FY 2012 Annual Report

I N N O VAT I O N 2 0 1 2

i2E ANNUAL REPORT

Our Mission:

2012 HIGHLIGHTS

Provided advisory services to 105 Oklahoma high-growth start-up companies Assisted 28 companies in raising $24.5M in private capital Established Ardmore SeedStep Angels chapter Reached a milestone by providing $1 million in scholarships, fellowships and cash awards to college students

To Nurture Entrepreneurs and Build High-Growth Companies in Oklahoma. We work directly with entrepreneurs, researchers and companies to help them develop their technolo-

gies, launch and grow new businesses and access needed capital. We do that through our team of venture advisors who bring a depth of knowledge and experience to clients that provide them with the tools

to successfully launch a company and navigate the treacherous early stages of the business life cycle. We provide access to capital through nearly $40 million of investment capital under our management. And

we actively engage in entrepreneurial development through initiatives such as our Entrepreneur-inResidence workshops and Donald W. Reynolds Governor’s Cup Business Plan competition.

Busy entrepreneurs tell us that our model works for them because we not only provide high quality

Featured in the federal Economic Development Administration annual report

venture advice, capital and entrepreneurial development, we act as a portal to other private and public

resources – making it easier to access the right information, expertise and investment at the right time.

Selected to manage $13.1M in funding from the U.S. Treasury through the State Small Business Credit Initiative

i2E’s commitment to transparency in our operations, along with demonstrated evidence of strong corporate governance and management were recognized in October 2010 when we received the Certificate of Excellence by the national Standards for Excellence Institute.

The certification reflects fundamental values of honesty, integrity, fairness, respect, trust, responsibility

and accountability that we show in our everyday operations. i2E’s programs and services, management, fundraising and financial practices were examined in-depth before the certification was awarded. i2E was one of the first organizations to be certified under the national Standards accreditation program that began in 2006 and only the second non-profit in Oklahoma to achieve the certification.

We’re proud of the recognition that our efforts have received, as well of the results that are demonstrated on these pages in new jobs, investments dollars and increased wealth for all of Oklahoma.

1

Our Mission:

2012 HIGHLIGHTS

Provided advisory services to 105 Oklahoma high-growth start-up companies Assisted 28 companies in raising $24.5M in private capital Established Ardmore SeedStep Angels chapter Reached a milestone by providing $1 million in scholarships, fellowships and cash awards to college students

To Nurture Entrepreneurs and Build High-Growth Companies in Oklahoma. We work directly with entrepreneurs, researchers and companies to help them develop their technolo-

gies, launch and grow new businesses and access needed capital. We do that through our team of venture advisors who bring a depth of knowledge and experience to clients that provide them with the tools

to successfully launch a company and navigate the treacherous early stages of the business life cycle. We provide access to capital through nearly $40 million of investment capital under our management. And

we actively engage in entrepreneurial development through initiatives such as our Entrepreneur-inResidence workshops and Donald W. Reynolds Governor’s Cup Business Plan competition.

Busy entrepreneurs tell us that our model works for them because we not only provide high quality

Featured in the federal Economic Development Administration annual report

venture advice, capital and entrepreneurial development, we act as a portal to other private and public

resources – making it easier to access the right information, expertise and investment at the right time.

Selected to manage $13.1M in funding from the U.S. Treasury through the State Small Business Credit Initiative

i2E’s commitment to transparency in our operations, along with demonstrated evidence of strong corporate governance and management were recognized in October 2010 when we received the Certificate of Excellence by the national Standards for Excellence Institute.

The certification reflects fundamental values of honesty, integrity, fairness, respect, trust, responsibility

and accountability that we show in our everyday operations. i2E’s programs and services, management, fundraising and financial practices were examined in-depth before the certification was awarded. i2E was one of the first organizations to be certified under the national Standards accreditation program that began in 2006 and only the second non-profit in Oklahoma to achieve the certification.

We’re proud of the recognition that our efforts have received, as well of the results that are demonstrated on these pages in new jobs, investments dollars and increased wealth for all of Oklahoma.

1

W O R D I N D U S T R I E S FA B R I C AT I O N , L L C

Tulsa’s Word Industries Fabrication, LLC

produces fabricated pipe, metering and other products for the nation’s energy industry. Founded in 2011 by long-time manufacturing veteran Tom Word, the company’s products help producers bring oil and gas out of the ground and keep it flowing to U.S. consumers. For the company’s 65 employees, there is a sense of urgency and mission to meet high demand for oil field equipment that translates into more U.S. energy production and less dependence on foreign sources. “Our employees have a certain pride and swagger that they are helping America declare its energy independence,” Word said. “You might not think that welders and pipefitters would see their role in global energy markets, but they do.” Its production techniques and on-time delivery of critical oilfield equipment differentiates Word from other manufacturers that can’t meet industry demands of time and quality. “Until the infrastructure catches up, many wells will remain capped,” Word said. “(Producers) only wish we could deliver more and have greater capacity.” Among various products the company makes at its 40,000 square foot manufacturing location in north Tulsa is a patent-pending pipe flange called the Talon Flange that reduces vibration in oilfield equipment and results in less downtime for maintenance. It also owns patents for a safety skid and a pipe gripper that add efficiency to its operations. Tom Word turned to i2E to position the company for funding that will allow expansion of its production capacity.

“i2E has been tremendous, they have asked tough questions that make me stop and say, ‘how do they know that when they’ve never fabricated a pipe in their life?’ We are fortunate enough to have such highly experienced and educated resources to seek direction from.”

EVERY DAY IS INDEPENDENCE DAY

Out on the manufacturing floor, the company’s skilled workers have seized the mission and adopted a slogan that declares “we’re proud of our opportunity to rid the USA of the dependence on foreign oil.” 2

3

W O R D I N D U S T R I E S FA B R I C AT I O N , L L C

Tulsa’s Word Industries Fabrication, LLC

produces fabricated pipe, metering and other products for the nation’s energy industry. Founded in 2011 by long-time manufacturing veteran Tom Word, the company’s products help producers bring oil and gas out of the ground and keep it flowing to U.S. consumers. For the company’s 65 employees, there is a sense of urgency and mission to meet high demand for oil field equipment that translates into more U.S. energy production and less dependence on foreign sources. “Our employees have a certain pride and swagger that they are helping America declare its energy independence,” Word said. “You might not think that welders and pipefitters would see their role in global energy markets, but they do.” Its production techniques and on-time delivery of critical oilfield equipment differentiates Word from other manufacturers that can’t meet industry demands of time and quality. “Until the infrastructure catches up, many wells will remain capped,” Word said. “(Producers) only wish we could deliver more and have greater capacity.” Among various products the company makes at its 40,000 square foot manufacturing location in north Tulsa is a patent-pending pipe flange called the Talon Flange that reduces vibration in oilfield equipment and results in less downtime for maintenance. It also owns patents for a safety skid and a pipe gripper that add efficiency to its operations. Tom Word turned to i2E to position the company for funding that will allow expansion of its production capacity.

“i2E has been tremendous, they have asked tough questions that make me stop and say, ‘how do they know that when they’ve never fabricated a pipe in their life?’ We are fortunate enough to have such highly experienced and educated resources to seek direction from.”

EVERY DAY IS INDEPENDENCE DAY

Out on the manufacturing floor, the company’s skilled workers have seized the mission and adopted a slogan that declares “we’re proud of our opportunity to rid the USA of the dependence on foreign oil.” 2

3

E M P OWR N E T

Look into the future, say, 40 years from now

and what do you see? Go ahead, squint if you have to. If you see yourself as an older Oklahoman still living independently in your own home, you are no different from your peers. An overwhelming 9 out of 10 individuals over the age of 50 say they want to “age in place,” which means they don’t see themselves in an assisted living center or nursing home.

A PLAN IN PLACE

The challenge, of course, will be to continue living independently when status or situations change and long term care services are needed. That’s where a new Tulsa-based company founded by a veteran of the long term care industry steps in. EmpowrNet is a web-based concierge-like business that connects aging people and their families, long term care insurance carriers and service providers, ensuring their dayto-day needs are met while still living at home. How will it work? EmpowrNet founder Deborah Karns describes a scenario where a husband dies, leaving his elderly wife as a widow. With the EmpowrNet application, the widow or her family could notify the insurance provider through a web portal that her husband has died. This would immediately trigger an assessment of her situation and calls to necessary inhome service providers. Without home maintenance, health care or even housekeeping services brought to her by EmpowrNet, the new widow might otherwise be forced to move into a nursing facility right away. “If the insurer can service the widow at home even for three months, that’s a savings to them,” Karns said. Karns said with even a 5-10 percent reduction in use of nursing home care, cost savings to the long term care industry would be $750-$1.5 billion annually. A serial entrepreneur who had a successful career within the long term care industry, Karns sought assistance from i2E with building EmpowrNet because of past experience she had with i2E.

“I needed a lot of coaching, a lot of information and a lot of advice. That’s what I’ve been getting here.” Bottom line for aging consumers is that EmpowrNet will reduce costs, improve long term care and allow more people to continue living independently longer throughout their lives.

4

5

E M P OWR N E T

Look into the future, say, 40 years from now

and what do you see? Go ahead, squint if you have to. If you see yourself as an older Oklahoman still living independently in your own home, you are no different from your peers. An overwhelming 9 out of 10 individuals over the age of 50 say they want to “age in place,” which means they don’t see themselves in an assisted living center or nursing home.

A PLAN IN PLACE

The challenge, of course, will be to continue living independently when status or situations change and long term care services are needed. That’s where a new Tulsa-based company founded by a veteran of the long term care industry steps in. EmpowrNet is a web-based concierge-like business that connects aging people and their families, long term care insurance carriers and service providers, ensuring their dayto-day needs are met while still living at home. How will it work? EmpowrNet founder Deborah Karns describes a scenario where a husband dies, leaving his elderly wife as a widow. With the EmpowrNet application, the widow or her family could notify the insurance provider through a web portal that her husband has died. This would immediately trigger an assessment of her situation and calls to necessary inhome service providers. Without home maintenance, health care or even housekeeping services brought to her by EmpowrNet, the new widow might otherwise be forced to move into a nursing facility right away. “If the insurer can service the widow at home even for three months, that’s a savings to them,” Karns said. Karns said with even a 5-10 percent reduction in use of nursing home care, cost savings to the long term care industry would be $750-$1.5 billion annually. A serial entrepreneur who had a successful career within the long term care industry, Karns sought assistance from i2E with building EmpowrNet because of past experience she had with i2E.

“I needed a lot of coaching, a lot of information and a lot of advice. That’s what I’ve been getting here.” Bottom line for aging consumers is that EmpowrNet will reduce costs, improve long term care and allow more people to continue living independently longer throughout their lives.

4

5

IDEFI MUSIC

HI-DEFIANCE idefi music flourished in 2012. Dozens of musicians and bands began to upload and sell music off of their unique music website. They were named Innovator of the Year winner by the Journal Record. Brady Deaton took his story to the SXSW music, film and interactive software conference in Texas. And it was named one of the participants in the inaugural Venture Spur program.

an online platform where musicians could upload and sell their music. idefi music has no upfront investment in the bands and begins providing more traditional record label services as sales grow. The innovative approach to the music business benefits musicians by allowing them to control the music sold directly to fans.

