Semler Scientific (SMLR), a company specializing in medical devices, experienced a sharp decline in its stock price by as much as 15% in after-hours trading on Thursday following the announcement of its plans to offer $75 million in convertible senior notes. The company also disclosed that part of the proceeds from the offering would be used to increase its bitcoin (BTC) holdings.
Shares of the company fell to a low of $51, with pre-market trading showing an 8% decline. The Santa Clara, California-based company later decided to increase the offering size to $85 million, with an additional $15 million option available. The notes will mature in 2030 and carry an annual interest rate of 4.25%.
The conversion price for the notes was set at $76.44, which is a 2% premium to the stock’s closing price on Thursday. The notes are redeemable starting in August 2028, provided the stock price reaches 130% of the conversion price.
Of the funds raised, $6.6 million will be used for capped-call transactions to limit equity dilution for existing investors, while the remaining funds will be allocated for bitcoin acquisitions and other corporate purposes.
For the fourth quarter, Semler reported a 3.3% increase in revenue, reaching $12.5 million, while operating income rose by 8.8% to $3.7 million. The unrealized gain from the change in the fair value of its bitcoin holdings amounted to approximately $29 million. As of January 17, the company held 2,321 BTC, with an aggregate purchase price of $191.9 million and an average purchase price of $82,689 per bitcoin.
