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Semler Scientific Announces $85M Offering Amid Bitcoin Accumulation Plans

Semler Scientific raises $85M in convertible notes to invest in Bitcoin, eyeing increased corporate Bitcoin holdings amid market interest.
Semler Scientific Announces $85M Offering Amid Bitcoin Accumulation Plans

Highlights

  • Semler Scientific ups convertible note offer to $85M, also includes $15M option.
  • The company will use some of the money raised to buy more Bitcoin.
  • Semler Scientific had previously announced plans to raise $75 million to expand its Bitcoin strategy.

Semler Scientific has announced an increase in its convertible senior notes offering to $85 million from the previously planned $75 million. The company also granted initial purchasers the option to buy an additional $15 million in notes. This move aligns with its corporate strategy, which includes further investment in Bitcoin.

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Semler Scientific Announces $85M Private Offering

In a press release, Semler Scientific announced that it had priced its private offering of $85 million aggregate principal amount of 4.25% convertible senior notes due 2030. The offering is made in reliance on the exemption provided by Rule 144A under the Securities Act of 1933, which permits the offer of securities to certain qualified institutional buyers. Subject to the satisfaction of certain conditions, the transaction is anticipated to be completed on January 28, 2025.

The notes are not secured, and the interest will be compounded at a rate of 4.25% per annum and will be paid on the first of February and the first of August of every year, starting from August 1, 2025. The conversion rate at the commencement of the offering is 13.0826 shares per $1,000 principal amount, which implies a conversion price of $76.44 per share. This is a 25% premium over the last reported stock price on January 23, as reported at the Nasdaq stock exchange. Semler Scientific can elect to receive the consideration in cash, stock, or a combination of both after the conversion.

The notes are not redeemable by the company before August 4, 2028. From this date, redemption is allowed if the common stock of Semler Scientific is trading at not less than 130% of the conversion price for a particular period. If a “fundamental change” occurs, for example, a merger or acquisition, noteholders are entitled to put their notes to the company and compel it to repurchase the notes at their face value plus interest.

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Capped Call Transactions and Potential Market Effects

To limit the dilutive impact of note conversions, Semler Scientific used capped call transactions with financial institutions. These transactions establish a cap price of $107.01 per share, which is 75% above the last trading price of the stock on the 23rd of January 2025.

The company also anticipates that the financial institutions involved will offset their exposure by acquiring and liquidating Semler Scientific shares. 

As a consequence, these activities may affect the price of the stock before and after the transaction. If the option held by initial purchasers to purchase more notes is exercised, Semler Scientific anticipates that it will undertake further capped call transactions.

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Semler Scientific Bitcoin Investment Strategy

Semler Scientific expects to receive gross proceeds of approximately $89.0 million in this offering, with net proceeds of approximately $81.4 million, or $95.8 million, if the additional $15 million option is exercised. 

The company will spend $6.6 million on the capped call options, and the rest of the money will be spent on corporate purposes, such as buying more Bitcoin.

This move comes after the company announced plans to raise $75 million to expand its Bitcoin strategy as part of its overall financial approach. The company has expressed its focus on digital assets, following the trend of corporations adopting Bitcoin on their balance sheets.

Bitcoin Market Developments and Broader Context

Semler Scientific’s decision follows a trend that has seen institutional investors and governments express interest in Bitcoin. 

The US government is said to be looking into the possibility of holding a Bitcoin reserve, with Senator Cynthia Lummis in charge of the Senate’s Digital Assets Subcommittee.

During the World Economic Forum, BlackRock CEO Larry Fink met with sovereign wealth fund managers to discuss Bitcoin investment approaches. Fink remarked that the Bitcoin price could reach as high as $700,000 if these fund managers allocate 2% to 5% of their portfolios in Bitcoin. 

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Kelvin Munene Murithi

Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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