Deaton dreams big. A decade before founding idefi music, he built a recording studio in his Tulsa home. That dream became more of a nightmare when the first band he signed and invested thousands of dollars in suddenly disbanded. A decade later, the dream still burned in Deaton, so he created idefi music as

“The music industry is changing, but one thing remains constant,” Deaton says. “Millions of artists worldwide dream of the day they get one shot, that one chance to show the world. They hope for a day they can defy what others thought they could do and defy the norm.”

“When I first showed up at i2E, all I had was an idea and a dream, i2E helped me develop my dream into a viable business. It has not always been easy, but they ask the hard questions while giving guidance and support.”

idefimusic.com defies the traditional music model. It’s risk free to both bands and idefi music. And it connects musicians and fans anywhere the world. Brady Deaton’s dream is alive in idefi music.

7

IDEFI MUSIC

HI-DEFIANCE idefi music flourished in 2012. Dozens of musicians and bands began to upload and sell music off of their unique music website. They were named Innovator of the Year winner by the Journal Record. Brady Deaton took his story to the SXSW music, film and interactive software conference in Texas. And it was named one of the participants in the inaugural Venture Spur program.

an online platform where musicians could upload and sell their music. idefi music has no upfront investment in the bands and begins providing more traditional record label services as sales grow. The innovative approach to the music business benefits musicians by allowing them to control the music sold directly to fans.

Deaton dreams big. A decade before founding idefi music, he built a recording studio in his Tulsa home. That dream became more of a nightmare when the first band he signed and invested thousands of dollars in suddenly disbanded. A decade later, the dream still burned in Deaton, so he created idefi music as

“The music industry is changing, but one thing remains constant,” Deaton says. “Millions of artists worldwide dream of the day they get one shot, that one chance to show the world. They hope for a day they can defy what others thought they could do and defy the norm.”

“When I first showed up at i2E, all I had was an idea and a dream, i2E helped me develop my dream into a viable business. It has not always been easy, but they ask the hard questions while giving guidance and support.”

idefimusic.com defies the traditional music model. It’s risk free to both bands and idefi music. And it connects musicians and fans anywhere the world. Brady Deaton’s dream is alive in idefi music.

7

COLLEGE INFLUENCE

Millions of high school students graduate each year

with a dream of higher education, but they are unsure of how to make it a reality. The college application process is daunting. They don’t know how they will pay or what financial aid is available. Tulsa entrepreneur William Tisdale watched the scenario play out in his own home. His two oldest children graduated from a public high school with good grades but with little knowledge of the college application process. Tisdale was inspired to create a Tulsa-based company called College Influence, which better prepares high school students and parents for the college application process. College Influence has devised an innovative Web-based interactive tool that assists high school students in the college selection and application process. The College Influence proprietary technology collects important data that indicates a student’s ability, aptitude, readiness and likelihood of attending college or other post secondary school. The tool also is valuable for school counselors in that it provides data that will allow them to quickly identify and act up on opportunities, and help students reach their desired destination. With a friendly, social media-like online environment, College Influence helps students gain a better understanding of their academic strengths and weaknesses, heightened awareness of financial aid and scholarship opportunities, and improve their communication with targeted colleges. Counselors and parents can also easily track the status of their students, be proactive and avoid missing important application deadlines. Likewise, Colleges win as they can more easily target prospective students who fit their profile. Tisdale turned to i2E early on to help him develop his business plan and with strategic planning.

“The relationship with i2E has been invaluable. Their expertise definitely steered us away from many common mistakes new businesses often make. They have also provided many networking opportunities where we have made connections with development resources.”

TRACKING OUR FUTURE 8

With a website already established, College Influence is reaching out to its target market of 17 million U.S. high school students and their parents, high schools, school districts and college campuses across the nation. College Influence will ensure that prospective college students have the tools available to complete the application process and turn their college dreams into reality.

9

COLLEGE INFLUENCE

Millions of high school students graduate each year

with a dream of higher education, but they are unsure of how to make it a reality. The college application process is daunting. They don’t know how they will pay or what financial aid is available. Tulsa entrepreneur William Tisdale watched the scenario play out in his own home. His two oldest children graduated from a public high school with good grades but with little knowledge of the college application process. Tisdale was inspired to create a Tulsa-based company called College Influence, which better prepares high school students and parents for the college application process. College Influence has devised an innovative Web-based interactive tool that assists high school students in the college selection and application process. The College Influence proprietary technology collects important data that indicates a student’s ability, aptitude, readiness and likelihood of attending college or other post secondary school. The tool also is valuable for school counselors in that it provides data that will allow them to quickly identify and act up on opportunities, and help students reach their desired destination. With a friendly, social media-like online environment, College Influence helps students gain a better understanding of their academic strengths and weaknesses, heightened awareness of financial aid and scholarship opportunities, and improve their communication with targeted colleges. Counselors and parents can also easily track the status of their students, be proactive and avoid missing important application deadlines. Likewise, Colleges win as they can more easily target prospective students who fit their profile. Tisdale turned to i2E early on to help him develop his business plan and with strategic planning.

“The relationship with i2E has been invaluable. Their expertise definitely steered us away from many common mistakes new businesses often make. They have also provided many networking opportunities where we have made connections with development resources.”

TRACKING OUR FUTURE 8

With a website already established, College Influence is reaching out to its target market of 17 million U.S. high school students and their parents, high schools, school districts and college campuses across the nation. College Influence will ensure that prospective college students have the tools available to complete the application process and turn their college dreams into reality.

9

ADROIT SURGICAL

It happens on the battlefield. Or in the streets

CLEARING THE WAY

of a neighborhood. Someone is wounded by gunfire or injured in an auto accident, and medics or emergency medical personnel need to quickly clear their airway so they can breathe. These are often life-and-death situations that require medical professionals to place a tube down the throat of the injured person in a process called intubation. Intubation allows air to reach the lungs, but it requires passing a tube between the vocal cords without causing more harm to the patient. In an emergency situation, this can be hard to do. Doctors in a hospital setting have the advantage of using a device called an indirect laryngoscope that provides access to the throat with views through a video screen. It is expensive and not readily portable. Outside of the hospital, medical personnel rely on standard intubating laryngoscopes that often require numerous intubation attempts because of poor lighting or fluids that block a clear view of throat. Sometimes it is unsuccessful. Oklahoma City physician Nilesh R. Vasan, M.D., has created a self-contained, disposable, light weight, self-powered laryngoscope that replicates the set-up of an operating room but portable so emergency personnel can take it anywhere. “The key to this product is how simple and intuitive it is to use,” Dr. Vasan said. “Patent pending modifications have been introduced to improve the illumination of the device so even personnel outside the hospital such as on a battlefield, for example, will have the best chance of securing the airway quickly.” Adroit Surgical was founded as a medical device company to develop the airway technology. Dr. Vasan turned to i2E for assistance in developing his business and very quickly prototypes have been developed.

“i2E has been instrumental in taking my idea and patent application to the next level in a very short time.” Dr. Vasan envisions the portable laryngoscope eventually being routinely used by health care providers both in hospital settings and in the field after it obtains Food and Drug Administration approval. “Ultimately, the health care provider may have only seconds to save someone or avoid further complications, and this device satisfies those goals,” Dr. Vasan said.

10

Whether on the battlefield or in the streets of a city, the Adroit Surgical device will help medical personnel save lives when seconds count.

11

ADROIT SURGICAL

It happens on the battlefield. Or in the streets

CLEARING THE WAY

of a neighborhood. Someone is wounded by gunfire or injured in an auto accident, and medics or emergency medical personnel need to quickly clear their airway so they can breathe. These are often life-and-death situations that require medical professionals to place a tube down the throat of the injured person in a process called intubation. Intubation allows air to reach the lungs, but it requires passing a tube between the vocal cords without causing more harm to the patient. In an emergency situation, this can be hard to do. Doctors in a hospital setting have the advantage of using a device called an indirect laryngoscope that provides access to the throat with views through a video screen. It is expensive and not readily portable. Outside of the hospital, medical personnel rely on standard intubating laryngoscopes that often require numerous intubation attempts because of poor lighting or fluids that block a clear view of throat. Sometimes it is unsuccessful. Oklahoma City physician Nilesh R. Vasan, M.D., has created a self-contained, disposable, light weight, self-powered laryngoscope that replicates the set-up of an operating room but portable so emergency personnel can take it anywhere. “The key to this product is how simple and intuitive it is to use,” Dr. Vasan said. “Patent pending modifications have been introduced to improve the illumination of the device so even personnel outside the hospital such as on a battlefield, for example, will have the best chance of securing the airway quickly.” Adroit Surgical was founded as a medical device company to develop the airway technology. Dr. Vasan turned to i2E for assistance in developing his business and very quickly prototypes have been developed.

“i2E has been instrumental in taking my idea and patent application to the next level in a very short time.” Dr. Vasan envisions the portable laryngoscope eventually being routinely used by health care providers both in hospital settings and in the field after it obtains Food and Drug Administration approval. “Ultimately, the health care provider may have only seconds to save someone or avoid further complications, and this device satisfies those goals,” Dr. Vasan said.

10

Whether on the battlefield or in the streets of a city, the Adroit Surgical device will help medical personnel save lives when seconds count.

11

The menu of i2E Venture Advisory services that Oklahoma entrepreneurs access to grow their businesses continued to expand in fiscal 2012 when OSCR and our new Chief Financial Officer-in-Residence came on board. OSCR is an acronym for the Oklahoma SBIR Collaborative Resource, which is an innovative new program designed to assist entrepreneurs in making successful applications for federal funding through the Small Business Innovation Research and Small Business Technology Transfer programs. i2E’s Rick Rainey is co-director of the OSCR program, along with Steven Martinez from the Oklahoma Center for the Advancement of Science and Technology. OSCR’s goal is to increase both the number of SBIR applicants from Oklahoma and the number of applicants that successfully compete for Phase 1 and Phase 2 SBIR awards. i2E clients gain valuable perspective on the financial future of their company from Sonja Wilson, our new CFO-in-Residence. Sonja assists Oklahoma entrepreneurs with financial modeling and creating a proper financial structure within their new businesses. She provided unique financial modeling services to 12 client companies in fiscal 2012, helping them create realistic future revenue projections and develop the financial structure to support operations. i2E’s Sales Executive-in-Residence also provided critical market development and sales services to 10 startup businesses throughout the year. Our Entrepreneur-in-Residence program continued to provide assistance and education to Oklahoma entrepreneurs in group settings through popular EinR workshops throughout the year as well as one-on-one mentoring sessions. Workshops were devoted to such topics as Valuing Emerging High Growth Companies and Due Diligence. The Executives-in-Residence and Entrepreneur-in-Residence programs, as well as an expanded i2E Fellows program, all were developed as part of the OKC Technology Business Launch Initiative, which is a three-year pilot business development program to offer enhanced business growth services to technology-based start-up companies and entrepreneurs with high-growth potential. The bottom line is that i2E has now provided business advisory services to more than 500 high-growth ventures since 1998.

portfolio companies by geography

259= 259 OKC MSA 169+= 169 Tulsa MSA 108= 108 Balance of State

Oklahoma’s emerging high growth companies no

portfolio companies by industry

24% Life Sciences

from the concept to growth stages, as well as an Angel investment group composed of successful

19% Other

11% Energy & Environmental

26

In FY2012, we helped position 26 entrepreneur-

and

ial companies for funding across all five stages of development; 28 of our client firms obtained $24.5

entrepreneurial

companies for funding

Oklahomans who are co-investors on many deals.

