Tempus AI, Inc. has announced its plan to offer $400 million in convertible senior notes due in 2030, with the potential for an additional $60 million, subject to market conditions. The notes will accrue interest payable semiannually and mature on July 15, 2030, unless earlier converted, redeemed, or repurchased.
The company intends to use the net proceeds from the offering to repay $274.7 million of its outstanding senior secured term loans, reducing interest expense. Additionally, the funds will be utilized for capped call transactions to reduce potential dilution and for general corporate purposes, including acquisitions or strategic investments, working capital, operating expenses, capital expenditures, or repayment of additional indebtedness.
In connection with the pricing of the notes, Tempus expects to enter into privately negotiated capped call transactions to cover the number of shares of its Class A common stock initially underlying the notes. These transactions are anticipated to reduce potential dilution and offset any cash payments in excess of the principal amount of converted notes, subject to a cap.
Furthermore, the company expects the option counterparties or their respective affiliates to enter into various derivative transactions with respect to the Class A common stock and/or purchase shares of Class A common stock concurrently with or shortly after the pricing of the notes. This activity could impact the market price of the Class A common stock or the notes.
The notes and any shares of Class A common stock issuable upon conversion of the notes have not been registered under the securities laws, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption.
Tempus AI, Inc. is a technology company leading the adoption of AI to advance precision medicine and patient care, with a focus on providing AI-enabled precision medicine solutions to physicians and facilitating the discovery, development, and delivery of optimal therapeutics. The market has reacted to these announcements by moving the company's shares 3.02% to a price of $60.97. For more information, read the company's full 8-K submission here.
