Investor’s Luncheon

July 19, 2017

Tony Giovaniello, President, Shasta EDC

Try not to become a man of success, but rather try to become a man of value.

Albert Einstein

Always do right. This will surprise some people and astonish the rest.

Mark Twain

An optimist sees an opportunity in every calamity; a pessimist sees a calamity in every opportunity.

Sir Winston Churchill

Two sales people from the shoe factory were dispatched to Africa.

They each sent back a telegram:,

One said:

“Get me out of here, no one wears shoes here!”

The other said:

“Send me more inventory, no one owns shoes here!”

Agenda

• Board Update

• Financials

• Startup Overview & Kick Start Program

• Events

• Recruitment Activity

• Airline Update

• Strategic Direction

Board Update

Board Update

Michele GoedertCommercial Real Estate AgentExecutive Committee

Joe CeramiCerami & Browning ConstructionVice Chairman

Steve WilliamsInterWest InsuranceChairman Keith Hunting

D.H. Scott & CompanyAt Large Board Member

Financials

TOTAL

Total

Budget

YTD

Budget

YTD

Actual

YTD Over

(Under)

% Over

(Under)

Ordinary Income/Expense

Income

4010 · Contract - City of Anderson 20,000.00 20,000.00 0.00 -20,000.00 -100%

4020 · Contract - City of Redding 76,000.00 76,000.00 76,000.00 0.00 0%

4025 - Contract - City of Redding CDBG 50,000.00 50,000.00 38,350.28 -11,649.72 -23%

4030 · Contract - City of Shasta Lake 27,500.00 27,500.00 27,500.00 0.00 0%

4040 · Contract - County of Shasta 57,500.00 57,500.00 57,500.00 0.00 0%

4120 · Shasta EDC Campaign 120,000.00 120,000.00 117,900.00 -2,100.00 -2%

4160 · Campaign Income - In-Kind 5,000.00 5,000.00 -5,000.00 -100%

4246 - Event Income

4246.1 - Gamechangers 10,500.00 10,500.00 11,375.55 875.55 8%

4246.6 - Start up Weekend 6,258.43

4246.4 - Sponsorships 5,000.00 5,000.00 3,000.00 -2,000.00 -40%

4410 · Board Meeting Income 5,000.00 5,000.00 4,463.00 -537.00 -11%

4900 · Interest Income 200.00 200.00 239.78 39.78 20%

4910 · Miscellaneous Income 250.00 250.00 7,750.00 7,500.00 3000%

Total Income 376,950.00 376,950.00 350,337.04 -26,612.96 -7%

TOTAL

Total

Budget

YTD

Budget

YTD

Actual

YTD Over

(Under)

% Over

(Under)