28

obtained

million in private equity.

41% IT/Software

of our clients

$24.5m

in private equity.

In fiscal 2012, i2E provided its unique menu of targeted venture

FY2012 portfolio companies’ job growth

advisory services to 105 STARTUP COMPANIES, providing entrepreneurs with the tools they need to grow their companies

JOB GROWTH

2008

2009

2010

2011

2012

i2E Portfolio

26%

36%

20%

22%

39%

State Average

1.4%

-1.9%

-0.1%

1.2%

1.3%

to create new jobs, revenue and wealth for Oklahoma. FY2012 reported economic impact

$92M in annualized revenues 80% of revenues obtained outside the state $48M in annualized payroll 987 current full time equivalent employees 53 patents filed and 17 issued

FY2012 portfolio companies average annual wage comparison

643=+ $70,643 i2E Portfolio 246= $37,246 Oklahoma Average Our clients are true small businesses, with 78% employing 10 people or less, paying 90% higher than the state average.

12

erally appropriated funds that invest in companies

fy2012 we

helped position

matter where they are along the business life cycle. Our investment team manages five state and fed-

5% Advanced Materials

In

i2E offers a continuum of investment capital for

11 41 19 5 24 +

V E N T U R E A DV I S O RY S E RV I C E S

FY2012 reported sales distribution i2E’s portfolio of high-growth companies is producing technologyrelated products or services targeted at large domestic and international

20%

69%

Oklahoma

markets. Our client companies continue to report that 80% of their revenue is generated from sales outside Oklahoma. That brings revenue into the state and creates jobs and wealth for Oklahomans.

11% International

13

The menu of i2E Venture Advisory services that Oklahoma entrepreneurs access to grow their businesses continued to expand in fiscal 2012 when OSCR and our new Chief Financial Officer-in-Residence came on board. OSCR is an acronym for the Oklahoma SBIR Collaborative Resource, which is an innovative new program designed to assist entrepreneurs in making successful applications for federal funding through the Small Business Innovation Research and Small Business Technology Transfer programs. i2E’s Rick Rainey is co-director of the OSCR program, along with Steven Martinez from the Oklahoma Center for the Advancement of Science and Technology. OSCR’s goal is to increase both the number of SBIR applicants from Oklahoma and the number of applicants that successfully compete for Phase 1 and Phase 2 SBIR awards. i2E clients gain valuable perspective on the financial future of their company from Sonja Wilson, our new CFO-in-Residence. Sonja assists Oklahoma entrepreneurs with financial modeling and creating a proper financial structure within their new businesses. She provided unique financial modeling services to 12 client companies in fiscal 2012, helping them create realistic future revenue projections and develop the financial structure to support operations. i2E’s Sales Executive-in-Residence also provided critical market development and sales services to 10 startup businesses throughout the year. Our Entrepreneur-in-Residence program continued to provide assistance and education to Oklahoma entrepreneurs in group settings through popular EinR workshops throughout the year as well as one-on-one mentoring sessions. Workshops were devoted to such topics as Valuing Emerging High Growth Companies and Due Diligence. The Executives-in-Residence and Entrepreneur-in-Residence programs, as well as an expanded i2E Fellows program, all were developed as part of the OKC Technology Business Launch Initiative, which is a three-year pilot business development program to offer enhanced business growth services to technology-based start-up companies and entrepreneurs with high-growth potential. The bottom line is that i2E has now provided business advisory services to more than 500 high-growth ventures since 1998.

portfolio companies by geography

259= 259 OKC MSA 169+= 169 Tulsa MSA 108= 108 Balance of State

Oklahoma’s emerging high growth companies no

portfolio companies by industry

24% Life Sciences

from the concept to growth stages, as well as an Angel investment group composed of successful

19% Other

11% Energy & Environmental

26

In FY2012, we helped position 26 entrepreneur-

and

ial companies for funding across all five stages of development; 28 of our client firms obtained $24.5

entrepreneurial

companies for funding

Oklahomans who are co-investors on many deals.

28

obtained

million in private equity.

41% IT/Software

of our clients

$24.5m

in private equity.

In fiscal 2012, i2E provided its unique menu of targeted venture

FY2012 portfolio companies’ job growth

advisory services to 105 STARTUP COMPANIES, providing entrepreneurs with the tools they need to grow their companies

JOB GROWTH

2008

2009

2010

2011

2012

i2E Portfolio

26%

36%

20%

22%

39%

State Average

1.4%

-1.9%

-0.1%

1.2%

1.3%

to create new jobs, revenue and wealth for Oklahoma. FY2012 reported economic impact

$92M in annualized revenues 80% of revenues obtained outside the state $48M in annualized payroll 987 current full time equivalent employees 53 patents filed and 17 issued

FY2012 portfolio companies average annual wage comparison

643=+ $70,643 i2E Portfolio 246= $37,246 Oklahoma Average Our clients are true small businesses, with 78% employing 10 people or less, paying 90% higher than the state average.

12

erally appropriated funds that invest in companies

fy2012 we

helped position

matter where they are along the business life cycle. Our investment team manages five state and fed-

5% Advanced Materials

In

i2E offers a continuum of investment capital for

11 41 19 5 24 +

V E N T U R E A DV I S O RY S E RV I C E S

FY2012 reported sales distribution i2E’s portfolio of high-growth companies is producing technologyrelated products or services targeted at large domestic and international

20%

69%

Oklahoma

markets. Our client companies continue to report that 80% of their revenue is generated from sales outside Oklahoma. That brings revenue into the state and creates jobs and wealth for Oklahomans.

11% International

13

ENTREPRENEURIAL D E V E LO P M E N T

2012 GOVERNOR’S CUP

THE INTERVIEW

In the real world, ideas don’t make it far without input from industry experts. Each team sat down with industry experts. There were no presentations, no handouts, no guests, just the students and the experts. The winning category teams were chosen based on the knowledge of their business and competitive advantages, how well they articulated the business model and how the business makes money and the competency across the team.

As a learning experience for Oklahoma college students, the reach of the Donald W. Reynolds Governor’s Cup extends far beyond the classroom. Students are introduced to the real world opportunities and challenges faced by entrepreneurs as they conduct market research, formulate financial projections and write business plans. Then they pitch them to a panel of potential investors. Students brought expertise from academic areas such as finance, engineering, marketing and accounting as they turned innovative ideas into legitimate concepts. New and exciting business opportunities emerged this year, including a patented way to enhance the productions of methane to produce a clean source of natural gas, a unique fire-suppression technology, calcium supplements totally free of heavy metals and a device that allows speakers to roam a classroom or auditorium while wirelessly interacting with the audience.

THE EXPERTS

Alba Weaver is the economic development project manager for OGE Energy corp. She has experience in brand development, advising new businesses on formation of corporations and business structures, and strategic consulting, including business plan and sales strategy development. Bill Botts has over 48 years of management experience having been president, CEO or chairman of the board of more than 15 public and private companies. His major focus has been in the high tech arena including software, computer systems, semiconductors and services. He has served in director roles for public and private corporations as well as on charitable and non-profit boards.

Along the way to the oral presentation semifinals and finals rounds, the Governor’s Cup offered opportunities for students to interview for paid i2E Fellowships and Oklahoma Business Roundtable scholarships, as well as meet some of the state’s top business and community leaders through networking events. The teams that reached the podium gained a new perspective on entrepreneurship that will carry over into their classroom and careers long after the celebrations have ended.

Bill Payne is an active angel investor, board member, and advisor to entrepreneurs. He assisted in founding four angel groups: the Frontier Angel Fund, Tech Coast Angels, Vegas Valley Angels and Aztec Venture Network.

Seven-Year Impact

26

campuses from across the state

950

college students

290

innovative ideas

$1,000,000+ in cash awarded

$40,000

First place teams in both the Graduate and Undergraduate divisions

$20,000 each, while second place earned $10,000 each and third place $5,000 each. The top two teams in each division won

competed against teams from Arkansas and Nevada in the Tri-

State Competition in Las Vegas, Nev. Total awards for this year’s

Jack Anthony has over 35 years of medical device and biotechnology leadership experience including: Baxter Healthcare, Applied Immune Sciences, Inhale Therapeutics, Fibrogen, Tularik, Saegis Pharmaceuticals, and Pharmix Corporation. Joel Wiggins is the president and CEO of the Enterprise Center of Johnson County. He is an international business plan coach, entrepreneurial educator, and consultant specializing in incubation and technology commercialization.

Oklahoma competition exceeded $200,000, while the Las Vegas event offered another $118,000.

in scholarships

$85,240

14

in fellowships

15

ENTREPRENEURIAL D E V E LO P M E N T

2012 GOVERNOR’S CUP

THE INTERVIEW

In the real world, ideas don’t make it far without input from industry experts. Each team sat down with industry experts. There were no presentations, no handouts, no guests, just the students and the experts. The winning category teams were chosen based on the knowledge of their business and competitive advantages, how well they articulated the business model and how the business makes money and the competency across the team.

As a learning experience for Oklahoma college students, the reach of the Donald W. Reynolds Governor’s Cup extends far beyond the classroom. Students are introduced to the real world opportunities and challenges faced by entrepreneurs as they conduct market research, formulate financial projections and write business plans. Then they pitch them to a panel of potential investors. Students brought expertise from academic areas such as finance, engineering, marketing and accounting as they turned innovative ideas into legitimate concepts. New and exciting business opportunities emerged this year, including a patented way to enhance the productions of methane to produce a clean source of natural gas, a unique fire-suppression technology, calcium supplements totally free of heavy metals and a device that allows speakers to roam a classroom or auditorium while wirelessly interacting with the audience.

THE EXPERTS

Alba Weaver is the economic development project manager for OGE Energy corp. She has experience in brand development, advising new businesses on formation of corporations and business structures, and strategic consulting, including business plan and sales strategy development. Bill Botts has over 48 years of management experience having been president, CEO or chairman of the board of more than 15 public and private companies. His major focus has been in the high tech arena including software, computer systems, semiconductors and services. He has served in director roles for public and private corporations as well as on charitable and non-profit boards.

Along the way to the oral presentation semifinals and finals rounds, the Governor’s Cup offered opportunities for students to interview for paid i2E Fellowships and Oklahoma Business Roundtable scholarships, as well as meet some of the state’s top business and community leaders through networking events. The teams that reached the podium gained a new perspective on entrepreneurship that will carry over into their classroom and careers long after the celebrations have ended.

Bill Payne is an active angel investor, board member, and advisor to entrepreneurs. He assisted in founding four angel groups: the Frontier Angel Fund, Tech Coast Angels, Vegas Valley Angels and Aztec Venture Network.

Seven-Year Impact

26

campuses from across the state

950

college students

290

innovative ideas

$1,000,000+ in cash awarded

$40,000

First place teams in both the Graduate and Undergraduate divisions

$20,000 each, while second place earned $10,000 each and third place $5,000 each. The top two teams in each division won

competed against teams from Arkansas and Nevada in the Tri-

State Competition in Las Vegas, Nev. Total awards for this year’s

Jack Anthony has over 35 years of medical device and biotechnology leadership experience including: Baxter Healthcare, Applied Immune Sciences, Inhale Therapeutics, Fibrogen, Tularik, Saegis Pharmaceuticals, and Pharmix Corporation. Joel Wiggins is the president and CEO of the Enterprise Center of Johnson County. He is an international business plan coach, entrepreneurial educator, and consultant specializing in incubation and technology commercialization.

