesses will not arise, which could negatively impact its financial reporting[220]. - Increased government enforcement actions may lead to heightened scrutiny of the company's practices and those of its customers, potentially affecting revenue[217]. - The company is at risk of reputational harm and diminished profits due to potential legal actions and compliance issues related to healthcare regulations[216]. Market Dynamics - The total market capitalization of bitcoin was approximately $1.9 trillion as of December 31, 2024, compared to approximately $18.0 trillion for gold[28]. - Bitcoin remains the largest digital asset by market capitalization, with Ethereum being the second largest as of the report date[51]. - Stablecoins have rapidly grown as an alternative to Bitcoin, serving as a medium of exchange and store of value, particularly on trading platforms[51]. - The annual cost of care for heart failure in the U.S. exceeds $30 billion, with over one million hospitalizations per year[78]. - The percentage of individuals covered by managed care programs is expected to grow in the United States over the next decade, impacting reimbursement dynamics[145]. - Changes in the Health Care Reform Law could negatively affect business prospects, particularly if incentives for identifying sicker patients are removed[214]. - The Health Care Reform Law encourages collaborative efforts among healthcare providers, which may lead to reduced medical device acquisitions and consolidation of suppliers[215].

Group 1: Bitcoin's Mainstream Acceptance - Bitcoin has gained legitimacy and mainstream status, with the SEC acknowledging it through spot Bitcoin ETFs like iShares Bitcoin Trust by BlackRock [1] - Companies like MicroStrategy have successfully used Bitcoin to enhance shareholder value, with its stock soaring 20x since 2020 [1] Group 2: Companies Embracing Bitcoin - More companies outside the tech sector are replacing cash reserves with Bitcoin or investing in it [3] - Alliance Resource Partners, the largest coal producer in the Eastern U.S., is diversifying into Bitcoin mining, having mined over $30 million worth of Bitcoin by April 2024 [6][11] - Semler Scientific adopted Bitcoin as its primary treasury reserve asset in May 2024, leading to a significant increase in its stock price from $26 to a peak of $81.56 [15] - Mogo Inc. approved an initial investment of up to $5 million in Bitcoin and Bitcoin ETFs, which initially boosted its stock price [21] Group 3: Financial Performance and Outlook - Alliance Resource Partners reported a revenue of $2.4 billion and net income of $360.9 million for the full year 2024, with a forecast of coal sales volumes between 32.25 million to 34.25 million tons for 2025 [7][8] - Semler Scientific holds 3,192 Bitcoins valued at an average price of $87,854 each, with a market capitalization growth of over 200% since adopting Bitcoin [19][20] - Mogo's Q3 2024 revenues rose 8.28% YoY to $12.69 million, with significant growth in its payment solutions business [22][23]

Financial Data and Key Metrics Changes - Total revenues in Q4 2024 were $12.4 million, down approximately 18% compared to Q4 2023 [22] - Operating expenses in Q4 2024 were $8.9 million, a decrease of 29% year-over-year [23] - Net income for Q4 was $29.2 million or $3.64 per basic share, compared to net income of $4.2 million or $0.62 per basic share in Q4 2023 [25] Business Line Data and Key Metrics Changes - The company achieved record cash generation of over $24 million in 2024 from healthcare operations [9] - The two largest customers comprised 39% and 31% of quarterly revenues in Q4 2024 [22] - The company is pursuing a new 510(k) clearance for a product extension of its QuantaFlo technology [10][18] Market Data and Key Metrics Changes - The company is now the tenth largest corporate holder of Bitcoin, owning 3,192 bitcoins valued at over $300 million [8] - The market capitalization has grown by more than 200% since adopting Bitcoin as a treasury strategy [8] Company Strategy and Development Direction - The company adopted Bitcoin as its primary treasury reserve asset in May 2024, becoming the second U.S. public company to do so [6] - The long-term vision includes expanding product offerings to incorporate additional cardiovascular applications [17] - The company aims to minimize declines in QuantaFlo revenue while supporting growth in operations related to other cardiovascular diseases [34] Management's Comments on Operating Environment and Future Outlook - Management expects further pressure on revenues in 2025 due to the phasing of the 2024 CMS rate announcement [22] - There is excitement about strong government support for Bitcoin, particularly the repeal of SAB 121, which may encourage large public companies to add Bitcoin to their balance sheets [36] Other Important Information - The company has invested $280 million in Bitcoin, viewing it as a highly accretive move [12] - The convertible senior notes offering was upsized from $75 million to $100 million due to strong investor demand [11] Q&A Session Summary Question: Why did you decide to do the convertible note offering? - The company decided to raise capital in the convertible market as it is a cheaper source of funding and less dilutive to stockholders, allowing for a large amount of capital to be raised quickly [29] Question: What's driving the underlying trends in the business and what do you expect for 2025? - Despite government decisions affecting PAD payment, the company continues to add new clients for QuantaFlo software licenses and aims to minimize revenue declines while supporting growth in cardiovascular disease operations [32][34] Question: What are your expectations from the new government in Washington, D.C. regarding crypto? - Management is encouraged by the strong government support for Bitcoin and believes that the repeal of SAB 121 may lead to increased custody of Bitcoin by major banks, potentially increasing the likelihood of large public companies adding Bitcoin to their balance sheets [36]

