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SCRA Board of TrusteesAudit and Finance Committee
June 4 2019
Agenda
1000-1005 Welcome and Call to Order (Bryant Barnes)Approval of Minutes (Bryant Barnes)February 5 2019 (SCRA Audit and Finance Committee)
1005-1020 Report from the Evaluation Committee (Don HerriottBryantBarnesMicroBurst Learning)
1020-1030 FY19 Interim Financials (John Sircy)1030-1035 Portfolio Review (John Sircy)1035-1040 Industry Partnership Fund (Bob Quinn)1040-1055 Growth Strategy (Bob Quinn)1055-1105 FY20-22 Strategic Plan (Bob QuinnJohn Sircy)1105-1130 FY20 Annual Operating Plan (Bob QuinnJohn Sircy)1130 Adjourn
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 2
Welcome and Call to OrderBryant Barnes
Approval of MinutesFebruary 5 2019
SCRA Audit and Finance Committee
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 4
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
April 30 2019 vs One Year Agobull $108M increase in earning assetsbull $20M increase in unrestricted net assets
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 7
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 8
In 000s 4302019 4302018 $ Var Var NotesAssetsUnrestricted cash 157$ 5978$ (5821)$ -974 See short-term investments below
Restricted cash 1 1364 (1363) -999 Monetizing IPF contributions for operating purposes
Receivables amp prepaids 1830 8385 (6555) -782 IPF $36M USC $17M clean up of receivables in FY 2018 to come
Short-term investments 7937 - 7937 1000 See unrestricted cash above earning 218
Total current assets 9925 15727 (5802) -369PPampE net 32592 34107 (1515) -44 Depreciation and limited cap-ex
Long-term investments 42926 40095 2831 71 Took advantage of increase in bond yields in October 2018
Total non-current assets 75518 74202 1316 18 Total assets 85443$ 89929$ (4486)$ -50LiabilitiesShort-term liabilities 725$ 1448$ (723)$ -499Notes payable - buildings 14445 15292 (847) -55 Total liabilities 15170 16740 (1570) -94Net AssetsUnrestricted 48890$ 46907$ 1983$ 42Restricted 3236 7467 (4231) 567 Timing on IPF contributions
Net investment in capital assets 18147 18815 (668) -36 Net of change in PPampE and related debt
Net position 70273 73189 (2916) 1000 Total liabilities amp net position 85443$ 89929$ (4486)$ -1000
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 9
$157
$7937
$42926
$14445
$48890
$5978
$-
$40095
$15292
$46907
$-
$10000
$20000
$30000
$40000
$50000
$60000
Unrestricted cash Short-term inv Long-term inv Debt Unrestricted net assetsApril 30 2019 April 30 2018
In Thousands
Executive Summary
Statement of Activities FYTD Actual vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Unfavorable Contributions
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
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FY20 AOP Statement of Activities
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In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
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Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Agenda
1000-1005 Welcome and Call to Order (Bryant Barnes)Approval of Minutes (Bryant Barnes)February 5 2019 (SCRA Audit and Finance Committee)
1005-1020 Report from the Evaluation Committee (Don HerriottBryantBarnesMicroBurst Learning)
1020-1030 FY19 Interim Financials (John Sircy)1030-1035 Portfolio Review (John Sircy)1035-1040 Industry Partnership Fund (Bob Quinn)1040-1055 Growth Strategy (Bob Quinn)1055-1105 FY20-22 Strategic Plan (Bob QuinnJohn Sircy)1105-1130 FY20 Annual Operating Plan (Bob QuinnJohn Sircy)1130 Adjourn
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 2
Welcome and Call to OrderBryant Barnes
Approval of MinutesFebruary 5 2019
SCRA Audit and Finance Committee
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 4
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
April 30 2019 vs One Year Agobull $108M increase in earning assetsbull $20M increase in unrestricted net assets
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 7
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 8
In 000s 4302019 4302018 $ Var Var NotesAssetsUnrestricted cash 157$ 5978$ (5821)$ -974 See short-term investments below
Restricted cash 1 1364 (1363) -999 Monetizing IPF contributions for operating purposes
Receivables amp prepaids 1830 8385 (6555) -782 IPF $36M USC $17M clean up of receivables in FY 2018 to come
Short-term investments 7937 - 7937 1000 See unrestricted cash above earning 218
Total current assets 9925 15727 (5802) -369PPampE net 32592 34107 (1515) -44 Depreciation and limited cap-ex
Long-term investments 42926 40095 2831 71 Took advantage of increase in bond yields in October 2018
Total non-current assets 75518 74202 1316 18 Total assets 85443$ 89929$ (4486)$ -50LiabilitiesShort-term liabilities 725$ 1448$ (723)$ -499Notes payable - buildings 14445 15292 (847) -55 Total liabilities 15170 16740 (1570) -94Net AssetsUnrestricted 48890$ 46907$ 1983$ 42Restricted 3236 7467 (4231) 567 Timing on IPF contributions
Net investment in capital assets 18147 18815 (668) -36 Net of change in PPampE and related debt
Net position 70273 73189 (2916) 1000 Total liabilities amp net position 85443$ 89929$ (4486)$ -1000
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 9
$157
$7937
$42926
$14445
$48890
$5978
$-
$40095
$15292
$46907
$-
$10000
$20000
$30000
$40000
$50000
$60000
Unrestricted cash Short-term inv Long-term inv Debt Unrestricted net assetsApril 30 2019 April 30 2018
In Thousands
Executive Summary
Statement of Activities FYTD Actual vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Unfavorable Contributions
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
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In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Welcome and Call to OrderBryant Barnes
Approval of MinutesFebruary 5 2019
SCRA Audit and Finance Committee
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 4
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
April 30 2019 vs One Year Agobull $108M increase in earning assetsbull $20M increase in unrestricted net assets
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 7
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 8
In 000s 4302019 4302018 $ Var Var NotesAssetsUnrestricted cash 157$ 5978$ (5821)$ -974 See short-term investments below
Restricted cash 1 1364 (1363) -999 Monetizing IPF contributions for operating purposes
Receivables amp prepaids 1830 8385 (6555) -782 IPF $36M USC $17M clean up of receivables in FY 2018 to come
Short-term investments 7937 - 7937 1000 See unrestricted cash above earning 218
Total current assets 9925 15727 (5802) -369PPampE net 32592 34107 (1515) -44 Depreciation and limited cap-ex
Long-term investments 42926 40095 2831 71 Took advantage of increase in bond yields in October 2018
Total non-current assets 75518 74202 1316 18 Total assets 85443$ 89929$ (4486)$ -50LiabilitiesShort-term liabilities 725$ 1448$ (723)$ -499Notes payable - buildings 14445 15292 (847) -55 Total liabilities 15170 16740 (1570) -94Net AssetsUnrestricted 48890$ 46907$ 1983$ 42Restricted 3236 7467 (4231) 567 Timing on IPF contributions
Net investment in capital assets 18147 18815 (668) -36 Net of change in PPampE and related debt
Net position 70273 73189 (2916) 1000 Total liabilities amp net position 85443$ 89929$ (4486)$ -1000
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 9
$157
$7937
$42926
$14445
$48890
$5978
$-
$40095
$15292
$46907
$-
$10000
$20000
$30000
$40000
$50000
$60000
Unrestricted cash Short-term inv Long-term inv Debt Unrestricted net assetsApril 30 2019 April 30 2018
In Thousands
Executive Summary
Statement of Activities FYTD Actual vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Unfavorable Contributions
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Approval of MinutesFebruary 5 2019
SCRA Audit and Finance Committee
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 4
