Annual Report FY2017

Our mission is to invest in Oklahoma entrepreneurs and build high growth comapnies.

Scott Meacham President & CEO

Over our 20-year history, i2E’s nationally recognized services have provided business expertise and funding to (more than) 700 of Oklahoma’s emerging small businesses.

With almost $60 million of investment capital under management, we are focused on serving Oklahoma companies in all phases of the business life cycle, from startups looking for initial capital to established businesses seeking funding to expand their markets or products.

We strive to create more high paying jobs in Oklahoma while diversifying our economy.

We help launch new products into the marketplace more efficiently and more quickly while providing guidance to bring more funding to Oklahoma’s researchers and entrepreneurs.

Through our proven business and venture development process, we turn innovations into successful enterprises ... i2E.

WHAT WE DO

NATIONAL RECOGNITION

OUR PARTNERS

Evaluate the potential of new concepts through a rigorous venture assessment process to determine product-market fit

Southern Growth Policies Board 2006 Innovation Award recognized for fresh approaches to solving problems and creating opportunity in the South’s rural regions

Cherokee Nation

Assist with development of business plans, evlauation of marketing plans and assessment of capital needs Provide guidance in building a management team, choosing an optimal busiess structure and creating financial forecasting Assist with developing an effective investor presentation Assist in obtaining non-dilutive funding through federal and state funding sources or private investment Work with universities to encourage commercialization of universtiy-based innovation Provide assistance in raising capital Make equity and near equity investments to help start new companies and grow exsisting companies

Kauffman Foundation 2008 Entrepreneurship Summit recognized as a principal source of high value-added human & intellectual capital International Economic Development Council 2009 Best Practices Award for comprehensive commercialization services State Science & Technology Institute 2010 Excellence in Technology-based Economic Development for increasing Access to Capital Standards for Excellence Institute 2010 Standards for Excellence only second Oklahoma non-profit organization certified Regional Innovation Acceleration Network 2011 Venture Development Market Leader recognized as a leader in this field

Chickasaw Nation Choctaw Nation Greater Oklahoma City Chamber Love’s Travel Stops Muscogee(Creek) Nation Oklahoma Business Roundtable Oklahoma Center for the Advancement of Science and Technology (OCAST) Oklahoma Experimental Program to Stimulate Competitive Research (EPSCoR) Oklahoma Manufacturing Alliance Oklahoma Medical Research Foundation Presbyterian Health Foundation U.S. Department of Treasury U.S. Economic Development Administration Rural Enterprises, Inc. State Small Business Credit Initiative

Access to Capital

Venture Advisory Services

Investments

Entrepreneurial Development

Financials

6 12 14 16 18

ACCESS TO CAPITAL i2E has been a primary source of concept, seed stage, start-up and early growth investment capital for Oklahoma’s emerging small businesses for nearly two decades. The rigorous approach of its investment process has built a reputation for producing companies that are well positioned for success in the market place.

i2E’s portfolio of Oklahoma-based companies attracted

$638,541,473 in private investment from banks, venture capital funds, angel investors and other strategic investors.

OKLAHOMA SEED CAPITAL FUND

SEEDSTEP ANGELS

This early stage fund targets new companies and existing companies looking to move into a new product or market. This investment enables companies to build a business infrastructure around their concept or product, take their concept to market or scale concepts that have reveived market validation. Investment terms are typically convertible debt or preferred equity on market terms and involve a rigorous due diligence and approval process. The Oklahoma Seed Capital Fund is a state appropriated investment fund through the Oklahoma Center for the Advancement of Science and Technology, managed by i2E.

This is a network of Accredited Oklahoma investors who provide capital, strategic advice and mentoring to emerging growth companies to help them succeed. Typical investments range from $25,000–$500,000 with individual members making investment decisions.

TBFP CONCEPT FUND This fund is designed to provide Oklahoma start-up companies with pre-seed, proof-of-concept funding to develop a marketable concept or product.