Oklahoma competition exceeded $200,000, while the Las Vegas event offered another $118,000.

in scholarships

$85,240

14

in fellowships

15

Entrepreneurial Development

Entrepreneurial Development

2012 INTERVIEW WINNERS

AT&T IT Communications Category Perk Rogers State University Team members: Michael Orr, Katrina Loy, Lori Keough, Linsey Curtis and Patrick Johnston Greater Oklahoma City Chamber Healthcare Category PristineCal Oklahoma State University Team members: Stacey Brandhorst, Cory Perkins, Jay Omanson and Rachel Mui

i2E Student Generated Category MaxQ Oklahoma State University Team members: Saravan Kumar, Shanmugavelayudam, Balaji Jayakumar, Venkat Gidda and Jessica Shelton

Oklahoma Business Roundtable Manufacturing Material Sciences and Transportation Category Spectrum FX University of Tulsa Team members: Amethyst Cavallaro, Kathryn Junk, John Galbraith, and Jessica Casper

OG&E Positive Energy and Environmental Category Organic Energy University of Oklahoma Team members: Christina Hopson, Bryan Duncan, Roger Satur, and Rocky Chavez

O K L A H O M A B U S I N E S S R O U N D TA B LE The Oklahoma Business Roundtable was formed in 1991 as a non-profit public/private partnership and is composed of more than 170 top Oklahoma corporations and business organizations. The Roundtable is Oklahoma’s top economic development support organization with emphasis on entrepreneurship, business expansion, and new business location. Now in its fifth year, the Oklahoma Business Roundtable has awarded $5,000 Paulsen Award scholarships to two of this year’s Governor’s Cup participants. These scholarships, named in honor of longtime OBR President Don Paulsen, are designed to encourage Oklahoma’s future leaders to continue their education while at the same time contributing their viewpoints to the ongoing dialogue on key economic issues.

G R A D UAT E W I N N E R S

All students competing in the Governor’s Cup are eligible to apply, and finalists participate in an interview process before a panel of Business Roundtable members. Candidates answer questions relating to their views on shaping Oklahoma economic policy and are asked to share their future plans for education and career. The scholarships can be used next fall to pay for tuition at any Oklahoma college or university.

1st Place Spectrum FX The University of Tulsa A fire suppression liquid that extinguishes all spectrums of fires marketed to the aviation industry. Advisor: Claire Cornel Team Leader: Amethyst Cavallaro Team Members: Kathryn Junk, John Galbraith and Jessica Casper

2nd Place PsychSavvy The University of Tulsa A customizable, online mental health resource for mental health professionals, college educators, students and clients.

3rd Place Precision HealthTech Oklahoma City University Medical device start-up company developing an interactive physical therapy workstation that incorporates software to measure patient progress.

Advisor: Claire Cornell Team Leader: Robyn Undieme Team Members: Kathryn Packell, Cary Taylor

Advisor: Craig Shimasaki Team Leader: Brian Mullins Team Members: Christina Truong, Talia Berning and Anthony Moorehead

2nd Place Bright Sanitation University of Oklahoma Low-cost public toilets for dense urban areas lacking proper sewage , disposing of waste through a bio-digester, converting it to compost, biogas and water that can safely be released into lakes and streams.

3rd Place SoLoKnow University of Tulsa Online social communities for universities, providing personalized, real time information on campus, class and club events.

THE JUDGES

Bob Danner Chairman Bio-Cide International, Inc. Tom Friedemann Superintendent/CEO Francis Tuttle Technology Center Larry Parman President and CEO Parman & Easterday Chris Scully President Dell THE WINNERS

Rocky Chavez University of Oklahoma Jay Omanson Oklahoma State University

U N D E R G R A D UAT E W I N N E R S

1st Place Moleculera Labs Oklahoma City University A clinical testing laboratory that performs tests for auto-immune diseases that cause psychiatric disorders Advisor: Craig Shimasaki Team Leader: Jacob Lamb Team Members: Emily Sanders, Bethany Layman and Luke Reese 16

Advisor: Lowell Busenitz Team Leader: Steve Brachtenbach Team Members: Garett Pearce,Tom Spurgat and Megan Walsh

Blake Wade, former President of the Oklahoma Business Roundtable, presents Paulsen Awards to Rocky Chavez, University of Oklahoma, and Jay Omanson, Oklahoma State University.

Advisor: John Hale Team Leader: Ahmed El-Kishky Team Members: Phoebe Hardwicke, Eric Kuxhausen and Jack Lestina 17

Entrepreneurial Development

Entrepreneurial Development

2012 INTERVIEW WINNERS

AT&T IT Communications Category Perk Rogers State University Team members: Michael Orr, Katrina Loy, Lori Keough, Linsey Curtis and Patrick Johnston Greater Oklahoma City Chamber Healthcare Category PristineCal Oklahoma State University Team members: Stacey Brandhorst, Cory Perkins, Jay Omanson and Rachel Mui

i2E Student Generated Category MaxQ Oklahoma State University Team members: Saravan Kumar, Shanmugavelayudam, Balaji Jayakumar, Venkat Gidda and Jessica Shelton

Oklahoma Business Roundtable Manufacturing Material Sciences and Transportation Category Spectrum FX University of Tulsa Team members: Amethyst Cavallaro, Kathryn Junk, John Galbraith, and Jessica Casper

OG&E Positive Energy and Environmental Category Organic Energy University of Oklahoma Team members: Christina Hopson, Bryan Duncan, Roger Satur, and Rocky Chavez

O K L A H O M A B U S I N E S S R O U N D TA B LE The Oklahoma Business Roundtable was formed in 1991 as a non-profit public/private partnership and is composed of more than 170 top Oklahoma corporations and business organizations. The Roundtable is Oklahoma’s top economic development support organization with emphasis on entrepreneurship, business expansion, and new business location. Now in its fifth year, the Oklahoma Business Roundtable has awarded $5,000 Paulsen Award scholarships to two of this year’s Governor’s Cup participants. These scholarships, named in honor of longtime OBR President Don Paulsen, are designed to encourage Oklahoma’s future leaders to continue their education while at the same time contributing their viewpoints to the ongoing dialogue on key economic issues.

G R A D UAT E W I N N E R S

All students competing in the Governor’s Cup are eligible to apply, and finalists participate in an interview process before a panel of Business Roundtable members. Candidates answer questions relating to their views on shaping Oklahoma economic policy and are asked to share their future plans for education and career. The scholarships can be used next fall to pay for tuition at any Oklahoma college or university.

1st Place Spectrum FX The University of Tulsa A fire suppression liquid that extinguishes all spectrums of fires marketed to the aviation industry. Advisor: Claire Cornel Team Leader: Amethyst Cavallaro Team Members: Kathryn Junk, John Galbraith and Jessica Casper

2nd Place PsychSavvy The University of Tulsa A customizable, online mental health resource for mental health professionals, college educators, students and clients.

3rd Place Precision HealthTech Oklahoma City University Medical device start-up company developing an interactive physical therapy workstation that incorporates software to measure patient progress.

Advisor: Claire Cornell Team Leader: Robyn Undieme Team Members: Kathryn Packell, Cary Taylor

Advisor: Craig Shimasaki Team Leader: Brian Mullins Team Members: Christina Truong, Talia Berning and Anthony Moorehead

2nd Place Bright Sanitation University of Oklahoma Low-cost public toilets for dense urban areas lacking proper sewage , disposing of waste through a bio-digester, converting it to compost, biogas and water that can safely be released into lakes and streams.

3rd Place SoLoKnow University of Tulsa Online social communities for universities, providing personalized, real time information on campus, class and club events.

THE JUDGES

Bob Danner Chairman Bio-Cide International, Inc. Tom Friedemann Superintendent/CEO Francis Tuttle Technology Center Larry Parman President and CEO Parman & Easterday Chris Scully President Dell THE WINNERS

Rocky Chavez University of Oklahoma Jay Omanson Oklahoma State University

U N D E R G R A D UAT E W I N N E R S

1st Place Moleculera Labs Oklahoma City University A clinical testing laboratory that performs tests for auto-immune diseases that cause psychiatric disorders Advisor: Craig Shimasaki Team Leader: Jacob Lamb Team Members: Emily Sanders, Bethany Layman and Luke Reese 16

Advisor: Lowell Busenitz Team Leader: Steve Brachtenbach Team Members: Garett Pearce,Tom Spurgat and Megan Walsh

Blake Wade, former President of the Oklahoma Business Roundtable, presents Paulsen Awards to Rocky Chavez, University of Oklahoma, and Jay Omanson, Oklahoma State University.

Advisor: John Hale Team Leader: Ahmed El-Kishky Team Members: Phoebe Hardwicke, Eric Kuxhausen and Jack Lestina 17

Entrepreneurial Development

Entrepreneurial Development

MEDIA & MARKETING

THE FELLOWSHIPS More than 50 Oklahoma college students applied for the

summer 2012 i2E Fellows program, drawn by the promise of a hands-on, real world experience with an Oklahoma entrepreneur. No theory, case studies or hypothetical examples included. Seven were selected for 10-week Fellowships at i2E or Oklahoma City area companies, earning a collective $52,575. In return, i2E and the startup companies gained employees who tackled meaningful assignments that both advanced the companies and provided a taste of the challenges faced by entrepreneurs. Over the 4-year history of the program, 28 students from campuses across Oklahoma have served i2E Fellowships, earning $163,625 along the way. Some have gone on to work full- or part-time for the host companies, while

Rupesh Agrawal MBA student Oklahoma State University Company: Precision Health Technologies Project: Rupesh built a management system that allows Precision Healthcare Group to measure “in real time” financial results against forecasted results and make modifications to financial modeling. Carol Curtis Post-doctorial Fellow Oklahoma Medical Research Foundation (OMRF) Company: i2E and OMRF Project: Carol worked with i2E’s Venture Advisory staff and the OMRF Office of Tech Transfer evaluating new technologies for commercialization. Corey Gingrich MBA student University of Oklahoma Company: Altheus Therapeutics Governor’s Cup Team: Kemmx Corp. Project: Corey supported Altheus Therapeutics in the evaluation of licensing and partnership opportunities within the specialty pharmaceuticals industry.

18

others have taken the experience gained through the Fellowship to employment at other companies or on to graduate programs for advanced degrees. We hope they all eventually pursue entrepreneurship in Oklahoma as a career choice, fulfilling our mission of growing companies and creating wealth for the state by developing the next generation of entrepreneurial talent to lead startup companies to successful futures. The program is sponsored by the Greater Oklahoma Chamber, the city of Oklahoma City, the Oklahoma Medical Research Foundation, the Oklahoma Business Roundtable, the Presbyterian Health Foundation and the federal Economic Development Administration.

Mary Hestilow Senior Economics major University of Oklahoma Company: i2E Project: Mary worked with i2E’s Venture Advisory and Operations staff on competitive market research and benchmarking projects. Alvin Ly Senior Finance major Oklahoma City University Company: i2E Project: Alvin worked with i2E’s Investment and Venture Advisory staff on financial modeling and competitive market research. Marybeth Murphy Senior Entrepreneurship and Venture Management major University of Oklahoma Company: Mintiva Governor’s Cup Team: Nanomed Project: Marybeth assisted Mintiva with operational activities along with new and existing business development initiatives. Edward (Ted) Perry MBA Student Oklahoma State University Company: i2E, Inc. Governor’s Cup Team: Golf Analtix Project: Ted worked with i2E’s Venture Advisory and Operations staff on competitive market research, investor presentations, benchmarking, and reporting projects.