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
April 30 2019 vs One Year Agobull $108M increase in earning assetsbull $20M increase in unrestricted net assets
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 7
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 8
In 000s 4302019 4302018 $ Var Var NotesAssetsUnrestricted cash 157$ 5978$ (5821)$ -974 See short-term investments below
Restricted cash 1 1364 (1363) -999 Monetizing IPF contributions for operating purposes
Receivables amp prepaids 1830 8385 (6555) -782 IPF $36M USC $17M clean up of receivables in FY 2018 to come
Short-term investments 7937 - 7937 1000 See unrestricted cash above earning 218
Total current assets 9925 15727 (5802) -369PPampE net 32592 34107 (1515) -44 Depreciation and limited cap-ex
Long-term investments 42926 40095 2831 71 Took advantage of increase in bond yields in October 2018
Total non-current assets 75518 74202 1316 18 Total assets 85443$ 89929$ (4486)$ -50LiabilitiesShort-term liabilities 725$ 1448$ (723)$ -499Notes payable - buildings 14445 15292 (847) -55 Total liabilities 15170 16740 (1570) -94Net AssetsUnrestricted 48890$ 46907$ 1983$ 42Restricted 3236 7467 (4231) 567 Timing on IPF contributions
Net investment in capital assets 18147 18815 (668) -36 Net of change in PPampE and related debt
Net position 70273 73189 (2916) 1000 Total liabilities amp net position 85443$ 89929$ (4486)$ -1000
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 9
$157
$7937
$42926
$14445
$48890
$5978
$-
$40095
$15292
$46907
$-
$10000
$20000
$30000
$40000
$50000
$60000
Unrestricted cash Short-term inv Long-term inv Debt Unrestricted net assetsApril 30 2019 April 30 2018
In Thousands
Executive Summary
Statement of Activities FYTD Actual vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Unfavorable Contributions
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Report from the Evaluation Committee Bryant BarnesDon HerriottMicroBurst Learning
FY19 Interim FinancialsJohn Sircy
Executive Summary
April 30 2019 vs One Year Agobull $108M increase in earning assetsbull $20M increase in unrestricted net assets
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 7
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 8
In 000s 4302019 4302018 $ Var Var NotesAssetsUnrestricted cash 157$ 5978$ (5821)$ -974 See short-term investments below
Restricted cash 1 1364 (1363) -999 Monetizing IPF contributions for operating purposes
Receivables amp prepaids 1830 8385 (6555) -782 IPF $36M USC $17M clean up of receivables in FY 2018 to come
Short-term investments 7937 - 7937 1000 See unrestricted cash above earning 218
Total current assets 9925 15727 (5802) -369PPampE net 32592 34107 (1515) -44 Depreciation and limited cap-ex
Long-term investments 42926 40095 2831 71 Took advantage of increase in bond yields in October 2018
Total non-current assets 75518 74202 1316 18 Total assets 85443$ 89929$ (4486)$ -50LiabilitiesShort-term liabilities 725$ 1448$ (723)$ -499Notes payable - buildings 14445 15292 (847) -55 Total liabilities 15170 16740 (1570) -94Net AssetsUnrestricted 48890$ 46907$ 1983$ 42Restricted 3236 7467 (4231) 567 Timing on IPF contributions
Net investment in capital assets 18147 18815 (668) -36 Net of change in PPampE and related debt
Net position 70273 73189 (2916) 1000 Total liabilities amp net position 85443$ 89929$ (4486)$ -1000
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 9
$157
$7937
$42926
$14445
$48890
$5978
$-
$40095
$15292
$46907
$-
$10000
$20000
$30000
$40000
$50000
$60000
Unrestricted cash Short-term inv Long-term inv Debt Unrestricted net assetsApril 30 2019 April 30 2018
In Thousands
Executive Summary
Statement of Activities FYTD Actual vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Unfavorable Contributions
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
FY19 Interim FinancialsJohn Sircy
Executive Summary
April 30 2019 vs One Year Agobull $108M increase in earning assetsbull $20M increase in unrestricted net assets
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 7
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 8
In 000s 4302019 4302018 $ Var Var NotesAssetsUnrestricted cash 157$ 5978$ (5821)$ -974 See short-term investments below
Restricted cash 1 1364 (1363) -999 Monetizing IPF contributions for operating purposes
Receivables amp prepaids 1830 8385 (6555) -782 IPF $36M USC $17M clean up of receivables in FY 2018 to come
Short-term investments 7937 - 7937 1000 See unrestricted cash above earning 218
Total current assets 9925 15727 (5802) -369PPampE net 32592 34107 (1515) -44 Depreciation and limited cap-ex
Long-term investments 42926 40095 2831 71 Took advantage of increase in bond yields in October 2018
Total non-current assets 75518 74202 1316 18 Total assets 85443$ 89929$ (4486)$ -50LiabilitiesShort-term liabilities 725$ 1448$ (723)$ -499Notes payable - buildings 14445 15292 (847) -55 Total liabilities 15170 16740 (1570) -94Net AssetsUnrestricted 48890$ 46907$ 1983$ 42Restricted 3236 7467 (4231) 567 Timing on IPF contributions
Net investment in capital assets 18147 18815 (668) -36 Net of change in PPampE and related debt
Net position 70273 73189 (2916) 1000 Total liabilities amp net position 85443$ 89929$ (4486)$ -1000
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 9
$157
$7937
$42926
$14445
$48890
$5978
$-
$40095
$15292
$46907
$-
$10000
$20000
$30000
$40000
$50000
$60000
Unrestricted cash Short-term inv Long-term inv Debt Unrestricted net assetsApril 30 2019 April 30 2018
In Thousands
Executive Summary
Statement of Activities FYTD Actual vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Unfavorable Contributions
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Executive Summary
April 30 2019 vs One Year Agobull $108M increase in earning assetsbull $20M increase in unrestricted net assets
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 7
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 8
In 000s 4302019 4302018 $ Var Var NotesAssetsUnrestricted cash 157$ 5978$ (5821)$ -974 See short-term investments below
Restricted cash 1 1364 (1363) -999 Monetizing IPF contributions for operating purposes
Receivables amp prepaids 1830 8385 (6555) -782 IPF $36M USC $17M clean up of receivables in FY 2018 to come
Short-term investments 7937 - 7937 1000 See unrestricted cash above earning 218
Total current assets 9925 15727 (5802) -369PPampE net 32592 34107 (1515) -44 Depreciation and limited cap-ex
Long-term investments 42926 40095 2831 71 Took advantage of increase in bond yields in October 2018
Total non-current assets 75518 74202 1316 18 Total assets 85443$ 89929$ (4486)$ -50LiabilitiesShort-term liabilities 725$ 1448$ (723)$ -499Notes payable - buildings 14445 15292 (847) -55 Total liabilities 15170 16740 (1570) -94Net AssetsUnrestricted 48890$ 46907$ 1983$ 42Restricted 3236 7467 (4231) 567 Timing on IPF contributions
Net investment in capital assets 18147 18815 (668) -36 Net of change in PPampE and related debt
Net position 70273 73189 (2916) 1000 Total liabilities amp net position 85443$ 89929$ (4486)$ -1000
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 9
$157
$7937
$42926
$14445
$48890
$5978
$-
$40095
$15292
$46907
$-
$10000
$20000
$30000
$40000
$50000
$60000
Unrestricted cash Short-term inv Long-term inv Debt Unrestricted net assetsApril 30 2019 April 30 2018
In Thousands
Executive Summary
Statement of Activities FYTD Actual vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Unfavorable Contributions
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 8
In 000s 4302019 4302018 $ Var Var NotesAssetsUnrestricted cash 157$ 5978$ (5821)$ -974 See short-term investments below
Restricted cash 1 1364 (1363) -999 Monetizing IPF contributions for operating purposes
Receivables amp prepaids 1830 8385 (6555) -782 IPF $36M USC $17M clean up of receivables in FY 2018 to come
Short-term investments 7937 - 7937 1000 See unrestricted cash above earning 218