Financial Results - Semler Scientific, Inc. announced preliminary unaudited financial information for Q4 2024, with results still subject to change[5] - The financial closing procedures for Q4 and the year ended December 31, 2024, are not yet complete, indicating potential discrepancies in final results[6] - The preliminary financial information does not provide a complete understanding of Semler Sci's results and should not be viewed as a substitute for full financial statements[6]

Core Viewpoint - Semler Scientific, Inc. has made significant progress in its bitcoin acquisition strategy, reporting substantial holdings and a high BTC Yield as a key performance indicator [1][4]. Group 1: Bitcoin Acquisition and Holdings - Between January 11, 2025, and February 3, 2025, Semler Scientific acquired 871 bitcoins for $88.5 million, with an average purchase price of $101,616 per bitcoin [2]. - As of February 3, 2025, the company holds a total of 3,192 bitcoins, acquired for an aggregate of $280.4 million at an average price of $87,854 per bitcoin [2]. Group 2: BTC Yield Performance - From January 1, 2025, to February 3, 2025, Semler Scientific's BTC Yield was reported at 21.9% [3]. - For the period from July 1, 2024, to February 3, 2025, the BTC Yield was significantly higher at 152.2% [3]. Group 3: Strategic Insights - The company uses BTC Yield as a KPI to evaluate the effectiveness of its bitcoin acquisition strategy, which it believes is beneficial to stockholders [4][8]. - The BTC Yield metric is intended to provide investors with insights into the company's decision to fund bitcoin purchases through the issuance of additional shares [4][8]. Group 4: Company Background - Semler Scientific is recognized for developing technology products and services aimed at evaluating and treating chronic diseases, with its flagship product being QuantaFlo®, a rapid point-of-care test for cardiovascular diseases [18]. - The company has adopted bitcoin as its primary treasury asset, indicating a strategic shift towards cryptocurrency investment [18].

Core Viewpoint - Semler Scientific, Inc. has announced an upsized offering of $85 million in 4.25% convertible senior notes due 2030, increasing from a previously announced $75 million, with the offering expected to close on January 28, 2025 [1] Key Elements of the Transaction - The notes will be senior unsecured obligations accruing interest at 4.25% per year, maturing on August 1, 2030, with an initial conversion rate of 13.0826 shares per $1,000 principal amount, equating to a conversion price of approximately $76.44 per share, representing a 25% premium over the last reported sale price on January 23, 2025 [2][3] - Semler Scientific may redeem the notes starting August 4, 2028, if certain stock price conditions are met, at a redemption price equal to 100% of the principal amount plus accrued interest [3] - In the event of a "fundamental change," noteholders may require Semler Scientific to repurchase their notes at 100% of the principal amount plus accrued interest [4] Use of Proceeds - The estimated net proceeds from the offering will be approximately $81.4 million, or $95.8 million if the option for additional notes is fully exercised, with approximately $6.6 million allocated for capped call transactions and the remainder for general corporate purposes, including Bitcoin acquisition [5] Capped Call Transactions - Capped call transactions have been entered into to offset potential dilution from the conversion of notes, with an initial cap price of approximately $107.01 per share, representing a 75% premium over the last reported sale price on January 23, 2025 [7][8] - The option counterparties may engage in derivative transactions and purchase Semler Scientific's common stock, which could influence the market price of the stock and the notes [9][10] Company Overview - Semler Scientific, Inc. specializes in technology products and services for healthcare providers, particularly in combating chronic diseases, with its flagship product QuantaFlo® aiding in the diagnosis of cardiovascular diseases [13]

