To: Students, Faculty, Staff and Families
Subject: Winter 2024 Semester: Suspension of In-person AUIS educational offerings on Island
Date: 12/20/2023

Dear all:

A relevant introduction to our AUIS history

In February 2014, IEMR LLC was engaged to restructure the failing Sint Eustatius School of Medicine, which had fallen into insolvency in Nov of 2013. During the assessment and recovery plan development process IEMR leadership elected to secure control of the then-bankrupt EUSOM student files as a component of an asset purchase, initiated to protect and salvage the careers of some 500 hundred students that would have been adversely impacted by the universities closure and termination of operations.

Over the next four and one-half years, the academic and administrative teams worked diligently to vacate the bankruptcy, restore the academic standards and fiscal footing of the school, expand its offerings, and establish the university as a place of academic excellence, quality, and opportunity for non-traditional students; seeking careers in medicine. In short, most if not all of these objectives were satisfactorily met.

Yet, In the school’s nineteen-year history, it had never actively pursued regional accreditation, a benchmark of recognized academic quality until 2018, when AUIS began the arduous institutional accreditation process, only to be interrupted by the COVID-19 pandemic.

Notwithstanding the pandemic challenges, the AUIS academic team with support from the administrative leadership, pushed forward to submit updated academic accreditation documentation required of its MD program with the final accreditation visit scheduled for November 26th, 2023. CAAM-HP then postponed the visit until mid-January of 2024 due to illness of one of the examiners.

As you are aware, Covid placed a student recruitment deficit and a demanding burden on the operations of our school, lost revenue from diminished clinical rotations due to restrictions on student access to hospital rotations, impedances to easy and cost-efficient travel to and from the island, on island curfews, limited housing and associated on island living cost increases, and a myriad of other disruptions to our normal operational functions all but stopped the school’s continuation.

These influences and others have placed significant economic demands upon our limited available operating resources, resulting in the need to secure external investor capital to continue our post-COVID recovery. During the two-year disruption, while actively seeking investor support, AUIS was forced to secure and accept interim federal Small Business Administration (SBA) funding to support and maintain the ongoing day-to-day operations of the institution. COVID-19’s ongoing impact directly diminished revenue performance most easily seen as a reduction in new enrollment, reduction in clinical rotations, marketing, and recruiting. Notwithstanding all these circumstantial assaults upon our close-knit university, we continued forward with our eye on recovery and the attainment of regional accreditation.

The administration utilized the SBA funding to sustain the school. At the same time, we actively increased our efforts to identify and secure additional external investor capital to support the anticipated underperforming revenue generation expected during the post-COVID recovery period. The actual period of recovery has proven to be longer than anticipated and the restoration to normal growth velocity has been equally challenging, resulting in the exhaustion of our operational capital resources.

Throughout all of this, we have continued to seek, meet, and solicit investor support, from multiple groups including a broad spectrum of varying professional sectors. We believe that we have finally identified an appropriate investor group match and have been in active discussions with them for some time in the hope of arriving upon a relationship structure that would fund the completion of the accreditation process and the additional time required to perfect our full recovery to pre-COVID performance and growth trajectories.

As of this communication, it appears that our earnest efforts to secure a match have been unsuccessful and that the needed funding will not be available in sufficient time and amount to meet the pressing emergency needs of members of our faculty and staff, the accreditation final filing requirements, and our creditors.

Therefore, in an effort to reposition our limited resources and to allow us time to reassess our operations, we have made a decision to suspend the educational offerings on the island for the Winter 2024 semester. We will continue to offer the MD5 program virtually and the clinical program for all currently enrolled students until further notice.

In this operational phase, we will center our activity around supporting the challenging transition facing our students.

It has been a true honor to lead the team that has accomplished so much over these past ten years. I am truly sorry that our challenges with student recruiting and undercapitalization have brought this journey to an uncomfortable pause for our students , so very close to the finish line.

With my heartfelt respect

Milo D. Pinckney

Dear AUIS alumni, students, and families

As many of you may know, AUIS has suffered significant losses since the Covid pandemic adversely restricted AUIS’s normal operations. As of this writing our efforts to recover the university student census and academic operations to normal levels have been exhausted. The school will be forced to close if we don’t raise sufficient capital resources to sustain operations and allow the school sufficient time to return the student census and operating reserves to return to normal levels. All efforts to secure an angel investor have failed up to this point in time. Our choices are to either close permanently or attempt this creative solution.

