CareCloud Announces Conversion of Series A Preferred Stock
CareCloud (CCLD) has announced the mandatory conversion of its 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock into Common Stock. The conversion, effective March 6, 2025, at 4:01 p.m. Eastern Time, will convert each preferred share into 7.3358 shares of Common Stock, including all accumulated and unpaid dividends.
This strategic move will eliminate approximately $7 million in annual dividend obligations, allowing the company to reinvest capital in growth initiatives. According to Norman Roth, Interim CFO, the conversion will result in a cleaner capital structure and enhanced flexibility for shareholder value creation.
Shareholders owning at least 100,000 preferred shares as of the Mandatory Exchange Date retain the right to object to the conversion. Fractional shares will be rounded up to the next whole share, and dividends on converted shares will cease to accrue on the conversion date.
CareCloud (CCLD) ha annunciato la conversione obbligatoria delle sue azioni privilegiate cumulative rimborsabili perpetue di serie A con un rendimento del 8,75% in azioni ordinarie. La conversione, che avrà effetto il 6 marzo 2025, alle 16:01 ora orientale, convertirà ogni azione privilegiata in 7,3358 azioni di azioni ordinarie, incluse tutte le cedole accumulate e non pagate.
Questa mossa strategica eliminerà circa 7 milioni di dollari di obbligazioni annuali sui dividendi, consentendo all'azienda di reinvestire il capitale in iniziative di crescita. Secondo Norman Roth, CFO ad interim, la conversione porterà a una struttura di capitale più pulita e a una maggiore flessibilità per la creazione di valore per gli azionisti.
Gli azionisti che possiedono almeno 100.000 azioni privilegiate alla data di scambio obbligatorio mantengono il diritto di opporsi alla conversione. Le azioni frazionarie verranno arrotondate alla prossima azione intera e i dividendi sulle azioni convertite cesseranno di accumularsi alla data di conversione.
CareCloud (CCLD) ha anunciado la conversión obligatoria de sus acciones preferentes acumulativas redimibles perpetuas de serie A con un rendimiento del 8.75% en acciones ordinarias. La conversión, que será efectiva el 6 de marzo de 2025 a las 4:01 p.m. hora del Este, convertirá cada acción preferente en 7.3358 acciones de acciones ordinarias, incluyendo todos los dividendos acumulados y no pagados.
Este movimiento estratégico eliminará aproximadamente 7 millones de dólares en obligaciones anuales de dividendos, permitiendo a la empresa reinvertir capital en iniciativas de crecimiento. Según Norman Roth, CFO interino, la conversión resultará en una estructura de capital más limpia y una mayor flexibilidad para la creación de valor para los accionistas.
Los accionistas que posean al menos 100,000 acciones preferentes a la fecha de intercambio obligatorio conservan el derecho a oponerse a la conversión. Las acciones fraccionarias se redondearán a la siguiente acción completa y los dividendos sobre las acciones convertidas dejarán de acumularse en la fecha de conversión.
CareCloud (CCLD)는 8.75% 시리즈 A 누적 상환 가능 영구 우선주를 보통주로 강제 전환한다고 발표했습니다. 이 전환은 2025년 3월 6일 동부 표준시 오후 4시 1분에 시행되며, 각 우선주는 누적 및 미지급 배당금을 포함하여 7.3358주의 보통주로 전환됩니다.
이 전략적 조치는 연간 약 700만 달러의 배당금 의무를 제거하여 회사가 성장 이니셔티브에 자본을 재투자할 수 있도록 합니다. 노먼 로스(Norman Roth) 임시 CFO에 따르면, 이 전환은 더 깔끔한 자본 구조를 만들고 주주 가치를 창출할 수 있는 유연성을 높일 것입니다.
의무 교환일 기준으로 최소 100,000주의 우선주를 보유한 주주들은 전환에 이의 제기할 권리를 유지합니다. 분할 주식은 다음 전체 주식으로 반올림되며, 전환일에 전환된 주식에 대한 배당금은 더 이상 발생하지 않습니다.
CareCloud (CCLD) a annoncé la conversion obligatoire de ses actions privilégiées cumulatives remboursables perpétuelles de série A à 8,75 % en actions ordinaires. La conversion, qui prendra effet le 6 mars 2025 à 16h01, heure de l'Est, convertira chaque action privilégiée en 7,3358 actions ordinaires, y compris tous les dividendes accumulés et non payés.
Ce mouvement stratégique éliminera environ 7 millions de dollars d'obligations annuelles de dividendes, permettant à l'entreprise de réinvestir du capital dans des initiatives de croissance. Selon Norman Roth, CFO par intérim, la conversion entraînera une structure de capital plus claire et une flexibilité accrue pour la création de valeur pour les actionnaires.
Les actionnaires possédant au moins 100 000 actions privilégiées à la date d'échange obligatoire conservent le droit de s'opposer à la conversion. Les actions fractionnaires seront arrondies à l'action entière suivante, et les dividendes sur les actions converties cesseront d'accumuler à la date de conversion.
