Semler Scientific: Why Small Companies Bet on Bitcoin Too

Semler Scientific was a small Californian maker of a blood-flow test for doctors' offices that made bitcoin its main reserve in May 2024. In 16 months its holdings grew from 581 to 5’048 BTC while the core business shrank. In January 2026 Semler was absorbed into Strive. The case shows why small companies bet on bitcoin: it can make a fading business interesting to shareholders, but it does not fix the business.

Who was Semler Scientific?

Semler Scientific, Inc. was a medical technology company from Silicon Valley, last based in Campbell, California, listed on Nasdaq as SMLR. Its main product was QuantaFlo, a four-minute in-office test of blood flow. A clamp on a toe or finger shines infrared light through the skin, and the software picks up signs of peripheral artery disease (PAD), narrowed arteries in the legs.

The business model was unspectacular and for a long time very profitable. Semler hardly sold devices; it licensed the software and charged per test. Its largest customers were US insurers paying for tests of older members in Medicare Advantage. In 2023 Semler earned $20.6 million on $68.2 million of revenue, with only about 15 million shares. For a company of that size, that was a lot of money.

That surplus is what led to bitcoin. The company had more cash than its core business needed, and the board under chairman Eric Semler was looking for a use that would not lose purchasing power.

May 2024: the bitcoin decision

On 28 May 2024 Semler told the US Securities and Exchange Commission (SEC) that its board had made bitcoin the company's primary treasury reserve asset, and bought 581 BTC for $40.0 million including fees. Eric Semler explained that after reviewing the alternatives, the board saw bitcoin as the best use of surplus cash. The medical business was to carry on.

That made Semler the second US listed company with this strategy after MicroStrategy (now Strategy). The share price rose by more than a quarter on the day. Small companies had watched the market value Strategy at a premium to its bitcoin since 2020, and Semler was one of the first attempts to carry that model over to an ordinary operating business. The general logic is explained in Bitcoin treasury companies.

How Semler paid for its bitcoin

Cash reserves alone would have stopped at a few hundred bitcoin. So Semler used, one after the other, every route Strategy uses:

Source: Semler Scientific SEC filings (8-K of 28 May 2024, 28 Jan 2025, 5 May 2025, 4 Jun 2025, 26 Sep 2025; 10-K 2024; 10-Q for 30 Sep 2025).

As its measure of success Semler adopted Strategy's "BTC Yield", the change in bitcoin per share. Up to 3 June 2025 it reported 26.7% for the year. What that figure shows and what it hides is covered in How to calculate BTC Yield.

The core business shrank

While the bitcoin stack grew, the medical business got worse. Two things came together:

1. Less money per test. In 2024 the US health agency CMS changed payments in Medicare Advantage. Screening tests like QuantaFlo became less attractive for insurers, and many customers tested less or cancelled.
2. The Justice Department case. The US Department of Justice (DOJ) alleged that tests with QuantaFlo and its predecessor FloChec had led to false claims to Medicare. Semler denied any wrongdoing but on 10 September 2025 agreed a settlement of $29.75 million plus interest, paid partly with the Coinbase loan.

Source: Semler 10-K 2024 and 10-Q for 30 Sep 2025.

Revenue nearly halved within a year. Much of the profit in 2024 and 2025 came from the rising value of the bitcoin. Under the US rule ASU 2023-08, which Semler adopted early for 2024, bitcoin is carried at market value, so a price rise shows up as profit even without a sale. The accounts looked better than the business. How this works under US GAAP and German HGB is explained in Bitcoin on the balance sheet.

Why small companies bet on bitcoin

Semler is a typical case. Four reasons come up again and again with small treasury companies:

• Surplus cash with no good use. A business that throws off cash but no longer grows piles it up. In the bank it loses purchasing power, and it is too small for acquisitions.
• A story for the capital markets. A medical device firm with falling revenue interests few investors. A bitcoin company in 2024 and 2025 got attention, trading volume and access to convertibles and share programmes.
• Leverage through the mNAV. As long as the market values a share above its bitcoin, the company can issue new shares and buy more bitcoin per share. How that engine works and why it stops is shown in Small treasury companies.
• A convinced insider. In small companies a few people decide. At Semler it was chairman Eric Semler; the board also gained bitcoin journalist Natalie Brunell.