The solution:
AUIS needs to raise approximately 3.5 million dollars to restore normal operations. These funds will be deployed to reestablish marketing, complete the accreditation process, and replenish reserves. This could be accomplished if each AUIS practicing alumni or other interested party invested $3500.00. I know this is a significant amount to most, yet it would be sufficient to propel the school forward and enable it to produce fine physicians similar to yourselves.

We are not requesting a gift from you, we are asking you to invest in your school’s continued future. For those who have completed the program secured licensure and are practicing, we are asking you to take immediate action to support the school that was the foundation of your now successful careers, for those who are still in the academic program, we are asking you to take ownership of your schools, and in doing so to assume your relative ownership interest in its continued future.

Imagine the result of our success, this solution would result in the first co-op student-owned school in the history of the Caribbean. Its graduates would be directly engaged in the production of the physicians that followed them out of the program and over time your and their medical education costs would be partially recovered from future distributions.

The current valuation of the school used for this contemplated transaction is 6.4 million or $64,000.00 per share. This share price is a stipulated value. Each contributing alumni, student, family, or investor will receive a proportionate equity share value equal to that of their capital contribution. The current owners will dilute their current equity proportionate to the capital raised and reinvest 100% of the proceeds of the shares sold at parity for the benefit of the school, as a collective equity reinvestment. The benefit of this structure is that it solidifies the continued support of the school by the existing shareholders and makes them your go-forward partners with the new investors owning 45% of the school.

This is an extremely time-sensitive plan, the only hope for success is predicated on the students, alumni, and outside investors’ expedient response to this call to action.

We have posted a link http://auis.edu/invest on the auis.edu site. You can download the associated documents and make your contribution by bank wire, Credit Card, or e-check. We will not access contributed funds until we attain the following thresholds listed below. If we fail to meet the published thresholds we will return all funds above the last threshold met. All funds will be collected by our house counsel, Max Law Office, and held in the Max Law escrow account until the specified thresholds are met.

Threshold
● $975,000.00 USD, funds to be allocated to meet immediate short-term debt obligations, accreditation fees, and associated final visit expenses, and May 2024 enrollment. This amount is required by 02/16/2024
● $1,025,000.00 USD Marketing/admissions, operating reserves, and remediation programming for preclinical students impacted by the covid pandemic This amount is required by 04/01/2024
● $500,000.00 USD International recruitment, US student loan program reserves This amount is required by 08/31/2024
● $1,000,000.00 Academic program expansion and US academic program offerings. This amount is required by 06/31/2025

Your questions and comments are welcomed at ownership@auis.edu There is not a great deal of time to enable this solution to work so your decision and contribution is required by 1-29-24 if we do not raise the needed funds we will return all contributions to the original contributors.

The Subject institution has been operating in the Caribbean since 1999 delivering Doctor of Medicine (MD) degrees to a primarily North American audience. Graduates of the program are eligible for credential certification by ECFMG, medical residency training, and achievement of a full Physician practice license in the United States, Canada, and the United Kingdom. Currently, the university is approved for Canadian federal loans for all provinces in Canada and has Meritize student loans for US students.

The medical school is chartered on a desirable Caribbean Island that sits safely outside of the hurricane belt with a gross revenue of $3M in 2018 into 2019; $3M in 2019, which had been projected to be the first break-even year, with predicted student increases of 30-45 per year. This goal was missed by a $98,000 revenue shortfall. with a decline in 2020 through mid-2021 to a two-year flat period which was due to pandemic-related enrollment reductions and diminished hospital access to clinical students, attributable to DOH-imposed covid restrictions. 2022 yielded a period of slow but visible recovery resulting in incremental growth over the realized pandemic declines of the preceding two years. A highly scalable business model with large fixed costs initially and benefited by controllable, predictable, low variable costs that exist within a broad spectrum of student numbers.
Recent expansion into international recruitment has proven fruitful. Limited post-COVID resources have restricted normal levels of investment in marketing, and advertising.