ACCELERATE OKLAHOMA! FUND As a part of the federal States Small Business Credit Initiative (SSBCI), this U.S. Treasury funded initiative offers funds that provide critical capital and coinvestment for Oklahoma entrepreneurs at specific stages of their companies’ lifecycles. Investment terms are typically convertible debt or preferred equity on market terms and involve a rigorous due diligence process.

OKLAHOMA ANGEL FUND I The Oklahoma Angel Fund I is a privately funded venture capital fund that targets companies with high-growth potential that require capital to assist with proof of concept, go to market, scaling or expansion into new products and/or new markets. The fund is designed to capitalize on the growth in entrepreneurial activity and venture financing, primarily in the state of Oklahoma, and in selective states within the region.

Oklahoma Seed Capital FunD This seed stage fund targets new companies and existing companies looking to move into a new product or market.

This investment fund enables companies to build a business infrastructure around their concept or product, take their concept to market or scale concepts that have received market validation. Investment terms are typically convertible debt or preferred equity on market terms and involve a rigorous due diligence and approval process. The Oklahoma Seed Capital Fund is a state supported investment fund through the Oklahoma Center for the Advancement of Science and Technology, managed by i2E.

Software/IT 42% Life Science 42% Subassemblies/Components 3% Manufacturing Equipment 3% Chemicals 3% Energy & Environment 3% Advanced Materials 3%

$15,887,880 in 29 companies leveraging over

$206,281,168 in private investment

243 full time employees with average annual wage of

$75,373 40%

2016 IMPACT > BY INDUSTRY

Since 2007 the Seed Fund has invested

Job Growth

9

New Patents Issued

$26.5M Annual Revenue

$14.4M Annual Payroll

TBFP Concept Fund This fund is designed to provide Oklahoma start-up companies with pre-seed, proof of-concept funding to develop a marketable concept or product. Since 2011 the Concept Fund has been self-sustaining.

impact 1999-2017

$12,020,346 $5,932,179 has been invested in

122 companies with repayments totaling

$13M Annual Payroll

$23M Annual Revenue

For every dollar invested by the state, i2E clients have raised $48 in private capital

50% Job Growth

> BY INDUSTRY

36% Computer Software and Hardware 16% BioPharma 15% Telecommunications/Internet 11% Advanced Devices 10% Other 7% Energy & Environment 3% Subassemblies/Components 3% Advanced Materials

8

New Patents Issued

> ANNUAL REVENUE

216 full time employees with an average annual wage of

$74,374 > LEVERAGED PRIVATE INVESTMENT $443M

All Concept Fund Companies $443,039,311 Concept Funding $12,020,346

$12M

1999

2017

VENTURE ADVISORY Our venture advisors work closely with each client, assisting them in the commercialization of their concept from initial technology development to business launch to scaling of proven concepts. These services involve assessing product-market fit, determining optimal go to market strategies, business

2017 ECONOMIC IMPACT

Annual Revenues

Full Time Equivalent Employees

All New Products Introduced

> 2016 REPORTED SALES DISTRIBUTION i2E’s portfolio of high-growth companies is producing products or services targeted at large domestic and international markets. Our client companies continue to report that 81% of their revenue is generated from sales outside Oklahoma.

That brings revenue into the state and creates jobs and wealth for Oklahomans.

planning, determining capital needs and positioning for funding.

The Venture Assessment Program (VAP) helps entrepreneurs perform market analysis and investigate the commercial opportunity of their business. It is a three week program designed to investigate the productmarket fit and business opportunity of a startup including: > Assessment of market needs > Determination of potential market(s) > Identify market barriers > Identify preliminary distribution channels > Identify market trends and competitors > Estimate preliminary profit potential The Oklahoma Small Business Research Assistance (SBRA) program offers the resources and expertise to successfully compete for federal grant funding. i2E co-directs this program with the Oklahoma Center for the Advancement of Science and Technology. SBRA’s goal is to increase both the number of Oklahoma applicants for SBIR/STTR funding as well as the number of successful grant proposals from Oklahoma.

The GrowOK program is a three-week program designed to explore the product/market fit of a new business concept focused on opportunities in rural Oklahoma. Each program includes three two-hour, in-person workshops, with outside activities to be completed by the participating company/ entrepreneur. Additionally, companies participate in weekly one-on-one meetings to receive individual feedback and direction for their business.

