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! ! UVI Research & Technology Park PROGRAM UPDATE June 2017 ! ! 2 UVI RTPark: Fostering Sustainable Growth and Creating Value The RTPark program is a specialist economic development agency that facilitates firms bringing knowledge-intensive businesses to the US Virgin Islands. Private sector investment contributes to economic activity and quality of life in the Territory. Benefits The RTPark program produces a net positive benefit to the US Virgin Islands, even after our clients receive generous tax incentives. The net benefit is in the order of tens of millions of dollars on an annual basis. In the last year, the RTPark program undertook a detailed evaluation and analysis of its work, resulting in the following key findings: in 2015, the RTPark network contributed over $70 million to USVI Territorial GDP, as a net position after tax benefits are taken into account. (Table 1). These thirty RTPark firms created almost 500 work opportunities (Table 2) and the average full-time salary and fees associated with these positions is twice that of the average wage. RTPark clients purchase residential and commercial real estate, and produce multiplier effects throughout the US Virgin Islands. These high net worth individuals reside in the Territory, pay individual taxes and undertake consumption activities including leisure, personal services and household maintenance among others. Table&1.&Net&Benefit&Analysis:&UVI&RTPark&Program,&2015& Item% TOTAL%(US% $million)% 1.%NET%BENEFITS%TO%THE%USVI% $67%to%72% 2.!Gross!contribution!=!the!sum:!(2.1)+(2.2)+(2.3)! 88!to!93! !!!!!2.1!Entity!business!expenditure! 80!to!84! !!!!!2.2!Entity!expenditure!on!UVI!commitments! 0.5! !!!!!2.3!Other!USVI!expenditure! 7!to!8! 3.!Tax!benefits!=!the!difference:!(3.1)K(3.2)! 21! !!!!!3.1!Taxes!paid! 6.5! !!!!!3.2!Taxes!foregone! 28! !"#$%"&"'(#)$#*$#ℎ"$,-./ =$ (23*))$4*&#3(%5#(*&)$ −!"#$#78$%"&"'(#))$! Table&2.&Work&opportunities&and&use&of&service&providers,&2015,&by&type&of&firms:&Number&and&spend& %% Telecommunications% &%Infrastructure% Other% TOTAL% Number%of%work%opportunities:% 160! 328! 488! Number%of%service%contracts:% 1,285! 256! 1,541! Spend:%work%opportunities:%US$%mn% 9! 19.5! 28.5! Spend:%service%contracts:%US$%mn% 24.4! 19.8! 44.2! These data are for the thirty clients, that is the number of firms active in the network in 2015. Since then, there have been fifteen additional companies; for a total of 45 companies (see detailed listing at the end of this report). This means that it is very likely that the current net benefit has increased.! ! ! 3 Growth By June 2017, the RTPark program will have attracted twenty new clients to the US Virgin Islands since 2015; and the number of active client is expected to be forty-seven. The leadership has set a stretch goal of having 54 active clients by December 2017. (Figure 2) The growth performance over this period is very encouraging and is possible because the RTPark program is not constrained by the physical size of the 64 West Center where it is headquartered. Incoming investors can set up premises and conduct business anywhere in the Territory. There are members of our community based on all three islands and this diversity and flexibility is an attractive feature of the program. The legal mandate of the RTPark program facilitates this growth. The RTPark program is engaged in a proactive business development strategy to attract impact investors. Firms owned and led by individuals who are as concerned with financial returns as they are with making a contribution to long term social, environmental and equity goals of the US Virgin Islands. In implementing this approach to its mandate, the program has partnered with leading organizations in the US mainland and further afield. The RTPark program plans to extend its scope of services to include offering capital and advisory services to local technology start-ups and small businesses, working with an innovative on-line accelerator. Targeted Business Development The UVI RTPark, will celebrate Caribbean Week in New York City with a Big Apple VIP Investment Showcase Reception on Wednesday June 7th, hosted at the Park Avenue offices of Morgan, Lewis & Bockius LLP. The event will highlight opportunities of the RTPark program for business leaders and key members of the Caribbean Diaspora in NY, and encourage Diaspora investors to #investinparadise. The response has been very positive; existing clients, client attorneys, political leaders and members of the Caribbean diplomatic corps are expected to attend or to provide messages of support. Financial Viability Since 2015, the RTPark program is completely self-sufficient and operates solely by generating commercial revenues. The growth of revenues in the last three years has been steady and the expenditures of the program are carefully managed so that surpluses generated are used to repay long Figure&2.