Resulting enrollment numbers to date have delayed our return to predictable growth trajectories. Anticipated changes in the market are and will continue to be driven by the ECFMG accreditation mandate, further positioning the firm for rapid growth and expansion in untapped emerging markets caused by the closing window of opportunity, which is solely attributable to the mandate influences on the Caribbean medical school market. Our goal has been to focus on building the academic infrastructure of the programs. The school has been successfully registered with the local accreditation body and is awaiting the final site visit scheduled to commence April 2024, placing the institution just weeks away from regional accreditation with CAAM-HP. The completion of the accreditation process will increase the student census exponentially as newly applying students’ will now have access to US federally sponsored, private, and commercial, as well as traditional bank education finance loans, allowing a market reposition of the school as a higher-priced boutique option with comparable academics to US institutions upon investing in infrastructure, and marketing.
Total tuition for our program ranges $100,000 – $ 126,000 depending upon scholarship and grants awarded for 4 years, this is often less than half the cost of most US medical schools (https://www.amsa.org/2018/11/10/real-cost-of-medical-school/). Upon attainment of regional accreditation, (anticipated by April 2024) tuition may be increased to more competitive rates consistent with other regionally accredited schools, vastly improving gross revenue and the corresponding return on investment. Most of our accredited competition charges 25%-100% more than our current tuition level with a nominal academic differential in their program offerings.

Total tuition for our program ranges $100,000 – $ 126,000 depending upon scholarship and grants awarded for 4 years, this is often less than half the cost of most US medical schools (https://www.amsa.org/2018/11/10/real-cost-of-medical-school/). Upon attainment of regional accreditation, (anticipated by April 2024) tuition may be increased to more competitive rates consistent with other regionally accredited schools, vastly improving gross revenue and the corresponding return on investment. Most of our accredited competition charges 25%-100% more than our current tuition level with a nominal academic differential in their program offerings.

In US dollars $8,500,000.00 (All transactional assets structured through a stock sale of the operating entity)

This valuation is predicated upon the predictive cost to create a new school from scratch and support it until such time as a new-co institution attains a similar market, regulatory recognition, census, loan authority, and curriculum/faculty stability. Naturally, this valuation is highly subjective and would be influenced by a broad spectrum of variables. but reasonably defensible given historical metrics related to start-ups and sales of other institutions in the Caribbean basin. Given our post-Covid condition, we have sought to arrive at a discussion number that we believe we can defend logically using any of the GAAP standard measures. Our primary goal is to secure a financial partner that can assist the institution in realizing its full potential as a high-quality alternative for non-traditional students seeking medical education.

Operating capital requirements: $3,000,000.00 -$4,500,000.00

● $1,500,000.00 Teach-Out reserve for accreditation standards compliance (can be LOC or other similar financial vehicle)
● $250,000.00 Additional faculty
● $350,000.00 three-year marketing spend
● $900,000.00 Equity used to meet financing requirements of local banks to fund physical plant purchase
● Additional funding of 1.5M (optional, if available would be used to fund initial classes of new programs, and local student housing facility)

● Medical School on the subject Subject Caribbean Island with a US medical school curriculum, serving 90% US and Canadian     Students since 1999
● Over 1100 Alumni actively licensed and practicing medicine in the US or Canada ● Half or less the cost of most US Medical     Programs (Close to $100,000 USD for 4 years) ● 74% of graduates matched into US and Canadian Residency programs on their first attempt
● Current University Charter on the subject island to offer MD and Bachelor in Medical Sciences (BMSc) degrees, with the option to     offer additional programs.
● United States recognition by the ECFMG (Educational Commission for Foreign Medical Graduates; https://www.ecfmg.org/)     established in and current since 2000, without interruption, allowing our students to sit for the US medical     licensing exams (USMLE) with all their US-trained counterparts
● Medical Council of Canada (MCC) recognition and eligibility to sit the Medical Council of Canada Qualifying Exams similar to local     Canadian Medical Programs. SUBJECT INSTITUTION Students qualify for Canadian provincial and federal     funding (OSAP)
● CAAM-HP Regional Accreditation is underway, awaiting the final site visit in February 2024. CAAM-HP recognition will place our program     on par with US mainland medical schools
● Stable diversified Faculty and staff in place, some with employment dating to 1999 ● Huge potential, The school is recovering from poor     prior management and relocation ● The current administration in place since 2013, leading the recovery

More details can be provided to interested parties post-execution of an NDA and completed financial capacity documents. The following is provided to establish a quick understanding of the current economic model. The majority of fixed costs are incurred in years 1-2 of the MD and BMSc programs, on Subject Caribbean Island, as nearly all on-staff faculty live and work on Subject Caribbean Island. This means additional students increase revenue and decrease the per-student cost of delivery. Clinical program revenue realized in years 3-4 is reflected as linear growth; expanded as a predictable per-student metric that translates directly to bottom-line performance.
The school charges higher tuition in years 3-4; when experienced academic delivery costs are lowest. Costs on the island are fixed and the campus/faculty have room for triple or quadruple the current student census within existing physical plant and academic resources. Costs in clinical training track linearly with student enrollment.

