Large Listed Firms Get $ 300 Million in Small Business Loans
Some other large companies that received loans appeared to have enough cash flow to survive the economic downturn. New York-based Lindblad Expeditions Holdings, for example, a cruise and travel company with 650 employees and a branded deal with National Geographic, has secured a $ 6.6 million loan. At the end of March, the company said it had about $ 137 million in cash on its balance sheet.
“When this crisis hit, we had two cases of corporate planning: 1) substantial layoffs and time off or 2) receiving these funds and having no impact on our employees,” wrote spokesperson Audrey. Chang in an email. “Lindblad is the very rare travel company that has not imposed any layoffs, time offs or pay cuts to date.”
Five of the companies identified by the AP were previously under investigation by financial regulators and others, including companies that have paid fines to resolve allegations, the files show.
Quantum Corp., the San Jose-based video data storage company employing 800 people, was fined $ 1 million last December over allegations that accounting errors resulted in overestimated revenues. Quantum received a loan of up to $ 10 million.
Without this loan, “we would most certainly be forced to downsize. We owe it to our employees – who have stayed with us through a long and difficult turnaround – to do everything possible to save their jobs during this crisis, ”company spokesman Bob Wientzen wrote in an e- mail.
Broadwind Energy, a suburban Chicago wind turbine maker that employs around 520 people, agreed to pay a $ 1 million fine five years ago after the SEC accused it of failing to notify investors that the downsizing of two major clients had caused “substantial declines” in its long-term financial outlook. Broadwind, who could not be reached immediately, received $ 9.5 million from the loan program.
Marrone Bio Innovations, a biopesticides company in Davis, Calif. With around 50 employees, also agreed to pay $ 1.8 million in 2016 after the SEC alleged its COO inflated results financial resources to meet projections that it would double its income in its first year. as a public enterprise. Marrone received a loan worth $ 1.7 million.
Pam Marrone, the chief executive, said the company “shouldn’t be punished” for what happened with the SEC because it has had its own audits for years now. She described the investigation as a “big blow” that cost her investors and drop her stock price below $ 1. She said she had to go into debt by $ 40 million and continues to pull herself out of the financial hole.
“People don’t realize how difficult it is to be a small public company like ours that is not yet profitable,” she said. “We can’t just go to investors and say, ‘OK, open your portfolios’. “
AP’s analysis found that around 1 in 4 companies actually warned investors months ago that they or their auditors had significant doubts about their ability to remain viable and meet their obligations. financial despite the booming economy of the time.
One of them was Helius Medical Technologies, a company near Philadelphia that is developing technology to help injured brains heal themselves.
The company has 19 employees and received a loan of $ 323,000 in difficult circumstances. Its most recent annual report warned, “We may be unable to continue to operate without threat of liquidation for the foreseeable future” and did not expect to have enough liquidity to go beyond May.
In an interview, President and CEO Phil Deschamps said the company was able to raise enough capital earlier this year that, along with the loan, it could survive until the start of the year. been – while she expects to have sought approval from the United States Food and Drug Administration for her device. Without the federal money, he said, the company would have lost scientists and lawyers who help prepare regulatory submissions.
Deschamps said his company follows the same rules and applies like any other, and his device could help thousands of people in the future. But he also understands why some people might question giving money to publicly traded companies.
“If we didn’t qualify for some reason, we would have left and found another way to do it,” he said.
Another company that faced financial doubts before the virus was Enservco Corp., a Denver-based oil and gas company. In its annual report filed last month, the company said, “We are not generating sufficient revenue to fund our current operations, and we have incurred significant net operating losses during the years ended December 31, 2019 and 2018, which raises substantial doubts about our ability to continue operating.