Cash woes cast doubt on Behaviour’s future

Canuck company arranges financing

MONTREAL — Cash-strapped Canadian film company Behaviour Communications is running into big-time financing trouble and, for the first time, the Montreal-based company is hinting that it may not be able to stay in business.

Behaviour announced Tuesday that it has been unable to secure alternative financing arrangements and that “in the absence of such alternative financing, there is no certainty as to the continuity of the operations of the company.”

Behaviour has been bleeding red ink almost constantly since software entrepreneur Richard Szalwinski bought the company (then called Malofilm Communications) three years ago and Behaviour execs have been desperately trying to secure a new financing arrangement for the past year.

At the same time, the company has been selling off most of its core assets. Two weeks ago, Behaviour sold its digital studio to Tube Images of Montreal for C$850,000 ($587,000) and, last summer, it sold its Canuck film-distribution operation to Industry Entertainment (now called Seville Pictures). The only major asset left in the Behaviour stable is Los Angeles-based international film sales agent Behaviour Worldwide.

Also, Behaviour is trying to delay the release of its year-end financial results. The company has filed with the Canadian securities commissions to apply to be exempted from having to file its annual results on the date required by securities legislation. Behaviour is awaiting a decision from the securities commissions.

In early February, Behaviour announced that it expects a significant net loss from discontinued and continuing operations for the year ended Sept. 30, including losses for the fourth quarter. The company recently reached an agreement in principle to extend its revolving credit facility for its U.S. subsidiary, Behaviour Worldwide, to March 10.

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