Board Summary Cascade Financial Technology Corp. 2595 S. Cimarron Rd. Suite 104, Las Vegas, NV 89117 Date: March 15, 2018 Main Location: Carson City Spencer Schmerling, Chief Executive Officer Call Center and Operations Business Type: Expansion County: Clark County Development Authority Representative: Perry Ursem - LVGEA APPLICATION HIGHLIGHTS - Cascade Financial Technology Corp. plans to expand its Clark County facility from approximately 2,000 square feet to over 20,000 square feet within the next few months. - Cascade Financial Technology Corp. started in Chatsworth, CA in 2014 and transitioned to Nevada in 2016. Over the course of its first year in the state, the company transitioned all of its jobs to Nevada and no longer has facilities or operations in California. - The company's Clark County facility currently houses a 24/7/365 call center along with operations, technical, and professional staff. PROFILE Cascade Financial Technology Corp. is a prepaid program manager and offers services to help organizations execute their prepaid program objectives. The company provides prepaid card services, prepaid consulting services, Person-to-Person (P2P) mobile payments, and prepaid call center services. Cascade Financial Technology Corp. also offers General Purpose Reloadable (GPR) prepaid cards, gift card programs, rewards and loyalty programs, and commercial prepaid programs. In addition, the company provides end to end wearable solutions such as business consulting, device design, sale, and program management services. The company has 17 client companies and cardholders in all 50 states and Washington DC. Source: Cascade Financial Technology Corp. SIGNIFICANCE OF ABATEMENTS IN THE COMPANY'S DECISION TO RELOCATE/EXPAND Recent strategic planning has the company focused on creating a greater presence in Nevada. A significant part of this consideration is the economic incentives offered by the state. The projected cost savings from the support of these incentives will allow the company to hire a greater number of full time employees, supporting the Governor's initiative for providing more Nevadan's with long term work and career opportunities. Additionally, Nevada's pro business climate provides Cascade with a sustainable location for ongoing strategic growth. Source: Cascade Financial Technology Corp. REQUIREMENTS Statutory Application Sufficient % Over / Under Job Creation 25 64 156% Company meets Average Wage $21.95 $26.64 21% abatement eligibility Equipment Capex (SU & MBT) $1,000,000 $728,700-27% requirements Equipment Capex (PP) $1,000,000 $728,700-27% INCENTIVES Requested Terms Estimated $ Amount Sales Tax Abmt. 2% for 2 years $45,544 Modified Business Tax Abmt. 50% for 4 years $160,505 Personal Property Tax Abmt. 50% for 10 years $10,719 Total $216,768 JOB CREATION Contracted 24-Month Projection 5-Year Projection 25 64 300 OTHER CAPITAL INVESTMENT Land Building Purchase BTS / Building Improvements $0 $0 $600,000 ECONOMIC IMPACT ESTIMATES (10-Year Cumulative) Total Construction Total Jobs Supported 841 6 Total Payroll Supported $288,465,909 $274,592 Total Output Estimate $1,397,541,291 $946,379 Estimate includes jobs, payroll & output by the company assisted as well as the secondary impacts to other local businesses. NEW TAX REVENUE ESTIMATES (10-Year Cumulative) Direct Indirect Total Local Taxes Property $525,814 $10,594,037 $11,119,851 Sales $24,375 $5,249,968 $5,274,343 Lodging $0 $441,819 $441,819 State Taxes Property $28,759 $616,852 $645,611 Sales $22,374 $1,788,489 $1,810,863 Modified Business $1,485,981 $2,208,712 $3,694,693 Lodging $0 $149,114 $149,114 Total $2,087,303 $21,048,991 $23,136,294 EMPLOYEE BENEFITS - Percentage of health insurance covered by company: 100%. - Health care package cost per employee - $7,200 annually with options for dependents. - PTO/Sick/Vacation, Merit Increases. NOTES - Percentage of revenue generated by the new jobs contained in this application from outside Nevada: 90%. - The company also considered Utah, Wyoming, and South Dakota as potential locations.