Total current assets 9925 15727 (5802) -369PPampE net 32592 34107 (1515) -44 Depreciation and limited cap-ex
Long-term investments 42926 40095 2831 71 Took advantage of increase in bond yields in October 2018
Total non-current assets 75518 74202 1316 18 Total assets 85443$ 89929$ (4486)$ -50LiabilitiesShort-term liabilities 725$ 1448$ (723)$ -499Notes payable - buildings 14445 15292 (847) -55 Total liabilities 15170 16740 (1570) -94Net AssetsUnrestricted 48890$ 46907$ 1983$ 42Restricted 3236 7467 (4231) 567 Timing on IPF contributions
Net investment in capital assets 18147 18815 (668) -36 Net of change in PPampE and related debt
Net position 70273 73189 (2916) 1000 Total liabilities amp net position 85443$ 89929$ (4486)$ -1000
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 9
$157
$7937
$42926
$14445
$48890
$5978
$-
$40095
$15292
$46907
$-
$10000
$20000
$30000
$40000
$50000
$60000
Unrestricted cash Short-term inv Long-term inv Debt Unrestricted net assetsApril 30 2019 April 30 2018
In Thousands
Executive Summary
Statement of Activities FYTD Actual vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Unfavorable Contributions
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
SCRA Balance SheetsApril 30 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 9
$157
$7937
$42926
$14445
$48890
$5978
$-
$40095
$15292
$46907
$-
$10000
$20000
$30000
$40000
$50000
$60000
Unrestricted cash Short-term inv Long-term inv Debt Unrestricted net assetsApril 30 2019 April 30 2018
In Thousands
Executive Summary
Statement of Activities FYTD Actual vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Unfavorable Contributions
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Executive Summary
Statement of Activities FYTD Actual vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Unfavorable Contributions
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Timing Grants and program expensesbull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 10
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
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In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
SCRA Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 11
In 000sFYTD April
ActualFYTD April
AOP $ Var Var NotesOperating revenueContract 581$ 426$ 155$ 364 Dept of Commerce ($208k) less SCHFCA ($90k)
Lease income 3363 3101 262 84 Straight line accounting per BDO (positive $135k impact)
Contributions 1934 6000 (4066) -678 Includes $282k from CURF
Other 116 76 40 526 Volvo furniture rent
Total operating revenue 5994$ 9603$ (3609)$ -376Operating expenseContract - direct 27$ 13$ 14$ 1077Facilities 1190 1214 (24) -20 Approximately $25k of one-time expenses
Grants and program expenses 1535 2295 (760) -331 90 Timing
Salaries and benefits 3758 4084 (326) -80 Industry Facilities and FampA favorabilities
General and administrative 468 512 (44) -86Professional services 552 513 39 76 Items not in AOP $54k related to ATI earnout $40k of lobbying fees
Building infrastructure expense 1455 1642 (187) -114Other 631 717 (86) -120 Under in travel and rents over in interest expense
Total operating expense 9616$ 10990$ (1374)$ -125 Net operating deficit (3622)$ (1387)$ (2235)$ -1611Non-operating activitiesTransfers to SC Launch Inc (1350)$ (1350)$ -$ 00ATI earnout 4000 - 4000 1000Interest income 1108 600 508 847 Switch from cash to accrual accounting - $400k boost
Unrealized gain (loss) on investments 1055 (83) 1138 -13711 Bond market rally
Non-operating activities 4813 (833) 5646 NMFNet surplus (deficit) 1191$ (2220)$ 3411$ NMF
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
SCRA Statement of Activity10 Months ended April 30 2019 vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 12
$3944
$1934 $1535
$8081
$1108 $1055
$3527
$6000
$2295
$8695
$600
$(83)
$(1000)
$-
$1000
$2000
$3000
$4000
$5000
$6000
$7000
$8000
$9000
$10000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain (Loss)
Actual AOP
In Thousands
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Executive Summary
Statement of Activities 2019 Forecast vs AOPbull Operating revenue
bull Favorable Contract amp leases bull Contributions Assumed $3M by 63019
bull Operating expensebull Favorable Salaries amp benefits GampA building infrastructurebull Unfavorable Professional services
bull Non-Operating Activitiesbull Favorable ATI earn-out interest income unrealized gains
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 13
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
SCRA Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 14
In 000s FY 2019 Forecast
FY 2019 AOP $ Var Var Notes
Operating revenueContract 680$ 511$ 169$ 331 $200k recovery and $50k monthly run rate
Lease income 4000 3722 278 75 Future monthly run rate = $319k
Contributions 3000 6000 (3000) -500 Assumes 50 of target
Other 116 76 40 526 Total operating revenue 7796$ 10309$ (2513)$ -244Operating expenseContract - direct 35$ 15$ 20$ 1333 Future monthly run rate = $4k
Facilities expense 1430 1466 (36) -25 Future monthly run rate = $120k
Grants and program expenses 3400 3625 (225) -62 Watt Center $400k under AG $150k over PDF $25 over
Salaries and benefits 4650 4901 (251) -51 Future monthly run rate = $446k
General and administrative 600 614 (14) -23 Future monthly run rate = $66k
Professional services 825 618 207 335 Future monthly run rate = $82k plus $110k in reserves
Building infrastructure expense 1750 1944 (194) -100 Future monthly run rate = $148k
Other 825 887 (62) -70 Future monthly run rate = $97k
Total operating expense 13515$ 14070$ (555)$ -39 Net operating deficit (5719)$ (3761)$ (1958)$ -521Non-operating activitiesTransfers to SC Launch Inc (1800)$ (1800)$ -$ 00Interest income 1250 720 530 736 Future monthly run rate = $71k
ATI earnout 4000 - 4000 1000Unrealized loss on investments 1000 (100) 1100 11000 Estimate $1055k appreciation through April 2019
Non-operating activities 4450 (1180) 5630 4771Net deficit (1269)$ (4941)$ 3672$ -743
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
SCRA Statement of ActivityFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 15
$4680
$3000 $3400
$10115
$1250 $1000
$4283
$6000
$3625
$10445
$720
$(100) $(2000)
$-
$2000
$4000
$6000
$8000
$10000
$12000
Contract amp Lease Contributions Program Exp All Other Exp Interest Inc Unrealized Gain(Loss)
Actual AOP
In Thousands
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 16
In 000s 3312019 3312018 $ Var Var NotesAssetsCash 51$ 6087$ (6036)$ -992 See short-term amp long-term investmentsReceivables 292 293 (1) -03Short-term investments 1258 - 1258 1000 Invested cash Total current assets 1601 6380 (4779) -749Long-term market investments 4334 - 4334 1000 Invested cashSC Launch portfolio investments 7 188 (181) -963Stage 2 portfolio investments 2892 18380 (15488) -843 Writedown of CCI Integrated Biometrics Long-term investments 7233 18568 (11335) -610 Total assets 8834$ 24948$ (16114)$ -646ResourcesLiabiliites -$ -$ -$ 00Net restricted assets 8834 24948 (16114) -646 Total resources 8834$ 24948$ (16114)$ -646
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
In 000s | 3312019 | 3312018 | $ Var | Var | Notes | ||||||
Assets | |||||||||||
Cash | $ 51 | $ 6087 | $ (6036) | -992 | See short-term amp long-term investments | ||||||
Receivables | 292 | 293 | (1) | -03 | |||||||
Short-term investments | 1258 | - 0 | 1258 | 1000 | Invested cash | ||||||
Total current assets | 1601 | 6380 | (4779) | -749 | |||||||
Long-term market investments | 4334 | - 0 | 4334 | 1000 | Invested cash | ||||||
SC Launch portfolio investments | 7 | 188 | (181) | -963 | |||||||
Stage 2 portfolio investments | 2892 | 18380 | (15488) | -843 | Writedown of CCI Integrated Biometrics | ||||||
Long-term investments | 7233 | 18568 | (11335) | -610 | |||||||
Total assets | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
Resources | |||||||||||
Liabiliites | $ - 0 | $ - 0 | $ - 0 | 00 | |||||||
Net restricted assets | 8834 | 24948 | (16114) | -646 | |||||||
