- Semler Scientific filed to raise $500M in order to fund Bitcoin purchases, among other operations.
- The firm has around 3,192 BTC and may borrow from Coinbase to meet a $29.75M DOJ demand.
- Under regulatory shifts and financial strategy, Semler plans to employ Bitcoin as a long-term asset
The Nasdaq-listed healthcare technology firm Semler Scientific has filed a Form S-3 registration with the U.S. Securities and Exchange Commission. Semler Scientific seeks to offer up to $500 million in securities. The funding will go towards general corporate needs, including growing its Bitcoin holdings.
The filing lets the company issue common stock, debt securities, warrants, and units. Based on the shelf registration, the proposed offerings can occur over time. However, Semler has not stated exactly what date the sales will take place nor how much it will spend on Bitcoin.
Bitcoin Remains a Strategic Focus
Semler began buying Bitcoin in May 2024. Its current data shows that it owns 3,192 BTC acquired at $87,854 average. According to the company, it has spent $280.4 million on Bitcoin, currently worth about $266 million in terms of current market prices. Semler said conditions will be monitored before any further buys are made. However, it has not set a goal for how many Bitcoins it plans to hold. The company reaffirmed Bitcoin as a long-term strategy in its SEC filing.
The most recent Bitcoin purchase by the firm was on Jan. 11 and Feb. 3 when it purchased 871 BTC at an average price of $101,616 per coin. The firm has earned a spot in the corporate Bitcoin space, and is the 12th largest public holder globally.
Funds can be used by the company other than Bitcoin for expenses such as capital expenses, R&D, working capital and administrative expenses. In the time before it entered Bitcoin, the company, according to its chairman Eric Semler, was financially stable but undervalued.
DOJ Settlement and Coinbase Loan Agreement
The April 9 filing also includes a separate 8-K disclosure proposing a settlement with the U.S. Department of Justice. In principle, Semler agrees to pay $29.75 million to resolve False Claims Act claims. The claims involve marketing activities regarding the QuantaFlo diagnostic devices. In 2017, the company was served a civil investigative demand concerning Medicare reimbursement violations. Shortly after Semler’s large Bitcoin purchase in early February, talks started for a settlement.
Semler revealed that the proposed DOJ settlement would rely on borrowed funds. The company entered into a master loan agreement with Coinbase, using its Bitcoin holdings as collateral. This proceeds from the agreement, and the cash on hand will be used to pay the potential settlement amount.
Following the filing, Eric Semler commented in a social media post, “We have reached a settlement in principle, EXCITED TO BUY MORE BTC!”
Future Outlook and Regulatory Context
Semler noted that it plans to continue with its strategy of including Bitcoin as a part of it, while the DOJ settlement is subject to final approval. In the S-3 filing, the company pointed out that Bitcoin gives protection against inflation and global financial instability.
Additionally, Semler’s shelf registration gives it the flexibility to raise money as market conditions change. It can issue securities when needed without further registration procedures. However, the corporate need and investor interest will drive the specific issuance plans.
This move also comes as regulators look into the corporate adoption of digital assets. Various companies are under the SEC’s scrutiny over how they manage crypto-related disclosures. Semler said that the firm would continue to evaluate the risks of Bitcoin investment.
Semler’s share price closed at $34.40 on Tuesday, up 0.41% for the day. The stock remains down 37% year-to-date, according to Google Finance data. The company has not disclosed the expected timing for its next Bitcoin purchase.