LAS VEGAS GLOBAL ECONOMIC ALLIANCE February 6,2018 Mr. Paul Anderson Executive Director Nevada Governor's Office of Economic Development 555 E. Washington Avenue, Suite 5400 Las Vegas, Nevada 89101 Dear Mr. Anderson, Cascade Financial Technology Corporation (herein "Cascade Financial") is applying to the State of Nevada for the Sales and Use Tax Abatement, Modified Business Tax Abatement, and Personal Property Tax Abatement. We request their application be placed on the agenda for the March 2018 GOED Board Meeting. Cascade Financial is exploring their options to expand operations in Southern Nevada from a current staff of 15 by hiring 64 additional employees over the next 24 months. These new hires will make an average hourly wage of $26.64 and be provided with a benefits package that includes 100% coverage of the employees' HMO healthcare premium. Cascade Financial will make a capital investment of $1.3 million dollars, which includes approximately $730,000 in capital equipment. Our team has reviewed Cascade Financial's application and found it to comply with Nevada's statutory requirements for tax abatements. This application has the full support and endorsement of the Las Vegas Global Economic Alliance. We appreciate your consideration in this matter. Sincerely, Perry Ursem Vice President, Business Retention and Expansion Enclosure 702.791.0000 800.634.6858 6720 VIA AUSTI PARKWAY, SUITE 330 LAS VEGAS, NEVADA 89119 LVGEA.ORG
Incentive Application Company Name: Cascade Financial Technology Corp Date of Application: February 2, 2018 Company is an / a: (check one) New location in Nevada Expansion of a Nevada company Section 1 - Type of Incentives Please check all that the company is applying for on this application: Sales & Use Tax Abatement Modified Business Tax Abatement Personal Property Tax Abatement Sales & Use Tax Deferral Recycling Real Property Tax Abatement Other: Section 2 - Corporate Information COMPANY NAME (Legal name under which business will be transacted in Nevada) Cascade Financial Technology Corp CORPORATE ADDRESS 2595 S. Cimarron Rd Suite 104 MAILING ADDRESS TO RECEIVE DOCUMENTS (If different from above) PO Box 81888 TELEPHONE NUMBER 702-745-3065 COMPANY CONTACT NAME Spencer Schmerling E-MAIL ADDRESS spencer@cascadefintech.com CITY / TOWN Las Vegas NV 89117 CITY / TOWN STATE / PROVINCE ZIP Las Vegas WEBSITE www.cascadefintech.com COMPANY CONTACT TITLE CEO PREFERRED PHONE NUMBER 702-608-4188 FEDERAL TAX ID # 46-5702331 STATE / PROVINCE Has your company ever applied and been approved for incentives available by the Governor's Office of Economic Development? If Yes, list the program awarded, date of approval, and status of the accounts (attach separate sheet if necessary): Yes ZIP NV 89180 No Section 3 - Program Requirements Please check two of the boxes below; the company must meet at least two of the three program requirements: A capital investment of $1,000,000 in eligible equipment in urban areas or $250,000 in eligible equipment in rural areas are required. This criteria is businesses. In cases of expanding businesses, the capital investment must equal at least 20% of the value of the tangible property owned by the business. New businesses locating in urban areas require fifty (50) or more permanent, full-time employees on its payroll by the eighth calendar quarter following quarter in which the abatement becomes effective. In rural areas, the requirement is ten (10) or more. For an expansion, the business must increase employees on its payroll by 10% more than its existing employees prior to expansion, or by 25 (urban) or 6 (rural) employees, whichever is greater. In urban areas, the average hourly wage that will be paid by the business to its new employees is at least 100% of the average statewide hourly wage. in rural areas, the average hourly wage will equal or exceed the lesser of the county-wide average hourly wage or statewide average hourly wage. Note: Criteria is different depending on whether the business is in a county whose population is 100,000 or more or a city whose population is 60,000 or more (i.e., urban area), or if the business is in a county whose population is less than 100,000 or a city whose population is less than 60,000 (i.e., rural area). Section 4 - Nevada Facility Type of Facility: Headquarters Technology Back Office Operations Research & Development / Intellectual Property PERCENTAGE OF REVENUE GENERATED BY THE NEW JOBS CONTAINED IN THIS APPLICATION FROM OUTSIDE NEVADA 90% NAICS CODE / SIC 525990 DESCRIPTION OF COMPANY'S NEVADA OPERATIONS Program managmeent prepaid card platform PROPOSED / ACTUAL NEVADA FACILITY ADDRESS May-2018 INDUSTRY TYPE Financial Services CITY / TOWN Service Provider Distribution / Fulfillment Manufacturing Other: EXPECTED DATE OF NEW / EXPANDED OPERATIONS (MONTH / YEAR) COUNTY TBD WHAT OTHER STATES / REGIONS / CITIES ARE BEING CONSIDERED FOR YOUR COMPANY'S RELOCATION / EXPANSION / STARTUP? Utah, Wyoming and South Dakota 1 ZIP