Total resources | $ 8834 | $ 24948 | $ (16114) | -646 | |||||||
SC Launch Inc Balance SheetsMarch 31 2019 and 2018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 17
$51
$5592
$7
$2892
$6087
$- $188
$18380
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
$16000
$18000
$20000
Cash Total Marketable Inv SC Launch Portfolio Stage 2 PortfolioMarch 31 2019 March 31 2018
In Thousands
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
SC Launch Statements of Activities 10 Months Ending April 30 2019
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 18
In 000s Actual AOP $ Var Var NotesOperating revenueInvestment returns 330$ 190$ 140$ 737 Integrated Biometrics payment of $150kContribution from SCRA 1350 1350 - 00 Total operating revenue 1680$ 1540$ 140$ 91Operating expenseInvestments 1875$ 2500$ (625)$ -250 Timing in partGeneral and administrative 11 12 (1) 00Professional services 74 111 (37) -333 Timing Total operating expense 1960$ 2623$ (663)$ -253 Net operating deficit (280)$ (1083)$ 803$ -741Non-operating activitiesUnrealized gain on investments 54 - 54 1000 Preferred stock and corporate debt Non-operating activities 54 - 54 1000Net deficit (226)$ (1083)$ 857$ 791
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
In 000s | Actual | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 330 | $ 190 | $ 140 | 737 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1350 | 1350 | - 0 | 00 | |||||||
Total operating revenue | $ 1680 | $ 1540 | $ 140 | 91 | |||||||
Operating expense | |||||||||||
Investments | $ 1875 | $ 2500 | $ (625) | -250 | Timing in part | ||||||
General and administrative | 11 | 12 | (1) | 00 | |||||||
Professional services | 74 | 111 | (37) | -333 | Timing | ||||||
Total operating expense | $ 1960 | $ 2623 | $ (663) | -253 | |||||||
Net operating deficit | $ (280) | $ (1083) | $ 803 | -741 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 54 | - 0 | 54 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 54 | - 0 | 54 | 1000 | |||||||
Net deficit | $ (226) | $ (1083) | $ 857 | 791 | |||||||
SC Launch Inc Statements of ActivitiesFYTD 2019 Actual vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 19
$330
$1350
$1875
$85 $54 $190
$1350
$2500
$123 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
SC Launch Statements of Activities FY19 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 20
In 000sFY 2019
FC AOP $ Var Var NotesOperating revenueInvestment returns 400$ 228$ 172$ 754 Integrated Biometrics payment of $150kContribution from SCRA 1800 1800 - 00 Total operating revenue 2200$ 2028$ 172$ 85Operating expenseInvestments 2700$ 3000$ (300)$ -100 Shift to equity investmentsGeneral and administrative 14 14 - 00Professional services 150 133 17 128 Legal fees - shift to equity investments Total operating expense 2864$ 3147$ (283)$ -90 Net operating deficit (664)$ (1119)$ 455$ -407Non-operating activitiesUnrealized gain on investments 50 - 50 1000 Preferred stock and corporate debt Non-operating activities 50 - 50 1000Net deficit (614)$ (1119)$ 505$ 451
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
In 000s | FY 2019 FC | AOP | $ Var | Var | Notes | ||||||
Operating revenue | |||||||||||
Investment returns | $ 400 | $ 228 | $ 172 | 754 | Integrated Biometrics payment of $150k | ||||||
Contribution from SCRA | 1800 | 1800 | - 0 | 00 | |||||||
Total operating revenue | $ 2200 | $ 2028 | $ 172 | 85 | |||||||
Operating expense | |||||||||||
Investments | $ 2700 | $ 3000 | $ (300) | -100 | Shift to equity investments | ||||||
General and administrative | 14 | 14 | - 0 | 00 | |||||||
Professional services | 150 | 133 | 17 | 128 | Legal fees - shift to equity investments | ||||||
Total operating expense | $ 2864 | $ 3147 | $ (283) | -90 | |||||||
Net operating deficit | $ (664) | $ (1119) | $ 455 | -407 | |||||||
Non-operating activities | |||||||||||
Unrealized gain on investments | 50 | - 0 | 50 | 1000 | Preferred stock and corporate debt | ||||||
Non-operating activities | 50 | - 0 | 50 | 1000 | |||||||
Net deficit | $ (614) | $ (1119) | $ 505 | 451 | |||||||
SC Launch Inc Statements of ActivitiesFY 2019 Forecast vs AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 21
$400
$1800
$2700
$164 $50
$228
$1800
$3000
$147 $-
$-
$500
$1000
$1500
$2000
$2500
$3000
$3500
Investment returns SCRA contributions Portfolio investments Other operating exp Unrealized gainActual AOP
In Thousands
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
Portfolio ReviewJohn Sircy
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
Market Summary
Yield Curve Forecastbull Yield curve inverted
bull 10-year yields below short-term ratesbull Historical average inversion period 14 months
bull Forecastbull Bull market for bonds running out of steambull Political realities adding noise to forecast
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 23
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
SCRA Investment Portfolio Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 24
000s of Portfolio Yield to MaturityMoney market 8038$ 157 218Bonds 43139 843 207 Totals 51177$ 1000 209
Duration of Bonds 487 years
Maturity by Fiscal Year 000s Yield to Maturity of Bonds2019 168$ 102 042020 - 000 002021 7258 162 1682022 10385 189 2412023 4670 200 1082024 2532 242 592025 5835 256 135
After 2025 12291 222 285Total Bonds 43139$ 207 1000
March 31 2019
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
March 31 2019 | |||||||
000s | of Portfolio | Yield to Maturity | |||||
Money market | $ 8038 | 157 | 218 | ||||
Bonds | 43139 | 843 | 207 | ||||
Totals | $ 51177 | 1000 | 209 | ||||
Duration of Bonds | 487 | years | |||||
Maturity by Fiscal Year | 000s | Yield to Maturity | of Bonds | ||||
2019 | $ 168 | 102 | 04 | ||||
2020 | - 0 | 000 | 00 | ||||
2021 | 7258 | 162 | 168 | ||||
2022 | 10385 | 189 | 241 | ||||
2023 | 4670 | 200 | 108 | ||||
2024 | 2532 | 242 | 59 | ||||
2025 | 5835 | 256 | 135 | ||||
After 2025 | 12291 | 222 | 285 | ||||
Total Bonds | $ 43139 | 207 | 1000 | ||||
SCRA Investment PortfolioMaturities and Yields
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 25
$168
$7258
$10385
$4670
$2532
$5835
$12291
102
162
189200
242256
222
000
050
100
150
200
250
300
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
2019 2021 2022 2023 2024 2025 After 2025Maturities YTMs
$s In Thousands
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
642019 26
SC Launch Investment Portfolio Summary
Type 000s of Portfolio Yield to MaturityCorporate bonds 625 144 386Government bonds 2540 584 169 Total fixed income 3165 728 212Preferred stock 1183 272 606 Totals 4348$ 1000 319
Fixed Income Maturities 000s Yield to Maturity of Fixed
Income PortfolioUnder 1 year 1285$ 129 4061 to 5 years 1507 225 476Over 5 years 373 444 118
Total Fixed income 3165$ 212 1000
March 31 2019
COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
March 31 2019 | |||||||
Type | 000s | of Portfolio | Yield to Maturity | ||||
Corporate bonds | 625 | 144 | 386 | ||||
Government bonds | 2540 | 584 | 169 | ||||
Total fixed income | 3165 | 728 | 212 | ||||
Preferred stock | 1183 | 272 | 606 | ||||
Totals | $ 4348 | 1000 | 319 | ||||
Fixed Income Maturities | 000s | Yield to Maturity | of Fixed Income Portfolio | ||||
Under 1 year | $ 1285 | 129 | 406 | ||||
1 to 5 years | 1507 | 225 | 476 | ||||
Over 5 years | 373 | 444 | 118 | ||||
Total Fixed income | $ 3165 | 212 | 1000 | ||||
SC Launch Inc Investment PortfolioAsset Mix
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 27
Corporate bonds14
Government bonds59
Preferred stock27
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
Industry Partnership FundBob Quinn
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
bull IPF amendment signed by Governorbull Increases annual cap from $6M to $9M phased in over three
years (2019-21)bull Decreases individual annual cap from $2M to $250K
bull Some progress at federal level on resolution of draft IRS regulation
