Twin Disc, Telkonet, and Sonic Foundry receive a combined $11 million in misdirected federal loan program funding.
Three publicly traded Wisconsin companies received millions of dollars in federal coronavirus relief loans that were supposed to go to small businesses, according to data compiled by the Washington Post.
Twin Disc, Telkonet, and Sonic Foundry received a combined total of more than $11 million. They are just three of the roughly 300 public companies that got a combined $1 billion in relief payouts from the Paycheck Protection Program, according to the Post.
The program has come under fire in recent weeks after large companies such as Shake Shack, Potbelly, and the Los Angeles Lakers received multimillion-dollar loans through the $349 billion program.
Those businesses have announced they will return their loans. Others are resisting public blowback and are opting to keep the loans, drawing ire from the Trump administration because publicly traded companies were not intended to receive funds.
Racine-based Twin Disc, a power-transmission manufacturer and distributor founded in 1919, received about $8.2 million, the largest loan of the three public Wisconsin companies, according to the Post. It reported almost $11 million in net profit from more than $300 million in net sales in 2019.
In 2018, Twin Disc acquired a marine propulsion company for almost $59 million. Before the acquisition, it had 700 employees. Twin Disc’s stock trades for just under $6 on the NASDAQ and has a market cap of $80 million.
Sonic Foundry, a Madison-based online video software creator, received $2.3 million, according to the Post. It reported a $3.6 million net loss last year from about $35 million in revenue. Sonic Foundry stock trades for $4.50 and it has a market cap of $30.5 million.
The company’s “about” page on its website says it has 250 employees worldwide, but Nicole Wise, Sonic Foundry’s communications director, wrote in a statement that it has fewer than 200 employees.
“While we are a publicly traded company on the OTC markets, we are by definition under the Small Business Administration guidelines classified as a small business with under 200 employees,” said Wise in an emailed statement. “Most of these employees are located locally in Madison. As a local small business, we are committed to continuing to support our employees during the pandemic, and the PPP assistance will help us accomplish this.”
Wise did not say whether the company would return the loan, nor did she say how coronavirus has affected the company’s revenue. The company’s flagship product is a video platform that serves, among other industries, education and health care.
Sonic Foundry is directly marketing its video product to education, businesses, and event holders during the pandemic. Coronavirus has served as a major boon for video platforms such as Zoom as people shift meetings to digital settings.
Telkonet, a Waukesha-based technology company, received about $910,000 from the loan pool, according to the Post. The company, founded in 1977, reported $12 million in revenue in the 2019 fiscal year, a 42 percent year-over-year growth. It has a market cap of $6.3 million on the Venture Market, with shares trading at under five cents, according to Yahoo Finance data.
Neither Twin Disc nor Telkonet responded to questions about why they needed the loans, and whether they would return them. UpNorthNews will update this story if the companies respond.