Section 5 - Complete Forms (see additional tabs at the bottom of this sheet for each form listed below) Check the applicable box when form has been completed. 5 (A) Equipment List 5 (B) Employment Schedule 5 (C) Evaluation of Health Plan, with supporting documents to show the employer paid portion of plan meets the minimum of 65%. Section 6 - Real Estate & Construction (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up - Plans Over the Next Ten Years Part 1. Are you currently/planning on Part 1. Are you currently leasing space in Nevada? yes leasing space in Nevada? If No, skip to Part 2. If Yes, continue below: If No, skip to Part 2. If Yes, continue below: What year(s)? 2016-2018 What year(s)? How much space (sq. ft.)? 2,000 How much space (sq. ft.)? Annual lease cost at current space: $32,400.00 Annual lease cost of space: Due to expansion, will you lease additional space? yes Do you plan on making building tenant improvements? If No, skip to Part 3. If Yes, continue below: If No, skip to Part 2. If Yes *, continue below: When to make improvements (month, year)? Part 2. Are you currently/planning on buying an owner occupied facility in Nevada? If No, skip to Part 3. If Yes *, continue below: Purchase date, if buying (month, year): How much space (sq. ft.)? Do you plan on making building improvements? If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Part 3. Are you currently/planning on building a build-to-suit facility in Nevada? If Yes *, continue below: When to break ground, if building (month, year)? Estimated completion date, if building (month, year): How much space (sq. ft.)? Expansions - Plans Over the Next 10 Years Expanding at the current facility or a new facility? new What year(s)? 2018-2028 How much expanded space (sq. ft.)? Annual lease cost of expanded space: Do you plan on making building tenant improvements? If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Part 2. Are you currently operating at an owner occupied building in Nevada? If No, skip to Part 3. If Yes, continue below: How much space (sq. ft.)? Current assessed value of real property? Due to expansion, will you be making building improvements? If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Part 3. Do you plan on building or buying a new facility in Nevada? If Yes *, continue below: Purchase date, if buying (month, year): When to break ground, if building (month, year)? Estimated completion date, if building (month, year): How much space (sq. ft.)? 20,000 $600,000.00 yes May-2018 no no * Please complete Section 7 - Capital Investment for New Operations / Startup. * Please complete Section 7 - Capital Investment for Expansions below. BRIEF DESCRIPTION OF CONSTRUCTION PROJECT AND ITS PROJECTED IMPACT ON THE LOCAL ECONOMY (Attach a separate sheet if necessary): 2
Section 7 - Capital Investment (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up Expansions How much capital investment is planned? (Breakout below): Building Purchase (if buying): Building Costs (if building / making improvements): Land: Equipment Cost: Total: How much capital investment is planned? (Breakout below): Building Purchase (if buying): Building Costs (if building / making improvements): Land: Equipment Cost: Total: $0 $600,000 $0 $728,700 $1,328,700 Is the equipment purchase for replacement of existing equipment? No Current assessed value of personal property in NV: See Attached (Must attach the most recent assessment from the County Assessor's Office.) Section 8 - Employment (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up Expansions How many full-time equivalent (FTE*) employees will be created by the end of the first eighth quarter of new operations?: Average hourly wage of these new employees: How many full-time equivalent (FTE*) employees will be created by the end of the first eighth quarter of expanded operations?: 64 Average hourly wage of these new employees: $26.64 How many FTE employees prior to expansion?: Average hourly wage of these existing employees: Total number of employees after expansion: 15 $37.27 79 * FTE represents a permanent employee who works an average of 30 hours per week or more, is eligible for health care coverage, and whose position is a "primary job" as set forth in NAC 360.474. OTHER COMPENSATION (Check all that apply): Overtime Merit increases Tuition assistance Bonus PTO / Sick / Vacation COLA adjustments Retirement Plan / Profit Sharing / 401(k) Other: Stock Options BRIEF DESCRIPTION OF ADDITIONAL COMPENSATION PROGRAMS AND ELIGIBILITY REQUIREMENTS (Attach a separate sheet if necessary): All employees get stock options; vacation, holidays and sick pay; and merit pay increases. Section 9 - Employee Health Insurance Benefit Program Is health insurance for employees and an option for dependents offered?: Package includes (check all that apply): Medical Vision Dental Qualified after (check one): Yes (copy of benefit plan must be attached) Upon employment Three months after hire date Six months after hire date Other: Health Insurance Costs: Percentage of health insurance coverage by (min 65%): Cost of health insurance for company (annual amount per employee): $ 7,200.00 Company: 100% For 2 of three plans. Health Plan annual out-of-pocket maximum (individual): $ 6,850.00 Employee: 0% Only pays difference for PPO Plan. Other: No 1st day of month after 60 days [SIGNATURE PAGE FOLLOWS] 3
