Microcap healthcare firm KindlyMD (NASDAQ:KDLY) says it has signed a definitive merger agreement with Nakamoto Holdings to start a Bitcoin treasury strategy. The somewhat unlikely partnership will provide Nakamoto with a public listing while listing the expectations of Kindly.
Kindly announced earnings yesterday, reporting net revenue of $579.7k, down 30% from 1Q 2024. This resulted in a net loss of $1.04 million, a 268% drop versus Q1.
Today, shares in Kindly are dramatically higher following the news of its agreement with Nakamoto Holdings. Shares closed on Friday at around $3.90. Currently, they are trading at over $15, rising by over 290%.
According to the announcement, the combined company will each seek to accumulate Bitcoin and grow the Bitcoin owned on a per share basis, using debt, equity and “other offerings.”
Nakamoto wants to create the “first global network of Bitcoin treasury companies. This is the first step in Nakamoto’s vision for an ecosystem of Bitcoin-native companies, including media, advisory, and financial services, that exist to accelerate Bitcoin adoption and utility.”
Nakamoto gained PIPE [private placement in public equity] financing, reporting that more than 200 investors participated.
The deal is said to include $510 million in gross proceeds from a fully committed a PIPE priced at $1.12 per share and consisting of common stock and pre-funded warrants in KindlyMD and $200 million in gross proceeds from the sale of senior secured convertible notes of KindlyMD that mature in 2028. The PIPE and Debt Financings are expected to close concurrently with the merger.
Institutional investors include Actai Ventures, Arrington Capital, BSQ Capital Partners, Kingsway, Off the Chain Capital, ParaFi, RK Capital, Van Eck, and Yorkville Advisors. Individual investors include Adam Back, Balaji Srinivasan, Danny Yang, Eric Semler (CEO of Semler Scientific), Jihan Wu, Ricardo Salinas, and Simon Gerovich (CEO of Metaplanet). YA II PN, Ltd., an investment fund managed by Yorkville Advisors, was said to be the sole convertible note purchaser.
David Bailey, founder and CEO of Nakamoto, believes that traditional finance and Bitcoin native markets are converging, and the securitization of Bitcoin will “redraw the world’s economic map.” He envisions a future where everyone, including public and private firms, holds Bitcoin.
“Nakamoto seeks to be the first publicly traded conglomerate designed to accelerate that. Nakamoto’s vision is to bring Bitcoin to the center of global capital markets, packaging it into equity, debt, preferred shares, and new hybrid structures that every investor can understand and own. Our mission is simple: list these instruments on every major exchange in the world.”
Tim Pickett, CEO of KindlyMD, expects the deal to drive long-term value for shareholders.
The merged firm will be led by Bailey, who is also co-founder and CEO of BTC Inc. – the company behind Bitcoin Magazine and the global annual Bitcoin Conferences – and General Partner of Bitcoin-focused investment firm UTXO Management.
Pickett will continue to manage KindlyMD’s healthcare operations.
KindlyMD shares will continue to trade on Nasdaq under its current ticker. The combined company expects to be renamed and trade under a new ticker symbol at some point in the future.
The current market cap of Kindly now stands at around $85 million, with heavy volume in trading.