 I am Cindy Matsuki, host of International Hawaii, showcasing Hawaii's important export businesses, as well as relevant small business topics to help our Hawaii small businesses, especially now during this time. Today, my guest is Wayne Laiyuan, Senior Project Manager of Innovate Hawaii. And that's a program within HTDC, the Hawaii Technology Development Corporation. So to start off, hi Wayne, thanks for joining me. Hi Cindy, great to be here. Thanks for having me. Can you do like a brief intro of yourself and maybe innovate Hawaii? Yeah, sure. Yeah, so again, Wayne Laiyuan, Innovate Hawaii. I'm a Senior Project Manager there. Primarily we help small meeting size manufacturers as part of the Innovate Hawaii program. Innovate Hawaii is part of the state and also part of a federal program called the Manufacturing Extension Partnership. So this is where our manufacturing expertise comes in. We're part of a nationwide network. There's 50 centers like ours in every state and Puerto Rico. And again, our main focus is around small meeting size manufacturing. Nice. So our goal here is to let people know about the PPE grant. So maybe could you give us some background on what the grant is? Yeah, so HTDC was appropriated $10 million of CARES Act funds by the state legislature. So I mean, first of all, thank you to the state legislature for crafting this program and supporting local manufacturing. And the program goals is to increase Hawaii's manufacturing capacity of cleaning supplies and PPE in the event that the import supply chain is disrupted due to global escalation of COVID-19 cases. So I think we've all seen it early on when the pandemic first started, right? Everyone was scrambling to find the cleaning supplies, PPE. So this isn't a response to that. And then just to get it out in the beginning, when I mentioned PPE, I know by definition, it refers to protective clothing, helmets, gloves, face shields, goggles, face masks, all those things that protect the wearer from either injury or the spread of illness. In this case, when I mentioned PPE in regards to this program, it also includes cleaning supplies and disinfectants. Oh, very good. And how much funding did HDDC receive and how much can companies receive from the grant? Yeah, so 10 million in total was appropriated for HDDC for this grant program. As far as for each company, companies can apply up to 500,000 in funding. And it's additional funding could be requested, but then there is additional things that the company would need to provide in order for HDDC to approve that amount. Okay, so how do they, like what kind of documentation do they need to get the funding? Like they just need to present their plan of expansion or pivot or... Yeah, so the application is available online. Everyone can go to HDDC.org. They'll see a huge banner talking about PPE innovation grants. They click on that, you know, bring them to the landing page, which has all the info on the grant as far as a button that'll take you to the online application. Because this is a state-funded grant, we do have to follow state requirements. So one of those is Hawaii Compliance Express. So for companies who aren't familiar with that, that's a document that proves that the company is compliant with Hawaii Department of Labor, Department of Tax, DCCA, and federal IRS. So that document that you submit to us will prove that you are in a compliance status. Other than that, other required stuff would probably be your things that we need to create your vendor account, state vendor account. That would usually just be a blank invoice that has a company name, company address, and their federal employee number. In the application, we can go into more detail. I don't know if you wanted to go into the weeds about that, but there's other documents too that we'll ask for. It's highlighted in the application. One thing that I like to call out is a budget table or an a budget narrative, as well as a company financials. So we're asking for a profit and loss statement and balance sheet from 2019 and then whatever you have current to date for this year. And so what types of expenses qualify for the grant? Yes, I mean, the types of grants that we hope to award would be grants for Hawaii manufacturers to pivot toward and or scale up PPE manufacturing operations. Other grants could be for to produce medical use PPE or even innovative grants for Hawaii small businesses that can demonstrate viable solutions to assist with the PPE supply chain. As far as, you know, use of funds, specifically, you know, grants can be used for purchase of manufacturing equipment, training of employees. For example, like, you know, we understand that, you know, some of the machinery that you could make that you would purchase would need additional training or upskilling of your employees. So those costs would be eligible. Wage compensation for employees of the business that relates to the PPE operation. So we're not funding the whole company, just a part that produces the PPE and as well as other expenses related to PPE also. Wow, that's really good. And did the state legislature decide that this was the best use of the CARES fund, huh? Um, yeah. How was that determined? I think, you know, early on, we saw, you know, the shortage, we saw, you know, the impacts to our supply chain, right? Even though there were companies, you know, outside of a way that could produce the PPE, people, businesses were having a hard time getting those in here. You know, there was a huge delay. I'm sure everyone went to Costco, the Target, they saw the line, they saw the empty shelves. You know, so I think, you know, I think right now we understand that, you know, many businesses are in economic distress, you know, that the current business environment is tough. So, you