SCRA Board of TrusteesAudit and Finance Committee
February 5, 2019
Agenda
10:30-10:35 Welcome and Call to Order (Bryant Barnes)Approval of Minutes (Bryant Barnes)September 20, 2018 (SCRA Audit and Finance Committee)
10:35-10:45 FY19 Interim Financials (John Sircy)10:45-10:50 Portfolio Review/Annual 403(b) Review (John Sircy)10:50-11:00 Industry Partnership Fund (Bob Quinn)11:00-11:10 Potential Incentives for Technology-based Companies (Bob Quinn)11:10-11:20 Consultant for Executive Director Performance Assessment (Bryant Barnes)11:20-11:45 Draft FY20-22 Strategic Plan (Bob Quinn/John Sircy)11:45-12:00 Preliminary FY20 Annual Operating Plan (Bob Quinn/John Sircy)12:00 Adjourn
Welcome and Call to OrderBryant Barnes
Approval of MinutesSeptember 20, 2018
SCRA Audit and Finance Committee
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 4
FY19 Interim FinancialsJohn Sircy
Executive Summary
Balance Sheet Commentary• Sufficient liquidity• Fully-invested status
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 6
SCRA Balance SheetsJune 30, 2018 and December 31, 2018
Assets 12/31/2018 6/30/2018 $ Var. % Var.Unrestricted cash 504$ 254$ 250$ 98.4%Restricted cash - 2 (2) -100.0%Receivables & prepaids 1,035 6,241 (5,206) -83.4%Short-term investments 4,015 5,878 (1,863) -31.7% Total current assets 5,554 12,375 (6,821) -55.1%PP&E, net 33,088 33,945 (857) -2.5%Long-term investments 43,289 39,162 4,127 10.5% Total non-current assets 76,377 73,107 3,270 4.5% Total assets 81,931$ 85,482$ (3,551)$ -4.2%LiabilitiesShort-term liabilities 1,653$ 2,102$ (449)$ -21.4%Notes payable - buildings 13,826 14,292 (466) -3.3% Total liabilities 15,479 16,394 (915) -5.6%Net AssetsUnrestricted 45,653$ 44,845$ 808$ 1.8%Restricted 2,459 5,498 (3,039) -55.3%Net invest. In cap assets 18,340 18,745 (405) -2.2% Net position 66,452$ 69,088$ (2,636)$ -3.8% Tl liabs & net assets 81,931$ 85,482$ (3,551)$ -4.2%
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 7
Sheet1
Assets12/31/186/30/18$ Var.% Var.
Unrestricted cash$ 504$ 254$ 25098.4%
Restricted cash- 02(2)-100.0%
Receivables & prepaids1,0356,241(5,206)-83.4%
Short-term investments4,0155,878(1,863)-31.7%
Total current assets5,55412,375(6,821)-55.1%
PP&E, net33,08833,945(857)-2.5%
Long-term investments43,28939,1624,12710.5%
Total non-current assets76,37773,1073,2704.5%
Total assets$ 81,931$ 85,482$ (3,551)-4.2%
Liabilities
Short-term liabilities$ 1,653$ 2,102$ (449)-21.4%
Notes payable - buildings13,82614,292(466)-3.3%
Total liabilities15,47916,394(915)-5.6%
Net Assets
Unrestricted$ 45,653$ 44,845$ 8081.8%
Restricted 2,4595,498(3,039)-55.3%
Net invest. In cap assets18,34018,745(405)-2.2%
Net position$ 66,452$ 69,088$ (2,636)-3.8%
Tl liabs & net assets$ 81,931$ 85,482$ (3,551)-4.2%
SC Launch Balance SheetsJune 30, 2018 and December 31, 2018
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Assets 12/31/2018 6/30/2018 $ Var. % Var.Unrestricted cash 310$ 759$ (449)$ -59.2%Receivables & prepaids 121 121 - 0.0%Short-term investments 1,188 1,514 (326) -21.5% Total current assets 1,619 2,394 (775) -32.4%Notes receivables 172 172 - 0.0%Long-term investments 7,138 6,400 738 11.5% Total non-current assets 7,310 6,572 738 11.2% Total assets 8,929$ 8,966$ (37)$ -0.4%LiabilitiesShort-term liabilities -$ -$ -$ 0.0% Total liabilities - - - 0.0%Net AssetsUnrestricted -$ -$ -$ 0.0%Restricted 8,929 8,966 (37) -0.4% Net position 8,929$ 8,966$ (37)$ -0.4% Tl liabs & net assets 8,929$ 8,966$ (37)$ -0.4%
Sheet1
Assets12/31/186/30/18$ Var.% Var.
