By REESE DUNKLIN, JUSTIN PRITCHARD, JUSTIN MYERS and KRYSTA FAURIA Associated Press

Companies with thousands of employees, past penalties from government investigations and risks of financial failure even before the coronavirus walloped the economy were among those receiving millions of dollars from a relief fund that Congress created to help small businesses through the crisis, an Associated Press investigation found.

The Paycheck Protection Program was supposed to infuse small businesses, which typically have less access to quick cash and credit, with $349 billion in emergency loans that could help keep workers on the job and bills paid on time. 

But at least 75 companies that received the aid were publicly traded, the AP found, and some had market values well over $100 million. And 25% of the companies had warned investors months ago — while the economy was humming along — that their ability to remain viable was in question. 

By combing through thousands of regulatory filings, the AP identified the 75 companies as recipients of a combined $300 million in low-interest, taxpayer-backed loans. 

Eight companies, or their subsidiaries, received the maximum $10 million possible, including a California software company that settled a Securities and Exchange Commission investigation late last year into accounting errors that overstated its revenue. 

The eight firms getting maximum loans are likely just a tip of the iceberg: Statistics released last week by the U.S. Small Business Administration showed that 4,400 of the approved loans exceeded $5 million. Overall, the size of the typical loan nationally was $206,000, according to the statistics. SBA will forgive the loans if companies meet certain benchmarks, such as keeping employees on payroll for eight weeks. 

The list of recipients identified by the AP is a fraction of the 1.6 million loans that lenders approved before the program was depleted last week, but it is the most complete public accounting to date. Neither the Trump administration nor the lending industry has disclosed a list of Paycheck Protection Program beneficiaries.

Representatives of the SBA, which is overseeing the program, did not respond to a request for comment late Monday. But last Friday, Treasury Secretary Steven Mnuchin said in a written statement that most of the loans, 74%, were for less than $150,000 and that demonstrated "the accessibility of this program to even the smallest of small businesses." 

President Donald Trump, asked Monday whether the criteria for who can receive loans should change, said that "we'll look at individual things and some people will have to return it if we think it's inappropriate." He added that the loans are supposed to be awarded, in part, by "what we think is right."

The AP analysis comes as lawmakers from both political parties negotiate an additional relief package that in large part would replenish the Paycheck Protection Program with more than $300 billion, but there are disagreements about terms for the new funding measure. A final deal could come as early as Tuesday. 

AP's review also found examples of companies that had foreign owners and that were delisted from U.S. stock exchanges, or threatened with removal, because of their poor stock performance before the coronavirus caused a downturn. Other companies have had annual losses for years. 

Wave Life Sciences USA Inc., a Boston-area biotechnology company that develops new pharmaceuticals, received a $7.2 million loan. Weeks earlier, Wave Life Sciences, whose parent company is based in Singapore, disclosed in its annual report net losses of $102 million, $147 million and $194 million during the last three fiscal years. 

"We currently have no products on the market and expect that it may be many years, if ever, before we have a product candidate ready for commercialization," it wrote.

In an emailed statement Monday, the company said: "The livelihood of our U.S. employees and their families would be severely disrupted if they were to lose their jobs or be furloughed. We are doing everything we can to support them."

Michael Minnis, who has studied the SBA program as an accounting professor at the University of Chicago Booth School of Business, said he understood the frustrations of smaller businesses that have not received funding when publicly listed companies have. But he said it would be hard to go into the program and change the parameters now.

"There's a fundamental trade-off here between speed and targeting this in the absolute best way," he said.

Minnis estimates the program might need to dispense $720 billion to meet demand.

Since launching April 3, the relief package has faced criticism about slow loan processing, unclear rules and limited funding that left many mom-and-pop businesses without help.

News that the $1.6 billion Shake Shack burger empire had received a maximum $10 million loan, disclosed in a filing Friday, ignited public anger. Company executives said late Sunday they would return the money after finding other sources of capital. 

By design, the Paycheck Protection Program was meant to get money out quickly to as many small businesses as possible, using a formula based in part on workforce and payroll size. Some of the eligibility criteria was expanded making it possible for some businesses with more than 500 employees to qualify if, for example, they met certain size standards for their industries or other conditions.

The owners behind large restaurants chains like Potbelly, Ruth's Chris Steak House and Taco Cabana were able to qualify and get the maximum $10 million in loans despite employing thousands of workers.

Some other big companies that received loans appeared to have enough cash on hand to survive the economic downturn. New York City-based Lindblad Expeditions Holdings, for example, a cruise ship and travel company with 650 workers and a branding deal with National Geographic, got a $6.6 million loan. At the end of March, the business reported having about $137 million in cash on its balance sheet.