CareCloud (CCLD) hat die obligatorische Umwandlung seiner 8,75% Serie A kumulierten einlösbaren ewigen Vorzugsaktien in Stammaktien angekündigt. Die Umwandlung, die am 6. März 2025 um 16:01 Uhr Eastern Time wirksam wird, wird jede Vorzugsaktie in 7,3358 Stammaktien umwandeln, einschließlich aller aufgelaufenen und nicht gezahlten Dividenden.
Dieser strategische Schritt wird etwa 7 Millionen Dollar an jährlichen Dividendenverpflichtungen beseitigen und es dem Unternehmen ermöglichen, Kapital in Wachstumsinitiativen reinvestieren. Laut Norman Roth, Interim CFO, wird die Umwandlung zu einer saubereren Kapitalstruktur und einer verbesserten Flexibilität zur Schaffung von Shareholder-Werten führen.
Aktionäre, die am Stichtag für den obligatorischen Austausch mindestens 100.000 Vorzugsaktien besitzen, behalten das Recht, der Umwandlung zu widersprechen. Bruchstücke von Aktien werden auf die nächste volle Aktie aufgerundet, und Dividenden auf umgewandelte Aktien hören am Umwandlungsdatum auf zu entstehen.
- Eliminates $7 million in annual dividend obligations
- Frees up capital for growth investments
- Simplifies capital structure
- Potential dilution of common stock due to 7.3358 conversion ratio
- Some preferred shareholders may object to mandatory conversion
Insights
CareCloud's conversion of its Series A Preferred Stock represents a strategic financial maneuver with significant positive implications for the company's cash position. The elimination of
This conversion effectively trades a perpetual dividend obligation for a one-time dilution event. While existing common shareholders will experience some dilution from the 7.3358 conversion ratio, the long-term benefits appear to substantially outweigh this drawback. The company transitions from a position where
The capital structure simplification removes a senior security layer that had priority claim on company resources, potentially making the company more attractive to growth investors rather than income-focused investors who favored the preferred shares. For a healthcare IT company operating in a competitive sector with constant innovation demands, this financial flexibility represents a significant advantage.
Balance sheet metrics should improve immediately following this conversion, with better debt-to-equity ratios and enhanced financial flexibility for strategic opportunities. While some preferred shareholders with holdings below the 100,000 share threshold may be dissatisfied with losing their dividend stream, the conversion mathematically accounts for accumulated dividends.
This financial restructuring signals management's confidence in growth prospects, as they're essentially betting that reinvesting
SOMERSET, N.J., March 06, 2025 (GLOBE NEWSWIRE) -- CareCloud, Inc. (the “Company”) (Nasdaq: CCLD, CCLDO, CCLDP), a leader in healthcare information technology and generative AI solutions for medical practices and health systems nationwide, announced today (the “Mandatory Exchange Date”) that it effected the mandatory conversion (the "Conversion") of shares of its
“We are excited to announce this conversion, which will eliminate approximately
The Company's Board of Directors elected to exercise its conversion rights, which provide for the conversion of each share of Preferred Stock into 7.3358 shares of Common Stock, inclusive of all accumulated and unpaid dividends. Any fractional shares of Common Stock which would otherwise be issuable will be rounded up to the next whole share of Common Stock. Dividends on converted shares will cease to accrue on the Mandatory Exchange Date.
The Conversion will be effective at 4:01 p.m. Eastern Time on March 6, 2025. Individual shareholders who, as of the Mandatory Exchange Date, owned at least 100,000 shares of Preferred Stock will not have their shares of Series A Preferred Stock automatically converted to Common Stock so long as they were held by the Company’s transfer agent, and presently retain the limited right to object to the Conversion.
Additional information regarding the Conversion can be found in the Amended and Restated Certificate of Designations, Preferences, and Rights of the
About CareCloud
CareCloud brings disciplined innovation to the business of healthcare. Our suite of technology-enabled solutions helps clients increase financial and operational performance, streamline clinical workflows and improve the patient experience. More than 40,000 providers count on CareCloud to help them improve patient care, while reducing administrative burdens and operating costs. Learn more about our products and services, including revenue cycle management (RCM), practice management (PM), electronic health records (EHR), business intelligence, patient experience management (PXM) and digital health at www.carecloud.com.
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SOURCE CareCloud
Company Contact:
Norman Roth
Interim Chief Financial Officer and Corporate Controller
CareCloud, Inc.
nroth@carecloud.com
Investor Contact:
Stephen Snyder
Co-Chief Executive Officer
CareCloud, Inc.
ir@carecloud.com
FAQ
What is the conversion ratio for CareCloud's (CCLD) Series A Preferred Stock?
How much will CareCloud (CCLD) save annually from the preferred stock conversion?
When does the CareCloud (CCLD) preferred stock conversion take effect?
Can any CareCloud (CCLD) preferred stockholders opt out of the mandatory conversion?
What happens to preferred stock dividends after CCLD's conversion?