Expense

6000 · Operating Expenses 51,300.00 51,300.00 42,497.74 -8,802.26

6120 · Administrative Expenses

Salaries and Fringes 225,319.00 225,319.00 197,580.68 -27,738.32 -12%

6210 · General Marketing Expenses 19,560.00 19,560.00 12,298.97 -7,261.03

6215 - External Marketing

6215.1 - Telemarketing 25,000.00 25,000.00 7,425.00 -17,575.00 -70%

6215.3 - Web Prospecting/Optimize 25,000.00 25,000.00 15,085.71 -9,914.29 -40%

6215.4 - PR Stories 14,000.00 14,000.00 0.00 -14,000.00 -100%

6351 · Local Retention Marketing Expenses

6356 · Business Development Local 2,500.00 2,500.00 12,729.37 10,229.37 409%

6359 - EDC - Airline Travel Bank 1,700.00 1,700.00 -1,700.00 -100%

6358 - Start-Up Development

6358.1 - Gamechangers 10,500.00 10,500.00 13,207.10 2,707.10 26%

6358.2 - B&B Pitch Breakfasts 7,480.00 7,480.00 2,880.23 -4,599.77 -61%

6358.3 - Website 155.00 155.00 0.00 -155.00 -100%

6358.4 - Startup Dev Curriculum 4,000.00 4,000.00 4,724.48 724.48 18%

6358.9 - Venture Hub Video 4,000.00 4,000.00 3,976.00 -24.00 -1%

6358.8 - Event Expenses 0.00 0.00 157.00 157.00

6380 · Attraction Marketing

6381 · Prospecting 5,000.00 5,000.00 1,027.05 -3,972.95 -79%

6384 · Site Visits 8,000.00 8,000.00 643.88 -7,356.12 -92%

6385 - Trade Shows 1,000.00 1,000.00 -1,000.00 -100%

6387 · Trade Shows/CREA Events

6389 · CREA Conferences 5,000.00 5,000.00 4,362.61 -637.39 -13%

6391 · Chapter Meetings 2,500.00 2,500.00 0.00 -2,500.00 -100%

Total Expense 431,574.00 431,574.00 330,894.79 -100,679.21 -23%

Net Ordinary Income -54,624.00 -54,624.00 19,442.25 74,066.25

Other Expense

Shasta Venture Hub Net Income -3,813.00 -3,813.00 4,346.99 8,159.99

Net Other Income -3,813.00 -3,813.00 4,346.99 8,159.99

Net Income -58,437.00 -58,437.00 23,789.24 82,226.24

Total Budget Month Budget June YTD Budget YTD Actual Over/Under

Ordinary Income/Expense

Income

4125 · Shasta Venture Hub 49,708.00 4,142.33 2,800.00 49,708.00 47,600.00 -2,108.00

4127.1 - Sublease Tegile 37,116.00 3,093.00 4,268.34 37,116.00 38,291.34 1,175.34

4127.2 - Sublease EDC 10,800.00 900.00 900.00 10,800.00 10,800.00 0.00

4246 · Event Income 1,950.00 162.50 0.00 1,950.00 300.00 -1,650.00

Total Income 99,574.00 8,297.83 7,968.34 99,574.00 96,991.34 -2,582.66

Expense

7010 - Bad Debt 5,160.00 430.00 0.00 5,160.00 650.00 -4,510.00

6085 - Rent 60,216.00 5,018.00 5,018.40 60,216.00 60,220.80 4.80

6061 - Internet 14,376.00 1,198.00 1,198.00 14,376.00 14,376.00 0.00

6238 - Tech Support 1,500.00 125.00 1,500.00 -1,500.00

6239 -Utilities/Common Area Supplies 4,000.00 333.33 205.80 4,000.00 2,562.60 -1,437.40

6071 - Janitorial 6,000.00 500.00 600.00 6,000.00 7,568.51 1,568.51

6086 - Repairs & Maintenance 2,000.00 166.67 8.04 2,000.00 5,939.56 3,939.56

6083 - Office Supplies 2,500.00 208.33 0.00 2,500.00 0.00 -2,500.00

6235 - Marketing 7,635.00 636.25 7,635.00

6021 · Bank Service Charges 0.00 0.00 110.65 0.00 1,326.88 1,326.88

Total Expense 103,387.00 8,615.58 7,140.89 103,387.00 92,644.35 -10,742.65

Net Ordinary Income -3,813.00 -317.75 827.45 -3,813.00 4,346.99 8,159.99

Shasta Venture Hub

June 17 Jul-16

ASSETS .

Current Assets

Checking/Savings

1005 · Cash in Tri Counties Checking 28,077.45 34,362.91

1015 · Pay Pal 0.00 114.54

1040 · Cash in RBC-CD 154,601.17 154,388.51

Total Checking/Savings 182,678.62 188,865.96

Accounts Receivable

1200 · Accounts Receivable 100.00 5,524.00

1220 · Pledges Receivable 29,850.00 6,750.00

1230 · Grants Receivable 31,416.57 34,051.66

Total Accounts Receivable 61,366.57 46,325.66

Total Current Assets 261,602.59 247,768.87

Total Fixed Assets 107,865.30 121,463.39

TOTAL ASSETS 369,467.89 369,232.26

LIABILITIES & EQUITY

Liabilities

Total Current Liabilities 27,221.37 34,956.50

Total Liabilities 27,221.37 34,956.50

Equity

3000 · Opening Bal Equity 233,753.69 233,753.69

3900 · Retained Earnings 72,404.62 89,872.76

Net Income 36,088.21 10,649.31

Total Equity 342,246.52 334,275.76

TOTAL LIABILITIES & EQUITY 369,467.89 369,232.26

Balance Sheet Summary

RecruitmentActivity

Recruitment Update

• Project Flicker

• Project Red Fox

• Project Spectrum

• Project Eagle

• Project Yellow Shoes

• Project Falcon

Employees

375

27

70

4,415

150

450

Larger Projects in 2016/2017:

Recruitment Update

• Project H2

• Project Bull

• Project Electric

• Project D&S Family

• Project Liquid

• Project Varietals

Employees

22

10

XX

50-100

50-70

125 - 450

Current Projects:

Startup Overview &Kick Start Program

AirlineUpdate

SKYWEST/UNITED EXPRESS

The Jet Service load factor for June 2017 is:

Departures = 81.54%

Arrivals = 73.29%

Cancellations = 6

The Jet Service load factor 2017 YTD:

Departures = 75.41%

Arrivals = 68.90%

Cancellations = 72

PENAIR

The load factor for the month of June 2017 is:

Departures = 56.75%

Arrivals = 59.52%

Cancellations = 4

The load factor for 2017 YTD is:

Departures = 49.42%

Arrivals = 45.44%

Cancellations = 73

Airline Update

Corporate Headquarters Meeting Requests:

• United - August 9th Chicago

• SkyWest - August 17th St. George

Events

June 27, 2017

June 1st - JEDI Women in Business Conference

June 8th – Pitch Breakfast

June 11th - Presentation to Chinese Delegation of 30+ Chairmen & CEOs

June 15th - Beer & Bytes – Reverse TED

June 16th – zMAD Leadership Experience

June 23/24th - Marketing and E-Commerce Boot Camp for International Trade

June 26th - Elephant Eater’s (AdForce Local)

June 27th - Elephant Eater’s Lunch (RADD)

June 27th - Global Relations Fellowship (Leadership Training)

Events in June

Scheduled:

July 6th - CAL Competes Conference

July 13th - Chamber of Commerce Greeters Meeting – Hosted by AdForce Local

July 19th - Investor’s Brown Bag

July 20th – Pitch Breakfast

July 27th - Beer & Bytes

Planned:

Shasta County District Attorneys Town Hall

GMI Shasta Meeting

Project Hometown Kick-off Meeting

Events Planned/Scheduled for July

Strategic Direction

Headwinds:• City of Anderson $20K

• CDBG Grant $50K ???

• Lease Renewal – Increasing Occupancy Costs $22K

• Breakeven at SVH is Not Really Breakeven ($25-55K)

• Startup Support Alternatives

• Migration Downtown

• Funding Competition in Startup Support

• Startup Funding Challenges (Seed Money)

• More Recruitment Activity

Strategic Direction

Ahead Full Speed

Full Focus on

Recruitment, Expansion,

and Retention

Open Approach, Telecommuters,

Free Lancers

Open Approach, Telecommuters,

Free Lancers

EDC Accomplishments and Goals

EDC’s Selected Accomplishments – May – Dec 2016

➢ Expansion such as Captive Aire, 30 New Employees

➢ Recruitment such as Alta California Roundwork – 20 New Employees

➢ Valley Pacific Purchase from Walt Schneider

➢ Two Offers on Stillwater

➢ Developing Opportunities such as D & S Family, LLC – Will re-engage at end of Q1

➢ RFI Activity from State Accelerating – Responded to 3 Last Year, Multiple Site Responses, 2 Last Week

➢ Still Working on Project Varietals – Since April 2016, 5 Visits in 2016

➢ Eight (8) Meetings with CEO/CFO/VP from Telemarketing

➢ Increased Offices Rented from 5 to 11, Put two more Offices in Service

➢ Game Changers 2016 – 300+ People, 20 Exhibitors

➢ Incubated and Accelerated Cloud Wise Academy (3 New Employees), 3 Others landed tech jobs