"When this crisis hit, we had two business planning cases: 1) substantial layoffs and furloughs or 2) receiving these funds and not impacting our employees," spokeswoman Audrey Chang wrote in an email. "Lindblad is the very rare travel company that has not imposed any layoffs, furloughs or salary reductions to date."

Five of the companies that the AP identified were previously under investigation by financial and other regulators, including firms that paid penalties to resolve allegations, records show.

Quantum Corp., a data storage company based in San Jose, California, that has a workforce of 800, paid a $1 million penalty last December over allegations that accounting errors resulted in overstated revenues. Quantum received a maximum $10 million loan.

Without that loan, "we would most certainly be forced to reduce headcount. We owe it to our employees — who've stuck with us through a long and difficult turnaround — to do everything we can to save their jobs during this crisis," company spokesman Bob Wientzen wrote in an email.

Broadwind Energy, a suburban Chicago maker of wind turbines that employs about 520, agreed to pay a $1 million penalty five years ago after the SEC accused it of failing to inform investors that reduced business from two major customers had caused "substantial declines" in its long-term financial prospects. Broadwind, which could not be immediately reached, received $9.5 million from the loan program.

Marrone Bio Innovations, a biopesticide company in Davis, California, that has about 50 workers, similarly agreed to pay $1.8 million in 2016 after the SEC alleged its chief operating officer had inflated financial results to hit projections that it would double revenues during its first year as a public company. 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 clean audits for years now. She described the investigation as a "body blow" that cost it investors and drove its stock price under $1. She said it has had to take on $40 million in debt and is still digging itself out of the financial hole.

 "People don't realize how tough it is to be a small public company like us that's not yet profitable," she said. "We can't just go to investors and say, 'OK, open up your wallets.' "

The AP analysis found that about 1 in 4 of the companies, in fact, had warned investors months ago that they or their auditors had significant doubts about their ability to remain viable and meet their financial obligations despite the booming economy at the time. 

One was Helius Medical Technologies, a company located near Philadelphia that develops technology to help injured brains heal themselves.

The company has 19 employees and received a $323,000 loan amid a tough stretch. Its most recent annual report warned, "We may be unable to continue to operate without the threat of liquidation for the foreseeable future" and did not expect to have enough cash to go beyond May.

In an interview, president and chief executive Phil Deschamps said the company was able to raise enough capital earlier this year that, when paired with the loan, it can survive to early summer — when it expects to have filed for U.S. Food and Drug Administration approval for its device. Without the federal money, he said, the company would have lost scientists and attorneys who help prepare regulatory submissions. 

Deschamps said his company followed the same rules and applied like any other, and that its device could help thousands of people in the future. But he also understands why some people might question giving money to publicly traded firms.

"If we didn't qualify for whatever reason, we would have walked away and figured out another way to do it," he said.

Another company that was facing financial doubts before the virus was Enservco Corp., a Denver-based firm that helps oil and gas firms, including in the fracking industry. In its annual report filed last month, the company said: "We do not generate adequate revenue to fund our current operations, and we incurred significant net operating losses during the years ended December 31, 2019, and 2018, which raise substantial doubt about our ability to continue as a going concern."

Chief executive Ian Dickinson said in an interview that his company would not have folded without the $1.9 million loan it received. But, he said, he welcomed the money and would've had to let go more employees than he already has without it. Enservco's annual report cited 186 employees; Dickinson said payroll has "reduced significantly" from that mark, without giving specifics.

Dickinson said he did not believe concerns about how long the company could survive were raised in the application process with its bank.

"At the end of the day, our employees are really no different than the employees of a nonpublic company," Dickinson said. "These are funds being used to keep folks on payroll and keep food on their tables." 

That big companies and ones with questionable records received such precious financial aid during the chaotic last few weeks frustrates Zachary Davis, a Santa Cruz, California, businessman who runs two artisanal ice cream shops, a beachside café and a taco bar with partner Kendra Baker. 

Before a shelter-in-place order in mid-March, the two were expecting their best year to date and were on track to pay off in May the $250,000 loan from the federal government that they used 10 years ago to open their original shop. 

"We were feeling pretty good about where we were in the world. Now it's just all turned upside down," said Davis, who had to lay off 70 workers. 

Davis says they were recently able to obtain a different $10,000 disaster loan from the federal government to pay off vendors, but he says that it "evaporated within seconds." Davis and Baker submitted a Paycheck Protection Program application with supporting documents on April 2 but are still waiting.

Competing against businesses with hundreds of millions a year in revenue and teams of accountants and lawyers is tough, Davis said, "and if you're a little guy, chances are you're going to the back of the line."