At their July 15, 2021 meeting, the board of directors of the Finance Authority of Maine (FAME) approved state new markets tax credit financing to benefit MedRhythms, Inc., a digital therapeutics company located in Portland. The board also approved bond financing for Vertical Harvest, L3C, a company planning to operate a vertical hydroponic greenhouse in Westbrook.
The board approved the issuance of tax credit certificates related to approximately $2,818,690 in investments through the Maine New Markets Capital Investment Program to assist MedRhythms, Inc. with financing the costs of developing and executing a commercialization strategy for a stroke rehabilitation digital therapeutic device, as well as additional R & D expenses. The certificates authorize the issuance by the state of approximately $1.1 million in tax credits through the program.
“We are pleased to support MedRhythms’ plans to advance their digital therapeutic for stroke rehabilitation, as well as additional research and development,” stated David Daigler, Chair of the FAME Board. “Digital therapeutics are a cutting-edge field that can help to improve the everyday lives of Mainers and other patients who will benefit from the company’s technology.”
“Digital therapeutics are the future of healthcare, and we appreciate the support of FAME. We are eager to advance our pipeline of prescription digital therapeutics targeting rehabilitation and prevention in areas of neurologic injury and disease,” said Brian Harris, CEO and Founder of MedRhythms, Inc.
MedRhythms, Inc. is a digital therapeutics company that uses sensors, music, and software to build evidence-based, neurologic interventions to measure and improve walking. The company, which currently employs eighteen individuals, with thirteen full-time employees in Maine, hopes to triple its workforce in the next few years.
The board approved the Certification Applications of Advantage Capital Community Development Fund XXXIII, LLC (ACC) and Midwest Community Development Fund XIII, LLC (MCD), both affiliates of Advantage Capital Community Fund, LLC. They relate to a $1,326,441.90 Qualified Equity Investment to be used for a Qualified Low Income Community Investment (QLICI) by MCD, and to a $1,492,248 Qualified Equity Investment to be used for a QLICI by ACC, in MedRythms, Inc.
The transactions involve investment proceeds to be used for prospective costs only, and no more refinancing of prior costs than permitted by rule. The transactions do not involve any “one-day” loans.
FAME administers the Maine New Markets Capital Investment Program in cooperation with Maine Revenue Services. The program is designed to attract investment in economically distressed areas of the state. It allows eligible investors to claim tax credits against state taxes in amounts up to 39 percent of a project’s total cost. The maximum aggregate amount of tax credit investment authority is set forth at $250 million, which equates to approximately $100 million of tax credits, of which after today approximately $550,000 in credits remains.
Also at the July meeting, the board approved up to $45 million in conduit bond financing for Vertical Harvest, L3C, a company formed to build, equip and operate a vertical hydroponic greenhouse in Westbrook. The company plans to produce over one million pounds of produce annually to sell to local consumers.
FAME’s funds will be used by the company to finance a portion of the construction costs to build the facility, including the acquisition of equipment, materials, and other eligible costs of the business. The project ultimately is expected to create approximately fifty full and part-time jobs at the company, many of which are expected to be performed by individuals with disabilities. The project is part of a larger master-planned development that is expected to include affordable housing and parking in downtown Westbrook.
“We appreciate FAME’s support for the agricultural component of this project,” stated Greg Day, President of TDB, LLC, developer of the project. “This master-planned program establishes a compelling business model for food production in an urban core that our firm is expanding to other communities throughout New England and the nation.”
FAME’s utilization of tax-exempt private activity bonds has helped to create and retain thousands of Maine jobs over the past five years alone. Such bonding, commonly referred to as “conduit bonds” due to their pass-through nature, are authorized by the Internal Revenue Code in order to stimulate economic development in certain targeted industries. The projects financed in recent years range from not-for-profit health and higher education projects to solid waste improvements, public infrastructure, and manufacturing.
FAME’s Revenue Obligations Securities Program provides tax-exempt bond financing to eligible borrowers without any recourse or obligation on the part of the state. The bonds carry no liability or credit enhancement on the part of FAME or the state. FAME acts as a conduit for borrowers in order to allow them to access favorable interest rates and to help stimulate the economy and create and retain Maine jobs. Because this project will treat wastewater as an exempt facility, all or a portion of the bonds will be eligible for tax-exempt treatment under federal tax law.