Unrestricted cash$ 310$ 759$ (449)-59.2%
Receivables & prepaids121121- 00.0%
Short-term investments1,1881,514(326)-21.5%
Total current assets1,6192,394(775)-32.4%
Notes receivables172172- 00.0%
Long-term investments7,1386,40073811.5%
Total non-current assets7,3106,57273811.2%
Total assets$ 8,929$ 8,966$ (37)-0.4%
Liabilities
Short-term liabilities$ - 0$ - 0$ - 00.0%
Total liabilities- 0- 0- 00.0%
Net Assets
Unrestricted$ - 0$ - 0$ - 00.0%
Restricted 8,9298,966(37)-0.4%
Net position$ 8,929$ 8,966$ (37)-0.4%
Tl liabs & net assets$ 8,929$ 8,966$ (37)-0.4%
Executive Summary
Statement of Activities Commentary• Favorable operating performance
• Revenues• Expenses
• Favorable non-operating results• Interest income• Unrealized gains in portfolio
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SCRA Statements of Activities 6 Months Ending December 31, 2018
In 000's Actual YTD Plan $ Var. % Var.Annual
PlanOperating revenueContract 265$ 256$ 9$ 3.5% 511$ Lease 1,894 1,861 33 1.8% 3,722 Contribution - - - 0.0% 6,000 Other 87 76 11 14.5% 76 Total operating revenue 2,246$ 2,193$ 53$ 2.4% 10,309$ Operating expenseContract - direct 28$ 8$ 20$ 250.0% 15$ Facilities 744 733 11 1.5% 1,466 Grants and program expenses 839 835 4 0.5% 3,625 Salaries and benefits 2,292 2,525 (233) -9.2% 4,901 General and administrative 246 307 (61) -19.9% 614 Professional services 216 327 (111) -33.9% 618 Building infrastructure expense 907 972 (65) -6.7% 1,944 Other 368 443 (75) -16.9% 887 Total operating expense 5,640$ 6,150$ (510)$ -8.3% 14,070$ Net operating surplus (deficit) (3,394)$ (3,957)$ 563$ -14.2% (3,761)$ Non-operating activitiesTransfers to SC Launch!, Inc. (450)$ (450)$ -$ 0.0% (1,800)$ Interest income 708 360 348 96.7% 720 Unrealized gain (loss) on investments 500 (50) 550 NMF (100) Non-operating activities 758 (140) 898 -641.4% (1,180) Net deficit (2,636)$ (4,097)$ 1,461$ 35.7% (4,941)$
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 10
Sheet1
In 000'sActualYTD Plan$ Var.% Var.Annual Plan
Operating revenue
Contract$ 265$ 256$ 93.5%$ 511
Lease1,8941,861331.8%3,722
Contribution- 0- 0- 00.0%6,000
Other87761114.5%76
Total operating revenue$ 2,246$ 2,193$ 532.4%$ 10,309
Operating expense
Contract - direct$ 28$ 8$ 20250.0%$ 15
Facilities744733111.5%1,466
Grants and program expenses83983540.5%3,625
Salaries and benefits2,2922,525(233)-9.2%4,901
General and administrative246307(61)-19.9%614
Professional services216327(111)-33.9%618
Building infrastructure expense907972(65)-6.7%1,944
Other368443(75)-16.9%887
Total operating expense$ 5,640$ 6,150$ (510)-8.3%$ 14,070
Net operating surplus (deficit)$ (3,394)$ (3,957)$ 563-14.2%$ (3,761)
Non-operating activities
Transfers to SC Launch!, Inc.$ (450)$ (450)$ - 00.0%$ (1,800)
Interest income70836034896.7%720
Unrealized gain (loss) on investments500(50)550NMF(100)
Non-operating activities758(140)898-641.4%(1,180)
Net deficit$ (2,636)$ (4,097)$ 1,46135.7%$ (4,941)
SCRA Statements of Activities FY19 Forecast vs. AOP
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In 000's Forecast AOP $ Var. % Var.Operating revenueContract 525$ 511$ 14$ 2.7%Lease 3,900 3,722 178 4.8%Contribution 6,000 6,000 - 0.0%Other - ATI earnout 4,087 76 4,011 5277.6% Total operating revenue 14,512$ 10,309$ 4,203$ 40.8%Operating expenseContract - direct 60$ 15$ 45$ 300.0%Facilities 1,540 1,466 74 5.0%Grants and program expenses 3,625 3,625 - 0.0%Salaries and benefits 4,800 4,901 (101) -2.1%General and administrative 600 614 (14) -2.3%Professional services 675 618 57 9.2%Building infrastructure expense 1,800 1,944 (144) -7.4%Other 900 887 13 1.5% Total operating expense 14,000$ 14,070$ (70)$ -0.5% Net operating surplus (deficit) 512$ (3,761)$ 4,273$ -113.6%Non-operating activitiesTransfers to SC Launch!, Inc. (1,800)$ (1,800)$ -$ 0.0%Interest income 1,105 720 385 53.5%Unrealized gain (loss) on investments (185) (100) (85) NMF Non-operating activities (880) (1,180) 300 -25.4%Net deficit (368)$ (4,941)$ 4,573$ 92.6%
Sheet1
In 000'sForecastAOP$ Var.% Var.