bull Contributions and firm pledges to date $2Mbull Good prospects in pipeline
Update
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 29
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
Growth StrategyBob Quinn
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
bull Growth of workload for Regional Managers and other SC Launch (SCL) staff requires enhanced resource allocation to improve investment and other impact
bull Mark Housley (Regional Manager) is retiring in June 2019bull SC Launch Inc Boardrsquos increased focus on ROIbull Necessity to maximize ROI to ensure long-term sustainabilitybull IPF amendment is $9M phased in over three years rather than anticipated $12Mbull In addition to ROI focus our mission requires support to other technology-based
startups (eg academic rural social enterprises)bull In some cases these may grow to be investible but in many cases not
bull Under current organizational structure there have been some issues regarding relative roles of staff
Background
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 31
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SCRA fuels South Carolinarsquos innovation economy
hellipby accelerating technology-enabled growth in research
academia entrepreneurship and industry
Our Mission
INDUSTRY
ACADEMIAENTREPRENEURS
FACILITIES
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 32
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
Objectives of Proposed Growth Strategybull Successfully address all elements of our mission bull Maximize returns by focusing on most investible companiesbull Continue to provide service across continuum of early- and later-stage
companiesbull Diversify support for early-stage and non-investible companies
bull Leverage tools and external partners (eg Resource Partner Network incubators Small Business Development Centers) to greatest degree possible
bull Implement statewide programs (eg Virtual Business Incubators SC Incubator Association Digital Infrastructure South Carolina TechSC)
bull Meet prioritized needs of academic partnersbull Optimize use of backgrounds talents and passions of respective staff
throughout SCRA
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 33
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
Proposed Organizational Structurebull SC Launch
bull Support of entrepreneurial companiesbull SC Ventures
bull Support of later-stage entrepreneurial companies and industrybull SC Academics
bull Support of academic institutions and academic startupsbull SC Facilities
bull Support of tenants of SCRA-owned and ndashleased facilities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 34
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Launch Proposed Staffing bull Directorbull 3 Investment Managers (Current Regional Managers) bull Operations Manager (Also supports SC Ventures) bull Program Administrator (Also supports SC Ventures)bull Sr Financial Analyst (Dotted line from Finance amp Administration also supports SC
Ventures)bull 3 Entrepreneurs in Residence (EIRs each part-time) or 1 full-time Services
Manager bull Depends on ability to recruit qualified EIRsbull New position(s) but using Housley FTE
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 35
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Launch Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Serves as Executive Director of SC Launch Inc bull Manages small subset of client companies that meet more stringent
screening criteria and are strong candidates for investment by SC Launch Inc (Tier 1 companies)
bull Manages andor participates in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Facilitates other funding mechanisms (eg crowdfunding) bull Mentors small subset of companies that do not currently meet stringent
screening criteria (Tier 2 companies)642019 COMPANY PROPRIETARY copy 2019 BY SCRA 36
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Launch Roles and Responsibilities bull Investment Managers
bull Manage portfolio of up to 30 client companiesbull Give priority attention to those companies that meet more stringent screening criteria and
are strong candidates for investment by SCL Inc (Tier 1 companies)bull Serve as SCRA lead for assigned client companies up to and including first tranche
investment by SCL Inc for subset of high-potential companies (these will ldquograduaterdquo to SC Ventures) or through exit andor other form of ldquograduationrdquo for remaining companies
bull Lead due diligence process conducted before acceptance into SCL and later to determine appropriateness for SCL Inc investment bull Supported by Sr Financial Analyst SC Ventures and others
bull Provide all support currently given by Regional Managers but with far greater focus on preparing for investment by SCL Inc
bull Work with SC Ventures to identify and engage third-party investorsbull With SCL core team select companies for Acceleration Grantsbull Work closely with the SC Ventures staff to ensure smooth handoff of relevant Portfolio
Companies after first tranche of SCL Inc investment bull Lead structuring negotiation and enforcement of financing agreements
bull Supported by Sr Financial Analyst SC Ventures and others642019 37
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Launch Roles and Responsibilities bull Entrepreneurs in Residences or Services Manager
bull Serve as primary points of contact for potential SCL client companies including support to Investment Managers and Entrepreneurial Programs Integrated Client Services (EPICS)
bull Provide mentoring to companies that do not meet stringent screening criteria (Tier 2 companies)bull Includes high-impact companies (eg social enterprises rural-based) andor
companies with potential to transition to Tier 1bull Coordinate with and make referrals to other service providersresources (eg
Resource Partner Network SCORE incubators virtual business incubators Small Business Development Centers)
bull With SCL core team select companies for Project Development Fund Grants bull Focus on milestones necessary to transition to Tier 1 bull Coordinate with SC Academics Program Manager on providing support to academic
startups
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 38
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
bull Entrepreneurial Programs Integrated Client Servicesbull Responsible for maintaining portfolio management and workload balance within SCL
and SC Ventures specifically covering client support services as directed by Managers or Directors
bull Handle intake administrative support monthly and quarterly meetings financial analysis grant and contract processing funding award processing conflicts management (as needed) portfolio reporting and activity tracking
bull EPICS core team = SCL Director Operations Manager Program Administrator EIRs and Sr Financial Analyst
39
EPICS
642019 COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Launch Roles and Responsibilities bull Operations ManagerProgram Administrator
bull Manage Resource Partner Network bull Facilitate company intakeleads and provide administrative support to EPICSbull Develop and run Launch N Learnsbull Conduct event planningbull Coordinate Company Reviewsbull Assist in due diligencebull Coordinate SCL Inc Board meetingsbull Also support SC Ventures relative to SCL Inc investments bull Coordinate and maintain all SCL and SC Ventures records reporting and database
managementbull SC Launch Team (Shared leadership)
bull Manage andor participate in statewide and regional initiatives (eg TechSC Digital infrastructure South Carolina SC Incubator Association E4 Carolinas)
bull Manage VBI bull Facilitate other funding mechanisms (eg crowdfunding)
642019 40COMPANY PROPRIETARY copy 2019 BY SCRA
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Launch Roles and Responsibilities bull Sr Financial Analyst
