SkySkopes seeks Minot MAGIC Fund assistance for UAS operation
By JILL SCHRAMM | March 25, 2017
Minot Area Development Corp. is requesting $375,100 in a forgivable loan from the MAGIC Fund to help an unmanned aviation company launch its operations in Minot.
The money would go toward establishing SkySkopes’ Bakken office in Minot, with the stipulation that at least 15 jobs would be created within three years. SkySkopes also would be required to provide proof of raising $500,000 in equity before disbursement of any MAGIC Fund dollars.
The MAGIC Fund Screening Committee meets Friday at 7:30 a.m. in City Hall to review the proposal.
SkySkopes would have to meet three benchmarks in each of the three years of the loan agreement under the plan going to committee. Failure to meet an annual benchmark would require repayment of $125,033 of the loan.
The first-year benchmarck requires having at least three full-time employees. The company would have to have seven full-time positions in year two and 15 full-time positions in year three. Interns are not included as employees.
Additionally, SkySkopes would need to provide proof of its contribution of assets and operating capital for the Minot office of at least $300,000 in each years one and two and $500,000 in year three.
MADC reports the total capital investment made by SkySkopes in employees and assets would be $2.3 million over three years. The additional $375,100 investment from the MAGIC Fund would aid in purchasing assets, including a large drone and data-collecting equipment.
Other provisions of the proposed agreement would require SkySkopes to enter a binding security agreement with MADC so any assets purchased with MAGIC Funds would revert back to MADC in event of a sale, buyout, transfer or bankruptcy.
SkySkopes states the request of the MAGIC Fund is part of a $875,700 fundraising round for its North Dakota operations, of which 60 percent would go toward Minot activities.
The company reports it has secured projects in the Minot area. It is partnering with a Williston firm to service its oil and gas clients. It is working on a potential pilot project with another oil company on pipeline inspections. Other potential projects also are in the works.
SkySkopes projects 15 full-time employees and several interns by 2019, with a combined payroll of $891,500. The company proposes to have on staff three employees and four interns this year.
SkySkopes President Matthew Dunlevy already has committed to be on the Minot Public School advisory committee for aviation technology education. He has agreed to provide the first thermal energy audit for higher education in North Dakota on the Minot State University campus at no charge and agreed to speak to MSU students at the Severson Entrepreneurship Academy and College of Business. He currently is working with Minot’s Fire Department to provide assistance for emergency response needs in Minot and western North Dakota.
Dunlevy had announced in December that his Grand Forks company planned to expand into Minot.