Site Selection Factors Company Name: Cascade Financial Technology Corp County: Clark Section 1 - Site Selection Ratings Directions: Please rate the select factors by importance to the company's business (1 = very low; 5 = very high). Attach this form to the Incentives Application. Availability of qualified workforce: 5 Transportation infrastructure: 4 Labor costs: 3 Transportation costs: 2 Real estate availability: 2 State and local tax structure: 5 Real estate costs: 2 State and local incentives: 5 Utility infrastructure: 1 Business permitting & regulatory structure: 2 Utility costs: 1 Access to higher education resources: 1 Please summarize the importance of the abatement program to your decision (please include at least a paragraph summary): The abatement program is instrumental in our decision where to expand. As a young growing business, we must pay great attention to our overhead and cash expenditures. A large tax bill would be detremental to our ability to expand and hire the staff necessary to grow our company. 5
5(A) Capital Equipment List Company Name: Cascade Financial Technology Corp County: Clark Section 1 - Capital Equipment List Directions: Please provide an estimated list of the equipment [columns (a) through (c)] which the company intends to purchase over the two-year allowable period. For example, if the effective date of new / expanded operations begins April 1, 2015, the two-year period would be until March 31, 2017. Add an additional page if needed. For guidelines on classifying equipment, visit: tax.nv.gov/localgovt/policypub/archivefiles/personal_property_manuals. Attach this form to the Incentives Application. (a) Equipment Name/Description Computers and connected accessories Monitors Desks (sit/stand adjustable) Ergonomic chairs Kitchen Equipment (fridges/coffe/appliances/etc.) Servers Telephones/Headsets/Related Conference Table/White Boards/Misc TV/Projectors/Displays ( b) (c) (d) # of Units Price per Unit Total Cost 74 $2,800.00 $207,200.00 222 $250.00 $55,500.00 100 $1,200.00 $120,000.00 100 $750.00 $75,000.00 1 $10,000.00 $10,000.00 5 $15,000.00 $75,000.00 100 $800.00 $80,000.00 1 $50,000.00 $50,000.00 8 $7,000.00 $56,000.00 TOTAL EQUIPMENT COST Is any of this equipment* to be acquired under an operating lease? *Certain lease hold equipment does not qualify for tax abatements 6 Yes $728,700.00 No
5(B) Employment Schedule Company Name: Cascade Financial Technology Corp County: Clark Section 1 - Full-Time Equivalent (FTE) Employees Directions: Please provide an estimated list of full time employees [columns (a) through (d)] that will be hired and employed by the company by the end of the first eighth quarter of new / expanded operations. For example, if the effective date of new / expanded operations is April 1, 2015, the date would fall in Q2, 2015. The end of the first eighth quarter would be the last day of Q2, 2017 (i.e., June 30, 2017). Attach this form to the Incentives Application. A qualified employee must be employed at the site of a qualified project, scheduled to work an average minimum of 30 per week, if offered coverage under a plan of health insurance provided by his or her employer, is eligible for health care coverage, and whose position of a primary job as set forth in NAC 360.474. (a) New Hire Position Title/Description Customer Hapiness Agent (cust. Service) Technical Staff Sales & Marketing Operations Administrative (b) ( c ) (d) (e) (f) Number of Positions Average Hourly Wage Average Weekly Hours Annual Wage per Position Total Annual Wages 40 $17.00 40 $35,360.00 $1,414,400.00 7 $45.00 40 $93,600.00 $655,200.00 3 $60.00 40 $124,800.00 $374,400.00 6 $35.00 40 $72,800.00 $436,800.00 8 $40.00 40 $83,200.00 $665,600.00 TOTAL 64 $26.64 $3,546,400.00 Section 2 - Employment Projections Directions: Please estimate full-time job growth in Section 2, complete [columns (b) through (c)]. These estimates are used for state economic impact and net tax revenue analysis that this agency is required to report. The company will not be required to reach these estimated levels of employment. Please enter the estimates on a year by year basis (not cumlative amounts) (a) Year 3-Year 4-Year 5-Year (b) Number of FTE(s) Projected (c) Average Hourly Wage (d) Payroll 100 $26.64 $5,541,120.00 250 $26.64 $13,852,800.00 300 $26.64 $16,623,360.00 7
$7,200.00
Our Business Cascade is a Program Manager with three main parts to its business: 1. Prepaid Cards Direct to Consumers www.cascadecard.com 2. Manage Prepaid Card Programs for Businesses www.cascadefintech.com 3. Wearables Solutions www.cascadewearables.com Cascade provides a financial platform so that our clients can create the most innovative and inclusive financial products and services allowing all people to participate in the FinTech revolution.
