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Operator: Good afternoon and welcome to the Semler Scientific First Quarter 2025 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. Before we begin, Semler Scientific needs to remind you that certain comments made during this call may constitute forward-looking statements and are made pursuant to and within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. These include express or imply statements regarding the expectations for our Bitcoin treasury strategy, plans to acquire additional Bitcoin, opportunity to upsize and the price of Bitcoin. Expansion on the health care business and the development and marketing of additional products including receipt and timing of an additional 510(k) clearance for QuantaFlo.

And for our proposed settlement with the U.S. Department of Justice. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the press release and our SEC filings. The forward-looking statements made today are as of the date of this call and the company does not undertake any obligation to update the forward-looking statements. If you do not have a copy of today’s release, you may obtain one by visiting the investor relations page of the website semlerscientific.com. I would now like to introduce Dr. Doug Murphy-Chutorian, CEO of Semler Scientific.

Doug Murphy-Chutorian: Good afternoon, everyone. Thank you for joining us on our first quarter 2025 results. We believe our healthcare business is well positioned this year as we pursue a new revenue opportunity in the cardiovascular space with existing large enterprise customer base. While we pursue new revenue opportunities, we will manage the healthcare business to generate cash which we plan to primarily use for additional Bitcoin purchases. Now I will hand the call over to Eric Semler who will provide you with an update on our Treasury Strategy. Eric?

Eric Semler: Thanks, Doug. And thank you to all our stakeholders for listening in today and for your support of our company. We were thrilled to participate in Strategies Bitcoin for Corporations conference last week in Orlando, where we had a chance to meet many of our passionate stockholders and fellow bitcoiners in person. A special thank you to Michael Sailor, Von Lee, and the strategy organization for all their wonderful support for hosting such a fantastic well-attended event. The corporate bitcoin treasury movement is gaining powerful momentum and scale. We are a bitcoin-first company. Nearly one year ago, we became the second U.S. public company to adopt the bitcoin standard. Since then, we have intelligently and accretively acquired 3,808 bitcoins that are now worth almost $400 million, which we believe makes us the fourth largest bitcoin treasury company in the U.S. and the ninth largest corporate holder of bitcoin in the U.S. So far in 2025, we acquired 1,510 bitcoins and had a BTC yield of 22.2%.

This resulted in BTC gain of 510 bitcoins and BTC dollar gain of $52 million. Since the quarter that we adopted bitcoin as our primary treasury reserve asset on May 28, 2024, we have achieved 152.8% positive bitcoin yield. This has resulted in a BTC gain of 1,447 bitcoins and a BTC dollar gain of $139 million. Over that same period, our stock has appreciated 64% in less than 12 months versus only 9% for the S&P 500. We were able to generate these strong returns despite headwinds in our health care business. We have ambitious goals for growing our bitcoin arsenal in 2025, and we have tremendous firepower backed by a new $500 million ATM program that became effective on April 22. During the first quarter of 2025, we completed a $100 million convertible note financing round using most of the net proceeds to buy bitcoin.

As a result, we believe we now have the highest leverage ratio among publicly traded bitcoin treasury companies, positioning us for outsized upside should bitcoin prices rise. Semler Scientific is a pioneer in developing and marketing — sorry, we believe this is a defining moment for bitcoin. It cannot be tariffed. It doesn’t issue earnings or guidance. It doesn’t have counterparty risk, and it continues to trade at a huge discount to gold. Most importantly, statements by the current administration suggests that bitcoin may soon be considered for strategic reserve purchases by the U.S. government. Our corporate strategy is underpinned by three core principles: our bitcoin treasury strategy is our highest priority, our health care business must generate cash and complement our Bitcoin treasury strategy, and we must intelligently and exponentially increase our Bitcoin holdings and hold them.

We look forward to continuing to get out on the road to tell our story. We will be participating at the BTC Conference in Las Vegas at the end of this month and at BTC Prague in June. We hope to have the chance to meet many of you at these events. Now I’m pleased to introduce our COO, Jen Oliva Herrington, to go over our health care business.

Jennifer Oliva Herrington: Thank you, Eric. While our health care business has seen the impact from payment changes made by CMS for our customers that became effective last year. We believe our business is in a good place to capitalize on current initiatives to drive future growth. We are starting to see green shoots in areas we have targeted for future growth, including diversifying our customer base and introducing additional FDA-cleared products and other services in the cardiovascular space to our strong and well-established customer base. Additionally, as we continue to innovate, we are pursuing a new 510(k) clearance for a product extension to aid in the diagnosis of heart failure with hopes of obtaining this clearance sometime in 2025.

Semler is a pioneer in developing and marketing technology products and services to health care providers to combat chronic diseases. Our unwavering focus on our core medical products and services business, alongside our bitcoin treasury strategy, ensures that we maintain our position at the forefront of medical and financial freedom. Now I’m pleased to introduce our CFO, Renae Cormier to go over our financial results.