Having spent the first 4 years working the school out of its 2014 bankruptcy, vacated in 2018. The sum of the last 10 years stabilizing the school and correcting its many deficiencies both academically and operationally, the time for a tactical equity purchase or investment and continued academic progress is ideal. SUBJECT INSTITUTION now has a broader academic charter granted by the host nation to expand its offering of studies beyond the limitations of a singular MD degree program, and has taken our first group of bachelor’s students, increasing the scope and potential catchment for students.

The regional accreditation applied for, CAAM-HP, is mandated by 2024 by ECFMG (Educational Commission for Foreign Medical Graduates); the regulatory body governing international medical schools. SUBJECT INSTITUTION now has completed the first site visit with CAAM-HP and will achieve provisional accreditation going into 2024 ahead of the ECFMG deadline, opening the door for access to private commercial, bank, and US Federal Loans under Title IV for SUBJECT INSTITUTION students.

With less than half of the 30+ medical universities in the Caribbean accredited, a predictable consolidation is justifiably anticipated and our intent is to further demonstrate the merit of our concept with the continued growth and performance of the SUBJECT INSTITUTION and position our school and programs to exploit the inevitable consolidation of other schools in the Caribbean into our then larger market capable entity.

In addition to broad governmental support, SUBJECT INSTITUTION and the Subject Caribbean Island has many compelling attributes for foreign investors.

● All SUBJECT INSTITUTION transactional activity is securely maintained within the domestic United States.
● Tax Abatements
    ○ 2.5% Corporate Income Tax cap
    ○ Payroll Tax reductions on non-citizen employees
● Real Estate-based incentives
    ○ Low-cost leases on state-owned land
● Development Allowances
    ○ Expedited permits
    ○ Immigration
    ○ Building
● Active Government Support from:
    ○ Ministry of Education
    ○ Ministry of Health
    ○ Ministry of Foreign Trade and Economic Development
● Unique Academic offering
    ○ We are the only Caribbean institution with a concurrent, evidenced-based integrative medicine curriculum that applies a holistic approach to medical training and admissions.

The Market History and why it’s a good time to acquire the SUBJECT INSTITUTION

The Caribbean education market has been a robust center of economic opportunity since 1972, marked by the opening of the first US offshore medical school; St. George’s University School of Medicine (SGU) on the island of Grenada. SGU was an institution founded in response to what was then an overwhelming demand for medical school seats, and the growing inability of US and Canadian schools to meet the demand for trained physicians. Since then, the demand for medical education has grown steadily. Today the Caribbean basin is host to 30 US offshore medical schools offering an Allopathic Medicine-based curriculum. Notwithstanding, current US census reports predict a 139,000 US physician shortage by 2033 (Source: AAMC – The Complexities of Physician Supply and Demand: Projections from 2018 to 2033).

Even with this type of realized demand, the US and Canadian medical education communities have insufficient capacity to meet the projected clinical provider supply requirements in time to service the patient care demand. This physician supply deficiency is further exacerbated by baby boomer-era physicians retiring and or being priced out of clinical practice by Medical Malpractice insurance premium rates.

The response has been to open second campuses of their existing school. This strategy has often proven to be a poor choice as well, frequently resulting in institutions expanding into sub-par second-tier programs of their core academic programs. This is generally attributable to the inability to replicate their faculty and to efficiently leverage their existing infrastructure and or generate new revenue streams while enjoying diminished program delivery cost.

SUBJECT INSTITUTION differs in its approach. The executed and working SUBJECT INSTITUTION strategy was to relocate our proven and established faculty, secure improved infrastructure made available to us on Subject Caribbean Island, leverage existing management, operational infrastructure, and favorable social-political environment to increase the academic and economic performance of the institution.

● Caribbean-basin medical schools: ~30, particularly the ones with CAAM-HP accreditation, established and having access to Canadian and/or US federal loans
● Other foreign medical schools offering an ECFMG-recognized MD degree:- in Eastern European nations like Poland and Hungary; China and Southeast Asia Indirect Competition
● DO schools in the US, to a limited degree
● US medical schools- the client profiles often are not the same, but the product satisfies the same consumer need.
● Canadian medical schools have similar economic and slot limitations to US schools. While we do compete for Canadian students we do so at parity with all other medical schools seeking these students.