New Patents Issued

74%

19%

7%

Domestic

Oklahoma

International

> CLIENT COMPANIES BY INDUSTRY 1998-2016 15% Other

Life Science 24%

11% Energy & Environment 6% Subassemblies & Components

In FY2017 i2E provided advisory services to 91 entrepreneurial companies. We helped position 20 companies for funding with a total of 34 clients obtaining more than $43.6M in private equity capital.

IT/Software 40%

4% Advanced Materials

> BY GEOGRAPHY

> 2017 AVERAGE ANNUAL WAGE COMPARISON Our clients are true small businesses, with 75% employing 10 people or less, while paying 57% higher than the state average.

114

$43,779 Oklahoma

232

$68,597

Balance of State

350

Tulsa

OKC

i2E Portfolio

> COMPANIES’ JOB GROWTH

i2E PORTFOLIO

26%

36%

20%

22%

39%

31%

32%

17%

29%

29%

STATE AVERAGE

-1.4%

-1.9%

-0.1%

1.2%

1.3%

1.9%

1.2%

1.1%

-0.5

-.03

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

FY2017 CLOSED INVESTMENTS Accele Biopharma Oklahoma City AccelerateOK – $200,000 Accele Biopharma is a business accelerator that provides bioscience startups with the management resources needed to take groundbreaking science from the laboratory to commercialization.

BioLytx Oklahoma City AccelerateOK Fund– $100,000 Biolytx's core technology is the development of a novel antibiotic peptide for use in treatment of serious hospital-acquired infections, including those resistant to current antibiotics.

Datebox Edmond Seed Fund II – $1,300,000 Datebox is a monthly subscription service targeting couples in committed relationships that provides a novel date night activity and related conversation topics for people in committed relationships.

DEHA Oklahoma City Concept Fund – $50,000 DEHA is developing therapeutics to treat unaddressed market needs in stroke and related disorders Docvia Tulsa AccelerateOK Fund– $35,000 ICEdot is a simple and inexpensive Web service that enables emergency responders to identify patients, their medical needs and instantly notify their emergency contacts.

Linear Health Sciences Norman OK Angel Fund I, Seed Fund II – $765,000 Linear Health Sciences has developed and is in the process of commercializing an innovative break away valve for use with hospital IV's and other fluid systems.

Qwik Response Systems Oklahoma City Concept Fund – $20,000 Qwik Response Systems is a software development company that specializes in inventing mobile phone applications with a focus on safety and emergency situations.

madepossibleby.us Oklahoma City Concept Fund – $20,000 Madepossibleby is developing new funding platforms for nonprofits and other entities.

Sevengenes Bartlesville Concept Fund – $50,000 Sevegenes' mission is to develop bio-better drugs and novel small molecule therapeutics to treat deadly diseases such as cancer with minimal or no side effects.

Monscierge, Inc Oklahoma City AccelerateOK Fund, OK Angel Fund I – $300,000 Monscierge has developed a communications platform for the global hospitality industry connecting guests to hotel management and staff.

Otologic Pharmaceutics Oklahoma City AccelerateOK Fund, Seed Fund II, Angel Fund I – $450,000 Otologic commercializes promising technologies that address novel pharmaceutical solutions for hearing loss and related issues.

Pamlico Biopharma Oklahoma City Seed Fund II – $250,000 Pamlico is developing a therapeutic to increase the effectiveness of antibiotics.

PurMabiologics, LLC Oklahoma City Concept Fund – $50,000 PurMabiologics has invented a technology to save and grow rare hybridomas, which are the most efficient antibody-producing cells.

Synereca Oklahoma City Seed Fund II – $500,000 Synereca Pharmaceuticals was created to address the growing problem of bacterial resistance to current antibiotics by developing drugs that restore or increase the effectiveness of existing antibiotics.