Renae Cormier: Thank you, Jen. I’ll cover our first quarter financial results and then speak more about our bitcoin Holdings. Following our remarks and as time permits, we’ll answer questions that have been submitted via e-mail. Total revenues in Q1 2025 were $8.8 million, which was down about 44% compared to the first quarter of 2024. We saw further pressure on revenues following the additional phase-in of the 2024 CMS rate announcement. Operating expenses in Q1 2025, which includes the cost of revenues, were $39.9 million versus $8.9 million in Q1 2024. I wanted to highlight a few unusual items that were included in operating expenses in Q1 2025, including a $29.8 million contingency reserve related to our agreement in principle to settle the DOJ CID.

It also includes $1.5 million in noncash stock compensation, $400,000 in statement sales used tax accruals and another $400,000 in legal fees related to the DOJ CID. Further details are laid out in our press release. The loss from operations was $31.1 million given these items, a decrease compared to income from operations of $70 million in the prior year. Other expenses net were $43.8 million and included a net unrealized loss of $41.8 million from the change in fair value of our bitcoin holdings. Accounting standards require bitcoin assets to be measured at fair value with gains and losses from changes in the fair value to be recognized in net income in each reporting period. While this may introduce volatility into our reported net income, it does not impact our cash flow from operations.

For some perspective on how dramatic the change in fair value measurements can be, as of March 31, 2025, the net unrealized loss on our bitcoin holdings was $17 million. As a reference, had bitcoin been priced around its current level of $104,000 per bitcoin, we would have had a net unrealized gain of over $51 million. That’s a large swing in just over a month. For the first quarter of 2025, our net loss was $64.7 million or $6.74 per basic and fully diluted share compared to net income of $6.1 million or $0.88 per basic share and $0.78 per fully diluted share in Q1 2024. Cash, cash equivalents and restricted cash at March 31, 2025, was $9.9 million. As we discussed in our last earnings call, and as Eric mentioned, in late January, we completed a convertible senior note offering with $100 million aggregate principal amount of five and a half years 4.25% notes due in August 2030.

Together with capped call transactions, the conversion premium is 75%, leading to an initial effective conversion price of similar stock of approximately $170 per share, which significantly reduces potential conversion dilution. We used net proceeds to purchase additional bitcoins. Last year, we had filed for $150 million ATM. We had utilized that ATM until our new HCM of $500 million became effective, and that was on April 22, 2025. For our initial ATM, we sold approximately 2.4 million shares for net proceeds of approximately $126 million. And our new program, our $500 million shelf, we have issued through May 12 approximately 1.8 million shares for net proceeds of approximately $61 million. We have got proceeds from the ATM issuance for general corporate purposes, including the purchase of additional bitcoin.

Since March 31, 2025, we purchased 616 bitcoins for an aggregate cost of $59.6 million. We now hold a total of 3,808 bitcoins valued at approximately $400 million, representing an unrealized fair value gain of $59 million. We also launched a bitcoin dashboard today at ir.semlerscientific.com, where investors will be able to find our bitcoin-related statistics in one location. We encourage investors to check back often as it will track additional bitcoin purchases as we announce them and provide a real-time snapshot of our market in bitcoin metrics.

Q – Renae Cormier: Now we’ll begin our Q&A. We received some questions ahead of the release that we tried to address in the prepared remarks, and we just have some additional questions. So, the first one is, what are your plans this year for accumulating more bitcoin? Eric, I’ll let you take that one.

Eric Semler: Thanks, Renae. We have extremely ambitious plans to accretively acquire more bitcoin. We want to aggressively increase our $388 million, close to $400 million now, bitcoin stockpile and are well on our way with our recently authorized $500 million ATM. We are confident that we can use our $500 million ATM this year and access additional sources of financing to buy more bitcoin. We believe that Michael Saylor and strategies success tapping into the preferred markets with strike and strike create a playbook for yet another great opportunity for us down the road.

Renae Cormier: Great. Jen can take our next question. So, what’s driving the underlying trends in the business? And what do you expect for 2025?

Jennifer Oliva Herrington: Thanks, Renae. Despite the government decision about payment for risk adjustment for PAD, we continue to see ongoing testing and additions to our customer base, albeit at decreased volumes for PAD. Our priority for 2025 is to minimize declines to QuantaFlo revenue while maintaining sufficient infrastructure to support, innovate and grow our operations related to other cardiovascular disease states. This includes the marketing of other FDA-cleared products that we are licensing to our valuable customer base. We seek to diversify and expand our customers and target new markets that will benefit from using these potentially life-saving products. We will be managing the health care business to generate cash, which we plan to use for general corporate purposes, including buying more bitcoin.

Renae Cormier: Thanks, Jen, and thank you, everyone, for your questions. As we wrap up this conference call, we want to emphasize our ongoing commitment to continued execution of our bitcoin treasury strategy and our health care business. We appreciate your participation in today’s discussion, and thank you for your ongoing support. Operator?

Operator: Thank you, everyone, for joining. This now concludes the conference call.