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July 2, 2024
Douglas Murphy-Chutorian
Chief Executive Officer
Semler Scientific, Inc.
2340-2348 Walsh Avenue, Suite 2344
Santa Clara, CA 95051
Re: Semler Scientific, Inc.
Registration Statement on Form S-3
Filed June 6, 2024
File No. 333-280013
Dear Douglas Murphy-Chutorian:
We have conducted a limited review of your registration statement and have
the following
comments.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe a comment applies to your facts
and circumstances
or do not believe an amendment is appropriate, please tell us why in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to this letter, we may have additional comments.
Registration Statement on Form S-3
Cover Page
1. It appears that the price of your common stock has fluctuated
significantly in the last
several months. Please revise your disclosure to address price
volatility, potential causes
of such volatility, if known, and add a separately captioned risk factor
to describe the risk
to investors. In addition, on the prospectus cover page, disclose the
following:
describe the recent price volatility in your stock and briefly
disclose any known risks
of investing in your stock under these circumstances;
for comparison purposes, disclose the market price of your common
stock prior to the
recent price volatility in your stock; and
describe any recent change in your financial condition or results of
operations, such
as your earnings, revenues or other measure of company value that
is consistent with
the recent change in your stock price. If no such change to your
financial condition or
results of operations exists, disclose that fact.
July 2, 2024
Page 2
Risk Factors, page 2
2. We note the disclosure on page 7 that you intend to use the net proceeds
from the sale of
any securities offered under this prospectus primarily for general
corporate purposes,
including the acquisition of bitcoin, unless otherwise indicated in the
applicable
prospectus supplement. Please include a separate risk factor here to
disclose that
proceeds from an offering may be used to purchase additional bitcoin and
describe the
attendant risks, including the price of bitcoin has been, and will
likely continue to be,
highly volatile.
Recent Developments
Bitcoin Strategy, page 5
3. Please prominently disclose that you are not registered as an investment
company under
the 1940 Act and that shareholders do not have the protections
associated with ownership
of shares in a registered investment company or the protections afforded
by the
Commodities Exchange Act.
4. Please briefly explain the relevance of the comparisons to gold given
you previously held
cash in a variety of non-interest bearing bank accounts, interest
bearing money markets,
and treasury bills. Additionally, provide the basis for your beliefs
that bitcoin has the
potential to generate outsize returns and its increasing acceptance
as digital gold.
Balance this discussion by disclosing that bitcoin is a highly volatile
asset and quantity the
range that bitcoin has traded in the last twelve months.
5. Refer to exhibit 99.1 to the Form 8-K filed June 6, 2024. We note the
use of the term
unregulated when referring to certain bitcoin trading venues.
Please revise to qualify
your use of this term by clarifying that these venues may be subject to
regulation in a
relevant jurisdiction but may not be complying.
6. Please disclose your policies governing when you exchange your cash for
bitcoin and
when you monetize your bitcoin. In addition, disclose whether you have
policies
governing the percentage of your treasury holdings that will be bitcoin.
7. To the extent you intend to hedge your bitcoin exposure, please discuss
your hedging
strategy. To the extent you do not intend to hedge your bitcoin
exposure, revise the
bitcoin volatility risk factor to describe the associated risks.
8. You state that you would become subject to additional counterparty risks
if you pursue
strategies to create income streams or otherwise generate funds using
your bitcoin
holdings. Please discuss the strategies you are contemplating, the
factors you will consider
in determining whether to pursue a particular strategy, and describe the
associated risks.
9. Please disclose the identity of your liquidity provider and disclose the
material terms of
the agreement, including which party is responsible for the costs
associated with transfers
of bitcoin.
10. To the extent that future bitcoin purchases will be executed using a
time-weighted average
price over a pre-arranged time period, please revise your disclosure as
follows:
Describe the material aspects of methodology used to calculate the
time-weighted
average price of bitcoin.
Disclose the pre-arranged time periods for the transfers of bitcoin
and describe how
July 2, 2024
Page 3
the bitcoin is transferred.
To the extent that the average price is calculated by referencing
crypto asset trading
platforms, identify the trading platforms, where each trading
platform is located and
how it is licensed or regulated, and the criteria and process for
selecting particular
trading platforms.
11. You state that your bitcoins are held in cold storage with a third-party
provider. Please
identify the third-party custodian and file the custody agreement as an
exhibit to the
registration statement. Also disclose and discuss the material aspects
of the bitcoin
custody agreement, including the following:
Describe how the custodian stores the private keys, including
whether they will be
commingled with assets of other customers and the geographic area
where they will
be stored.
Identify who will have access to the private key information and
disclose whether any
entity will be responsible for verifying the existence of the
bitcoin.
Disclose whether the custodian carries insurance for any losses of
the bitcoin it
custodies for you. If so, quantify the amount of and character of
the insurance,
disclose whether the insurance is shared among the custodian s
customers, and
describe any limitations on the custodian s liability.
Identify and describe the regulatory regimes applicable to the
custodian and
additional custodians you engage in the future.
Discuss your plans to engage additional custodians, including how
you will select a
particular custodian and any policies for allocating your bitcoin
holdings.
12. You state that no assurance can be provided that our custodially-held
bitcoin will not
become part of the custodian s insolvency estate if one or more of our
custodians enters
bankruptcy, receivership or similar insolvency proceedings. Please
add a separate risk
factor describing the specific risks and illustrate with recent examples
where such an
event has occurred.
13. Please disclose your policies related to forks and airdrops. Also
describe the risks
associated with forks and airdrops in a separate risk factor and
illustrate these risks by
providing an example, with quantification, of the impact that hard forks
have had on
crypto assets.
14. Please describe anti-money laundering (AML), know-your-customer (KML)
and other
procedures conducted by you and the liquidity provider to mitigate
transaction risk,
including whether a transaction counterparty is subject to sanctions and
is otherwise in
compliance with applicable laws and regulations. Also add risk factor
disclosure
describing the risks of that these due diligence procedures may fail to
prevent transactions
with a sanctioned entity and the impact if such a transaction occurs.
15. Please include a specific cross-reference here to your Bitcoin Strategy
Related
Supplemental Disclosures document, filed as Exhibit 99.1 to your June 6,
2024 Form 8-K.
Where you describe your new bitcoin strategy, please make appropriate
changes.
Risk Factors, page 5
16. Please describe any material risks to your business from the possibility
of regulatory
July 2, 2024
Page 4
developments related to crypto assets and crypto asset markets. Identify
material pending
crypto legislation or regulation and describe any material effects it
may have on your
business, financial condition, and results of operations. Your
discussion should include an
analysis of the applicability of the Investment Company Act of 1940. We
note some of
your disclosures in Exhibit 99.1 to the Form 8-K filed June 6, 2024.
17. Please describe any material financing, liquidity, or other risks you
face related to the
impact that a crypto asset market disruption may have, directly or
indirectly, on the value
of the crypto assets you may elect to use as collateral. We note some of
your disclosures
in Exhibit 99.1 to the Form 8-K filed June 6, 2024.
Exhibits Index, page II-1
18. The Bitcoin Strategy Related Supplemental Disclosures document appears
directly related
to the offering and the disclosures in your registration statement.
Please include as an
exhibit to your registration statement your Bitcoin Strategy Related
Supplemental
Disclosures document.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Please contact Benjamin Richie at 202-551-7857 or Lauren Nguyen at
202-551-3642
with any other questions.
Sincerely,
Division of
Corporation Finance
Office of
Industrial Applications and
Services
cc: Marianne Sarrazin, Esq.