know, what we really hope is that the grant will help businesses and not, and I've heard it, you know, companies need to understand, you know, what they're able to do, which is why, you know, if they have questions about the grant, if whatever they're doing would qualify or not, encourage companies to email PPE at HDDC.org for those type of things that we'll get back to them as soon as we can. Good. Is there like a priority of PPE or cleaning supplies that's needed or is it just anything? Or do you know what the biggest shortage is in Hawaii? It's hard to say because it changes, right? I think from recently, what I've heard is disinfectant wipes is one that, you know, everyone is having a hard time because I think masks, those have sort of caught up, but it's still in demand, I think. On our website and in the application, you know, we will ask companies to specify what type of PPE they'll be able to manufacture. So, caps, gowns, again, coveralls, gloves, surgical masks, respirators, even fabric masks. So if you think of the simple ones that the general population would wear, those would all be considered PPE under this grant. Face shields, hand sanitizers, cleaning supplies, and there's also other categories. So if there's something that we're not aware of that you think would help the community and can be manufactured here in Hawaii, we encourage you to apply and then, you know, explain to us, you know, what the solution is and why it's a good solution for Hawaii. That's really good. And is it, do you have to be a manufacturing company to apply? Like, say you just do sales or you import something, but you would like to start manufacturing. Could you apply for the grant? Yeah, so I can go over real quickly the, you know, some of the eligibility requirements. So, I mean, I think obviously existing Hawaiian manufacturers that are simply modifying their operations to produce PPE. So, you know, we've probably seen, you know, a lot of distilleries now making hand sanitizer, a lot of cut and sew operations making masks. So those would definitely qualify. If you're hoping to set up a new manufacturing operation, you know, to manufacture PPE, like either you're relocating the company or even spinning out a part of your company, we definitely apply and let us know that you have a plan that you can execute on that plan. New or existing businesses engage in PPE research and development. So R&D companies that have, that can show us strong potential for commercialization, those owning currents should apply. And even, you know, new or existing businesses in emerging industries that demonstrate the ability to deliver innovative solutions. So again, that's where the other category comes in where, you know, right now we only see what we need, but, you know, we don't know what we don't know, right? If there's something that you think would be beneficial to the state, definitely apply and then see what our evaluation committee would say. And then of course, nonprofit businesses also can apply. For example, we've seen some nonprofits that have converted, you know, to making, you know, PPE masks, for example, they're eligible to apply also. Wow, that's great. Are there any specific types of companies that are ineligible to apply? Usually, so again, going back to the program goals, you know, it's about increasing Hawaii's manufacturing capacity of PPE. So things like distributors or companies that just import already made products and just reselling, those companies would be ineligible. There's some gray area where if you were bringing in a specific material that could then be used for value added manufacturers. Like for example, if you're bringing a special type of material that can be used in masks that other companies can use to, as part of their masks, whether designed, those would potentially qualify. Again, it's up for the committee to decide, but I would still encourage those type of companies to apply anyway. Huh, so I've heard of a company that is using like a material that's embedded with like silver fibers or particles, would that be something that would qualify like even if you're just importing it? Yeah. That's produced by Hawaii manufacturers. Yeah, if I think for that one, they would have to be specific in their grant. I think it goes back to, the intent of this grant is to support Hawaii manufacturers and help establish a local supply chain in response to the COVID-19 public health emergency. So again, this grant isn't for distributors bringing in ready-made products, but if they're adding value materials being brought into the state to produce PPE, and I think we would ask them to just provide a clear and detailed justification on the budget narrative to support their request and also include how much of their product would be made in Hawaii. Interesting, and how's it going so far, like with applications? So one thing that's changed from our info sessions, we started this program the end of August. We officially launched end of August. Since then, application online has been open for submission. We have a pre-screening process that'll pretty much make sure everything was submitted so that way when the review committee gets it, it's ready to go. Originally, we were thinking of doing three review sessions, but with all the applications that were coming in and to give companies the most amount of time to execute on their proposal for their project, we've decided to do weekly review meetings. So it's been going, we're putting in the work, I think, to get the applications turned around as fast as we can, but there's some things that we hope that companies can do on their part, make sure their application is not messy, that it's done properly, and that it includes expenses that are allowed because if you don't, then