The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian crowdfunding platform yesterday said it plans to launch secondary market trading and improve issuer disclosure through the launch of additional features over the next nine months.

D’Arcy Rahming Jnr, ArawakX’s chief technology officer, told Tribune Business it plans by year-end to launch “a portal” where investors can obtain timely information on companies that have hit their crowdfunding targets. This will be followed by the unveiling of another electronic window that will allow market participants to trade shares in these companies via the secondary market.

Describing market transparency, and the timely, accurate disclosure of material information by issuers, as “super important”, he said: “I can tell you that in terms of disclosures about the companies, ArawakX is about to launch in the fourth quarter a portal where you will be able to see information about corporate activities. We’re also going to be launching our secondary market, hopefully by the fourth quarter but certainly by the first quarter of next year.”

Mr Rahming spoke out as questions were being raised over the progress made by Pinnacle Franchise Brands, the first entity to hit its crowdfund target via ArawakX with a just over $2m raise that closed in January 2022. Little had been heard subsequently from the company, which has the Red Lobster franchise rights to the Caribbean, until its just-released semi-annual progress report.

James Owen, Pinnacle’s chief financial officer, informed the 1,829 investors that supply chain and procurement issues had forced the company to push back plans for the first Red Lobster location’s opening from this year to the 2023 first quarter.

He added that the lease for that restaurant was signed just over two months ago for an undisclosed site in western New Providence, which is now “readying” for construction and fit-out. Mr Owen said the precise location for that restaurant cannot be disclosed due to a non-disclosure agreement with the landlord, but added that Pinnacle was “eyeing” another site in the island’s east. Pinnacle is headed by former Galleria and Outback Steakhouse chief, Chris Mortimer.

Mr Rahming, meanwhile, said in response to the disclosure concerns that “everything is new for everybody, so people are trying to figure it out”. While many expect a crowdfunding platform and market to be put together almost overnight, he added that it takes time to get it right.

“It takes time to build,” the ArawakX technology chief said. “People like to think it can be done immediately, but they take time to build. First you have to build the companies, then build the investor base, then build the disclosure portal. We want to build one of those and have some creative ideas on how to improve on that.

“People think these things are a lot easier than they are. These are really complicated things to do. It’s crazy behind the scenes working on these things but we’re all trying to make our country better.”

As for timely issuer disclosures, he told Tribune Business: “They’re super important. The reason being, as you know, investors when they have timely information can make decisions whether to buy, sell or hold. It brings more transparency, trust and confidence in the market.

“We really want to build this thing so successfully so we get as many companies get funded, and as many investors see returns, as possible. These things are built in stages. The first stage is get the initial public offerings (IPOs) up and running, then the secondary market and then the third stage is disclosure. Then you’ve made a market.

“When the first company pays a dividend, and people get their money back through share appreciation and dividends, this market is made. It’s just a matter of time before someone hits it big, pays their investors back and then everything will be in place for long-term, sustainable growth. It will be a nice, dynamic market where people can raise money and make investments.”

Mr Rahming said ArawakX also has plans to “launch additional products”, although he declined to identify them other than to say “it’s not just crowdfunding equity” and will involve other forms of investment securities.