&UVI&RTPark&Client&Growth,&2006M2017&(Source:&UVI&RTPark&Database&2017)& 1 1 2 3 5 10 15 17 27 33 42 54 0 5 10 15 20 25 30 35 40 45 50 55 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Number%of%Clients Growth%In%Client%Base PROJECTED ! ! 4 term legacy liabilities owed to the UVI and to invest in future growth. The annual budget of the RTPark averages $2-3 million per annum. Because of our proven financial viability, we are in the process of refinancing existing debt to enable growth without a high debt burden. To this end, we have engaged with all the local financial institutions in the US Virgin Islands, regional banks and specialist financial institutions on the mainland. Social Investments Beyond its success as a commercially focused, efficient organization, the RTPark program produces and enhances social value. An important aspect of the program is the requirement for clients to make contributions to the research and academic mission of the UVI. In 2016, the financial value of commitments and pledges to UVI from RTPark clients was $1.3 million. We are working hard to ensure that our clients execute those pledges and develop meaningful partnerships with UVI. In the last two years the team increased execution rates across all clients by more than twenty percent. Typical RTPark clients are engaged in the community, make charitable donations and serve on Boards of various civic organizations. The RTPark HQ supports science fairs, the VI Literary Festival, the UVI Golden Key Society, children's homes, choirs, and schools and serve as an active member of the St Croix Chamber of Commerce. We are pursuing efficient use of the headquarters building as a venue for knowledge-based activities beyond its important use for the UVI, College of Science and Mathematics. Thought Leadership and Hands-On Technology Engagement The RTPark headquarters contributes to the quality of life in the US Virgin Islands by organizing thought leadership events and hosting knowledgeable local leaders and policy makers and international leaders in the area of technology and development, sharing ideas and showcasing the US Virgin Islands. The successful TechFriday series, which exposes St Croix youth to technology fields, continues. In April 2016, together with the National Guard, we organized a hands-on interactive session on analytical chemistry and tools used in their WMD program. Later this year, RTPark clients are coming together to organize coding skill training sessions for young people. Another client is leading a workshop on electronic dance music production and technology-mediated music distribution strategies. In Feb. 2017, the RTPark organized a successful workshop on building an innovation culture in the USVI. Work with Rainforest Strategies to provide high-level training and dialogue on innovation will continue. On May 24th 2017, we hosted a Special Session at UVI’s International Conference for Leadership, Management and Strategic Development, on: Strategies For Success In The New Knowledge Economy. The panelists included Prof. Brett Gilbert, Rutgers University, an award winning academic, who shared factors for development & growth of tech hubs in the global South; Dale LeFebvre, Managing Member Anvil 1 LLC, RTPark Client, inventor, philanthropist, investor, poet and chef, who discussed his approach to Transformational Investing, and the unique perspective that considers challenges in an island environment as positive stimulus for ideation; Prof. Gillian Marcelle, UVI, School of Business, and Executive Director, RTPark, who provided insights on the RTPark program and its plans for showcase the US Virgin Islands within the impact investment community. Summary The RTPark community is an important hub for knowledge and an important catalyst for economic growth. At a time where there is concern over fiscal challenges and the need to identify and nurture sources of economic dynamism, we are proud of RTPark’s contribution to the Territory and look forward to doing even more with the full cooperation of all branches of government, the business community, media, professionals and under policy direction of the Board of Directors and UVI. ! ! 