Semler Scientific Files $500M Offering to Buy Bitcoin, Settle DOJ Claims

Semler Scientific, a Nasdaq-listed healthcare technology firm, has filed a registration statement with the U.S. Securities and Exchange Commission to offer $500 million in securities. The primary goal of this offering is to fund the purchase of bitcoin and other corporate purposes. The S-3 statement, filed on Tuesday, outlines the company's intention to offer and sell securities up to an aggregate value of $500 million across one or more offerings. These securities may include debt securities, common stocks, units, and warrants.

The proceeds from this offering will be used for general corporate purposes, including the acquisition of bitcoin, capital expenditures, research and development, and administrative expenses. Although Semler has not specified the exact allocation of the proceeds, the filing clearly indicates the company's commitment to advancing its bitcoin treasury strategy. Semler views its bitcoin holdings as long-term investments and plans to continue accumulating bitcoin. The company has not set a specific target for the amount of bitcoin it seeks to hold and will monitor market conditions to determine future purchases.

Since adopting its bitcoin strategy in May 2024, Semler has accumulated 3,192 BTC, valued at approximately $266 million. The company's last acquisition of 871 BTC occurred between January 11 and February 3 at an average price of $101,616 per bitcoin. Semler reports acquiring its total holdings of 3,192 BTC for an aggregate of $280.4 million and an average purchase price of $87,854 per bitcoin. Based on the current bitcoin market price, the company's bitcoin holdings reflect an unrealized loss of about $14 million.

In a separate 8-K filing on Tuesday, Semler disclosed an agreement-in-principle with the U.S. Department of Justice to pay $29.75 million. This settlement aims to resolve claims related to False Claims Act violations in the marketing tests on certain devices. The False Claims Act prohibits knowingly submitting fraudulent claims for payment to the federal government. Semler received a civil investigative demand from the DOJ in 2017 over possible violations related to the marketing tests of photoplethysmography devices for Medicare reimbursement.

Eric Semler, the founder and chairman of the company, expressed excitement about the settlement, stating, "We have reached a settlement in principle, excited to buy more BTC!" However, the company noted in the filing that there is no guarantee that a final agreement will be reached with the DOJ. Semler's 8-K filing also revealed that it has entered into a master loan agreement with a crypto exchange, allowing the company to borrow cash and crypto assets using its bitcoin holdings as collateral. If Semler is able to reach a settlement with the DOJ, the company intends to borrow under the master loan agreement and use the proceeds, along with its cash on hand, to pay the proposed settlement.