Semler Scientific(SMLR) - 2025 Q1 - Quarterly Report

Financial Performance - Revenues for Q1 2025 were $8,835,000, a decrease of 44$15,903,000 in Q1 2024[23] - Net loss for Q1 2025 was $64,702,000, compared to a net income of$6,073,000 in Q1 2024, resulting in a basic net loss per share of $6.74[23] - Total operating expenses surged to$39,936,000 in Q1 2025, compared to $8,927,000 in Q1 2024, primarily due to a litigation contingency of$29,750,000[23] - For the three months ended March 31, 2025, total revenues were $8.8 million, a decrease of 44.2$15.9 million in the same period in 2024[128] - The net loss for the three months ended March 31, 2025, was $64.7 million, compared to a net income of$6.1 million in the same period in 2024[128] - Total operating expenses for the same period were $39.9 million, an increase of$31.0 million or 347% compared to $8.9 million in the prior year, with operating expenses as a percentage of revenues rising to 452$9,737,000 as of March 31, 2025, up from $8,819,000 at the end of 2024[25] - Total assets rose to$293,445,000 as of March 31, 2025, compared to $239,828,000 at the end of 2024[25] - As of March 31, 2025, the Company held cash deposits of$6,195, which increased from $5,314 as of December 31, 2024[69] - The Company’s intangible digital assets increased to$263,504,000 as of March 31, 2025, compared to $214,633,000 at the end of 2024[25] - The fair value of the Company's intangible digital assets increased from$214,633 to $263,504 during the three months ended March 31, 2025, despite an unrealized loss of$41,829[65] Liabilities and Contingencies - Current liabilities increased significantly to $35,667,000 in Q1 2025, compared to$6,313,000 in Q4 2024[25] - The Company has a litigation contingency liability of $29,750 booked as of March 31, 2025, related to settlement discussions with the U.S. Department of Justice[97] - The company recorded a contingent liability of$29.8 million related to a proposed settlement with the DOJ as of March 31, 2025[135] - The company had negative working capital of approximately $17.2 million due to the contingent liability related to the DOJ settlement[147] Investments and Financing Activities - The company purchased digital assets worth$90,700,000 in Q1 2025, indicating a strategic investment in cryptocurrencies[30] - Proceeds from the issuance of debt amounted to $100,000,000 in Q1 2025, reflecting a significant financing activity[30] - The company generated$90.1 million of net cash from financing activities during the three months ended March 31, 2025, primarily from the issuance of 4.25% convertible senior notes[154] - The Company entered into a purchase agreement for the sale of $100,000 aggregate principal amount of 4.25$95,984, net of debt issuance costs of $4,016[88] Stock and Shareholder Information - The Company has authorized 50,000,000 shares of common stock, with each share entitled to one vote[98] - As of March 31, 2025, the Company had issued and sold a total of 2,237,988 shares of common stock for aggregate gross proceeds of approximately$119,715[100] - The Company matched $97 and$64 for employee 401(k) deferrals for the three-month periods ended March 31, 2025, and 2024, respectively[95] - The initial conversion price of the 2030 Senior Notes is approximately $76.44 per share, representing a premium of about 25.0$280,400 and a fair value of $263,504 as of March 31, 2025[64] - The company reported a fair value of 2,298 bitcoins at$214.6 million as of December 31, 2024, compared to the current holdings[196] - The company anticipates that the proportion of total assets represented by bitcoin holdings will increase in the future, leading to greater earnings volatility[197] - The company's bitcoin treasury strategy exposes it to significant volatility, with bitcoin trading between $50,000 and$109,000 in the past year[173] - The company faces significant risks due to the concentration of its bitcoin holdings, which limits risk mitigation opportunities and could lead to pronounced impacts on financial condition with any significant declines in bitcoin prices[211] Regulatory and Compliance Issues - The company is subject to enhanced regulatory scrutiny regarding bitcoin-related transactions, which may impose additional compliance requirements[205] - The company faces risks from potential regulatory actions that could impact the price and transferability of bitcoin[186] - The emergence of alternative digital assets, including stablecoins and central bank digital currencies (CBDCs), could negatively impact the price of bitcoin and adversely affect the company's financial condition[215] - The company has not registered the notes or shares of common stock issuable upon conversion under the Securities Act, limiting their offer and sale in the U.S.[163] Accounting and Disclosure - The Company adopted ASU 2023-09 effective January 1, 2025, which requires enhanced disclosures surrounding income taxes[43] - The Company is currently evaluating the impact of new accounting guidance issued by FASB in November 2024 on its disclosures[41] - The adoption of ASU 2023-08 is expected to materially impact the company's financial results, increasing volatility and affecting the carrying value of bitcoin on the balance sheet[181] - The company maintains effective disclosure controls and procedures as of March 31, 2025, ensuring timely financial reporting[168]