Operating revenue
Contract$ 525$ 511$ 142.7%
Lease3,9003,7221784.8%
Contribution6,0006,000- 00.0%
Other - ATI earnout4,087764,0115277.6%
Total operating revenue$ 14,512$ 10,309$ 4,20340.8%
Operating expense
Contract - direct$ 60$ 15$ 45300.0%
Facilities1,5401,466745.0%
Grants and program expenses3,6253,625- 00.0%
Salaries and benefits4,8004,901(101)-2.1%
General and administrative600614(14)-2.3%
Professional services675618579.2%
Building infrastructure expense1,8001,944(144)-7.4%
Other900887131.5%
Total operating expense$ 14,000$ 14,070$ (70)-0.5%
Net operating surplus (deficit)$ 512$ (3,761)$ 4,273-113.6%
Non-operating activities
Transfers to SC Launch!, Inc.$ (1,800)$ (1,800)$ - 00.0%
Interest income1,10572038553.5%
Unrealized gain (loss) on investments(185)(100)(85)NMF
Non-operating activities(880)(1,180)300-25.4%
Net deficit$ (368)$ (4,941)$ 4,57392.6%
SC Launch Statements of Activities 6 Months Ending December 31, 2018
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In 000's Actual YTD Plan $ Var. % Var.Annual
PlanOperating revenueInvestment returns 305$ 114$ 191$ 167.5% 228$ Contribution from SCRA 450 450 - 0.0% 1,800 Total operating revenue 755$ 564$ 191$ 33.9% 2,028$ Operating expenseInvestments 750$ 750$ -$ 0.0% 3,000$ General and administrative - - - 0.0% 14 Professional services 56 65 (9) -13.8% 133 Total operating expense 806$ 815$ (9)$ -1.1% 3,147$ Net operating surplus (deficit) (51)$ (251)$ 200$ -79.7% (1,119)$ Non-operating activitiesUnrealized gain (loss) on investments (13) - (13) -100.0% - Non-operating activities (13) - (13) -100.0% - Net deficit (64)$ (251)$ 187$ 74.5% (1,119)$
Sheet1
In 000'sActualYTD Plan$ Var.% Var.Annual Plan
Operating revenue
Investment returns$ 305$ 114$ 191167.5%$ 228
Contribution from SCRA450450- 00.0%1,800
Total operating revenue$ 755$ 564$ 19133.9%$ 2,028
Operating expense
Investments$ 750$ 750$ - 00.0%$ 3,000
General and administrative- 0- 0- 00.0%14
Professional services5665(9)-13.8%133
Total operating expense$ 806$ 815$ (9)-1.1%$ 3,147
Net operating surplus (deficit)$ (51)$ (251)$ 200-79.7%$ (1,119)
Non-operating activities
Unrealized gain (loss) on investments(13)- 0(13)-100.0%- 0
Non-operating activities(13)- 0(13)-100.0%- 0
Net deficit$ (64)$ (251)$ 18774.5%$ (1,119)
SC Launch Statements of Activities FY19 Forecast vs. AOP
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In 000'sFY 2019
FC AOP $ Var. % Var.Operating revenueInvestment returns 400$ 228$ 172$ 75.4%Contribution from SCRA 1,800 1,800 - 0.0% Total operating revenue 2,200$ 2,028$ 172$ 8.5%Operating expenseInvestments 3,000$ 3,000$ -$ 0.0%General and administrative 14 14 - 0.0%Professional services 150 133 17 12.8% Total operating expense 3,164$ 3,147$ 17$ 0.5% Net operating surplus (deficit) (964)$ (1,119)$ 155$ -13.9%Non-operating activitiesUnrealized gain (loss) on investments . - - -100.0% Non-operating activities - - - -100.0%Net deficit (964)$ (1,119)$ 155$ 13.9%
Sheet1
In 000'sFY 2019 FCAOP$ Var.% Var.