Roger Satur MBA Student University of Oklahoma Company: WeGoLook.com Governor’s Cup Team: Organic Energy Project: Roger assisted WeGoLook with tracking and evaluating multiple new and existing marketing and corporate business development initiatives. Ekaterina Shernstneva MBA student University of Tulsa Company: DermaMedics Project: Ekaterina worked on marketing initiatives for new and existing DermaMedics products. Chuck Shirley MBA and Master of Science Quantitative Financial Economics student Oklahoma State University Company: i2E, Inc. Governor’s Cup Team: Golf Analtix Project: Chuck worked with i2E’s Venture Advisory and Investment staff on competitive market research, business model development, financial modeling, and due diligence projects.

i2E’s ability to connect with Oklahoma entrepreneurs, thought leaders and

people near and far continued to expand in fiscal 2012 with greater use of digital and social media. The number of followers of our Twitter feed almost doubled to 462 by year’s end. And our Governor’s Cup Facebook page grew in a similar manner. We guided our Twitter followers to our website with direct links to the 119 blog posts written by i2E team members during the year, as well as numerous articles published in Oklahoma media about our clients or programs.

10

Electronic Newsletters Published

3

i&E Magazine Publications

25

We used Facebook to promote every step along the way in the Governor’s Cup competition, posting photo albums and even breaking news from the Awards Dinner when the winning teams were announced. By the end of the year 552 Facebook users had “liked” our page. We also promoted our clients with video interviews shot on location that highlighted Oklahoma entrepreneurs and the exciting products they are developing. We shot, edited and posted 42 video interviews during the year.

Networking Events

Our Tech-E-News also was used to connect with our stakeholders, with 10 electronic newsletters published during the year along with 21 “e-blasts” with breaking news that were emailed out.

Video Blogs

We also published three editions of our i&E magazine during fiscal 2012, highlighting up-andcoming client companies, i2E partners and programs, and conducted 25 networking events at which we connected with hundreds of Oklahomans face to face. Of course, we didn’t ignore traditional media venues in 2012. Oklahoma newspapers published 50 articles about i2E clients, and our Innovation & Entrepreneur’s column appeared weekly in The Oklahoman, which is the state’s largest daily newspaper. As the world tunes in more and more to digital media to connect with news sources and each other, i2E will be there to tell the story of Oklahoma entrepreneurs and our innovative programs.

50

Client Articles

42 48

Weekly Columns Published

119

Blog Posts

21

E-Blasts

Office of Entrepreneurial Development Our commitment to entrepreneurial education was enhanced by our Office of Entrepreneurial Development, which is a two-year partnership with the Greater Oklahoma City Chamber. The OED supports i2E initiatives such as the Oklahoma SBIR Collaborative Resources (OSCR) program, the Donald W. Reynolds Governor’s Cup business plan competition and the Who Wants to Be an Entrepreneur? workshop. This program also allows us to work with others in the community who support entrepreneurship in Oklahoma. 19

Entrepreneurial Development

Entrepreneurial Development

MEDIA & MARKETING

THE FELLOWSHIPS More than 50 Oklahoma college students applied for the

summer 2012 i2E Fellows program, drawn by the promise of a hands-on, real world experience with an Oklahoma entrepreneur. No theory, case studies or hypothetical examples included. Seven were selected for 10-week Fellowships at i2E or Oklahoma City area companies, earning a collective $52,575. In return, i2E and the startup companies gained employees who tackled meaningful assignments that both advanced the companies and provided a taste of the challenges faced by entrepreneurs. Over the 4-year history of the program, 28 students from campuses across Oklahoma have served i2E Fellowships, earning $163,625 along the way. Some have gone on to work full- or part-time for the host companies, while

Rupesh Agrawal MBA student Oklahoma State University Company: Precision Health Technologies Project: Rupesh built a management system that allows Precision Healthcare Group to measure “in real time” financial results against forecasted results and make modifications to financial modeling. Carol Curtis Post-doctorial Fellow Oklahoma Medical Research Foundation (OMRF) Company: i2E and OMRF Project: Carol worked with i2E’s Venture Advisory staff and the OMRF Office of Tech Transfer evaluating new technologies for commercialization. Corey Gingrich MBA student University of Oklahoma Company: Altheus Therapeutics Governor’s Cup Team: Kemmx Corp. Project: Corey supported Altheus Therapeutics in the evaluation of licensing and partnership opportunities within the specialty pharmaceuticals industry.

18

others have taken the experience gained through the Fellowship to employment at other companies or on to graduate programs for advanced degrees. We hope they all eventually pursue entrepreneurship in Oklahoma as a career choice, fulfilling our mission of growing companies and creating wealth for the state by developing the next generation of entrepreneurial talent to lead startup companies to successful futures. The program is sponsored by the Greater Oklahoma Chamber, the city of Oklahoma City, the Oklahoma Medical Research Foundation, the Oklahoma Business Roundtable, the Presbyterian Health Foundation and the federal Economic Development Administration.

Mary Hestilow Senior Economics major University of Oklahoma Company: i2E Project: Mary worked with i2E’s Venture Advisory and Operations staff on competitive market research and benchmarking projects. Alvin Ly Senior Finance major Oklahoma City University Company: i2E Project: Alvin worked with i2E’s Investment and Venture Advisory staff on financial modeling and competitive market research. Marybeth Murphy Senior Entrepreneurship and Venture Management major University of Oklahoma Company: Mintiva Governor’s Cup Team: Nanomed Project: Marybeth assisted Mintiva with operational activities along with new and existing business development initiatives. Edward (Ted) Perry MBA Student Oklahoma State University Company: i2E, Inc. Governor’s Cup Team: Golf Analtix Project: Ted worked with i2E’s Venture Advisory and Operations staff on competitive market research, investor presentations, benchmarking, and reporting projects.

Roger Satur MBA Student University of Oklahoma Company: WeGoLook.com Governor’s Cup Team: Organic Energy Project: Roger assisted WeGoLook with tracking and evaluating multiple new and existing marketing and corporate business development initiatives. Ekaterina Shernstneva MBA student University of Tulsa Company: DermaMedics Project: Ekaterina worked on marketing initiatives for new and existing DermaMedics products. Chuck Shirley MBA and Master of Science Quantitative Financial Economics student Oklahoma State University Company: i2E, Inc. Governor’s Cup Team: Golf Analtix Project: Chuck worked with i2E’s Venture Advisory and Investment staff on competitive market research, business model development, financial modeling, and due diligence projects.

i2E’s ability to connect with Oklahoma entrepreneurs, thought leaders and

people near and far continued to expand in fiscal 2012 with greater use of digital and social media. The number of followers of our Twitter feed almost doubled to 462 by year’s end. And our Governor’s Cup Facebook page grew in a similar manner. We guided our Twitter followers to our website with direct links to the 119 blog posts written by i2E team members during the year, as well as numerous articles published in Oklahoma media about our clients or programs.

10

Electronic Newsletters Published

3

i&E Magazine Publications

25

We used Facebook to promote every step along the way in the Governor’s Cup competition, posting photo albums and even breaking news from the Awards Dinner when the winning teams were announced. By the end of the year 552 Facebook users had “liked” our page. We also promoted our clients with video interviews shot on location that highlighted Oklahoma entrepreneurs and the exciting products they are developing. We shot, edited and posted 42 video interviews during the year.

Networking Events

Our Tech-E-News also was used to connect with our stakeholders, with 10 electronic newsletters published during the year along with 21 “e-blasts” with breaking news that were emailed out.

Video Blogs

We also published three editions of our i&E magazine during fiscal 2012, highlighting up-andcoming client companies, i2E partners and programs, and conducted 25 networking events at which we connected with hundreds of Oklahomans face to face. Of course, we didn’t ignore traditional media venues in 2012. Oklahoma newspapers published 50 articles about i2E clients, and our Innovation & Entrepreneur’s column appeared weekly in The Oklahoman, which is the state’s largest daily newspaper. As the world tunes in more and more to digital media to connect with news sources and each other, i2E will be there to tell the story of Oklahoma entrepreneurs and our innovative programs.

50

Client Articles

42 48

Weekly Columns Published

119

Blog Posts

21

E-Blasts

Office of Entrepreneurial Development Our commitment to entrepreneurial education was enhanced by our Office of Entrepreneurial Development, which is a two-year partnership with the Greater Oklahoma City Chamber. The OED supports i2E initiatives such as the Oklahoma SBIR Collaborative Resources (OSCR) program, the Donald W. Reynolds Governor’s Cup business plan competition and the Who Wants to Be an Entrepreneur? workshop. This program also allows us to work with others in the community who support entrepreneurship in Oklahoma. 19

A C C E S S T O C A P I TA L

T BFP

i2E’s arsenal of investment capital grew substantially in fiscal 2012 when we teamed with the Oklahoma Department of Commerce to create the $13.1 million Accelerate Oklahoma! initiative with funding provided by the U.S. Treasury Department’s State Small Business Credit Initiative. With the federal dollars, three investment funds were created that target businesses at any stage of their life cycle, from concept to seed to start-up to growth. We now manage the StartOK Accelerator Fund, the GrowOK Fund and the OK Angel Sidecar Fund, all of which are part of the Accelerate Oklahoma! program. The new funds complement our state appropriated capital sources, the OCAST Technology Business Finance Program and Oklahoma Seed Capital Fund, which have provided critical concept financing and seed stage funding to 113 Oklahoma startups since 1998.

Capital raised from angel investors - more than doubled to 8% while capital raised from VC investors fell 66% to 19%

OK Angel Side Car Fund

DermaMedics is a pharmaceutical skin care company specializing in the development of novel topical, non-steroidal, non-prescription therapeutics that effectively treats inflammatory skin problems. The products are specifically designed to be sold exclusively by physicians and/or other medical professionals such as medical spas, pharmacies and oncology related facilities. Perk Dynamics enables you to take control of your Coffee and Espresso Operations Management. Perk Dynamics product line provides easy to use Automated controls for coffee and espresso systems. Selexys Pharmaceuticals is committed to advancing the understanding of inflammation and developing novel new products to treat inflammatory diseases. Their pioneering work on the molecular mechanisms of inflammation has led to breakthroughs in novel therapeutics for inflammatory and thrombotic diseases and positioned Selexys with strong scientific underpinnings.

sources of capital

66%

41%

$40.5M in annualized revenues 90% of revenues outside state $22M in annualized payroll 316 full time employees equivalent average wage of $74,842 16 patents filed, 10 issued 34% job growth

portfolio companies by industry 1999-2012

8+722551 8%

Other

7% Energy & Environmental 7% Advanced Materials

2%

25%

51%

Manufacturing Equipment

Life Sciences

IT/Software

108 Companies Funded

44%

Entrepreneurs Funding Entrepreneurs

FY2012 TBFP companies average annual wage comparison

private equity investment 1999-2012

655=+ $74,842 i2E Portfolio 246= $37,246 Oklahoma Average

All Concept Fund Companies $268,497,418 In Business $173,997,100 Concept Funding $10,392,477

Start OK

23% 14% 8%

13%

25% 20% 10% 3%

Angel

Venture Capital

Strategic Convertible Partners Note

Percent of 12 Month Capital Raised Percent Source of Funding

20

Structured as an unsecured loan with a payback provision, the TBFP has funded over $10.3 million in investments and generated more than $4.5 million in repayments. Those repayments provided 44 percent of capital available for new investments in succeeding generations of entrepreneurs with new ideas. This is the equivalent of providing proofof-concept funding for 44 Oklahoma start-up companies. Over its history, TBFP funding has helped companies subsequently raise more than $268 million in private capital, creating a leverage ratio of 33:1 for the state’s investment.

