Medical Transcription Billing Corp. (NASDAQ: MTBC) recently returned to market to raise additional capital through the sale of preferred shares. Besides the benefit of the additional financial injection, the company also got the opportunity to gauge investor sentiment of its business model and future.
When Medical Transcription Billing Corp. (NASDAQ: MTBC) announced that it was offering some 63,040 Series A shares of its preferred stock, it didn’t know how much the market was hungry for the offering. The moment the preferred shares went on sale through underwriters, the demand proved to be so strong given the level of oversubscription witnessed.
The oversubscription to MTBC’s preferred shares offering tells a compelling story about how the market views the prospects of the company.
Medical Transcription Billing Corp. (NASDAQ: MTBC) offered each of its Series A shares at $25 apiece and ended up generated $1.4 million in net proceeds. The amount of the net proceed was arrived at after deducting underwriting discounts, offering expenses and other commissions.
Where is the money going to?
The $1.4 million that MTBC has raised through equity offering will go into funding acquisitions and driving growth. But the company didn’t specify how the funds will be allocated for acquisition and growth enhancement. Commenting on the equity fundraiser through the offering of preferred stock, MTBC’s CEO Stephen Snyder said that the management appreciates the immense confidence that investors have demonstrated in MTBC.
He promised that the management team will continue to execute on the path of driving growth and creating more value for shareholders. It is estimated that healthcare BPO market will be worth $276.8 billion in, indicating CAGR of 10.2% in a span of five years considering that the market is expected to be worth $170.5 billion in 2016.
Medical Transcription Billing Corp. (NASDAQ: MTBC) said that cash dividend is paid monthly on its Series A preferred shares. The dividend is calculated per year at the rate of 11% of the $25 price of the preferred shares.
Authorized preferred shares – Medical Transcription Billing Corp. (NASDAQ: MTBC)
The offering of the 63,040 Series A of preferred shares to generate $1.4 million came after Medical Transcription Billing Corp. (NASDAQ: MTBC) raised its authorized preferred share count. The company doubled its preferred shares authorization to two million from one million. The move has provided the company with a greater flexibility to raise additional capital through equity, which should help it to avoid getting into expensive credit arrangements.