For a finance chief it is a trade-off between return, volatility and credibility with customers and banks. The questions to answer first are in Bitcoin as a treasury strategy for CFOs.

The catch: the market stopped paying a premium

In autumn 2025 the mood turned against small treasury companies. Many shares fell below the value of their bitcoin. Semler was hit especially hard, because investors no longer trusted the medical business and counted the debt.

On 19 September 2025 Semler stock closed at about $29. Its roughly 15 million shares were worth about $440 million. Its bitcoin was worth almost $590 million at the same time. The market thus valued Semler at an mNAV of about 0.75: one dollar of bitcoin inside the company cost 75 cents on the exchange. Even including the $120 million of debt, the enterprise value sat just below the bitcoin value, and the medical business came for free.

Below 1 the engine runs backwards. Every new share brings in less money than it dilutes in bitcoin. Semler could no longer grow sensibly by issuing shares. At the same time it was small enough to interest a bigger buyer.

The takeover by Strive

On 22 September 2025 Strive and Semler announced their merger. Strive, an asset manager from Dallas with 5’886 BTC at the time, offered 21.05 of its own shares per Semler share. That was about $90.52 per share, a premium of about 210% to the last price. The deal was all-stock; no cash changed hands.

For Strive the maths worked because its own stock then traded above the value of its bitcoin: it swapped expensive shares of its own for cheap bitcoin inside another company. For Semler shareholders it was a way out of an mNAV below 1, paid in a stock with a premium.

The takeover closed on 16 January 2026. Semler Scientific has been a Strive subsidiary since then, and SMLR was delisted from Nasdaq. Eric Semler joined Strive's board; chief executive Doug Murphy-Chutorian left. The 5’048 BTC went to Strive.

What happened to the debt:

• The $100 million convertible note received a Strive guarantee and became convertible into Strive shares. By May 2026 Strive had retired it, partly by swapping it into its SATA preferred stock.
• The Coinbase loan was repaid, and the pledged bitcoin has been free since January 2026.

Strive now holds about 43’150 BTC and no debt (as of November 2026). Current holdings are on Strive's treasury profile. How Strive paid for the rest with preferred shares is explained in the profile of Strive stock (ASST).

What became of the medical business

When the deal was announced, Strive wrote that the diagnostics business might later be sold or spun off to shareholders. By November 2026 that had not happened. In the quarterly report for 30 September 2026 medical devices run as a separate segment of Strive:

• Medical device revenue in Q3 2026: $1.13 million. From 16 January to 30 September 2026 it was $3.89 million.
• For comparison: Semler on its own had $13.5 million of revenue in Q3 2024.
• Strive has written off medical device development costs.

The business that paid for the first bitcoin has shrunk to about a twelfth of its former quarterly revenue. Bitcoin did not rescue Semler; it gave shareholders an exit at a premium.

Worked example: what one Semler share means in bitcoin today

Anyone holding one Semler share on 30 September 2025 owned 33’337 sats on paper. After the merger and Strive's 1-for-20 reverse split in February 2026, one Semler share became 1.0525 Strive shares.

Gross, the former Semler shareholder has 7% more bitcoin. Net of everything paid first, they have half. The reason: Strive bought most of its bitcoin with preferred stock. If bitcoin rises strongly, the net share grows back quickly; if it falls, it shrinks faster than at Semler alone. A bitcoin company with little leverage became a stake in one with a lot.

What Semler teaches you

Check the core business on its own. A bitcoin stack easily hides a shrinking business. Look at the quarterly report: how are revenue and profit doing without the bitcoin revaluation?

Look at the kind of debt. A convertible due in five years buys time. A loan with bitcoin as collateral can force a sale in a crash.

An mNAV below 1 is not a bargain by itself. Semler sat below it for months. The discount disappeared through the takeover, not through the market. Without a buyer it could have stayed.

In a merger you get a different company. Semler shareholders swapped little leverage for a lot. If you want bitcoin without someone else's capital structure, hold it directly. What a regular bitcoin purchase adds up to over the years you can try in the savings plan calculator.