The parent of BroadbandTV, which conducted one of 2020′s splashier initial public offerings on the TSX, is running out of money. Its cash balances are dropping, an unnamed stockholder had to give it a $4-million loan earlier this month, and the company warns in its latest financial report that if it doesn’t secure new financing, it’s reasonable to doubt its ability to continue.
That narrative, and Ms. Rafati’s international prominence as a spokeswoman for both Canadian and women’s entrepreneurialism, has obscured the Vancouver-based company’s underwhelming business model. Bad news for Ms. Rafati, who topped up her controlling, multiple-vote shares by buying $7.5-million worth of common stock in the IPO. To do so, she took out a margin loan from an affiliate of Canadian Imperial Bank of Commerce, whose investment bank served as an underwriter on the IPO.
In early 2022, BBTV stock hit $2, and the margin loan was called by the CIBC affiliate. The board subsequently voted in March and May of that year to make $2-million in loans to Ms. Rafati. BBTV disclosed the loans in its June 30, 2022, financial statements, filed that August. Ms. Rafati did not vote on the matter, and the remaining members of the BBTV board are classified as independent directors.
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