Operating revenue
Investment returns$ 400$ 228$ 17275.4%
Contribution from SCRA1,8001,800- 00.0%
Total operating revenue$ 2,200$ 2,028$ 1728.5%
Operating expense
Investments$ 3,000$ 3,000$ - 00.0%
General and administrative1414- 00.0%
Professional services1501331712.8%
Total operating expense$ 3,164$ 3,147$ 170.5%
Net operating surplus (deficit)$ (964)$ (1,119)$ 155-13.9%
Non-operating activities
Unrealized gain (loss) on investments.- 0- 0-100.0%
Non-operating activities- 0- 0- 0-100.0%
Net deficit$ (964)$ (1,119)$ 15513.9%
Portfolio Review/Annual403(b) Review
John Sircy
Market Summary
Yield Curve Forecast• Yield curve inverted
• 5-year yields below short-term rates• Average inversion period: 7 months
• Forecast• Bull market cycle for bonds• 5-year Treasury yields: 2% range
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 15
SCRA Investment Portfolio Summary
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 16
000s % of Portfolio Interest RateMoney market 4,015$ 8.5% 2.18%Bonds 43,289 91.5% 2.04% Totals 47,304$ 100.0% 2.05%
Duration of Bonds 4.87 years
Maturity by Fiscal Year 000s Interest Rate % of Bond Port.2019 -$ 0.00% 0.0%2020 - 0.00% 0.0%2021 7,256 1.62% 16.8%2022 10,277 1.89% 23.7%2023 4,631 2.00% 10.7%2024 2,508 2.13% 5.8%2025 5,778 2.63% 13.3%
After 2025 12,839 2.14% 29.7%Total Bonds 43,289$ 2.04% 100.0%
December 31, 2018
Sheet1
December 31, 2018
000s% of PortfolioInterest Rate
Money market$ 4,0158.5%2.18%
Bonds43,28991.5%2.04%
Totals$ 47,304100.0%2.05%
Duration of Bonds4.87years
Maturity by Fiscal Year000sInterest Rate% of Bond Port.
2019$ - 00.00%0.0%
2020- 00.00%0.0%
20217,2561.62%16.8%
202210,2771.89%23.7%
20234,6312.00%10.7%
20242,5082.13%5.8%
20255,7782.63%13.3%
After 202512,8392.14%29.7%
Total Bonds$ 43,2892.04%100.0%
2/5/19 17
SC Launch Investment Portfolio Summary
Type 000s % of Portfolio YieldCorporate bonds 501 11.8% 3.68%Government bonds 2,484 58.6% 1.59%Equity 1,254 29.6% 6.06% Totals 4,239$ 100.0% 3.16%
Bond Maturities 000s Yield % of Bond Port.Under 1 year 744$ 1.01% 24.9%1 to 5 years 1,987 2.05% 66.6%Over 5 years 254 3.81% 8.5%
Total Fixed income 2,985$ 1.94% 100.0%
December 31, 2018
COMPANY PROPRIETARY © 2019 BY SCRA
Sheet1
December 31, 2018
Type000s% of PortfolioYield
Corporate bonds50111.8%3.68%
Government bonds2,48458.6%1.59%
Equity1,25429.6%6.06%
Totals$ 4,239100.0%3.16%
Bond Maturities000sYield% of Bond Port.