it'll just slow things down for us and also, and that'll just cause a lot more work and less time for other companies to execute on their project. Wow, so that's good. I mean, you've been receiving a lot of applications? Yeah. More than expected? Yeah, more than expected. I mean, it's keeping us busy and it's good because we hope and intend to expand all the funds that we were appropriated to support a lot of different businesses as part of our resilience strategy so that the state has a lot more options available for PPE. I would highly encourage companies to work with Hawaii Small Business Development Centers. They're available and set up to help companies submit quality applications. In addition to that, if you're in Kauai or Hawaii, feel free to reach out to our HTDC mentors, Warren Doi and Tom Lendert, respectively. They can also assist with your application. Nice. Wayne, we're going to take a quick break. Oh, one last question. Quick question. So can companies expect like a week turnaround time as far as receiving back feedback? I think feedback usually, once it's submitted, you know, we'll do the pre-screen. That usually takes about a week. And then if everything's good, it'll go for review the next week. So I would think about two weeks minimum, you know, just to be on the safe side. I don't want to sit on real expectations, but I think that's doable. Okay, that's great. We're going to take a quick break. This is International Hawaii with Wayne Laughan and Cindy myself, I'm the host. We'll be right back. Thank you. This is International Hawaii. I'm your host, Cindy Matsuki. And our guest today is Wayne Laughan, Senior Program Manager at Innovate Hawaii with HTDC. And we're talking about the PPE grant, which is PPE, yeah, PPE grant for Hawaii manufacturers, which is an amazing opportunity. So I want to get the word out to as many people as possible. So if you know anybody that has a manufacturing company or you are a manufacturing company, you have to take advantage of this if you can. So Wayne was telling me about some of the requirements that companies need to hit and some of the things you need to, and some of the guidelines for the grant, maybe you can go over some of those. Yeah, thanks, Cindy. So, I mean, I think you mentioned earlier, right? The grants are up to 500,000, but there is a possibility to request more, but then, you know, there is more justification needed in order for HTDC to approve that. One other thing that I'd like to mention is, you know, grants will be made to recipients with less than 50 employees. So, again, it is focusing on small, medium-sized businesses. If you have more than 50, then you would be ineligible for this grant. And then just to reiterate again, you know, everyone that's awarded selected for work needs to be in compliance with White Compliance Express. And the last thing, and probably the most important thing, is that all recipients must incur the costs. So whatever you're awarded, you need to spend by December 30th of this year. So it's a real short timeframe. And that's because, you know, this is CARES Act funding and that's the deadline that's set by, you know, the FEDS. So it's not something that we can change at the state level because this is CARES Act funding again, you know, all recipients must incur all funds by December 30th. When you say they have to incur the funds, does that mean you need to disperse the funds or they need to have spent the funds? Sorry. Yeah, yeah. From my understanding, the companies that are awarded, so whatever funding they're awarded for their project, all that needs to be spent by the end of the year. So, I mean, it goes back again to, you know, making sure that companies understand what they're able to do, right? Because if you come in for a whole bunch of money and then let's say you were approved and you don't execute on that money, you know, then, you know, the company's in trouble, we're in trouble and then pretty much, you know, it's a lost opportunity, right? It could have gone to someone else. So... And they have to refund the money or is it a reimbursable? It's not a reimbursable. So, all the money that were awarded is awarded upfront based on the application and the proposal that they submit. So, I mean, just to be clear, you know, we're not looking for an entrepreneur who has an idea to build a factory. You know, we're looking for companies who have experienced manufacturing products and currently have the capacity and the capability to manufacture PPE in Hawaii. So, I mean, some helpful hints for people thinking of applying, you know, please make sure that you're specific and that you have an actionable plan. You know, pretty much your proposal needs to communicate to the committee that you are capable of doing this. You know, some questions to think about, you know, how will you help us when global supply chain is cut off? How will you help on all islands because this is a statewide program or in your local community? You know, I think we're excited in looking for opportunities to make awards, but you know, we still need to do our due diligence. You know, so all we ask is to put yourself in our shoes, wear our hats, you know, help us understand your intent and that you can do what you're supposed to do. I saw there was a press release on a few of the companies that have received some of the funding. Could you kind of give us a review of those companies and what they qualified for and what they're doing with it? Yeah, so I think one of them that just came up and picked up their check recently was Kamana Composites, right? So I think originally they were making, you know, custom canoes and kayaks, but then they converted their operation to make face shields. Wow. Yeah, so that's one thing that they're doing. Another one