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Letter from the CEO

Access to Capital for Growing Companies ND/ MN EB-5 Regional Center 4200 James Ray Drive

The USCIS EB-5 Regional Center program has fueled the creation of tens of thousands of new jobs and the injection of billions of dollars into the U.S. economy since Congress created the program in 1990. In the long recession, interest in the EB-5 program has grown exponentially both from companies seeking capital and foreign investors who have the capital to fuel economic growth. The EB-5 program has become even more valuable for North Dakota and Northwest Minnesota. The UND Center for Innovation Foundation has built a strong team to help qualified companies access interested foreign direct investment to grow and create jobs. We also are linking together a strong network to help us identify foreign investors who find our region an attractive place to invest in the seven key industries which are targeted. Our Regional Center team are facilitators and coordinators to bring companies and investors together. We appreciate the strong support we have received from state and federal office holders as well as the trustees of the UND Center for Innovation Foundation. Our team is dedicated to fostering innovation, entrepreneurship, and private investment. We look forward to working with area leaders in the creation of good-paying, quality jobs for our residents as we provide investment opportunities for our new friends from foreign lands.

Grand Forks, ND 58203 info@ndmneb5.com

Sincerely,

www.ndmneb5.com Bruce Gjovig, ND/MN EB-5 Regional Center CEO


EB-5 Program Overview

North Dakota/ Northwest Minnesota EB-5 Regional Center

The United States investor Pilot Program, also known as the “EB-5 Regional Center Program,” is a job-creation visa program that was made possible by Section 610 of Public Law 102-395 (Oct. 6, 1992), and is administered by the U.S. Citizenship and Immigration Services (USCIS).

The ND/MN EB-5 Regional Center is located in the Ina Mae Rude Entrepreneur Center. The Regional Center is owned and managed by the Foundation, a 501(c)(3) nonprofit organization established in 1984 to support and encourage entrepreneurship and innovation. The Foundation has fostered over 400 companies which have employed more than 4000 people and attracted over $110 million in investment.

Under the EB-5 Regional Center Program, federally approved creditors must invest a minimum of $1,000,000, or $500,000 if the project is located in a targeted employment area “TEA.” A TEA is a geographic region with high unemployment rates (150% of the national average) or otherwise classified as a rural area (population less than 20,000) in a qualified project within the EB-5 Regional Center’s designated region. This investment must create a combined total of at least 10 full-time direct or indirect U.S. jobs. After determining that the investment has generated the necessary jobs and all EB-5 requirements have been met, investors may receive permanent resident status. 10,000 visas are set aside each year for investors interested in the EB-5 program.

What sets us apart from other Regional Centers? 1) Secure Regional Center: Unlike many regional centers, the ND/MN EB-5 Regional Center, a non-profit organization, does not take an ownership position in the projects they represent. 2) Additional Resources: The ND/MN EB-5 Regional Center provides full coaching and assistance to companies preparing for an EB-5 investment, while being transparent and honest about your project’s ability to successfully raise money from EB-5 investors. The UND Center for Innovation Foundation has the ability to provide companies additional resources in business start-up and expansion. 3) Program Based: The ND/MN EB-5 Regional Center is program based vs. project based; offering a rolling application process for potential projects. 4) Established Network: The ND/MN EB-5 Regional Center has operated since 2011 as the area’s first regional center and has built a network of service providers, agents, and foreign investors.

On April 19th, 2011 the ND/MN EB-5 Regional Center received our letter of approval from the USCIS granting the Foundation the right to operate an officially designated EB-5 Regional Center.

USCIS Regional Center Letter of Approval


Services Provided to Companies The ND/MN EB-5 Regional Center works as a consultant to local businesses interested and able to participate in approved EB-5 investment projects. Some of our services include:  Helping to target, evaluate and secure qualified private equity investment that is EB-5 eligible.  Marketing the company to potential international investors.  Identifying professional service providers such as translators, accountants and attorneys who can assist in making international investment into a reality.  Reporting responsibilities with the USCIS

Our Geographic Region In order to participate in the program, companies must be located within our geographic region and fall within one of our designated industry sectors.

Company Benefits 

$500,000 Equity Investment or Structured Loan Companies will receive $500,000 (TEA project) or $1,000,000 (non TEA project) from each EB-5 investor in the form of a direct equity investment or a structured loan.

Direct Access to Investors The ND/MN EB-5 Regional Center helps companies gain direct access to foreign investors through their partnerships and agent relationships.

Increased Access to Capital All EB-5 projects are structured for side-by-side funding with private equity investment, traditional debt, bonding, subordinated debt, and government financing.

Expert Coordination The Regional Center coordinates all EB-5 investors and communication with the USCIS on behalf of the project.

*TEA zones are designated by the light blue segments.

North Dakota/Northwest Minnesota EB-5 Regional Center Eligible Industries Agribusiness

Aviation/Aerospace

Biotech/Bioscience

No Long-Term Loss of Equity in your Company Unlike a typical equity investor, EB-5 investors are generally more focused on a clear exit within five years, rather than the return rate on their investment.

Construction & Real Estate Development

Information Technology /Communications

New Talent Pool/ New Markets Many EB-5 investors are successful business professionals that can bring not only their experience conducting business in international markets to the company, but their international network of other business professionals as well.