Under 1 year$ 7441.01%24.9%
1 to 5 years1,9872.05%66.6%
Over 5 years2543.81%8.5%
Total Fixed income$ 2,9851.94%100.0%
Annual 403(b) Review
Annual 403(b) Review
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Description MetricParticipation as % of Eligible Employees 89%
Total Assets (as of 9/30/2018) $8,670,000Asset Class % of TotalUS Equities 57%Stable Fund 17%
InternationalTarget Date Funds
8%7%
Fixed IncomeTechnology Fund
7%4%
Industry Partnership FundBob Quinn
Legislative Update (as of 2/4/19)• S.309 in Senate
• Introduced by Sen. Setzler• Increases annual limit from $6M to $12M• Phased in over two years
• Status: • Probable third and final reading in Senate on February 5• “Sunshine” amendment introduced by Sens. Martin and Davis
• H.3595 in House• Introduced by Rep. Elliott
• Increases annual limit from $6M to $9M• Phased in over three years
• Status:• Probable third and final reading in House on February 5
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 21
Fund Contribution Update (as of 2/4/19)• $2.3M committed to date
• Lagging contributions due to uncertainty related to proposed IRS regulation restricting federal deduction
• Regulation not relevant to companies if deducted as business expense
• IRS still considering possible changes to proposed regulation• Concerted effort to approach companies
• Involving SCRA/SC Launch Boards, SCRA staff and others• Opportunity for SCRA to expand industry engagement• Early industry engagements bearing fruit
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 22
Potential Tax Incentives for Technology-based Companies
Bob Quinn
Status of Effort
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 24
• Developed White Papers• Small Business Startup Tax Credit
• Based on NC bill• Qualified STEM-related Jobs Tax Refund
• Based on FL laws• Life Sciences Tax Incentives
• Based on MA laws• Receiving support of State Chamber• Working with Department of Commerce and others• Identifying champions in General Assembly for introduction of
bills next year
Consultant for Executive Director Performance Assessment
Bryant Barnes
Recommended Consultant and Scope
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 26
• MicroBurst Learning• Small, Columbia-based firm with strong track record • Used repeatedly by Don Herriott with consistently positive results
• Scope of Work• Charter small SCRA Board Member Evaluation Committee • Develop potential qualitative competencies and criteria• Finalize assessment process, evaluation instrument and Executive
Director self-assessment instrument • Interview five Board members and five staff• Review performance evaluation (including recommended salary
increase and bonus) with Evaluation Committee • Develop SOP for future assessments
Draft FY20-22 Strategic PlanBob Quinn/John Sircy
FY20-22 Strategic Plan Executive Summary
Key Strategies (unchanged)1. Continue Successful Execution of SCRA-Academia Strategic
Collaboration Agreement2. 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
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 28
FY20-22 Strategic Plan
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 29
Revenue Enhancement Scoreboard
Reference # Description 2020 2021 20222.1.1 SCL Investment performance 177,000$ 177,000$ 177,000$ 2.1.2 Consulting revenue - VBI 20,000 40,000 60,000 2.1.3 SCL Benefactors 100,000 100,000 100,000 2.2 Services to Industry 20,000 40,000 60,000
2.3.1 Lease revenue - legislative chg - - 200,000 2.3.2 Lease revenue - 22 West Edge 182,000 279,000 2.4 Bond yields - legislative chg - 200,000 200,000
2.5.1 Incoming Grants - 100,000 40,000 4.4 Crowdfunding - - 60,000 5.2 Investment management 10,000 10,000 10,000 5.4 Cost saves 105,000 105,000 105,000
Totals 432,000$ 954,000$ 1,291,000$
$ Amount - Net Impact
Sheet1
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference #Description202020212022Thereafter annuallyStatusRationale'
2.1.1SCL Investment performance177,000177,000177,000177,000Not includedHedge vs. SCL Organic portfolio performance