▪ Helped start Tuition Fund to Provide Tuition Assistance to Needed

➢ Second Annual Startup Weekend

➢ ATB Extension, 3 Airline Meetings, Portland Service Added, 3rd United Flight

➢ Working to mitigate Emerald Kingdom, New Process for Managing Offers

➢ Met with 30 Board Members and Investors for Updates and Input

EDC’s Selected Accomplishments – January – June 2017➢ Alta California Roundwork – 20 New Employees, Fire Support

➢ Secured Job credits for Bullert Electric’s New Build by Airport

➢ Valley Pacific – Increase Rail Service Availability, Use Permitting

➢ Continued Pursuit of D & S Family, LLC

➢ RFI Activity from State Accelerating – 3 last year, 4 already this year

➢ Developing Project Liquid, Project H2O

➢ Still Working on Project Varietals – Since April 2016, 7 Visits – Down to Under 10 Sites➢ Replaced Hope Seth with Split Approached, Todd Jones .5 FTE, Cloud Potential Contract

➢ Secured $10K/month free Google Adwords

➢ Started Grow Manufacturing Initiative – Shasta – 4 Meetings to date, Cloud Wise developing soft skill training

➢ Accelerated Expansion Use of SVH for Community Events

➢ Third Annual Startup Weekend Planning, Building up Startup Redding Organization

➢ Mead Hunt Conference – Speed Dated 5 Airline, Strategy Development for UA, AA, and Alaska

➢ Planning for Project Hometown

➢ Negotiated/Contracted with Oppsites – Web-based Site Marketing Database to generate leads

➢ EDC Website Content – Articles Local Businesses, SEO, Growing Hits, Website Redesign

➢ Tony Giovaniello Manufacturing Conference – Articles on Robotics, Insourcing – Supply Chain GC

➢ Social Media campaigns: EDC and SVH; FB, LI, Twitter

➢ One of 6 EDOs to present to Chinese Business Delegation in Sacramento

➢ Commercial Real Estate Broker’s Meeting @ SVH – February, Engaged Panattoni – Development Partner

➢ Building Brand with Go-Biz, Engaging with Assemblyman Dahle and Senator Ted Gaines

➢ Collaboration with Chamber, SBE, and Visit Redding/Shasta Cascade Wonderland

➢ Amplify Business Conference, Mexico – Import/Export Symposium

➢ Many Community Presentations: Realtors, Rotary, Lions, NBA, more – Joined Workforce Development Boards: RHS, Simpson

➢ Shasta Angels/SVH Process Alignment and Coordinated Mentoring

➢ Total Mentoring Hours = 75 Hours

➢ 4 Pitch Breakfasts, 3 Beer & Bytes with Programs

EDC’s Objectives – July 2017/June 2018

➢ Close on Lease - 2017/2018

➢ Assist Captive Aire with Incentive Agreement, Assist Bullert Electric in New Construction

➢ Valley Pacific – Continue Building Rail Service Availability for Other Businesses

➢ Further Develop Opportunity with D & S Family, LLC

➢ Close on Project Varietals, Project Eagle, Project H20, Project Liquid, Project Spectrum

➢ Next Round of Telemarketing Calls (Lead Development)

➢ Continue to Expand Use of SVH for Community Events

➢ Third Annual Startup Weekend, Start Migration to Startup Redding, New CDBG Program/Marketing

➢ ATB Extension, 3 Airline Meetings, Adopted into Long Term, Multi-Destination Strategy of United or American

➢ In person meetings with all Board Members and Investors (2017)

➢ New Management System for Colliers and New EDC Driven Marketing Strategy for Stillwater

➢ Telecommuting-Free Lancer Strategy, Meetings with Google, Facebook, HP, Others – Marketing Material/Web

➢ Sales – Core Competency Development and Marketing

➢ Project Hometown Development and Deployment

➢ Re-architect Website, Mentor Database

➢ Continue Development of Grow Manufacturing Initiative

➢ New Marketing Material: Redding MSA/Shasta County, Come Home, Video/Granzellas

➢ State Incentive Lobbying

Other Initiatives:

GMI – Shasta

Project Hometown

Inside Sales – Core Competency