bull Serves as key member of EPICSbull Acts as major contributor to due diligence process (eg financial forecast and cap table
analysis)bull Supports structuring negotiation and enforcement of financing agreementsbull Works with legal counsel on agreements and related matters (eg side letters)bull Monitors financial status of grants and investmentsbull Works with Director of Finance amp Administration on SCL Inc portfolio performance
measurement and analysisbull Performs initial compilation of SCL Inc Audit amp Finance Committee package bull Supports SC Ventures (eg process of identifying and working with exit candidates)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 41
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Ventures Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Industry Managerbull Industry Manager (05 FTE)bull Investment Manager
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 42
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Ventures Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when requiredbull Together with Investment Manager manages portfolio of up to 30 Portfolio
Companiesbull Portfolio comprised of subset of current SCL Inc Portfolio Companies and future
companies receiving first tranche of SCL Inc funding (selected by SC Ventures staff using pull orientation [ie companies that match investor or corporate interests] in consultation with SCL staff) companies identified by SC Ventures staff as having high potential for near-term SCL Inc investments (also using pull orientation) and Stage 2 companies
bull Together with Industry Managers supports industry by identifying technology-based solutions and facilitating relationships recruiting technology-based companies to South Carolina funding Demonstration and Relocation Grants etc
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 43
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Ventures Roles and Responsibilities bull Investment Manager
bull Together with Director manages portfolio of up to 30 Portfolio Companiesbull Provides in-depth support including assisting in business development management team
recruitment strategy development and implementation etc bull Matches companies that are ready for venture capital to appropriate venture investors
provides introductions and facilitates relationshipsbull Introduces SC Ventures SCL and SC Academics companies to corporate venture and RampD
groups and facilitates relationshipsbull Recommends follow-on tranches of investments by SCL Inc for selected companies in
which SCL Inc has already invested and prepares companies for presentations to SCL Inc Board
bull Sources companies and either refers them to SCL or if they have professional co-investors or are raising venture rounds recommends for SCV-managed direct investments by SCL Inc Board and prepares companies for presentations to SCL Inc Board
bull Serves on boards of selected companies in which SCL Inc investsbull Provides expertise on venture funding market (verticals valuation development stage) to
guide SC Ventures SCL and SC Academics grantsloans642019 COMPANY PROPRIETARY copy 2019 BY SCRA 44
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Ventures Roles and Responsibilities bull Industry Managers
bull Establish and manage cross-industry Innovation Forum with potential financial pooling to investigate and demonstrate new technologies demandedpulled from these industry partners
bull Serve as thought leaders on certain topics convene sharing among practitioners and bring in resourcesexperts to educate and implement
bull Conduct roadmapping for companies focused on Industry 40bull Conduct technology scouting for companies with focus on identifying solutions within
statersquos academic and entrepreneurial communitiesbull Provide Demonstration and Relocation Grantsbull Capture and share open innovation best practicesbull Provide services to industry such as
bull How to work with small companies ndash partnering licensing co-developmentbull Financing ndash venture investingbull Integration of small companies into acquirersbull Scaling operationsbull Due diligencebull Intellectual property642019 COMPANY PROPRIETARY copy 2019 BY SCRA 45
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Academics Proposed Staffing (ADDITIONAL STAFF IN RED)
bull Directorbull Program Manager 1 (Focused on academic research)bull Program Administratorbull Program Manager 2 (Focused on academic startups)
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 46
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Academics Roles and Responsibilities bull Director
bull Provides overall leadership of Divisionbull Plays role of player-coach performing duties of staff members when
requiredbull Leads implementation of Strategic Cooperation Agreement
bull Supports academic startups bull Funds infrastructure to be shared among academic institutions bull Provides grant services
bull Serves as SCRArsquos primary point of contact with academic institutionsbull Acts as Project Manager for US Economic Development Administration i6
Grant and other multi-institutional grants as appropriate
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 47
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Academics Roles and Responsibilities bull Program Manager 1
bull Manages following grant programsbull SCRA-Academia Collaboration Team (SACT) andor any successor
organizationbull Maturation Grantsbull Prototyping Grants
bull Provides outreach to academic institutionsbull Serves as point of contact for academic researchersbull Serves as point of contact with SC Ventures regarding industry-academia
relationships bull Program Administrator
bull Provides administrative support for SC Academicsbull Serves as SC Academics primary point of contact with SCRA Finance and
Administration regarding grants642019
COMPANY PROPRIETARY copy 2019 BY SCRA48
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Academics Roles and Responsibilities bull Program Manager 2
bull Manages following grant programsbull SBIRSTTR Matching Grantsbull Academic Startup Assistance Program (ASAP) Grants
bull Serves as relationship manager for academic startups until they transition to management by SCL Investment Managers
bull Serves as primary point of contact with SCL which will provide services to academic startups and coordinate services provided by others (eg RPN)
bull Serves as primary point of contact for universitiesrsquo Technology Transfer Offices
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 49
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Facilities Proposed Staffing
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 50
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
SC Facilities Roles and Responsibilities
bull Unchanged
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 51
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
FY20-22 Strategic PlanBob QuinnJohn Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
FY20-22 Strategic Plan Executive Summary
Key Strategies1 Enhance SCRA-Academia Strategic Collaboration 2 Optimize Mission-Driven Revenue to Ensure Sustainability3 Develop and Execute Multi-Year Legislative Strategy4 Increase Access to Capital for Startup and Growth Companies5 Drive Operational Excellence6 Recruit Grow and Retain Tech-Based Companies
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 53
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
FY20-22 Strategic Plan
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 54
Financial Impact over the Planning Cycle
Reference Description 2020 2021 2022211 SCL reserve portfolio 177000$ 177000$ 177000$ 212 SCL organic portfolio 233000 278000 323000 22 Services to Industry 20000 40000 60000
231 Lease revenue - legislative chg - - 200000 232 Lease revenue - 22 West Edge 203000 305000 386000 24 SCRA Bond yields net 155000 155000
