PR Newswire; 1/20/2006
- Company Also Issues 2006 Revenue Guidance of Over $6,000,000 -
MIAMI, Jan. 20 /PRNewswire-FirstCall/ -- Transax International Limited (BULLETIN BOARD: TNSX) , a network solutions company for healthcare providers and health insurance companies, is pleased to announced it has reached an agreement with Cornell Capital Partners, LLC to issue Series A Convertible Preferred Stock for $1.6 million. The company also announced today that its dramatic revenue growth since 2003 is expected to continue with revenues to exceed $6,000,000 for fiscal 2006.
Under terms of the agreement, Cornell Capital has committed a three-year, $1.6 million convertible preferred equity investment with a coupon yielding 7%. The Company may redeem the convertible shares at anytime. Additionally, the Company has repaid a promissory note of $255,237, terminated a previous Stand-By Equity Agreement and in return received 664,390 shares to its treasury stock previously held by Cornell Capital and Monitor Capital. Proceeds from the transaction will be used for international expansion and implementation of new contracts for 2006.
Commenting on the announcement, President and CEO of Transax Stephen Walters said, "We are pleased to announce this equity agreement with Cornell Capital. In addition to the money we have raised, Transax was able to eliminate a previous promissory note totaling $255,237, and was able to return to treasury 664,390 shares held by Cornell Capital and Monitor Capital. Overall, the transaction improves our liquidity, strengthens our balance sheet, and gives us great leverage to manage our future growth. The proceeds will help us in our expansion of the U.S., South American and Far East markets where we have received significant interest for our solutions and services." Mr. Walters continued, "Transax has experienced dramatic revenue growth from just over $300,000 in 2003 to $3,400,000 in 2005. Based on the recurring revenue we receive from our expanding base of installed customers, coupled with new projects we expect to initiate during the year, we expect to revenues to exceed $6,000,000 in 2006.
Craig Engler, Vice President with Cornell Capital, commented, "We have been working with Transax for over 15 months and have watched the company continue to execute on its business strategy. Transax has developed a unique suite of healthcare processing solutions for the burgeoning healthcare information technology sector. We are pleased to be an important part of Transax's growth strategy with this investment."
About Transax International Limited
Transax International is an emerging network solutions provider for the healthcare sector. Utilizing its proprietary Medlink (TM) technology, Transax provides a service similar to a credit card processing for the health insurance and providers industries. A Transax transaction consists of: approving eligibility, authorization, auto-adjudication of the health claim and generating the claim payable files -- provided instantaneously in "real time" -- regardless of method of claim generation.
Transax's solutions have been proven to significantly decrease health insurance claim expenditures and healthcare provider costs. Based in Miami, Fla., Transax maintains a major operations office in Rio de Janeiro, Brazil with approximately 35 staff. The Company has contracts in place with major health insurers in Brazil for up to 2,500,000 transactions per month and currently undertakes approximately 600,000 transactions per month, for which Transax receives approximately US55 cents per transaction.
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