Machinery Manufacturing

Utilities


North Dakota/Northwest Minnesota Regional Center Loan Model Participation/Application Fee: The ND/MN EB-5 Regional Center will charge a participation/application fee of $65,000 to help cover the following expenses:    Loan Size:

developing the investment package documentation developing the econometric analysis to determine job creation setting up an escrow agreement

The size of the loan may vary in $500,000 increments. May not exceed over 40% of source of funding for the total project. Typical Loan Structure: The typical loan structure for a project company would consist of interest only payments for 5 years with a balloon payment due upon the conclusion of the term. Each loan is structured differently depending on project and company needs and underwriting standards. Closing Costs: Every project will have 2% closing costs. The closing costs offset the expenses related to establishing and administrating the EB-5 funding. The participation/application fee is calculated in the closing costs.

Time Line for Potential EB-5 Projects Day 1

3 Months

6 Months

Interest Rates: Interest Rates will be determined on a project -by -project basis *In lieu of the loan model, direct equity and other forms of investment are possible on a project by project basis.

Approval of EB-5 Application 1-2 Months

Identify Investors 3-6 Months * Regional Center works with agents and travels to international markets to promote projects

9 Months

Minimum Document Requirements for EB-5 Application 1. Current Business Plan

Apply to the EB-5 Regional Center

12 Months

2. Complete set of Financials

Escrow 3-6 Months *Disbursement of funds up to 12 months after loan approval, subject to investor’s clearance by USCIS

3. Biographies of all Executive Level Leadership 4. Proven additional sources of funding: debt, equity, city funds, state funds, federal funds, etc. *Further documentation may be required by the Regional Center

15 Months

Release of EB-5 Investor Funds


EB-5 Due Diligence Process Phase 1- Preliminary Due Diligence 

Determine whether the project meets our initial requirements:  Location  Industry Sector  Seeking a minimum of $2MM in EB-5 investments Send company the EB-5 Investment Application Form

Phase 2– Qualifying Due Diligence      

Review complete business plan, including pro forma financials Company to fill out soft job creation form Economist will perform soft job creation analysis Visit with local officials regarding the project Visit project site Gather relevant company and industry information

Phase 3– Accept Project  

Collect up-front portion of the project fee Compile all relevant materials outlined in the due diligence packet:  Business Plan Components  Company Information  Legal Documents  Real Estate Documents Create marketing and promotional materials:  Company brochure  Update website to include project documents  Assemble due diligence packet for potential investors

Comparing Regional Center and Individual EB-5 Investments Amount of Investment:

Sixty-seven out of the seventy-three counties in the ND/MN Regional Center Designation are classified as TEA Zones due to their rural nature, requiring only a $500,000. The Individual EB-5 investments are either $500,000 or $1,000,000 depending upon whether the investor can prove that the investment is in a TEA zone. Otherwise, if the investor does not meet the TEA standards, the required amount of investment is $1,000,000. While the larger investment size per investor or $1,000,000 may seem more appealing to projects, it is much more difficult to attract investors to non-TEA zone projects. Job Creation: The biggest advantage of using a regional center, rather than individual EB-5 Investors is the job creation requirements. Individual EB-5 investments are required to create 10 direct jobs, while Regional Center EB-5 investments can account for direct of indirect job creation. Either the RIMS II or IMPLAN econometric analysis models are used to predict direct and indirect job creation. Individual Investment: Create or preserve at least 10 full-time jobs for qualifying U.S. workers within two years (or under certain circumstances, within a reasonable time after the two-year period) of the immigrant investor’s admission to the United States as a Conditional Permanent Resident. Regional Center Investment: Create or preserve either direct or indirect jobs. Direct jobs are actual identifiable jobs for qualified employees located within the commercial enterprise into which the EB-5 investor has directly invested his or her capital. Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor. A foreign investor may only use the indirect job calculation if affiliated with a regional center. Management: Investors utilizing a regional center are able to take a more passive role with the project in which they are investing, such as a limited partner. When individuals invest directly into a project, they are required by USCIS to take a more active role in business operations, often times having a voting seat on the board of directors, and/or holding a key management position.


EB-5 Regional Center Team Members & EB-5 Service Providers EB-5 Regional Center Team Bruce Gjovig EB-5 Regional Center CEO bruce@innovators.net

Jordan Schuetzle EB-5 Regional Center Director Jordan.Schuetzle@ ndmneb5.com

Helen Yang EB-5 Regional Center Intl. Development OfficerHelen.Yang@ndmneb5.com

Alexandra Naastad EB-5 Regional Center Project ManagerAlex.Naastad@ndmneb5.com

Dr. Cullen Goenner, Phd Economist University of North Dakota

Dr. Yong Hou EB-5 Regional Center Consultant yong@innovators.net

EB-5 Project Consulting Law Firms Lincoln Stone Stone & Grzegorek Lincoln@lskglaw.com

Charles Raether AmLaw Group Charles@amlawpro.com

Investment Structure/Investment Package Preparation Jon Strinden Fredrickson & Byron jstrinden@fredlaw.com

Joel Lebewitz, CPA, JD, CFF Lurie Besikof Lapidus jlebewitz@lblco.com


NDMN EB-5 Regional Center Brochure-Prospective Company  
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