251 Incoming Grants - 50000 50000 31 Board governance - (45000) (45000) 43 Crowdfunding - - 55000 52 Investment management 10000 10000 10000 54 Cost saves 105000 105000 105000 61 Virtual Business Incubator - - 20000
Totals 748000$ 1075000$ 1496000$
$ Amount - Net Impact
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||
Financial Impact over the Planning Cycle | |||||||||||||
$ Amount - Net Impact | |||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Status | Rationale | |||||||
211 | SCL reserve portfolio | $ 177000 | $ 177000 | $ 177000 | Not included | Hedge vs SCL Organic portfolio performance | |||||||
212 | SCL organic portfolio | 233000 | 278000 | 323000 | Included | Representative of new revenue streams | |||||||
22 | Services to Industry | 20000 | 40000 | 60000 | Included | Representative of new revenue streams | |||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | Included | Represents impact of Legislative strategy | |||||||
232 | Lease revenue - 22 West Edge | 203000 | 305000 | 386000 | Already included in core analysis | ||||||||
24 | SCRA Bond yields net | 155000 | 155000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 50000 | 50000 | Included | Representative of new revenue streams | |||||||
31 | Board governance | - 0 | (45000) | (45000) | |||||||||
43 | Crowdfunding | - 0 | - 0 | 55000 | Included | Representative of new revenue streams | |||||||
52 | Investment management | 10000 | 10000 | 10000 | Already included in core analysis | ||||||||
54 | Cost saves | 105000 | 105000 | 105000 | Already included in core analysis | ||||||||
61 | Virtual Business Incubator | - 0 | - 0 | 20000 | |||||||||
Totals | $ 748000 | $ 1075000 | $ 1496000 | ||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 253000 | 368000 | 688000 | |||||||||
Additional REs | 135000 | 160000 | 255000 | ||||||||||
SCRA 2020-2022 Strategic Plan | |||||||||||||||
Revenue Enhancement Scoreboard | |||||||||||||||
$ Amount - Net Impact | |||||||||||||||
Reference | Description | 2020 | 2021 | 2022 | Thereafter annually | Status | Rationale | ||||||||
211 | SCL Investment performance | 177000 | 177000 | 177000 | 177000 | Not included | Hedge vs SCL Organic portfolio performance | ||||||||
212 | Consulting revenue - VBI | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
213 | SCL Benefactors | 100000 | 100000 | 100000 | 100000 | Not included | Conservatism | ||||||||
22 | Services to Industry | 20000 | 40000 | 60000 | 80000 | Included | Representative of new revenue streams | ||||||||
231 | Lease revenue - legislative chg | - 0 | - 0 | 200000 | 200000 | Included | Represents impact of Legislative strategy | ||||||||
232 | Lease revenue - 22 West Edge | 147000 | 147000 | 147000 | Already included in core analysis | ||||||||||
24 | Bond yields - legislative chg | - 0 | 200000 | 200000 | 200000 | Already included in core analysis | |||||||||
251 | Incoming Grants | - 0 | 100000 | 40000 | 40000 | Included | Representative of new revenue streams | ||||||||
41 | Establish VC Fund | (2500000) | (2500000) | (2500000) | Varies | Depicted in Cases 2 amp 3 | Bold new initiative | ||||||||
44 | Crowdfunding | - 0 | - 0 | 60000 | 60000 | Included | Representative of new revenue streams | ||||||||
52 | Investment management | 10000 | 10000 | 10000 | 10000 | Already included in core analysis | |||||||||
54 | Cost saves | 105000 | 105000 | 105000 | 105000 | Already included in core analysis | |||||||||
61 | VBI | See 212 above | |||||||||||||
Total revenue enhancements included in Cases 1-3 | ========================gt | 40000 | 180000 | 420000 | 460000 | ||||||||||
Financialbull Annual change in net assets vs annual operating plans
bull Annual returns on SC Launch Inc organic portfolio
bull Portfolio company investments under management
bull of total revenue and $ value of revenue coming from sources other than Industry Partnership Fund Leases and Returns on Reserves
Internal Processesbull All-in time (in business days) required to fund a
grantinvestment
bull Annual growth rate of general and administrative expense and professional services expense
bull Time (in months) required to roll out new initiatives (eg crowdfunding fee-based services virtual business incubators)
Customerbull South Carolina-based jobs createdbull Follow-on funding for SC Launch Client Companiesbull Annual $ amount of grants and investmentsbull Number of grant recipients that receive SC Launch Inc
investmentsbull Overall stakeholder satisfaction (based on surveys)bull Number of formal relationships betweenamong industry
academia and early-stage companiesbull Occupancy rates at SCRA-managed facilitiesbull Annual $ amount of third-party grants awarded to SCRA and
entities supported by SCRA
People Developmentbull Number of internal promotionsrole enhancementsbull Employee satisfaction (using annual ldquoBest Places to Work in
South Carolinardquo surveybull Employee retention
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 55
FY20-22 Strategic Plan Balanced Scorecard4 Perspectives
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Long-term Cash Flow Forecast Assumptionsbull IPF caps FY 2020 - $7M FY 2021 - $8M FY 2022 and beyond $9Mbull Remaining ATI earnout of $11M $4M in FY 2020 $7M in FY 2021bull Bond reinvestment rate Increasing by 50 bps to 180 bps over the forecast bull Lease revenue
bull 22 WestEdge occupancy FY 2020 50 FY 2021 75 FY 2022 amp beyond 95bull Other Annual rate increase of 3 occupancy approaching 100
bull Program expenses Increase commensurate with IPF increasesbull SC Launch impact Funding level set at $26M annually return on portfolio 30bull Capital expenditures
bull 22 WestEdge $54M in FY 2020-2022bull Other $500K plus 1 growth annually
bull Cash operating expense 25 annual increasebull Other initiatives impact Ramping up to $255K annually by 2022
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 56
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA Long-term CF ForecastsReserve Balances
$0
$10000
$20000
$30000
$40000
$50000
$60000
$7-$8-$9 IPF Original $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 57
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
SCRA Long-term Cash Flow Forecast Annual Industry Partnership Fund Comparison
$-
$2000
$4000
$6000
$8000
$10000
$12000
$14000
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2027
FY2028
FY2029
FY2030
FY2031
FY2032
FY2033
FY2034
FY2035
FY2036
FY2037
FY2038
FY2039
FY2040
FY2041
$7-$8-$9M IPF $9-$12M IPF
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 58
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
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2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
FY20 AnnualOperating PlanBob QuinnJohn Sircy
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
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Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
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2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
FY20 AOP Balance Sheet
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 60
AOP Forecast ActualAssets 6302020 6302019 6302018 NotesUnrestricted cash 124$ 119$ 254$ Restricted cash 1 1 2 Receivables amp prepaids 2770 2760 6241 Short-term investments 4575 4525 5050 Total current assets 7470 7405 11547 PPampE net 35270 32270 33944 22 West EdgeLong-term investments 38157 42469 39991 Total non-current assets 73427 74739 73935 Total assets 80897$ 82144$ 85482$ LiabilitiesShort-term liabilities 850$ 850$ 1195$ Notes payable - buildings 13335 14275 15200 Total liabilities 14185 15125 16395 Net AssetsUnrestricted 38808$ 43864$ 44845$ Restricted 5969 5160 5498 Net invest In cap assets 21935 17995 18744 22 West Edge Net position 66712$ 67019$ 69087$ Tl liabs amp net assets 80897$ 82144$ 85482$
FY 20 AOP Balance Sheet ndash Asset Mix
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45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
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2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