WeGoLook Oklahoma City AccelerateOK Fund, Seed Fund II, Angel Fund I – $600,000 WeGoLook utilizes crowd-sourcing to provide claim services for the insurance industry and verification for buyers of online products such as automobiles and heavy equipment, as well as providing inspections and document delivery services through a nationwide network of more than 20,000 field agents known as "Lookers".

WeGoLook sold to Crawford and Company in January of 2017, the second largest insurance claims processing company in the world.

Total: $5,735,000 FY2017

Number of Closed Investments Total Amount of Closed Investments

CONCEPT

SEED

ACCELERATE

ANGEL FUND

TOTALS

5

6

7

5

23

$190,000

$2,915,000

$1,530,000

$1,100,000

$5,735,000

CONCEPT

SEED

ACCELERATE

ANGEL FUND

TOTALS

Inception through FY2017

No. of Approved Investments No.of Approved Companies Total Amt of Investment

137 54 41 5 237 122 28 25 5 180 $12,020,346 $16,137,880 $13,147,192

$1,110,000

$42,405,418

ENTREPRENEURIAL DEVELOPMENT Our Entrepreneurial Development programs encourage entrepreneurship through a variety of events and activities including a statewide collegiate business plan and pitch competition and fellowship programs that expose students to early stage businesses with practical, hands-on application of what they are learning in the classroom.

LOVE'S ENTREPRENEUR'S CUP Team building, academic diversity, market research and financial projections are all key elements that go into creating a winning team in the Love's Entrepreneurial Cup. Students representing colleges and universities across the state take what they’ve learned in the classroom and apply it to real world opportunities as they assemble a team, identify a product, research the market, formulate financial projections, write business plans and then pitch the opportunity to a panel of potential investors.

In the 13-year history of the completion, more than 2,000 college students have produced over 650 innovative ideas from 35 campuses statewide and been awarded over $1.7 M in cash, $110K in scholarships and $231K in fellowships. Over 35 have gone on to become i2E clients.

Love’s Travel Stops became the event’s Signature Sponsor beginning in 2017, replacing the founding sponsor, the Donald W. Reynolds Foundation which dissolved in 2017.

2017 LOVE'S ENTREPRENEUR'S CUP AWARD WINNERS

$1.7M Cash Awarded

Small Business Division First Place: VisuALS - Oklahoma Christian University Second Place: StoPanic - East Central University Third Place: The Social Niche - Northeastern Oklahoma A&M Undergraduate

650

Innovative Ideas

First Place: VisionaRX - Oklahoma State University Second Place: Toucan - University of Central Oklahoma Third Place: BLOOM - University of Oklahoma Graduate First Place: Composite Damage Solutions - University of Tulsa

35

Campuses Statewide

Second Place: ObturaTech - University of Oklahoma Third Place: Turning Systems, LLC - University of Central Oklahoma Interview Winners

$110K In Scholarships

Greater Oklahoma City Chamber Healthcare Award: Redcedar Products, Oklahoma State University i2E, Inc. Student Generated Award: 60Days Studios, University of Oklahoma Oklahoma Business Roundtable Material Sciences and Transportation Award: Reactiv, University of Oklahoma

$231K In Fellowships

OCAST Information Technology/Communications Award: 3DMe, University of Oklahoma OG&E Positive Energy and Environmental Award: Omnibus V2G Technologies, Oklahoma City University 2017 Paulsen Award Scholarship Winners Small Business Division: Miranda McNabb, East Central University High Growth Undergraduate Division: Yusuf Shurbaji, University of Central Oklahoma High Growth Graduate Division: Gerred Edwards, Oklahoma City University

> FY2017 MEDIA & MARKETING 21 networking events 15 e-Blasts 104 weekly columns 3 i&E magazines

2017 IBM Pitch Winners High Growth Undergraduate Division: Jacquelyn Lane, Oklahoma State University High Growth Graduate Division: Troy McClanahan, University of Tulsa Small Business Division: Srijita Ghosh, East Central University

