Semler Scientific® Reports Second Quarter 2024 Financial Results and Additional Bitcoin Purchases

SANTA CLARA, Calif., Aug. 5, 2024 /PRNewswire/ -- Semler Scientific, Inc. (Nasdaq: SMLR), a pioneer in developing and marketing technology products and services to healthcare providers to combat chronic diseases, today reported financial results for the second quarter ended June 30, 2024. In addition, the Company announced the purchase of an additional 101 bitcoins for an aggregate amount of $6.0 million. Since announcing the adoption of a bitcoin treasury strategy on May 28, 2024, the Company has purchased 929 bitcoins for a total of $63.0 million.

"We are pleased to report strong income from operations of $5.4 million in the second quarter," said Doug Murphy-Chutorian, MD, chief executive officer of Semler Scientific. "We remain laser focused on acquiring and holding bitcoin, while supporting and expanding our healthcare business."

"We are very encouraged by the strong positive reaction to our recent announcement of a bitcoin treasury strategy," said Eric Semler, chairman of Semler Scientific. "We continue to firmly believe that bitcoin is a compelling investment and plan on acquiring additional bitcoins with our cash from operations, as well as with cash generated from the sale of securities under our $150.0 million shelf registration statement, once effective."

FINANCIAL RESULTS

For the second quarter ended June 30, 2024, compared to the corresponding period of 2023, Semler Scientific reported:

    --  Revenues of $14.5 million, a decrease of $4.1 million, or 22%, compared
        to $18.6 million.
    --  Cost of revenues of $1.3 million, an increase of $0.1 million, or 3%,
        compared to $1.2 million
    --  Total operating expenses, which include cost of revenues, of $9.1
        million, a decrease of $2.3 million, or 20%, compared to $11.4 million.
    --  Income from operations of $5.4 million, a decrease of $1.8 million, or
        25%, compared to $7.2 million.
    --  Pre-tax net income of $1.1 million (which includes the change in fair
        value on our bitcoin holdings of negative $5.1 million), a decrease of
        $6.6 million, or 85%, compared to $7.7 million.
    --  Income tax expense of $1.1 million, or an effective tax rate of 99%,
        compared to $1.8 million, or an effective tax rate of 23%.
    --  Net income of $11 thousand, or breakeven, a decrease of $5.9 million, or
        100%, compared to net income of $5.9 million, or $0.88 per basic share
        and $0.75 per diluted share.

Semler Scientific's three largest customers (including their affiliates) comprised 44%, 27% and 11% of second quarter 2024 revenues, respectively, and its two largest customers comprised 37% and 34% of second quarter 2023 revenues, respectively.

BITCOIN HOLDINGS

On May 28, 2024, Semler Scientific announced the initial purchase of 581 bitcoins for an aggregate amount of $40.0 million. On June 6, 2024, the Company announced the purchase of an additional 247 bitcoins for an aggregate amount of $17.0 million. On June 28, 2024, the Company purchased an additional 49 bitcoins for an aggregate cost of $3.0 million. As of June 30, 2024, the Company held 877 bitcoins with a fair value of $54.9 million, which reflects a cumulative reduction in fair value of $5.1 million.

Subsequently through August 5, 2024, the Company has purchased an additional 52 bitcoins for an aggregate cost of $3.0 million. Semler Scientific's total holdings as of August 5, 2024 are 929 bitcoins for an aggregate purchase amount of $63.0 million. All purchase amounts include fees and expenses.

Notice of Conference Call

Semler Scientific will host a conference call today at 4:30 p.m. ET. The call will address results of the second quarter ended June 30, 2024, as well as provide a business update on Semler Scientific's strategies for the near-term future. Questions can be submitted prior to the start of the call to ir@semlerscientific.com.

Participants are encouraged to pre-register for the conference call using the following link: https://dpregister.com/sreg/10190580/fcfdde76dc. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time. Those without internet access or who are unable to pre-register may dial in by calling:

Domestic callers: (833) 816?1161
International callers: (412) 317?0717

Please specify to the operator that you would like to join the "Semler Scientific Call." The conference call will be archived on Semler Scientific's website at www.semlerscientific.com.


                                                                               
            
              Semler Scientific, Inc.


                                                                             
           
              Condensed Statements of Income


                                                                                      
            
              Unaudited


                                                                  
            
       (In thousands of U.S. Dollars, except share and per share data)




                                                                                                                                                             For the three months ended June                         For the six months ended June
                                                                                                                                                                     30,                                     30,


                                                                                                                                                      2024               2023                     2024             2023





            Revenues                                                                                                                       $
            14,465     $
            18,605            $
           30,368   $
            36,811



            Operating expenses:



            Cost of revenues                                                                                                                          1,255                1,219                      2,501              2,488



            Engineering and product development                                                                                                       1,440                1,762                      2,578              3,392



            Sales and marketing                                                                                                                       3,456                4,985                      7,131             10,177



            General and administrative                                                                                                                2,964                3,459                      5,832              7,318



             Total operating expenses                                                                                                                 9,115               11,425                     18,042             23,375



            Income from operations                                                                                                                    5,350                7,180                     12,326             13,436