Core Insights - Semler Scientific, Inc. announced preliminary unaudited financial results for Q4 2024, highlighting significant unrealized gains from Bitcoin holdings [1][2] - The company will provide full financial results and an update on Bitcoin holdings on February 18, 2025 [1][4] Financial Performance - Preliminary revenues are estimated between $12.1 million and $12.5 million [8] - Income from operations is projected to be between $3.4 million and $3.7 million [8] - An unrealized gain from the change in fair value of Bitcoin holdings is approximately $28.9 million [8] - Cash, restricted cash, and cash equivalents as of December 31, 2024, are approximately $9.0 million [8] Bitcoin Holdings - As of January 17, 2025, Semler Scientific holds 2,321 bitcoins, acquired for a total of $191.9 million at an average price of $82,689 per bitcoin [3]

Core Viewpoint - Semler Scientific, Inc. plans to offer $75 million in convertible senior notes due 2030, with an option for an additional $15 million, to qualified institutional buyers, subject to market conditions [1][2] Group 1: Offering Details - The notes will be senior unsecured obligations, accruing interest payable semiannually, with conversion options including cash, common stock, or a combination [2] - The interest rate and other terms will be determined at the time of pricing the offering, which is subject to market conditions [2] Group 2: Use of Proceeds - A portion of the net proceeds will be used for capped call transactions, while the remainder will be allocated for general corporate purposes, including the acquisition of bitcoin [3] Group 3: Capped Call Transactions - Semler Scientific expects to enter into capped call transactions to offset potential dilution from the conversion of the notes, with adjustments based on the number of shares underlying the notes [4] - If additional notes are purchased, further capped call transactions are anticipated [4] Group 4: Market Activity - The option counterparties may engage in derivative transactions and purchase common stock, which could influence the market price of Semler Scientific's common stock and the notes [5][6] Group 5: Company Overview - Semler Scientific is focused on developing technology products for healthcare providers, with its flagship product, QuantaFlo®, aiding in the diagnosis of cardiovascular diseases [9] - The company has adopted bitcoin as its primary treasury asset, indicating a strategic investment approach [9]

Company Strategy - Semler Scientific announced a Bitcoin Treasury strategy in May 2024 and allocated its entire treasury into BTC, holding through volatile and bearish BTC price action [3] Investment Philosophy - The investment philosophy focuses on deep fundamentals, impactful narratives, and Austrian economics, with a long-horizon research emphasis on digital assets, macro, and general value opportunities [3] - Short-horizon research concentrates on options and volatility for income generation and hedging [3] Industry Focus - The company has a global, long-run macro view as the basis for investment considerations, particularly in digital assets and macro trends [3]

Company Updates - Semler Scientific, Inc. has acquired 211 bitcoins for $21.5 million between December 5, 2024, and December 15, 2024, at an average price of $101,890 per bitcoin, resulting in a total holding of 2,084 bitcoins valued at approximately $168.6 million [2][4] - The company has filed a second prospectus supplement to its S-3 Shelf to offer an additional $50 million of shares under its existing ATM offering, increasing the total amount offered to $150 million [4][22] - As of December 13, 2024, Semler Scientific has generated approximately $100 million in gross proceeds from its ATM offering [4] Bitcoin Activity - Semler Scientific's BTC Yield was reported at 67.0% from October 1, 2024, to December 15, 2024, and 92.8% from July 1, 2024, to December 15, 2024 [5][12] - The BTC Yield is used as a key performance indicator (KPI) to assess the effectiveness of the company's bitcoin acquisition strategy, which is believed to be beneficial to stockholders [6][12] Financial Metrics - The company reported its Basic Shares Outstanding as 6,987,000 on June 30, 2024, increasing to 9,267,000 by December 15, 2024 [9] - The Assumed Diluted Shares Outstanding increased from 8,086,000 on June 30, 2024, to 9,967,000 by December 15, 2024 [9][11]