FINANCIAL REPORTS

FY2017 Revenue Percentages 14% OCAST Contracts 10% Accelerate Oklahoma Investment Fund 6% Fund Management Fees 4% Event Sponsorships and Fees 3% Corporate Contributions 2% Client Services Fees 6 0% Realized & Unrealized Gains/Losses 1% Other Incomes FY2017 Expense Percentages 43% OK Technology Commerciliaztion Center 25% i2E Seed Capital Fund 9% Love's Cup 8% Non-Program 6% Technology Business Finance Program 4% OK Bioscience Institute 2% Accelerate Oklahoma Program 3% Other Expenses

Statements of Financial Position FY2017 FY2016 As of June 30 Assets Cash & Cash Equivalents 1,552,965 1,682,794 5,676,560 307,979 Cash Held for Accelerate OK investments Certificates of Deposit – 100,573 Accounts Receivable 657,564 386,511 8,035 15,101 Prepaid Expenses Investment in Oklahoma Seed Capital Fund 215,004 40,554 45,599 9,000 Investment in Oklahoma Angel Fund 1, LP Accelerate Oklahoma Funds Investment 12,401,909 10,719,597 Other Investments 1,022,179 40,012 72,078 Furniture, Fixtures and Equipment, Net Total Assets 21,619,827 13,334,187 Liabilities and Net Assets Liabilities Accounts Payable 85,424 34,759 112,494 289,471 Deferred Revenue Other Current Liabilities 51,979 89,178 249,897 413,408 Total Current Liabilities Total Liabilities 249,897 413,408 Net Assets 2,558,735 2,082,751 Unrestricted Unrestricted -Investments 18,811,195 10,838,028 21,369,930 12,920,779 Total Unrestricted Net Assets Total Liabilities and Net Assets 21,619,827 13,334,187 Statements of Activities Revenues OCAST Contracts Accelerate Oklahoma Investment Funding Fund Management Fees Event Sponsorships and Fees Accelerate Oklahoma Admin Revenue Corporate Contributions Client Service Fees EDA Grant Revenues Realized & Unrealized Gains/Losses -Investments Interest Income-Investments Other Income Total Revenues Expenses OK Technology Commercialization Center i2E Seed Capital Fund Love's Cup/Donald W Reynolds Gov Cup Technology Business Finance Program OK Bioscience Institute Accelerate Oklahoma Program EDA Grant Expenses i2E Management Co. Non-Program Total Expenses

FY2017

Change in Net Assets Net Assets at Beginning of Year Net Assets at End of Year

8,449,151 2,556,864 12,920,779 10,363,915 21,369,930 12,920,779

1,700,268 1,179,024 764,562 437,617 47,772 293,525 174,278 66,721 7,175,194 25,151 49,362 11,913,474

FY2016 1,751,221 2,326,602 654,049 490,181 92,675 360,750 129,626 221,912 (91,202) 60,000 5,710 6,001,524

1,498,668 1,541,105 876,091 587,985 309,327 347,995 192,960 193,633 139,825 195,269 67,697 96,066 67,324 221,913 36,003 (654) 276,428 261,348 3,464,323 3,444,660

i2E TEAM

BOARD OF DIRECTORS Stephen Prescott, Chairman OMRF

Fred Morgan The State Chamber

extensive experience in technology commercialization, business

Mark Poole, Vice Chair First National Bank of Broken Arrow

David Pitts Bank SNB

development, venture investing, finance, organizational.

