Little Medical IT Company Medical Transcription Billing Corp Sells a Preferred Issue

Small medical software and IT company, Medical Transription Billing Corp (ticker:MTBC), has sold a new cumulative, perpetual preferred offering.

The coupon (the stated interest rate to be applied to the $25/share par value) will be 11%–which, of course, is a very nice yield, but it obviously points out a very high level of risk. This is a very small issue of just 204,000 shares so it should be expected to trade very thinly.

MTBC is a company that just went public in July, 2014 at $5/share and used the proceeds of $20 million to acquire a number of small medical billing companies.  For the 1st 6 months of 2015 the company had revenue of $12 million and a net loss of $1.5 million. The company has recently completed additional acquisitions of more small medical billing companies.

MTBC has a strategy of acquiring smaller companies in the U.S. and Canada and then moving their IT departments offshore and cutting costs dramatically. The company had stated previously that they expect to be profitable in the near future.

Obviously the investing public has little faith that the company will succeed as the price of the common shares which were floated at $5/share are now trading at $1.65.

Being really conservative investors we won’t be getting involved in this issue, but maybe someone who has different risk tolerances than us may have an interest.

Details of the issue are here.