Okanagan tech company Mazu jeopardized by stalled funding, says owner

Mazu staff face missing second paycheque in January

A Kelowna entrepreneur says the future of a website she created to provide a safe online place for youth has been put in jeopardy.

Mazu CEO Janice Taylor said her 20 staff have already missed one paycheque this month and will likely to receive another come their next payday on Friday due to the Southern Interior Development Initiative Trust creating a roadblock to funding.

The absence of a signature on an agreed loan extension agreement with SIDIT threatens to collapse Mazu’s support from other investors and force the company to close its doors.

Taylor feels she had no other option but to go public to the local media Wednesday with her frustration over her dealings with SIDIT, despite the fact she already has been threatened with legal action in a letter from SIDIT acting board chair Grace McGregor for any comments “malicious and defamatory of SIDIT or its staff.”

RELATED: Recognition for Mazu founder and CEO

Taylor says there have been changes with the SIDIT administrative staff, including three different CEOs since August 2017, that has led to her company’s financial structure and intent being misrepresented to the board, and she claims to have had no opportunity for the board or staff to better understand either Mazu’s current financial status, private investment support or long-term revenue objectives since the loan renewal talks began last September.

“We have an agreement to extend the loan for three years so all we need is a signature on the document for that agreement and we can carry on,” Taylor said.

“Instead, I am hearing around town how we have defaulted on our loan and that is absolutely not true and an irresponsible statement.”

Taylor’s involvement with SIDIT dates back to 2013 when she received a $200,000 seed money investment from the development initiative trust to grow her company as a five year loan.

She made interest payments totalling $87,000 with the option after five years for SIDIT to demand repayment of the loan principal amount or invest it as shares in the company.

At the time, Mazu was valued at $2 million, and has since grown in equity value to $18 million with more than 70 private investors, including some of the staff.

Taylor says the loan extension agreement was for a further 3.5 years under the same conditions.

But Taylor says the hangup in the deal centres around a subordinate clause, in which SIDIT would not be classified as a tier 1 lender under the agreement, allowing other tier one investors, such as a bank or other private financial lending institution, to get first priority in getting paid out if Mazu was to fold.

RELATED: Safeguarding youth from Internet addiction

Taylor argues that as a public trust, SIDIT should not be looking for a quick turnaround profit, but provide a long-term investment that will help companies to grow and generate jobs for their local economies.

“We are the poster child for everything that SIDIT claims to be in their own strategy policy. It was set up for companies like us, particularly those in high-tech that have an idea and need time to go through the ups and downs in figuring out how to turn it into a revenue generating business,” she said.

“We have job growth, are attracting investment, in the last five years gone from 15 to 20 employees, been involved in university co-op programs with students and ended up hiring two as full-time staff. This should be a win-win situation for everyone going forward and instead we have our own version of the wall here where my staff are not getting paid.”



barry.gerding@blackpress.ca

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Vernon woman pleas for return of stolen scooter

‘It’s been another kick in the teeth… how do you get ahead and keep your head above water?’

Chilliwack on the map for Salmon Arm Roots and Blues

Canadian music legends confirmed for 28th annual music festival

Vernon dumped with fourth snowiest January in three decades

January isn’t even over yet, and Vernon has already recorded one of… Continue reading

City of Vernon to redirect reclaimed water into Okanagan Lake

MacKay Reservoir nears capacity; city to reflow water into lake near Kin Beach

Visit Russia, Japan with Vernon’s Grannies in Travelogue series

The 10th season of Travelogue presentations is underway with two more to go

VIDEO: Soldiers trade rifles for snow shovels to help dig out St. John’s

A state of emergency is set to extend into a fifth day

Warm ‘blob’ could be behind mass starvation of North Pacific seabirds: study

Unprecedented death toll raises red flag for North American marine ecosystems

Police search for owner of another icy sailboat on Okanagan Lake

The frozen vessel was spotted near the 800 block of Manhattan Drive in Kelowna

Volunteer spends hundreds of hours restoring piece of railway history

Revelstoke Railway Museum now home to an authentic Kalamazzo No. 2 Section Handcar

Future of Penticton francophone school secured following funding announcement

$11.5M in funding means École Entre-lacs now independently owned and operated

ICBC to bring in ranking system for collision, glass repair shops

Change comes after the much-maligned auto insurer has faced criticism for sky-high premiums

‘It was just so fast’: B.C. teen recalls 150-metre fall down Oregon mountain

Surrey’s Gurbaz Singh broke his leg on Mount Hood on Dec. 30

Kelowna author Irwin Wislesky to release science-fiction novel on time travel

Invisible Footprints in Time follows Maxine Samuels and her quest back in time to save the future

Most Read