Semler Scientific Announces $85M Private Offering

Semler Scientific has announced an increase in its convertible senior notes offering to $85 million from the previously planned $75 million.

Semler Scientific, a company engaged in the development and commercialization of advanced materials, announced an increase in its convertible senior notes offering to $85 million. The company also granted an option to initial purchasers to buy an additional $15 million in notes.

Semler Scientific Announces $85M Private Offering

As part of its corporate strategy, which includes further investment in Bitcoin, Semler Scientific announced in a press release the pricing of its private offering of $85 million in the 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. The transaction is anticipated to be completed on January 28, 2025, subject to the satisfaction of certain conditions.

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.

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.