5 Item No. Organization Location Business Segments Size* 1 13D Research (USVI), LLC STT Technology & Knowledge-Intensive Research, Consulting & Investment Services Medium 2 American Health Advocates, Inc STT Technology-Mediated Services -- Healthcare & Life Insurance Small 3 Anvil 1, LLC STT Technology & Knowledge-Intensive Research, Consulting & Investment Services Small 4 Atlas Tracking Solutions, LLC STT Technology-Mediated Services -- Asset Mgmt Small 5 BCS Tech Ventures, LLC STX Technology & Knowledge-Intensive Research, Consulting & Investment Services Medium 6 Brisa Max Holdings, LLC STT Technology & Knowledge-Intensive Research, Consulting & Investment Services Medium 7 Broadband VI, LLC STX Telecom, Internet & Infrastructure Large 8 CentriLogic USVI, LLC STT Cloud Services, Data Hosting & Data Center Mgmt Medium 9 Choice Communications, LLC STT Multimedia Services; Telecom, Internet & Infrastructure Large 10 dBase VI, LLC STT Technology-Mediated Services -- Logistics Mgmt Large 11 Exigo Companies VI: Epic.IO, LLC Exigo On Demand USVI, LLC Exigo Office, Inc. STX Specialist Software Development, Design & Application; Cloud Services, Data Hosting & Data Center Mgmt Large 12 Fostar Managed Services, Inc. STT Cloud Services, Data Hosting & Data Center Mgmt Small 13 Full Zoom Media, LLC STT Internet Advertising & Media Platform Services; Specialist Software Development Small 14 Geniuscove, Inc. STT Specialist Software Development; E-Commerce & Web-Based Services Small 15 Godney Holdings, LLC STT Intellectual Property Rights Mgmt Small 16 Greenlamp, LLLP STT Internet Advertising & Media Platform Services Medium 17 Hidalgo, LLC STT E-Commerce & Web-Based Services -- Jewelry Small 18 Hip Logistics, LLC STT E-Commerce & Web-Based Services -- Recreational Products Small 19 Hydrocarbon Management Research and Technology, LLC STT Advanced Supply Chain Mgmt and Logistics Small 20 Iconic Holdings, LLC STT Internet Advertising & Media Platform Services Medium UVI RTPark Client Network Summary ! ! 6 Item No. Organization Location Business Segments Size* UVI RTPark Client Network Summary 21 Innovate 1550, LLC STT Internet Advertising & Media Platform Services Small 22 Innovative Entities: Innovative: Caribbean Comm. Corp. Innovative: ICC TV, Inc. Innovative: St. Croix Cable TV, Inc. Innovative: VIPowerNet, LLC Innovative: Vitelcom Cellular, Inc. STT Multimedia Services; Telecom, Internet & Infrastructure Large 23 INOV8, LLC STT Technology & Knowledge-Intensive Research, Consulting & Investment Services Small 24 Intellectual Global Concepts, LLC STX Technology-Mediated Services -- Media & Entertainment Medium 25 ITIM USVI, LLC STT Specialist Software Development, Design & Application -- Pharmaceutical R&D; Technology & Knowledge-Intensive Research, Consulting & Investment Services Small 26 J. A. Wright & Associates, LLC STT Technology & Knowledge-Intensive Research, Consulting & Investment Services Small 27 Knowledge Investments, LLLP STX Specialist Software Development, Design & Application; Technology & Knowledge-Intensive Research, Consulting & Investment Services Small 28 LNL Publishing, LLC STX Electronic Publishing Medium 29 MB Jewels, LLC STT E-Commerce & Web-Based Services -- Jewelry Small 30 Media Source, LLC STT Internet Advertising & Media Platform Services; Cloud Services, Data Hosting & Data Center Mgmt Medium 31 MEI Global LLC & MEI Licensing LLC STT Specialist Software Development, Design & Application -- Electronic Funds Transfer Medium 32 New Vista, LLC STT Technology & Knowledge-Intensive Research, Consulting & Investment Services Medium ! ! 7 Item No. Organization Location Business Segments Size* UVI RTPark Client Network Summary 33 OTS Digital, LLC STT Specialist Software Development, Design & Application; Technology & Knowledge-Intensive, Research, Consulting & Investment Services Small 34 qSpark USVI, LLC STT Specialist Software Development, Design & Application -- Trading Algorithm Platforms Small 35 Rank Group, LLC STJ Specialist Software Development, Design & Application -- Energy Trading Small 36 Scarab Technology Services, LLC STT Technology & Knowledge-Intensive Research, Consulting & Investment Services; Specialist Software Development, Design & Application -- Medical Devices Small 37 Seals Investments VI, LLC STX E-Commerce & Web-Based Services -- Financial Planning Small 38 Self-Insurance Consultants, Inc. STT Technology-Mediated Services -- Healthcare Mgmt Systems Small 39 Shop Smart Ventures, LLC STT Technology & Knowledge-Intensive Research, Consulting & Investment Services; E-Commerce & Web-Based Services Medium 40 STX Online Education, LLC STX E-Commerce & Web-Based Services -- Education & Training Small 41 The Nexus Group, LLC STT Internet Advertising & Media Platform Services Small 42 Thermopylae Security and Technology, Inc. STT Specialist Software Development, Design & Application Small 43 Tropical Telecom, Ltd. STT Telecom, Internet and Infrastructure Medium 44 VI Techstack, LLC STJ Technology-Mediated Services -- Public Opinion Polling; Customer Relations Mgmt Small 45 XO Energy Worldwide, LLLP STT Specialist Software Development, Design & Application -- Energy Spot Trading & Risk Mgmt Large *# of Staff -- Small: 0-5, Medium: 6-15, Large: 15+ As of June 2017