2.1.2Consulting revenue - VBI20,00040,00060,00080,000IncludedRepresentative of new revenue streams
2.1.3SCL Benefactors100,000100,000100,000100,000Not includedConservatism
2.2Services to Industry20,00040,00060,00080,000IncludedRepresentative of new revenue streams
2.3.1Lease revenue - legislative chg- 0- 0200,000200,000IncludedRepresents impact of Legislative strategy
2.3.2Lease revenue - 22 West Edge147,000147,000147,000Already included in core analysis
2.4Bond yields - legislative chg- 0200,000200,000200,000Already included in core analysis
2.5.1Incoming Grants- 0100,00040,00040,000IncludedRepresentative of new revenue streams
4.1Establish VC Fund(2,500,000)(2,500,000)(2,500,000)VariesDepicted in Cases 2 & 3Bold new initiative
4.4Crowdfunding- 0- 060,00060,000IncludedRepresentative of new revenue streams
5.2Investment management10,00010,00010,00010,000Already included in core analysis
5.4Cost saves105,000105,000105,000105,000Already included in core analysis
6.1VBISee 2.1.2 above
Total revenue enhancements included in Cases 1-3========================>40,000180,000420,000460,000
Sheet1 (2)
SCRA 2020-2022 Strategic Plan
Revenue Enhancement Scoreboard
$ Amount - Net Impact
Reference #Description202020212022Thereafter annuallyStatusRationale'
2.1.1SCL Investment performance$ 177,000$ 177,000$ 177,000$ 177,000Not includedHedge vs. SCL Organic portfolio performance
2.1.2Consulting revenue - VBI20,00040,00060,00080,000IncludedRepresentative of new revenue streams
2.1.3SCL Benefactors100,000100,000100,000100,000Not includedConservatism
2.2Services to Industry20,00040,00060,00080,000IncludedRepresentative of new revenue streams
2.3.1Lease revenue - legislative chg- 0- 0200,000200,000IncludedRepresents impact of Legislative strategy
2.3.2Lease revenue - 22 West Edge182,000279,000147,000Already included in core analysis
2.4Bond yields - legislative chg- 0200,000200,000200,000Already included in core analysis
2.5.1Incoming Grants- 0100,00040,00040,000IncludedRepresentative of new revenue streams
4.4Crowdfunding- 0- 060,00060,000IncludedRepresentative of new revenue streams
5.2Investment management10,00010,00010,00010,000Already included in core analysis
5.4Cost saves105,000105,000105,000105,000Already included in core analysis
Totals$ 432,000$ 954,000$ 1,291,000$ 1,199,000
Total revenue enhancements included in Cases 1-3========================>40,000180,000420,000460,000
Financial• Annual change in net assets vs. annual operating
plans• Annual returns on SC Launch Inc. organic portfolio• % of total revenue and $ value of revenue coming
from sources other than Industry Partnership Fund, Leases and Returns on Reserves
Internal Processes• All-in time (in business days) required to fund a
grant/investment• Annual growth rate of general and administrative
expense and professional services expense• Time (in months) required to roll out new
initiatives (e.g., crowdfunding, fee-based services, virtual business incubators)
Customer• South Carolina-based jobs created• Follow-on funding for SC Launch Client Companies• Annual $ amount of grants and investments• Number of grant recipients that receive SC Launch,
Inc. investments• Overall stakeholder satisfaction (based on surveys)• Number of formal relationships between/among
industry, academia and early-stage companies
People Development• Number of internal promotions/role
enhancements• Annual “Best Places to Work in South Carolina”
ranking
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 30
FY20-22 Strategic Plan Executive Balanced Scorecard - 4 Perspectives
Long-term Cash Flow Forecast Assumptions (Strategic Plan-driven changes in red)• IPF caps: FY 2019 - $6M; FY 2020 - $9M; FY 2021 and beyond $12M• ATI earnout of $15M: $4M in FY 2019 – 2020; $7M in FY 2021• Bond reinvestment rate: 3.90%• Lease revenue:
• 22 WestEdge occupancy: FY 2021: 50%; FY 2022: 75%; FY 2023 and beyond: 95%
• Other: Annual increase of 3% • Program expenses: Increase with IPF increase• SC Launch impact: Funding ramping up to $4.5M annually; return on portfolio 3.0%• Capital expenditures:
• 22 WestEdge: $5.955M in FY 2020-2022• Other: $500K plus 1% growth annually
• Cash operating expense: 1.5% annual increase• Other revenue: Ramping up to $460K annually by 2023
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 31
SCRA Long-term Cash Flow Forecast
(40,000)
(30,000)
(20,000)
(10,000)
0
10,000
20,000
30,000
40,000
50,000
60,000
SCL Returns Lease Revenue IPFProgram/Other Expense Strategic Plan Reserves Original Case Reserves
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 32
Preliminary FY20 AnnualOperating PlanBob Quinn/John Sircy
Preliminary FY20 AOP
Two Scenarios:$6M and $9M IPF
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 34
FY20 AOP Balance Sheet$6M IPF Base Case
Assets 6/30/2020 6/30/2019 6/30/2018Unrestricted cash 250$ 250$ 254$ Restricted cash - - 2 Receivables & prepaids 3,000 3,000 6,241 Short-term investments 1,952 4,519 5,050 Total current assets 5,202 7,769 11,547 PP&E, net 35,000 33,000 33,944 Long-term investments 42,500 43,425 39,991 Total non-current assets 77,500 76,425 73,935 Total assets 82,702$ 84,194$ 85,482$ LiabilitiesShort-term liabilities 1,200$ 1,200$ 1,195$ Notes payable - buildings 13,335 14,275 15,200 Total liabilities 14,535 15,475 16,395 Net AssetsUnrestricted 41,002$ 44,494$ 44,845$ Restricted 5,500 5,500 5,498 Net invest. In cap assets 21,665 18,725 18,744 Net position 68,167$ 68,719$ 69,087$ Tl liabs & net assets 82,702$ 84,194$ 85,482$
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 35
Sheet1
Assets6/30/206/30/196/30/18
Unrestricted cash$ 250$ 250$ 254
Restricted cash- 0- 02
Receivables & prepaids3,0003,0006,241
Short-term investments1,9524,5195,050
Total current assets5,2027,76911,547
PP&E, net35,00033,00033,944
Long-term investments42,50043,42539,991
Total non-current assets77,50076,42573,935
Total assets$ 82,702$ 84,194$ 85,482
Liabilities
Short-term liabilities$ 1,200$ 1,200$ 1,195
Notes payable - buildings13,33514,27515,200
Total liabilities14,53515,47516,395
Net Assets
Unrestricted$ 41,002$ 44,494$ 44,845
Restricted 5,5005,5005,498
Net invest. In cap assets21,66518,72518,744
Net position$ 68,167$ 68,719$ 69,087
Tl liabs & net assets$ 82,702$ 84,194$ 85,482
Preliminary FY20 AOP Balance Sheet $9M IPF Changes vs. Base Case
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 36
Assets 6/30/2020Unrestricted cash -$ Restricted cash - Receivables & prepaids - Short-term investments 1,456 Total current assets 1,456 PP&E, net - Long-term investments - Total non-current assets - Total assets 1,456$ LiabilitiesShort-term liabilities -$ Notes payable - buildings - Total liabilities - Net AssetsUnrestricted 1,456$ Restricted - Net invest. In cap assets - Net position 1,456$ Tl liabs & net assets 1,456$
Sheet1
Assets6/30/20
Unrestricted cash$ - 0
Restricted cash- 0
Receivables & prepaids- 0
Short-term investments1,456
Total current assets1,456
PP&E, net- 0
Long-term investments- 0
Total non-current assets- 0
Total assets$ 1,456
Liabilities
Short-term liabilities$ - 0
Notes payable - buildings- 0
Total liabilities- 0
Net Assets
Unrestricted$ 1,456
Restricted - 0
Net invest. In cap assets- 0
Net position$ 1,456
Tl liabs & net assets$ 1,456
Preliminary FY20 AOP
Two Scenarios• $6M and $9M IPF• Impact
• Grants and program expenses• Personnel expenses• Transfers to SC Launch!, Inc.
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 37
Preliminary FY20 AOP Statement of Activities$6 million IPF Base Case
