Semler Scientific Reaches Tentative Settlement Agreement with DOJ

Healthcare Technology Firm to Pay $29.75 Million Fine

Healthcare technology firm Semler Scientific has reached a tentative settlement agreement with the U.S. Department of Justice (DOJ), as disclosed in a recent filing. The company has agreed to pay a $29.75 million fine to settle all claims related to potential violations of a federal anti-fraud law in connection with its flagship product, QuantaFlo.

Background of the Settlement

Last month, Semler Scientific revealed that it had received a civil investigative demand (CID) from the DOJ in 2017. Following this, the company complied with subsequent subpoenas and initiated settlement discussions with the DOJ in February. The investigation regarding the marketing of QuantaFlo is independent of Semler Scientific’s bitcoin holdings.

Utilizing Bitcoin Holdings for Settlement

In its filing with the U.S. Securities and Exchange Commission (SEC), Semler Scientific, a significant holder of bitcoin, announced an agreement with crypto exchange Coinbase. This agreement allows the company to borrow cash and digital assets, using its bitcoin holdings as collateral. If the settlement with the DOJ is approved, Semler Scientific plans to utilize the Coinbase master loan agreement to pay the proposed fine.

Remaining Risks and Contingencies

While the settlement agreement is in principle, Semler Scientific cautioned investors about potential risks. If a final agreement is not reached, there is a possibility of the DOJ pursuing charges against the company for damages exceeding the agreed settlement amount. In such a scenario, the company asserts its intent to vigorously defend itself.

Bitcoin Holdings and Financial Position

Currently, Semler Scientific holds 3,192 bitcoins, valued at approximately $267 million. The company’s financial position, coupled with its bitcoin assets, provides a strategic approach to addressing the settlement with the DOJ.