We also manage the Oklahoma SeedStep Angels group composed of successful Oklahomans who often act as private co-investors to the state- and federally-appropriated investment funds.

i2E’s portfolio attracts investment to the region with more than $770 million in funding. Approximately $489 million of this has been in private investment from venture capital, angels and strategic investors.

Since 1999, the OCAST Technology Business Finance Program has provided a timely answer to a dilemma facing many Oklahoma entrepreneurs: where do they turn for critical capital to build a prototype and prove their concept. In increments of $100,000 to $150,000, the i2E managed fund has provided proof-of-concept capital to 108 companies since its inception.

Debt

Accele Biopharma, Inc. Acting as an accelerator/incubator specifically for pharmaceutical and biotechnologies discovered in or transferred into Oklahoma, ABP will provide the core management (including raising and managing investment capital) components needed to develop these discoveries locally. Accele Venture Partners (AVP), a companion venture fund, is currently raising an Oklahoma based venture fund to support the 4 to 5 anticipated ABP spinout companies, each being treated as an individual investment opportunity.

TBFP 2012 Investment

Mintiva creates and provides customers with the highest quality products, specially formulated for distinct topical applications. Mintiva incorporates maximum strength FDA-approved topical pain relievers, unique all-natural botanical ingredients, and cuttingedge cosmetic formulations.

2012

21

A C C E S S T O C A P I TA L

T BFP

i2E’s arsenal of investment capital grew substantially in fiscal 2012 when we teamed with the Oklahoma Department of Commerce to create the $13.1 million Accelerate Oklahoma! initiative with funding provided by the U.S. Treasury Department’s State Small Business Credit Initiative. With the federal dollars, three investment funds were created that target businesses at any stage of their life cycle, from concept to seed to start-up to growth. We now manage the StartOK Accelerator Fund, the GrowOK Fund and the OK Angel Sidecar Fund, all of which are part of the Accelerate Oklahoma! program. The new funds complement our state appropriated capital sources, the OCAST Technology Business Finance Program and Oklahoma Seed Capital Fund, which have provided critical concept financing and seed stage funding to 113 Oklahoma startups since 1998.

Capital raised from angel investors - more than doubled to 8% while capital raised from VC investors fell 66% to 19%

OK Angel Side Car Fund

DermaMedics is a pharmaceutical skin care company specializing in the development of novel topical, non-steroidal, non-prescription therapeutics that effectively treats inflammatory skin problems. The products are specifically designed to be sold exclusively by physicians and/or other medical professionals such as medical spas, pharmacies and oncology related facilities. Perk Dynamics enables you to take control of your Coffee and Espresso Operations Management. Perk Dynamics product line provides easy to use Automated controls for coffee and espresso systems. Selexys Pharmaceuticals is committed to advancing the understanding of inflammation and developing novel new products to treat inflammatory diseases. Their pioneering work on the molecular mechanisms of inflammation has led to breakthroughs in novel therapeutics for inflammatory and thrombotic diseases and positioned Selexys with strong scientific underpinnings.

sources of capital

66%

41%

$40.5M in annualized revenues 90% of revenues outside state $22M in annualized payroll 316 full time employees equivalent average wage of $74,842 16 patents filed, 10 issued 34% job growth

portfolio companies by industry 1999-2012

8+722551 8%

Other

7% Energy & Environmental 7% Advanced Materials

2%

25%

51%

Manufacturing Equipment

Life Sciences

IT/Software

108 Companies Funded

44%

Entrepreneurs Funding Entrepreneurs

FY2012 TBFP companies average annual wage comparison

private equity investment 1999-2012

655=+ $74,842 i2E Portfolio 246= $37,246 Oklahoma Average

All Concept Fund Companies $268,497,418 In Business $173,997,100 Concept Funding $10,392,477

Start OK

23% 14% 8%

13%

25% 20% 10% 3%

Angel

Venture Capital

Strategic Convertible Partners Note

Percent of 12 Month Capital Raised Percent Source of Funding

20

Structured as an unsecured loan with a payback provision, the TBFP has funded over $10.3 million in investments and generated more than $4.5 million in repayments. Those repayments provided 44 percent of capital available for new investments in succeeding generations of entrepreneurs with new ideas. This is the equivalent of providing proofof-concept funding for 44 Oklahoma start-up companies. Over its history, TBFP funding has helped companies subsequently raise more than $268 million in private capital, creating a leverage ratio of 33:1 for the state’s investment.

We also manage the Oklahoma SeedStep Angels group composed of successful Oklahomans who often act as private co-investors to the state- and federally-appropriated investment funds.

i2E’s portfolio attracts investment to the region with more than $770 million in funding. Approximately $489 million of this has been in private investment from venture capital, angels and strategic investors.

Since 1999, the OCAST Technology Business Finance Program has provided a timely answer to a dilemma facing many Oklahoma entrepreneurs: where do they turn for critical capital to build a prototype and prove their concept. In increments of $100,000 to $150,000, the i2E managed fund has provided proof-of-concept capital to 108 companies since its inception.

Debt

Accele Biopharma, Inc. Acting as an accelerator/incubator specifically for pharmaceutical and biotechnologies discovered in or transferred into Oklahoma, ABP will provide the core management (including raising and managing investment capital) components needed to develop these discoveries locally. Accele Venture Partners (AVP), a companion venture fund, is currently raising an Oklahoma based venture fund to support the 4 to 5 anticipated ABP spinout companies, each being treated as an individual investment opportunity.

TBFP 2012 Investment

Mintiva creates and provides customers with the highest quality products, specially formulated for distinct topical applications. Mintiva incorporates maximum strength FDA-approved topical pain relievers, unique all-natural botanical ingredients, and cuttingedge cosmetic formulations.

2012

21

Access to Capital

Access to Capital

S E E D C A P I TA L F U N D For Oklahoma companies ready to move from concept to product launch, i2Eâ&#x20AC;&#x2122;s Oklahoma Seed Capital Fund provides the investment capital to help them reach the market and achieve success that creates jobs and wealth for Oklahoma. Since it was launched in 2007, the Seed Fund has invested $5.6 million in 16 companies, which have attracted more than $25 million in co-investment.

Companies receiving seed capital funding created 66 full time jobs that pay more than double the average annual wage in Oklahoma.

66 full time employees 38% job growth rate average annual wage of $88,081 4 patents filed, 2 issued $4.7M in revenue

2012 Concept Investment from Seed Fund

Associated Material Processing, LLC (AMP) is a waste abatement company focused on the efficient, cost effective removal and recovery of toxic arsenic from effluent streams produced at semiconductor facilities. Based on bench scale validation and preliminary results, AMP believes commercial production of their proprietary sorbent, will be simplistic, rapid and cost effective.

2012 Seed Fund Investments

DermaMedics is a pharmaceutical skin care company specializing in the development of novel topical, non-steroidal, nonprescription therapeutics that effectively treats inflammatory skin problems. The products are designed to be sold exclusively by physicians and/or other medical professionals such as medical spas, pharmacies and oncology related facilities. Failsafe Hazmat Complianceâ&#x20AC;&#x2122;s software is the first logic based, comprehensive hazardous materials shipping software for multi-modal transportation methods on the market that will standardize preparation, processing, and management of shipping documentation. Failsafe Hazmat can help companies avoid millions of dollars of potential fines and litigation, which can be incurred when shipping hazardous materials domestically and internationally, and enhance productivity. OMRF Glioblastoma Multiforme (GBM) is the most prevalent and aggressive type of malignant brain tumor in humans. At this time, there are no effective treatments available for this type of tumor. OMRF researchers have identified a compound, OKN-007, that has the unique ability to cross the blood-brain barrier and has been successfully shown to decrease both tumor size and tumor vasculature in animal models of glioblastoma. Perk Dynamics enables you to take control of your Coffee and Espresso Operations Management. Perk Dynamics product line provides easy to use Automated controls for coffee and espresso systems.

2012 Follow-On Investments

Altheus Therapeutics was established to develop novel therapies for Inflammatory Bowel Disease (IBD). Altheusâ&#x20AC;&#x2122; technologies, developed at the University of Oklahoma, are the result of 30 years of research and insight into the disease. Emotion Media, LLC is a professional multi-media design studio that specializes in creating custom media services for the professional photography industry and other businesses. Our dedicated team of programmers, designers, and service professionals take special care in creating and delivering high quality, high-impact presentations. 22

Dr. Allen Apblett, co-founder & Chief Scientific Officer, Associated Material Processing, LLC

23

Access to Capital

Access to Capital

S E E D C A P I TA L F U N D For Oklahoma companies ready to move from concept to product launch, i2Eâ&#x20AC;&#x2122;s Oklahoma Seed Capital Fund provides the investment capital to help them reach the market and achieve success that creates jobs and wealth for Oklahoma. Since it was launched in 2007, the Seed Fund has invested $5.6 million in 16 companies, which have attracted more than $25 million in co-investment.

Companies receiving seed capital funding created 66 full time jobs that pay more than double the average annual wage in Oklahoma.

66 full time employees 38% job growth rate average annual wage of $88,081 4 patents filed, 2 issued $4.7M in revenue

2012 Concept Investment from Seed Fund

Associated Material Processing, LLC (AMP) is a waste abatement company focused on the efficient, cost effective removal and recovery of toxic arsenic from effluent streams produced at semiconductor facilities. Based on bench scale validation and preliminary results, AMP believes commercial production of their proprietary sorbent, will be simplistic, rapid and cost effective.

2012 Seed Fund Investments

DermaMedics is a pharmaceutical skin care company specializing in the development of novel topical, non-steroidal, nonprescription therapeutics that effectively treats inflammatory skin problems. The products are designed to be sold exclusively by physicians and/or other medical professionals such as medical spas, pharmacies and oncology related facilities. Failsafe Hazmat Complianceâ&#x20AC;&#x2122;s software is the first logic based, comprehensive hazardous materials shipping software for multi-modal transportation methods on the market that will standardize preparation, processing, and management of shipping documentation. Failsafe Hazmat can help companies avoid millions of dollars of potential fines and litigation, which can be incurred when shipping hazardous materials domestically and internationally, and enhance productivity. OMRF Glioblastoma Multiforme (GBM) is the most prevalent and aggressive type of malignant brain tumor in humans. At this time, there are no effective treatments available for this type of tumor. OMRF researchers have identified a compound, OKN-007, that has the unique ability to cross the blood-brain barrier and has been successfully shown to decrease both tumor size and tumor vasculature in animal models of glioblastoma. Perk Dynamics enables you to take control of your Coffee and Espresso Operations Management. Perk Dynamics product line provides easy to use Automated controls for coffee and espresso systems.