Competitors Barriers to Entry

● Capital investment- 10’s of millions (SUBJECT INSTITUTION – Not a startup, a relocated pre-existing 20yr old school with, Canadian federal loans, limited US loans, successful residency match history, and established global regulatory recognitions)
● Regulations in different states (SUBJECT INSTITUTION has already met these regulatory tests)
● Caribbean corruption/incompetence (INSTITUTION has secured a charter and is on politically stable and resident in a sophisticated Caribbean Island)
● Faculty- development of a respected cohesive body of medical educators
● Name and brand recognition (Existing brand with the current student body and recognized historical performance)

Effective 2024, ECFMG® has announced that physicians applying for ECFMG Certification will be required to graduate from a medical school that has been appropriately accredited. To satisfy this requirement, the physician’s medical school must be accredited through a formal process that uses criteria comparable to those established for U.S. medical schools by the Liaison Committee on Medical Education (LCME) or that uses other globally accepted criteria, such as those put forth by the World Federation for Medical Education (WFME). As a result of this mandate, ECFMG will no longer qualify students from unaccredited schools to sit the USMLE board exams. SUBJECT INSTITUTION is currently in the accreditation assessment and evaluation process and will meet this benchmark prior to the deadline.

With this new ECFMG benchmark, schools that have attained accreditation by one of the LCME-recognized accrediting bodies will also be accepted by the California State accreditation guidelines and as a result of meeting that test, immediately qualify for US Title IV student loan programs. See: (https://www.ecfmg.org/about/initiatives-accreditation-requirement.html)

The global alternative medicine and therapies market size was in excess of 30.0 billion USD in 2014. Notable drivers include lower side effects and growing patient awareness levels. The increasing geriatric population base, growing awareness about general health and well-being, and inclination towards leisure and relaxation are also likely to continue to boost demand.

Some of the defining nuances of integrative medicine are:

● The patient and practitioner are partners in the healing process.
● All factors that influence health, wellness, and disease are taken into consideration, including body, mind, and community.
● Providers use all healing sciences to facilitate the body’s innate healing response.
● Effective interventions that are natural and less invasive are used whenever possible.
● Good medicine is based on good science. It is inquiry-driven and open to new paradigms.
● Alongside the concept of treatment, the broader concepts of health promotion and the prevention of illness are paramount.
● The care is personalized to best address the individual’s unique conditions, needs, and circumstances. Practitioners of integrative medicine exemplify its principles and commit themselves to self-exploration and self-development.

● The boutique, student-centric, quality over volume focused school (Max enrollment: 500 students Target: 250-350 students on-island) with high academic standards.
● Flexible entry requirements focus on the “whole student”, we are looking for emotional intelligence and proof of commitment to the career, not necessarily the highest historical test scores.
● Addition of Integrative medicine to the curriculum.
● Welcome non-traditional students with proven experience (Nurses, Physician assistants, PhDs).
● Technology-centric approach led w/ proprietary technology: Caribbean-based medical schools have historically lacked a command and control solution for the student’s clerkship experience. Real-time, controlled chain of custody, verifiable and traceable measures of patient encounters, procedures, academic initiatives, and exposures did not exist. This has led to many schools being seen as “medical degree mills” both unable to improve their student outcomes and incapable of achieving accreditation.

CARL is the tool needed to deliver a holistic solution for the training of physicians in repeatable best practices of clinical care. CARL is not another Learning Management System (LMS). CARL creates an end state that is focused on and addresses the practice realities of being a clinician:

■ Lifetime skills competence
■ Real-time medical knowledge
■ Knowledge built on documented patient encounters and repeated best practices
■ Structured documentation for patient privacy and safety
■ Encoding knowledge into long-term memory
    ○ See: https://www.futureofhealthcarenews.com/med-school-reimagined-how-technology-is-transforming-education-outcomes/

These drivers all directly align with the foundational teaching philosophy of the institution and play a central role in the brand and academic curriculum. The institution and the physicians it produces are at the forefront of a paradigm shift in modern medicine that will significantly improve the healthcare outcomes of patients encountered, clinical research, and institutional healthcare costs.

The opportunity presented represents the growth and expansion of a going concern that has a proven business model that is opportunistically ripe relative to timing, market conditions, demand, human capital resources, and leadership experience. Given all of the data prior
presented, the opportunity demands attention and proactive support. Additional data can be provided in response to any questions readers may have.