            Interest and dividend income                                                                                                                714                  597                      1,534              1,080



            Change in fair value of notes held for investment                                                                                           128                (111)                       128              (217)



            Change in fair value of digital assets                                                                                                  (5,055)                                       (5,055)



             Other (expense) income, net                                                                                                            (4,213)                 486                    (3,393)               863



            Pre-tax income                                                                                                                            1,137                7,666                      8,933             14,299



            Income tax provision                                                                                                                      1,126                1,787                      2,849              3,451



            Net income                                                                                                                         $
            11      $
            5,879             $
           6,084   $
            10,848



            Net income per share, basic                                                                                                      $
            0.00       $
            0.88              $
           0.88     $
            1.62



            Weighted average number of shares used in computing basic net                                                                         6,944,664            6,707,341                  6,918,709          6,704,306
    income per share



            Net income per share, diluted                                                                                                    $
            0.00       $
            0.75              $
           0.78     $
            1.38



            Weighted average number of shares used in computing diluted                                                                           7,795,149            7,867,001                  7,789,101          7,887,584
    net income per share


                                                                                               
              
                Semler Scientific, Inc.


                                                                                              
              
                Condensed Balance Sheets


                                                                           
              
                (In thousands of U.S. Dollars, except share and per share data)




                                                                                                                                                                                  June 30,         December 31,


                                                                                                                                                                         2024             2023


                                                                                                                                                                                  Unaudited



              
                
                  Assets

    ---


              Current Assets:



              Cash and cash equivalents                                                                                                                            $
        7,332 $
              57,200



              Restricted cash                                                                                                                                              132                132



              Trade accounts receivable, net of allowance for credit losses of $243 and $287, respectively                                                               7,470              6,125



              Short-term notes held for investments                                                                                                                      6,100



              Inventory, net                                                                                                                                               385                445



              Prepaid expenses and other current assets                                                                                                                  2,271              2,042



              Total current assets                                                                                                                                      23,690             65,944



              Assets for lease, net                                                                                                                                      1,768              2,285



              Property and equipment, net                                                                                                                                  620                720



              Long-term investments                                                                                                                                        512                512



              Notes held for investment                                                                                                                                                    5,372



              Intangible digital assets                                                                                                                                 54,945



              Other non-current assets                                                                                                                                     127                270



              Deferred tax assets, net of valuation allowance of $1,207 and $0, respectively                                                                             3,124              2,962



              Total assets                                                                                                                                        $
        84,786 $
              78,065





              
                
                  Liabilities and Stockholders' Equity

    ---


               Current liabilities:



                Accounts payable                                                                                                                                     $
        227    $
              402



                Accrued expenses                                                                                                                                         5,086              4,502



                Deferred revenue                                                                                                                                           840              1,120



                Other short-term liabilities                                                                                                                               211                176



                Total current liabilities                                                                                                                                6,364              6,200





              Long-term liabilities:



              Other long-term liabilities                                                                                                                                   24                 70



              Total long-term liabilities                                                                                                                                   24                 70



              Commitments and contingencies (Note 15)



              Stockholders' equity:



              Common stock, $0.001 par value; 50,000,000 shares authorized; 7,202,146 and 7,099,441 shares                                                                   7                  7
    issued, and 6,987,724 and 6,885,019 shares outstanding (treasury shares of 214,422 and
    214,422), respectively



              Additional paid-in capital                                                                                                                                12,504             11,985



              Retained earnings                                                                                                                                         65,887             59,803



              Total stockholders' equity                                                                                                                                78,398             71,795





              Total liabilities and stockholders' equity                                                                                                          $
        84,786 $
              78,065


                                                                             
              
                Semler Scientific, Inc.


                                                                        
              
                Condensed Statements of Cash Flows


                                                                                    
              
                Unaudited


                                                                          
              
                (In thousands of U.S. Dollars)




                                                                                                                                                   Six months ended June
                                                                                                                                                                30,


                                                                                                                                            2024                          2023



     
                
                  CASH FLOWS FROM OPERATING ACTIVITIES:



     Net income                                                                                                                       $
        6,084                  $
          10,848





     Reconciliation of Net Income to Net Cash Provided by Operating Activities:



     Depreciation                                                                                                                             346                             279



     Deferred tax expense                                                                                                                   (163)                          (207)



     Loss on disposal of assets for lease                                                                                                     319                             114



     Gain on short-term investments                                                                                                                                        (237)



     Allowance for credit losses                                                                                                             (44)                             92



     Change in fair value of notes held for investment                                                                                      (128)                            217



     Change in fair value of digital assets                                                                                                 5,055



     Stock-based compensation                                                                                                                 295                             860



     Changes in Operating Assets and Liabilities:



     Trade accounts receivable                                                                                                            (1,292)                        (2,240)



     Inventory                                                                                                                                 60                             (7)



     Prepaid expenses and other current assets                                                                                              (135)                          (950)



     Other non-current assets                                                                                                                  43                             106



     Accounts payable                                                                                                                       (175)                          (326)



     Accrued expenses                                                                                                                         584                           3,495



     Other current and non-current liabilities                                                                                              (291)                             13