2012 Follow-On Investments

Altheus Therapeutics was established to develop novel therapies for Inflammatory Bowel Disease (IBD). Altheusâ&#x20AC;&#x2122; technologies, developed at the University of Oklahoma, are the result of 30 years of research and insight into the disease. Emotion Media, LLC is a professional multi-media design studio that specializes in creating custom media services for the professional photography industry and other businesses. Our dedicated team of programmers, designers, and service professionals take special care in creating and delivering high quality, high-impact presentations. 22

Dr. Allen Apblett, co-founder & Chief Scientific Officer, Associated Material Processing, LLC

23

Access to Capital

Access to Capital

SEEDST EP ANGELS The SeedStep Angels group continued its remarkable story of growth and expansion in fiscal 2012, a year in which a new chapter was launched in Ardmore, along with increased capital investment in Oklahoma startups, stronger syndication efforts with regional Angel networks and the introduction of best practices to the investment group. The Ardmore chapter debuted in January with six founding members, joining already established Oklahoma City and Tulsa groups and increasing the network’s total statewide membership to 30. The Ardmore angels heard their first investor pitches in May.

Angel investment grew during the

year, as well, when individual SeedStep Angels invested $573,000 in seven

companies, a 57 percent increase over the previous year.

Founded in 2009, the SeedStep Angels also continued to build relationships with regional Angel networks. Syndicated deals from angel groups in Kansas, Missouri and Texas, were presented at SeedStep Angel screening meetings, and resulted in one investment from an Oklahoma Angel. The group also worked to promote best practices in Angel investing. In March, John May, a nationally recognized Angel investor and founder of several Angel groups in the Washington, D.C., area, gave a Power of Angel Investing Seminar on due diligence in Oklahoma City. Trish Brasted, founder of the Midwest Venture Alliance in Wichita, KS also sat on a panel for the seminar. The group also held events with Rob Adams (Texas Venture Labs) revolving around the subject of market validation and Rob Wiltbank (Willamette University) regarding revenue capital.

fy2012 investments

Associated Material Processing, LLC (AMP) is a waste abatement company focused on the efficient, cost effective removal and recovery of toxic arsenic initially from effluent streams produced at semiconductor facilities. Based on bench scale validation and preliminary results, AMP believes commercial production of their proprietary sorbent, will be simplistic, rapid and cost effective. CritiTech specializes in optimizing the delivery of challenging drug substances – potent molecules, poorly soluble compounds and biomolecules. Using proprietary SCF Technology and ability to simplify formulations, the company can extend the potential delivery options to oral, injection and inhalation routes, as well as to implantable devices. DermaMedics is a pharmaceutical skin care company specializing in the development of novel topical, non-steroidal, non-prescription therapeutics that effectively treats inflammatory skin problems. The products are specifically designed to be sold exclusively by physicians and/or other medical professionals such as medical spas, pharmacies and oncology related facilities. Exerbotics technology is considered by industry experts to be the most advanced and innovative strength-training equipment in the world. The Exerbotics series of strength-training equipment incorporates LCD touch screen monitors that display in real time a client’s effort level, motion and force, providing data that is revolutionizing personal and fitness training. Expert TA enables Professors and Teaching Assistants to focus their time on educating your students. Leave the homework grading to the computer, complete with partial credit grading of the most complex of math and physics problems. Perk Dynamics enables you to take control of your Coffee and Espresso Operations Management. Perk Dynamics product line provides easy to use Automated controls for coffee and espresso systems. Selexys Pharmaceuticals’ pioneering work on the molecular mechanisms of inflammation has led to breakthroughs in novel therapeutics for inflammatory and thrombotic diseases and positioned Selexys with strong scientific underpinnings.

OKC GROUP

TULSA GROUP

18 Angels 12 Screened 9 Presented 6 Investments

6 Angels 12 Screened 10 Presented 6 Investments

2 Commitments

2 Commitments

ARDMORE GROUP 7 Angels 3 Presented

24

Rick Alvarez co-founder and Vice President of Operations and Research for Selexys Pharmaceuticals.

2 Commitments 25

Access to Capital

Access to Capital

SEEDST EP ANGELS The SeedStep Angels group continued its remarkable story of growth and expansion in fiscal 2012, a year in which a new chapter was launched in Ardmore, along with increased capital investment in Oklahoma startups, stronger syndication efforts with regional Angel networks and the introduction of best practices to the investment group. The Ardmore chapter debuted in January with six founding members, joining already established Oklahoma City and Tulsa groups and increasing the network’s total statewide membership to 30. The Ardmore angels heard their first investor pitches in May.

Angel investment grew during the

year, as well, when individual SeedStep Angels invested $573,000 in seven

companies, a 57 percent increase over the previous year.

Founded in 2009, the SeedStep Angels also continued to build relationships with regional Angel networks. Syndicated deals from angel groups in Kansas, Missouri and Texas, were presented at SeedStep Angel screening meetings, and resulted in one investment from an Oklahoma Angel. The group also worked to promote best practices in Angel investing. In March, John May, a nationally recognized Angel investor and founder of several Angel groups in the Washington, D.C., area, gave a Power of Angel Investing Seminar on due diligence in Oklahoma City. Trish Brasted, founder of the Midwest Venture Alliance in Wichita, KS also sat on a panel for the seminar. The group also held events with Rob Adams (Texas Venture Labs) revolving around the subject of market validation and Rob Wiltbank (Willamette University) regarding revenue capital.

fy2012 investments

Associated Material Processing, LLC (AMP) is a waste abatement company focused on the efficient, cost effective removal and recovery of toxic arsenic initially from effluent streams produced at semiconductor facilities. Based on bench scale validation and preliminary results, AMP believes commercial production of their proprietary sorbent, will be simplistic, rapid and cost effective. CritiTech specializes in optimizing the delivery of challenging drug substances – potent molecules, poorly soluble compounds and biomolecules. Using proprietary SCF Technology and ability to simplify formulations, the company can extend the potential delivery options to oral, injection and inhalation routes, as well as to implantable devices. DermaMedics is a pharmaceutical skin care company specializing in the development of novel topical, non-steroidal, non-prescription therapeutics that effectively treats inflammatory skin problems. The products are specifically designed to be sold exclusively by physicians and/or other medical professionals such as medical spas, pharmacies and oncology related facilities. Exerbotics technology is considered by industry experts to be the most advanced and innovative strength-training equipment in the world. The Exerbotics series of strength-training equipment incorporates LCD touch screen monitors that display in real time a client’s effort level, motion and force, providing data that is revolutionizing personal and fitness training. Expert TA enables Professors and Teaching Assistants to focus their time on educating your students. Leave the homework grading to the computer, complete with partial credit grading of the most complex of math and physics problems. Perk Dynamics enables you to take control of your Coffee and Espresso Operations Management. Perk Dynamics product line provides easy to use Automated controls for coffee and espresso systems. Selexys Pharmaceuticals’ pioneering work on the molecular mechanisms of inflammation has led to breakthroughs in novel therapeutics for inflammatory and thrombotic diseases and positioned Selexys with strong scientific underpinnings.

OKC GROUP

TULSA GROUP

18 Angels 12 Screened 9 Presented 6 Investments

6 Angels 12 Screened 10 Presented 6 Investments

2 Commitments

2 Commitments

ARDMORE GROUP 7 Angels 3 Presented

24

Rick Alvarez co-founder and Vice President of Operations and Research for Selexys Pharmaceuticals.

2 Commitments 25

i 2E F Y 2012 FINANCI A L R EP ORTS Statement of Financial Position

FY2012

FY2011

Assets

Revenues

Current Assets

OCAST Funding

Cash & Cash Equivalents

Accounts Receivable

Prepaid Expenses

Certificates of Deposit

Accelerate Oklahoma Funds Investment Investment in Oklahoma Seed Capital Fund

1,812,821

438,625

402,299

271,190

191,895

Fund Management Fees

375,000

375,000

–

Accelerate Oklahoma Investment Funding

737,000

–

697,001

OKC Technology Business Launch Initiative

515,235

423,968

2,100,957

1,108,485

Other Revenues

395,943

101,886

65,686

43,580

Total Revenues

4,593,205

3,115,974

Expenses

59,282

78,822

Commercialization Services

2,473,259

2,081,411

9,290

4,551

Concept Financing Program

194,487

194,487

375,011

375,061

Other Assets Total Assets

2,134,027

Governor’s Cup Sponsorships & Grants

737,000

2,972,215 1,235,438

i2E Seed Capital, LLC

Liabilities and Net Assets

Accelerate Oklahoma Program

135,002

–

Current Liabilities

Donald W. Reynolds Governor’s Cup

457,657

374,917

262,730

80,959

17,632

8,474

Other Expenses

126

120

Total Expenses

Accounts Payable

TBFP Reinvestment Fund Payable

Accelerate Oklahoma Funding Payable

Deferred Revenue

166,451

63,570

Net Assets at Beginning of Year

Accrued Liabilities

68,396

51,462

Net Assets at End of Year

1,160,605

123,626

9,290

4,551

1,169,895

128,177

Total Current Liabilities Accrued Liabilities, Noncurrent

3,898,146 3,106,835

Excess of Revenues Over Expenses

908,000

i2E Team

Board Of Directors

Institutional Governance

Rex Smitherman, Vice President, Operations

Michael LaBrie, Secretary, McAfee & Taft

governance practice and ethical conduct by all board

Sarah Seagraves, Vice President, Marketing

Jonathan Adamson, Hall Capital Partners

members and staff. Consistent with those intentions,

Tom Francis, Director, Investment Funds

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

i2E has adopted the following charters for its

Josh O’Brien, Director of Entrepreneurial Development

Leslie Batchelor, The Center for Economic Development Law

Board of Directors and Board Committees:

David Daviee, Director Finance

C. James Bode, Bank of Oklahoma, N.A.

Shintaro Kaido, Venture Advisor

Robert Brearton, American Fidelity Assurance Company

Board of Directors Charter of Governance: Sets and

Mark Lauinger, Venture Advisor

Bill W. Burgess, Vortex, Inc.

ensures fidelity to i2E’s mission. Reviews and approves

Richard Rainey, Venture Advisor

Michael Carolina, OCAST

organizational strategy, goals, plans, and budgets. In addition

Sonja Wilson, CFO-In-Residence

Bob Craine, TSF Capital, LLC

the board is charged with establishing policies, approving

Casey Harness, Business Analyst

Steve Cropper

major engagements in public policy, and ensuring that

Kenneth Knoll, Manager Concept Funds

Philip Eller, Eller Detrich, P.C.

management systems are in place for compliance.

Scott Thomas, IT Manager

Suzette Hatfield, Crawley Ventures

Grady Epperly, Marketing Manager

David Hogan, Hogan Taylor, LLP

Executive Committee Charter: The function of the

Michael Kindrat-Pratt, Coordinator SeedStep Angels

Philip Kurtz, Benefit Informatics

Executive Committee is to exercise powers of the Board

Cindy Williams, Investment Analyst

Hershel Lamirand III, Oklahoma Health Center Foundation

of Directors on matters which arise between regularly

Jay Sheldon, eMedia Specialist

Merl Lindstrom, Phillip 66

scheduled Board meetings or when it is not practical

Jim Stafford, Communications Specialist

Scott Meacham, Crowe & Dunlevy

or feasible for the Board to meet. This Committee

David Thomison, Vice President, Investments

219,589

467,811

Furniture, Fixtures and Equipment, Net

FY2011

1,360,309 1,647

Total Current Assets

FY2012

Statement of Activities

Roy Williams, Chairman, Greater Oklahoma City Chamber

i2E strives to have the highest standards of corporate

695,059

9,139

1,107,261

1,098,122

Katelynn Henderson, Events Specialist

Fred Morgan, The State Chamber

also reviews and monitors all compensation, benefit

1,802,320

1,107,261

Jennifer Buettner, Executive Assistant

David Myers, Ponca City Development Authority

and human resource policy matters, plus monitors and

Kate Nelson, Administrative Assistant

Michael Neal, Tulsa Metro Chamber

evaluates the performance of the corporation’s CEO.