2018 Expansion History &Traction 2014 2015 2016 2017 California Operations Started Expansion Nevada Operations Started California Operations Closed
Market Opportunity The Global Market for Prepaid Cards is projected to reach $3.1 Trillion by 2022. http://www.strategyr.com/marketresearch/prepaid_cards_market_trends.asp P2P Payments Market in the US is Expected to Cross US $200 Billion by 2020 https://letstalkpayments.com/p2p-payments-market-in-us-is-expected-to-cross-us- 200-billion-mark-by-2020/ Worldwide Mobile Payment Revenue is Expected to Surpass $1 Trillion in 2019. https://www.statista.com/statistics/226530/mobile-payment-transaction-volumeforecast/
The Problem Program Managers are using difficult and slow to implement legacy technology. The Solution FinTech startups need a modern, agile platform to get to market quickly.
White Label Programs Contactless Payments RESTful API s Extensive Fraud Mitigation World Class Customer Service (USA) BSA/AML Compliance Reliable and Scalable Platform Prepaid / P2P / Mobile Payments Product / Service
Revenue Model B2B Clients: $25,000 - $50,000 startup fee $8,000 - $12,000 monthly once implemented 3-5 year contracts End Users: B2B we earn $0.50 - $2.00/end user/month B2C we earn $3.00 - $5.00/end user/month Life Time Value: Small Client with 20,000 end users - $1.6m Large Client with 1m end users - $30m
Marketing & Growth Strategy Key Marketing Efforts: Industry Advertising SEO & Paid Search Agents Trade Shows &Conferences
Management Team Spencer Schmerling CEO Successful Entrepreneur, Marketer, Technologist, w/ Extensive Payments Experience James Hardy VP Sales & Marketing Successful Executive, Leader, Networker Gary Opp VP Investor Relations Financial Planning, Insurance, Securities John Bamforth CTO Technical Architect, Network Security, PCI Expert Eric Tamke VP Operations Extensive Payments Experience, AML/BSA Expert, Compliance Officer Sarah Zeal Director of Happiness Manages Customer Happiness Team (Customer Service), Proven Track Record of Providing Concierge Level Service
Financial Highlights Revenue Year 1 Year 2 Year 3 Year 4 Year 5 B2C Program Revenue $1,072,479 $7,466,612 $24,945,492 $78,090,594 $244,654,969 B2B Program Revenue $16,385,597 $84,190,887 $170,814,421 $290,004,275 $404,896,885 Total Revenue $17,458,076 $91,657,499 $195,759,913 $368,094,869 $649,551,854 Cost of Goods Sold $6,203,153 $30,952,783 $67,658,578 $133,858,390 $258,820,955 Gross Margin $11,254,923 $60,704,716 $128,101,335 $234,236,479 $390,730,899 Operating Expenses $5,514,634 $14,395,012 $27,003,467 $46,030,308 $72,123,535 Net Income $5,740,288 $46,309,704 $101,097,868 $188,206,172 $318,607,364 Net Income % of Revenue 33% 51% 52% 51% 49% Consumer Adoption Contactless Consumers Year 1 Year 2 Year 3 Year 4 Year 5 Cardholders (Beginning of the Month) Contactless New Cardholders 404,950 1,469,036 2,684,328 4,114,234 4,677,780 New Cardholder Growth Rate Plastic New Cardholders 107,570 772,620 1,691,247 3,037,236 5,454,440 New Cardholder Growth Rate Virtual New Cardholders 165,694 506,717 909,990 1,634,212 2,934,810 New Cardholder Growth Rate Attrition 253,691 1,368,056 2,800,450 4,794,452 6,679,917 Attrition Rate (Monthly) 15.00% 15.00% 15.00% 15.00% 15.00%
There are Fewer than 100 Program Managers in the US. Competition Most of them are slow to market because: Have legacy systems Are not responsive Outsource key functions How Cascade Revolutionizes this Industry: RESTful API s that are unified across all of our vendors World-Class Customer Support (USA based) Extensive Fraud Mitigation
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