AOP | Forecast | Actual | |||||||
Assets | 63020 | 63019 | 63018 | Notes | |||||
Unrestricted cash | $ 124 | $ 119 | $ 254 | ||||||
Restricted cash | 1 | 1 | 2 | ||||||
Receivables amp prepaids | 2770 | 2760 | 6241 | ||||||
Short-term investments | 4575 | 4525 | 5050 | ||||||
Total current assets | 7470 | 7405 | 11547 | ||||||
PPampE net | 35270 | 32270 | 33944 | 22 West Edge | |||||
Long-term investments | 38157 | 42469 | 39991 | ||||||
Total non-current assets | 73427 | 74739 | 73935 | ||||||
Total assets | $ 80897 | $ 82144 | $ 85482 | ||||||
Liabilities | |||||||||
Short-term liabilities | $ 850 | $ 850 | $ 1195 | ||||||
Notes payable - buildings | 13335 | 14275 | 15200 | ||||||
Total liabilities | 14185 | 15125 | 16395 | ||||||
Net Assets | |||||||||
Unrestricted | $ 38808 | $ 43864 | $ 44845 | ||||||
Restricted | 5969 | 5160 | 5498 | ||||||
Net invest In cap assets | 21935 | 17995 | 18744 | 22 West Edge | |||||
Net position | $ 66712 | $ 67019 | $ 69087 | ||||||
Tl liabs amp net assets | $ 80897 | $ 82144 | $ 85482 | ||||||
FY 20 AOP Balance Sheet ndash Asset Mix
0
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10000
15000
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35000
40000
45000
Short-term investments Long-term investments PPampE
6302020 6302019 6302018
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 61
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
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4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
FY20 AOP Statement of Activities
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 62
In 000s 2020 AOP 2019 FC $ Var Var 2019 AOP NotesOperating revenueContract 600$ 680$ (80)$ -118 511$ FC Dept of Commerce less SCHFCA ($118k)Lease 4242 4000 242 61 3722 FY 2020 AOP 22 West Edge ($203k)Contributions 7000 3000 4000 1333 6000 FC Includes $282k CURF transferOther 76 116 (40) -345 76 FC Includes Volvo furniture rental Total operating revenue 11918$ 7796$ 4122$ 529 10309$ Operating expenseContract - direct 60$ 35$ 25$ 714 15$ Facilities 1537 1430 107 75 1468 FY 2020 AOP 22 West EdgeGrants and program expenses 3725 3400 325 96 3625 FC Watt commitment timingSalaries and benefits 5235 4650 585 126 4901 FY 2020 AOP Growth StrategyGeneral and administrative 812 710 102 144 704 FY 2020 AOP Software telephonyProfessional services 848 825 23 28 618 FC Legal consultingDepreciation 1970 1640 330 201 1858 FY 2020 AOP 22 West EdgeOther 930 825 105 127 881 FY 2020 AOP Travel Total operating expense 15117$ 13515$ 1602$ 119 14070$ Net operating deficit (3199)$ (5719)$ 2520$ -441 (3761)$ Non-operating activitiesTransfers to SC Launch Inc (2100)$ (1800)$ (300)$ 167 (1800)$ Interest income 992 1250 (258) -206 720 FC Accrual accountingATI earnout 4000 4000 - 00 - Unrealized gain (loss) on investments - 1000 (1000) -1000 (100) FC Bond rally Non-operating activities 2892 4450 (1558) -350 (1180) Net surplus (deficit) (307)$ (1269)$ 962$ 758 (4941)$
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
In 000s | 2020 AOP | 2019 FC | $ Var | Var | 2019 AOP | Notes | |||||||
Operating revenue | |||||||||||||
Contract | $ 600 | $ 680 | $ (80) | -118 | $ 511 | FC Dept of Commerce less SCHFCA ($118k) | |||||||
Lease | 4242 | 4000 | 242 | 61 | 3722 | FY 2020 AOP 22 West Edge ($203k) | |||||||
Contributions | 7000 | 3000 | 4000 | 1333 | 6000 | FC Includes $282k CURF transfer | |||||||
Other | 76 | 116 | (40) | -345 | 76 | FC Includes Volvo furniture rental | |||||||
Total operating revenue | $ 11918 | $ 7796 | $ 4122 | 529 | $ 10309 | ||||||||
Operating expense | |||||||||||||
Contract - direct | $ 60 | $ 35 | $ 25 | 714 | $ 15 | ||||||||
Facilities | 1537 | 1430 | 107 | 75 | 1468 | FY 2020 AOP 22 West Edge | |||||||
Grants and program expenses | 3725 | 3400 | 325 | 96 | 3625 | FC Watt commitment timing | |||||||
Salaries and benefits | 5235 | 4650 | 585 | 126 | 4901 | FY 2020 AOP Growth Strategy | |||||||
General and administrative | 812 | 710 | 102 | 144 | 704 | FY 2020 AOP Software telephony | |||||||
Professional services | 848 | 825 | 23 | 28 | 618 | FC Legal consulting | |||||||
Depreciation | 1970 | 1640 | 330 | 201 | 1858 | FY 2020 AOP 22 West Edge | |||||||
Other | 930 | 825 | 105 | 127 | 881 | FY 2020 AOP Travel | |||||||
Total operating expense | $ 15117 | $ 13515 | $ 1602 | 119 | $ 14070 | ||||||||
Net operating deficit | $ (3199) | $ (5719) | $ 2520 | -441 | $ (3761) | ||||||||
Non-operating activities | |||||||||||||
Transfers to SC Launch Inc | $ (2100) | $ (1800) | $ (300) | 167 | $ (1800) | ||||||||
Interest income | 992 | 1250 | (258) | -206 | 720 | FC Accrual accounting | |||||||
ATI earnout | 4000 | 4000 | - 0 | 00 | - 0 | ||||||||
Unrealized gain (loss) on investments | - 0 | 1000 | (1000) | -1000 | (100) | FC Bond rally | |||||||
Non-operating activities | 2892 | 4450 | (1558) | -350 | (1180) | ||||||||
Net surplus (deficit) | $ (307) | $ (1269) | $ 962 | 758 | $ (4941) | ||||||||
FY 20 AOP Statement of Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
Lease revenue IPF Facilities expense Grants Salaries amp benefits GampA Professional svcs Interest income
2020 AOP 2019 FC 2019 AOP
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 63
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
SCRA FY 2020 AOPContingency Plan Summary
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 64
Summary $s ( 000s) NotesFY 2020 AOP deficit (307)$ IPF shortfall (3500) 50 discount assumedRevised FY 2020 deficit - pre-saves (3807)$
Expense Saves in Response to IPF ShortfallOperating expense Legal 87 Greater discipline exercized Technical services (IT) 161 Delay various IT initiatives Management consultants 65 Lobbying Recruitment 18 Focused approach Travel 38 Use of GTMtechnology Business meetings 27 Use of GTMtechnology Training 18 Targeted group strategy Sponsorshipsmemberships 75 Prioritize Other 8 Essentials Total operating expense saves 497 Program expense Acceleration grants 500 Focus on investment potential companies Project development funds 100 Focus on investment potential companies Demonstration projects 200 Focus on investment potential companies ASAP and Maturation grants 50 Prioritize SACT grants 100 Prioritize Transfers to SC Launch 400 SCL liquidity for FY 2020 - sufficient Total program expense saves 1350 Total contengency saves 1847 Revised FY 2020 AOP deficit - post-saves (1960)$
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Summary | $s ( 000s) | Notes | |||||
FY 2020 AOP deficit | $ (307) | ||||||
IPF shortfall | (3500) | 50 discount assumed | |||||
Revised FY 2020 deficit - pre-saves | $ (3807) | ||||||
Expense Saves in Response to IPF Shortfall | |||||||
Operating expense | |||||||
Legal | 87 | Greater discipline exercized | PS | ||||
Technical services (IT) | 161 | Delay various IT initiatives | PS | ||||
Management consultants | 65 | Lobbying | PS | ||||
Recruitment | 18 | Focused approach | |||||
Travel | 38 | Use of GTMtechnology | Other | ||||
Business meetings | 27 | Use of GTMtechnology | Other | ||||
Training | 18 | Targeted group strategy | |||||
Sponsorshipsmemberships | 75 | Prioritize | GampA | ||||
Other | 8 | Essentials | |||||
Total operating expense saves | 497 | ||||||
Program expense | |||||||
Acceleration grants | 500 | Focus on investment potential companies | |||||
Project development funds | 100 | Focus on investment potential companies | |||||
Demonstration projects | 200 | Focus on investment potential companies | |||||
ASAP and Maturation grants | 50 | Prioritize | |||||
SACT grants | 100 | Prioritize | |||||
Transfers to SC Launch | 400 | SCL liquidity for FY 2020 - sufficient | |||||
Total program expense saves | 1350 | ||||||
Total contengency saves | 1847 | ||||||
Revised FY 2020 AOP deficit - post-saves | $ (1960) | ||||||
Contingency Expense Save Mix
Operating27
Program51
Transfers to SCL22
642019 COMPANY PROPRIETARY copy 2019 BY SCRA 65
Adjourn
Adjourn