David Pitts, Stillwater National Bank Mark Poole, Summit Bank

Finance and Audit Committee Charter: The primary

Net Assets

Stephen Prescott, OMRF

purpose of this Committee is to assist the Board of Directors

Meg Salyer, Accel Financial Staffing

in fulfilling its fiscal oversight responsibilities. It serves as

Darryl Schmidt, BancFirst

an independent and objective party to monitor the integrity

Sheri Stickley, OKBio

of the Corporation’s financial accounting and reporting

Wes Stucky, Ardmore Industrial Development Authority

processes and internal control system. Nominating and

Richard Williamson, TD Williamson, Inc.

Governance Committee Charter: The Committee assists

Duane Wilson, LDW Services, LLC

the Board in developing and overseeing the Corporation’s

Don Wood, Norman Economic Development Coalition

policies and procedures regarding Board composition and

Total Liabilities

Unrestricted

408,778

Unrestricted - Board Designated

312,369

1,393,542

794,892

Total Unrestricted Net Assets

1,802,320

1,107,261

Total Liabilities and Net Assets

2,972,215 1,235,438

recommendations of candidates for nomination to the Board.

46+10816119

Other Revenues OKC Technology Business Launch Initiative

Accelerate Oklahoma Investment Funding

9%

11%

16%

8%

Fund Management Fees

10%

Governor's Cup Sponsorships & Grants

46%

OCAST Funding

FY2012 Expenses

63+5103127

FY2012 Revenues

63%

Commercialization Services

5%

Concept Financing Program

10%

3%

i2E Seed Capital, LLC

Accelerate Oklahoma Program

12%

7%

Donald W. Reynolds Governor’s Cup

Other Expenses

Investment Committee Charters: The Board engages two Investment Committees, the Technology Business Finance Program Committee and The Oklahoma Seed Capital Fund Investment Committee to consider and approve applications for investment within the requirements of the investment programs. 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 annually. The results of the evaluation are compiled and presented to the full Board for review and discussion.

Sources of State Funding: OCAST provides funding for i2E Commercialization Services, the TBFP Concept Fund and is the primary investor in the Oklahoma Seed Capital Fund.

26

27

i 2E F Y 2012 FINANCI A L R EP ORTS Statement of Financial Position

FY2012

FY2011

Assets

Revenues

Current Assets

OCAST Funding

Cash & Cash Equivalents

Accounts Receivable

Prepaid Expenses

Certificates of Deposit

Accelerate Oklahoma Funds Investment Investment in Oklahoma Seed Capital Fund

1,812,821

438,625

402,299

271,190

191,895

Fund Management Fees

375,000

375,000

–

Accelerate Oklahoma Investment Funding

737,000

–

697,001

OKC Technology Business Launch Initiative

515,235

423,968

2,100,957

1,108,485

Other Revenues

395,943

101,886

65,686

43,580

Total Revenues

4,593,205

3,115,974

Expenses

59,282

78,822

Commercialization Services

2,473,259

2,081,411

9,290

4,551

Concept Financing Program

194,487

194,487

375,011

375,061

Other Assets Total Assets

2,134,027

Governor’s Cup Sponsorships & Grants

737,000

2,972,215 1,235,438

i2E Seed Capital, LLC

Liabilities and Net Assets

Accelerate Oklahoma Program

135,002

–

Current Liabilities

Donald W. Reynolds Governor’s Cup

457,657

374,917

262,730

80,959

17,632

8,474

Other Expenses

126

120

Total Expenses

Accounts Payable

TBFP Reinvestment Fund Payable

Accelerate Oklahoma Funding Payable

Deferred Revenue

166,451

63,570

Net Assets at Beginning of Year

Accrued Liabilities

68,396

51,462

Net Assets at End of Year

1,160,605

123,626

9,290

4,551

1,169,895

128,177

Total Current Liabilities Accrued Liabilities, Noncurrent

3,898,146 3,106,835

Excess of Revenues Over Expenses

908,000

i2E Team

Board Of Directors

Institutional Governance

Rex Smitherman, Vice President, Operations

Michael LaBrie, Secretary, McAfee & Taft

governance practice and ethical conduct by all board

Sarah Seagraves, Vice President, Marketing

Jonathan Adamson, Hall Capital Partners

members and staff. Consistent with those intentions,

Tom Francis, Director, Investment Funds

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

i2E has adopted the following charters for its

Josh O’Brien, Director of Entrepreneurial Development

Leslie Batchelor, The Center for Economic Development Law

Board of Directors and Board Committees:

David Daviee, Director Finance

C. James Bode, Bank of Oklahoma, N.A.

Shintaro Kaido, Venture Advisor

Robert Brearton, American Fidelity Assurance Company

Board of Directors Charter of Governance: Sets and

Mark Lauinger, Venture Advisor

Bill W. Burgess, Vortex, Inc.

ensures fidelity to i2E’s mission. Reviews and approves

Richard Rainey, Venture Advisor

Michael Carolina, OCAST

organizational strategy, goals, plans, and budgets. In addition

Sonja Wilson, CFO-In-Residence

Bob Craine, TSF Capital, LLC

the board is charged with establishing policies, approving

Casey Harness, Business Analyst

Steve Cropper

major engagements in public policy, and ensuring that

Kenneth Knoll, Manager Concept Funds

Philip Eller, Eller Detrich, P.C.

management systems are in place for compliance.

Scott Thomas, IT Manager

Suzette Hatfield, Crawley Ventures

Grady Epperly, Marketing Manager

David Hogan, Hogan Taylor, LLP

Executive Committee Charter: The function of the

Michael Kindrat-Pratt, Coordinator SeedStep Angels

Philip Kurtz, Benefit Informatics

Executive Committee is to exercise powers of the Board

Cindy Williams, Investment Analyst

Hershel Lamirand III, Oklahoma Health Center Foundation

of Directors on matters which arise between regularly

Jay Sheldon, eMedia Specialist

Merl Lindstrom, Phillip 66

scheduled Board meetings or when it is not practical

Jim Stafford, Communications Specialist

Scott Meacham, Crowe & Dunlevy

or feasible for the Board to meet. This Committee

David Thomison, Vice President, Investments

219,589

467,811

Furniture, Fixtures and Equipment, Net

FY2011

1,360,309 1,647

Total Current Assets

FY2012

Statement of Activities

Roy Williams, Chairman, Greater Oklahoma City Chamber

i2E strives to have the highest standards of corporate

695,059

9,139

1,107,261

1,098,122

Katelynn Henderson, Events Specialist

Fred Morgan, The State Chamber

also reviews and monitors all compensation, benefit

1,802,320

1,107,261

Jennifer Buettner, Executive Assistant

David Myers, Ponca City Development Authority

and human resource policy matters, plus monitors and

Kate Nelson, Administrative Assistant

Michael Neal, Tulsa Metro Chamber

evaluates the performance of the corporation’s CEO.

David Pitts, Stillwater National Bank Mark Poole, Summit Bank

Finance and Audit Committee Charter: The primary

Net Assets

Stephen Prescott, OMRF

purpose of this Committee is to assist the Board of Directors

Meg Salyer, Accel Financial Staffing

in fulfilling its fiscal oversight responsibilities. It serves as

Darryl Schmidt, BancFirst

an independent and objective party to monitor the integrity

Sheri Stickley, OKBio

of the Corporation’s financial accounting and reporting

Wes Stucky, Ardmore Industrial Development Authority

processes and internal control system. Nominating and

Richard Williamson, TD Williamson, Inc.

Governance Committee Charter: The Committee assists

Duane Wilson, LDW Services, LLC

the Board in developing and overseeing the Corporation’s

Don Wood, Norman Economic Development Coalition

policies and procedures regarding Board composition and

Total Liabilities

Unrestricted

408,778

Unrestricted - Board Designated

312,369

1,393,542

794,892

Total Unrestricted Net Assets

1,802,320

1,107,261

Total Liabilities and Net Assets

2,972,215 1,235,438

recommendations of candidates for nomination to the Board.

46+10816119

Other Revenues OKC Technology Business Launch Initiative

Accelerate Oklahoma Investment Funding

9%

11%

16%

8%

Fund Management Fees

10%

Governor's Cup Sponsorships & Grants

46%

OCAST Funding

FY2012 Expenses

63+5103127

FY2012 Revenues

63%

Commercialization Services

5%

Concept Financing Program

10%

3%

i2E Seed Capital, LLC

Accelerate Oklahoma Program

12%

7%

Donald W. Reynolds Governor’s Cup

Other Expenses

Investment Committee Charters: The Board engages two Investment Committees, the Technology Business Finance Program Committee and The Oklahoma Seed Capital Fund Investment Committee to consider and approve applications for investment within the requirements of the investment programs. 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 annually. The results of the evaluation are compiled and presented to the full Board for review and discussion.

Sources of State Funding: OCAST provides funding for i2E Commercialization Services, the TBFP Concept Fund and is the primary investor in the Oklahoma Seed Capital Fund.

26

27

State Small Business Credit Initiative www.treasury.gov/resource-center

i2E is a 501(c)(3) private not-for-profit corporation focused on wealth creation by growing the technology-based entrepreneurial economy in Oklahoma. We are able to accomplish our mission through support from the Oklahoma Center for the Advancement of Science and Technology (OCAST). We would like to thank OCAST, the state of Oklahoma, and all of our partners for their ongoing financial support. The success of i2E and our client companies also relies on the contributions of many individuals and organizations who invest their time, expertise, and capital in Oklahomaâ&#x20AC;&#x2122;s start-up technology companies. The economic impact statistics used throughout this report are based on client company responses to i2Eâ&#x20AC;&#x2122;s annual impact survey and internal database.

State Small Business Credit Initiative www.treasury.gov/resource-center

i2E is a 501(c)(3) private not-for-profit corporation focused on wealth creation by growing the technology-based entrepreneurial economy in Oklahoma. We are able to accomplish our mission through support from the Oklahoma Center for the Advancement of Science and Technology (OCAST). We would like to thank OCAST, the state of Oklahoma, and all of our partners for their ongoing financial support. The success of i2E and our client companies also relies on the contributions of many individuals and organizations who invest their time, expertise, and capital in Oklahomaâ&#x20AC;&#x2122;s start-up technology companies. The economic impact statistics used throughout this report are based on client company responses to i2Eâ&#x20AC;&#x2122;s annual impact survey and internal database.

840 Research Parkway, Suite 250 • OKC, OK 73104 • 618 E. Third, Suite 1 • Tulsa, OK 74120 800.337.6822 • www.i2E.org • facebook.com/OKGOVCUP • twitter.com/i2E_Inc

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