Semler Scientific announced an increase in its planned convertible senior bond issuance from $75 million to $85 million. The company is offering an additional $15 million in bond purchase options to initial buyers. This move aligns with the company’s investment strategy focused on Bitcoin 
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Details of the Bond Issuance
The company has issued $85 million worth of convertible senior bonds with a 4.25% interest rate. The issuance will mature in 2030, with payments made biannually at an annual compounded interest rate of 4.25%.
The bonds cannot be redeemed by the company until August 4, 2028. After this date, if Semler Scientific’s common stock trades at a conversion price of at least 130%, the bonds can be redeemed. Additionally, in the event of a “fundamental change,” such as a merger or acquisition, bondholders will have the right to redeem the bonds at their nominal value plus interest.
Bitcoin Investment Strategy
Semler Scientific plans to use approximately $81.4 million from the bond issuance for purposes such as purchasing Bitcoin. To mitigate the dilutive effect of bond conversions, the company engaged in capped option transactions with financial institutions. These transactions aim to control dilution by setting a cap price of $107.01 per share.
This move follows the previous $75 million bond issuance to expand the company’s Bitcoin strategy. Focusing on digital assets reflects a growing trend of Bitcoin adoption within the company’s balance sheet. This includes considerations of the U.S. government potentially creating Bitcoin reserves and BlackRock CEO Larry Fink’s Bitcoin price predictions, underlining Bitcoin’s relevance.
The increasing interest of financial institutions and governments in Bitcoin is shaping Semler Scientific’s investment decisions. The company is developing strategies to manage the potential impact of bond conversions on stock prices while growing its reserve. One of the primary objectives is to increase stock prices as reserves grow, a strategy many companies are beginning to adopt.