Michael LaBrie, Secretary McAfee & Taft

Ryan Posey HSI Sensing

Scott Meacham President & CEO

Leslie Batchelor Center for Economic Development Law

Teresa Rose Crook Oklahoma City Community Foundation

Rex Smitherman Senior Vice President, Operations

Howard G. Barnett, Jr., OSU-Tulsa, OSU-CHS

Meg Salyer Accel Financial Staffing

Sarah Seagraves Senior Vice President, Marketing

Robert Brearton American Fidelity Assurance Company

Claudia San Pedro Sonic Corporation

Mark Lauinger Senior Vice President, Client Services

Jay Calhoun Apis Holdings

Darryl Schmidt BancFirst

Tom Francis Director of Funds Administration

Michael Carolina OCAST

Craig Shimasaki Moleculera Labs

Judy Beech Director of Finance

Steve Cropper

Brien Thorstenberg Tulsa Regional Chamber

The i2E management and staff is composed of professionals with

Carol Curtis Venture Advisor & Director of Academic Research Assessment Richard Rainey Venture Advisor & Director, SBRA Program Melissa Kempkes Investment Portfolio Manager James Lovely Venture Advisor Stacey Brandhorst Venture Advisor & Director of Venture Assessment Scott Thomas IT Manager Darcy Wilborn Client Engagement Director Cindy Henson Underwriting Coordinator & Investment Compliance Officer Katelynn Henderson Events Specialist Shaun Fair Underwriting Specialist Jennifer Buettner Executive Assistant Kate Nelson Administrative Assistant

Carl Edwards Price Edwards Company Presbyterian Health Foundation

Roy Williams Greater Oklahoma City Chamber

Philip Eller Eller Detrich, P.C.

Richard Williamson T.D. Williamson

Joseph J. Ferretti University of Oklahoma Health Sciences Center

Duane Wilson LDW Services, LLC

Cheryl Hill Hill Manufacturing/Hill Equipment Danny Hilliard Chickasaw Nation Ronnie Irani RKI Energy Resources Philip Kurtz CareATC Brad Krieger Arvest Bank Hershel Lamirand III Capital Development Strategies Merl Lindstrom Phillips 66

INSTITUTIONAL GOVERNANCE i2E strives to have the highest standards of corporate governance practice and ethical conduct by all board members and staff. Consistent with those intentions, i2E has received the Standards for Excellence Certification.

Board of Directors Charter of Governance: Sets and ensures fidelity to i2E’s mission. Reviews and approves organizational strategy, goals, plans, and budgets. In addition the board is charged with establishing policies, approving major engagements in public policy, and ensuring that management systems are in place for compliance.

Executive Committee Charter: The function of the Executive Committee is to exercise powers of the Board of Directors on matters which arise between regularly scheduled Board meetings or when it is not practical or feasible for the Board to meet. This Committee also reviews and monitors all compensation, benefit and human resource policy matters, plus monitors and evaluates the performance of the corporation’s CEO. Finance and Audit Committee Charter: The primary purpose of this Committee is to assist the Board of Directors in fulfilling its fiscal oversight responsibilities.

It serves as an independent and objective party to monitor the integrity of the Corporation’s financial accounting and reporting processes and internal control system.

Nominating and Governance Committee Charter: The Committee assists the Board in developing and overseeing the Corporation’s policies and procedures regarding Board composition and recommendations of candidates for nomination to the Board.

Investment Committee Charters: The Board engages two Investment Committees, The Oklahoma Seed Capital Fund Investment Committee and the Accelerate Oklahoma Committee, to consider and approve applications for investment within the requirements of the investment programs.

Resource Development Committee: The primary function of the Resource Development Committee is to assist i2E in attaining sustainability of its programs and services and to diversify its funding sources by formulating strategies for fundraising in the short and long-term, establish clear goals for sustainability of the organization, and achieve diversity in funding sources, as well as, assisting the Board of Directors in identifying and cultivating donors and funding partners on the behalf of i2E. Code of Ethics and Conflict of Interest: The i2E Code of Ethics and Conflict of Interest Policy outlines principles and standards of honesty and ethical accountability by which all board members and employees agree to adhere to with respect to the company and its associates.

Board Evaluation: The Board completes a board evaluation survey biannually. The results of the evaluation are compiled and presented to the full Board for review and biannual discussion. i2E, Inc. is a 501(c)(3) private not-for-profit corporation focused on growing innovative small businesses in Oklahoma and making a positive impact on the state’s economy. i2E receives state appropriations from the Oklahoma Center for the Advancement of Science and Technology and is an integral part of Oklahoma’s Innovation Model.

840 Research Parkway, Suite 250 Oklahoma City, OK 73104 618 E. Third, Suite 1 Tulsa, OK 74120 www.i2E.org facebook.com/i2E facebook.com/OKLOVESCUP twitter.com/i2E_Inc