     
                
                  Net Cash Provided by Operating Activities                                                                 10,558                          12,057





     
                
                  CASH FLOWS FROM INVESTING ACTIVITIES:



     Additions to property and equipment                                                                                                     (48)                          (260)



     Purchase of notes held for investment                                                                                                  (500)                          (500)



     Purchase of digital assets                                                                                                          (60,000)



     Proceeds from maturities of short-term investments                                                                                                                   57,707



     Purchase of short-term investments                                                                                                                                 (49,728)



     Purchase of assets for lease                                                                                                                                          (674)



     
                
                  Net Cash (Used in) Provided by Investing Activities                                                     (60,548)                          6,545





     
                
                  CASH FLOWS FROM FINANCING ACTIVITIES:



     Repurchase of warrants                                                                                                                                              (1,949)



     Taxes paid related to net settlement of equity awards                                                                                   (45)                          (172)



     Stock issuance expenses                                                                                                                (102)



     Proceeds from exercise of stock options                                                                                                  269



     
                
                  Net Cash Provided by (Used in) Financing Activities                                                          122                         (2,121)



     
                
                  (DECREASE) INCREASE  IN CASH                                                                            (49,868)                         16,481



     
                
                  
                    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD                          57,332                          23,014



     
                
                  
                    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD                       $
     
          7,464     $
              
            39,495


                                                                   
            
            Semler Scientific, Inc.


                                                             
             
          Digital Assets- Additional Information


                                                               
              
          Rollforward of bitcoin holdings


                                                                          
        
                Unaudited




                                                                Source of                                        Digital                             Change in                         Digital
                                                                                                                  Assets                                                  Assets                          Approximate          Approximate
                                                  Capital                              at Cost                           fair Value            at Fair Value                Number of                   Average
                                                  Used to                                (in                                 (in                     (in                  Bitcoin Held                  Purchase
                                                 Purchase                            thousands)                          thousands)              thousands)                                            Price Per
                                                  Bitcoin                                                                                                                                               Bitcoin



     Balance as of March 31, 2024                                          
          $                            
            $                   
         $                                                 
         $



     Digital assets purchased                           (a)                                         60,000                                                        60,000                        877                    68,436



     Change in fair value of the digital assets                                                                                    (5,055)                    (5,055)



     Balance as of June 30, 2024                                                      $
              60,000                     $
         (5,055)            $
           54,945                        877                $
      68,436



                (a)               Cash from
                                   operations

About Semler Scientific, Inc.:

Semler Scientific, Inc. is a pioneer in developing and marketing technology products and services to healthcare providers to combat chronic diseases. Its flagship product, QuantaFlo®, which is patented and cleared by the U.S. Food and Drug Administration (FDA), is a rapid point-of-care test that measures arterial blood flow in the extremities. The QuantaFlo test aids in the diagnosis of cardiovascular diseases, such as peripheral arterial disease (PAD), and Semler Scientific is seeking a new 510(k) clearance for expanded-indications. QuantaFlo is used by healthcare providers to evaluate their patient's risk of mortality and major adverse cardiovascular events (MACE). Semler Scientific also invests in bitcoin and has adopted bitcoin as its primary treasury asset. Additional information about Semler Scientific can be found at www.semlerscientific.com.

Forward-Looking Statements

This press release contains "forward-looking" statements. Such statements can be identified by, among other things, the use of forward-looking language such as the words "believe," "goal," "may," "will," "intend," "expect," "anticipate," "estimate," "project," "would," "could" or words with similar meaning or the negatives of these terms or by the discussion of strategy or intentions. The forward-looking statements in this release include express or implied statements regarding expansion of the healthcare business; seeking a new 510(k) clearance for QuantaFlo with expanded indications for use; purchase of additional bitcoin; value of bitcoin and ability to execute on the bitcoin treasury strategy; among others. Such forward-looking statements are subject to a number of risks and uncertainties that could cause Semler Scientific's actual results to differ materially from those discussed here, such as such as risks inherent with investing in bitcoin, including bitcoin's volatility; risk of implementing a new bitcoin treasury strategy; risk that insurance plans and other customers will not continue to license its cardiovascular testing products; risk of changes in the reimbursement landscape for its customers including related to the Centers for Medicare and Medicaid Services (CMS) rate announcement; risk of obtaining a new 510(k) clearance for expanded indications; along with those other risk factors detailed in Semler Scientific's filings with the Securities and Exchange Commission. These forward-looking statements involve assumptions, estimates, and uncertainties that reflect current internal projections, expectations or beliefs. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. All forward-looking statements contained in this press release are qualified in their entirety by these cautionary statements and the risk factors described above. Furthermore, all such statements are made as of the date of this release and Semler Scientific assumes no obligation to update or revise these statements unless otherwise required by law.

No Offer or Solicitation

This press release does not and shall not constitute an offer to sell or a solicitation of an offer to buy any securities of Semler Scientific, Inc., nor shall there be any offer, solicitation or sale of such securities, in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

INVESTOR CONTACT:

Renae Cormier
Chief Financial Officer
ir@semlerscientific.com

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SOURCE Semler Scientific, Inc.