is Lanikai Brewing. They also converted, you know, they used to make alcohol. They still make alcohol, but this time instead of making it into drinks, they use alcohol for hand sanitizers or hand works. So those are the kind of companies that we've awarded so far. We have more in the pipeline that are in process that have been, you know, selected for award. So stay tuned for, you know, more press releases and more info on companies that are getting the funding. Nice. So can companies that have already converted or pivoted, can they get reimbursed for things that they've already done? So like, was Lanikai already doing that before the grant came out? Yeah, so they were already doing that previously. Their grant application came in for funding to expand their capabilities. So getting more equipment so that they can produce more. So definitely if you're already doing it, you know, technically you can apply, you know, I think you just need to explain a lot more what kind of benefit you'll bring to the state for stuff that you've already done and stuff you plan to do. Oh, that's really good. That's great. And so is there an application deadline? Technically, I think we're hoping to get all applications in by the end of October. Again, because there is still, you know, the pre-screen process, the review process and the award process. And realistically, I think if we were to go past that date, that wouldn't give too much time for companies to execute on their plans and expend the money by the end of December. So we encourage companies, you know, again, to submit as soon as they can, but the same time we expect companies to do their homework and provide complete applications that are clear and, you know, that explain, right, what they want to do so that it's easier for us to see and understand what they're doing and also easier for us to make awards. Wow, that's a fast timeline. Maybe we need to talk to over. Yeah. So as far as Innovate Hawaii, like what have you seen for Hawaiian manufacturers? How have they been affected by the pandemic and the shutdowns? Like are they doing okay or? I think it depends, you know, which industry you're looking at. So, you know, for a lot of companies that were dependent on tourism, I think they're hurting now, right? So they're looking, you know, if they're in the grocery stores or in the big box stores or have other channels to make sales, I think they're hanging in there. But for companies that were solely dependent on tourism, I think they're hurting. So, you know, we understand, you know, that so we're doing everything we can to help. But again, going back to before, right, we all saw, right, you know, I think our goal is to help keep everyone healthy and make sure that everyone can open up safely. So I think by having this PPE grant available, we're allowing companies to manufacture PPE locally that'll help, you know, just with finding supplies or things that are in critical need for reopening. And are there any other resources besides the grant for manufacturers? Specifically for manufacturers. Right now, I think this might be the only one. We do have SBIR, but that's still pending. We haven't released, you know, officially yet on that one. But again, it's more for pre-manufacturing or R&D companies that are in that commercialization stage. Wow, and that's more like innovative. Like things to do with the pandemic itself, like with COVID-19 or that kind of thing. I mean, it's different because every federal agency has their own, you know, solicitation or things that they'd like companies to work on. So it's real specific. And it's usually cutting-edge research. Not something that would probably be ready for mass production yet. Have you seen more of the agencies focusing on the pandemic? Yeah, definitely, definitely. I think there is a big focus, at least on the federal side, to see what can be done with COVID-19 and ways to help the general population or even the world cope with it. So it's ongoing, I think. But I'm real glad that we have this program because it's just another way that we can help small and medium-sized manufacturers of Hawaii. Definitely. So maybe, can you go over the contact information and where people can apply or find out more information about the grant? Yeah, sure. So again, all the info. We have a long direct link, but I won't say that. I think the easiest thing is just to go to htdc.org. Once you get there, we have a rotating banner but it should be the first banner that you see. It's our innovation grants for PPE supply chain. You click on Learn More. That'll bring you to our PPE grant landing page. From there, you can look through. Previous recordings are available over info sessions. Presentation slides are available for you to review. There is more info on the grant guidelines and the process, info on the CARES Act funding. And then at the very bottom, there is that Apply Now button that you can click on. That'll bring you to the online application. And then again, any questions, any issues with the application, if you're unsure, if you qualify, anything like that, please email PPE at htdc.org. We have a lot of people looking into that email. So that's the best way to get a response is through that email. Okay, great. And then I think we're gonna actually have the full link in the description below when this video gets posted. Yeah. So I wanted to thank you for your time and for sharing about the PPE grant. This is like such a huge opportunity. And I hope we're able to expend it all and not give it that because that would be horrible. But thank you for joining me on International Hawaii and talking about the PPE grant, Wayne Laugan of Innovate Hawaii and HTVC. And we will see you next time on International Hawaii and Big Tech. Thank you. Thanks, Indy.