In 000's 2020 AOP 2019 FC $ Var. % Var. 2019 AOPOperating revenueContract 600$ 525$ 75$ 14.3% 511$ Lease 4,233 3,900 333 8.5% 3,722 Contribution 6,000 6,000 - 0.0% 6,000 Other - ATI earnout 4,076 4,087 (11) -0.3% 76 Total operating revenue 14,909$ 14,512$ 397$ 2.7% 10,309$ Operating expenseContract - direct 60$ 60$ -$ 0.0% 15$ Facilities 1,580 1,540 40 2.6% 1,466 Grants and program expenses 3,650 3,625 25 0.7% 3,625 Salaries and benefits 4,920 4,800 120 2.5% 4,901 General and administrative 615 600 15 2.5% 614 Professional services 692 675 17 2.5% 618 Building infrastructure expense 2,190 1,800 390 21.7% 1,944 Other 946 900 46 5.1% 887 Total operating expense 14,653$ 14,000$ 653$ 4.7% 14,070$ Net operating deficit 256$ 512$ (256)$ -50.0% (3,761)$ Non-operating activitiesTransfers to SC Launch!, Inc. (1,800)$ (1,800)$ -$ 0.0% (1,800)$ Interest income 992 1,105 (113) -10.2% 720 Unrealized gain (loss) on investments - (185) 185 -100.0% (100) Non-operating activities (808) (880) 72 -8.2% (1,180) Net surplus (deficit) (552)$ (368)$ (184)$ -50.0% (4,941)$
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 38
Sheet1
In 000's2020 AOP2019 FC$ Var.% Var.2019 AOP
Operating revenue
Contract$ 600$ 525$ 7514.3%$ 511
Lease4,2333,9003338.5%3,722
Contribution6,0006,000- 00.0%6,000
Other - ATI earnout4,0764,087(11)-0.3%76
Total operating revenue$ 14,909$ 14,512$ 3972.7%$ 10,309
Operating expense
Contract - direct$ 60$ 60$ - 00.0%$ 15
Facilities1,5801,540402.6%1,466
Grants and program expenses3,6503,625250.7%3,625
Salaries and benefits4,9204,8001202.5%4,901
General and administrative615600152.5%614
Professional services692675172.5%618
Building infrastructure expense2,1901,80039021.7%1,944
Other946900465.1%887
Total operating expense$ 14,653$ 14,000$ 6534.7%$ 14,070
Net operating deficit$ 256$ 512$ (256)-50.0%$ (3,761)
Non-operating activities
Transfers to SC Launch!, Inc.$ (1,800)$ (1,800)$ - 00.0%$ (1,800)
Interest income9921,105(113)-10.2%720
Unrealized gain (loss) on investments- 0(185)185-100.0%(100)
Non-operating activities(808)(880)72-8.2%(1,180)
Net surplus (deficit)$ (552)$ (368)$ (184)-50.0%$ (4,941)
Preliminary FY20 AOP Statement of ActivitiesComparison of the Two Scenarios – Affected Line Items
2/5/19 COMPANY PROPRIETARY © 2019 BY SCRA 39
In 000's $9M IPF Base Case ChangeContributions 9,000$ 6,000$ 3,000$ Grants and program expenses (4,275) (3,650) (625) Salaries and benefits (5,339) (4,920) (419) Transfers to SC Launch!, Inc. (2,300) (1,800) (500) Totals (2,914)$ (4,370)$ 1,456$
Sheet1
In 000's$9M IPF Base CaseChange
Contributions$ 9,000$ 6,000$ 3,000
Grants and program expenses(4,275)(3,650)(625)
Salaries and benefits(5,339)(4,920)(419)
Transfers to SC Launch!, Inc.(2,300)(1,800)(500)
Totals$ (2,914)$ (4,370)$ 1,456
Adjourn
SCRA Board of Trustees�Audit and Finance Committee�AgendaWelcome and Call to Order�Bryant BarnesApproval of MinutesFY19 Interim Financials�John SircyExecutive SummarySCRA Balance Sheets�June 30, 2018 and December 31, 2018SC Launch Balance Sheets�June 30, 2018 and December 31, 2018Executive SummarySCRA Statements of Activities �6 Months Ending December 31, 2018SCRA Statements of Activities �FY19 Forecast vs. AOPSC Launch Statements of Activities �6 Months Ending December 31, 2018SC Launch Statements of Activities �FY19 Forecast vs. AOPPortfolio Review/Annual�403(b) Review�John SircyMarket SummarySCRA Investment Portfolio SummarySC Launch Investment Portfolio SummarySlide Number 18Annual 403(b) ReviewIndustry Partnership Fund�Bob QuinnLegislative Update (as of 2/4/19)Fund Contribution Update (as of 2/4/19)Potential Tax Incentives for Technology-based Companies�Bob QuinnStatus of EffortConsultant for Executive Director Performance Assessment�Bryant BarnesRecommended Consultant and ScopeDraft FY20-22 Strategic Plan�Bob Quinn/John SircyFY20-22 Strategic Plan Executive SummaryFY20-22 Strategic PlanFY20-22 Strategic Plan Executive Balanced Scorecard - 4 PerspectivesLong-term Cash Flow Forecast Assumptions (Strategic Plan-driven changes in red)SCRA Long-term Cash Flow Forecast Preliminary FY20 Annual� Operating Plan�Bob Quinn/John SircyPreliminary FY20 AOPFY20 AOP Balance Sheet�$6M IPF Base CasePreliminary FY20 AOP Balance Sheet �$9M IPF Changes vs. Base CasePreliminary FY20 AOPPreliminary FY20 AOP Statement of Activities�$6 million IPF Base CasePreliminary FY20 AOP Statement of Activities�Comparison of the Two Scenarios – Affected Line ItemsSlide Number 40
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