i&E Magazine Winter 2010

O K L A H O M A’ S A D V A N C E D T E C H N O L O G Y M A G A Z I N E

FA L L 2 0 1 0

Innovators & Entrepreneurs

SEEING INFRARED

Ardmore-based Amethyst Research Inc. creates better low-light imaging technology for military, Homeland Security applications.

THE PEER NETWORK

Oklahoma’s young business owners find support from shared experiences in the Entrepreneurs’ Organization

Amethyst Research Inc. co-founder and Chief Technology Officer Dr. Terry Golding

Innovation A Proven Investment in Oklahoma

Dr. Singh, University of Tulsa

Helping Oklahoma innovators take their ideas to market every day.

(866) 265-2215

www.ocast.ok.gov

Small Business>>Agriculture>>Health>>Manufacturing>>Energy>>Environment>>Technology>>Internships

CONTENTS i&E Profiles

Innovative Equine Technologies 4 LandMasters Energy Management Systems 6 Crossroads LED 8 Otologic Pharmaceutics 10

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Cover Story

Amethyst Research Inc. has brought federal funding, high tech research and top scientists to Southern Oklahoma

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Special Recognition

Seal of Excellence and National Honor Roll into Oklahoma

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Peer to Peer

Entrepreneurs’ Organization provides support and shared experiences for young business owners

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Partners

22 innovators & Entrepreneurs is produced by i2E, Inc., manager of the Oklahoma Technology Commercialization Center.

For more information on any content contained herein, please contact i2E at 800-337-6822. Š Copyright 2010 i2E, Inc. All rights reserved.

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i2E TEAM

ABOUT i2E i2E’s award winning suite of business and advisory services, access to capital and entrepreneurial development programs are all designed to help us accomplish our mission: home grown economic development by nurturing the growth of advanced technology companies in Oklahoma.

In the past year we have enhanced the services we provide by adding new employees to carry out our mission and tapping new sources of funding that will allow us to deepen our positive impact upon Oklahoma’s economy.

With a $1 million grant from the Federal Economic Development Administration and matching funds from five local partners – the Greater Oklahoma City Chamber, the city of Oklahoma City, the Oklahoma Medical Research Foundation, the Oklahoma Business Roundtable, and Presbyterian Health Foundation – i2E is creating a “Quick Launch” program that will provide additional services at key stages of companies’ development. i2E continues to maintain a large role in providing access to capital for Oklahoma’s technology-based entrepreneurs. The impact of our investment programs is demonstrated by the fact that over the past decade i2E clients received 90% of all venture capital invested in Oklahoma technology companies.

We manage two state-appropriated funds and a private angel investment group that was organized in the spring of 2009.

Together, i2E funding sources – the Technology Business Finance Program, the Oklahoma Seed Capital Fund and the SeedStep Angels group – provide critical proof of concept funding, seed and start-up equity financing and private equity funding for Oklahoma’s high growth companies. i2E’s role in developing new entrepreneurial talent for Oklahoma also is evolving. We are preparing to manage the seventh annual Donald W. Reynolds’ Governor’s Cup business plan competition, while expanding the number of i2E Fellows we will name in 2011.

Our efforts to build Oklahoma’s innovation economy have won national and international acclaim. In the past two years, we have been recognized with awards from both the International Economic Development Council and the State Science and Technology Institute.

We continue to turn Innovation to Enterprise for Oklahoma – i2E.

The i2E management and staff is composed of professionals with extensive experience in technology commercialization, business development, venture investing, finance, organizational.

Tom Walker President and CEO

Leslie Batchelor The Center for Economic Development Law James Bode Bank of Oklahoma, N.A. Mike Carolina OCAST Bob Craine TSF Capital, LLC

David Thomison Vice President, Investments

Steve Cropper Phil Eller Eller Detrich, P.C.

Rex Smitherman Vice President, Operations Wayne Embree Vice President, Entrepreneur Services Sarah Seagraves Vice President, Marketing

Suzette Hatfield Crawley Ventures David Hogan Hogan Taylor, LLP Phil Kurtz Benefit Informatics

Tom Francis Director, Investment Funds

Hershel Lamirand, III Oklahoma Health Center Foundation

David Daviee Director, Finance Richard Gajan Executive Advisor

Merl Lindstrom ConocoPhilips, Inc.

Richard Rainey Executive Advisor

Dan Luton OCAST

Casey Harness Business Analyst

Scott Meacham Crowe & Dunlevy

Kenneth Knoll Manager, Concept Funds

Fred Morgan The State Chamber

Scott Thomas IT Manager

Mike Neal Tulsa Metro Chamber

Grady Epperly Marketing Manager Michael Kindrat-Pratt Coordinator, SeedStep Angels Jim Stafford Communications Specialist

David Pitts Stillwater National Bank Mark Poole Summit Bank Stephen Prescott OMRF

Cindy Williams Investment Assistant

Darryl Schmidt BancFirst

Jennifer Buettner Executive Assistant

Sheri Stickley OKBio Wes Stucky Ardmore Industrial Development Authority

BOARD OF DIRECTORS

Dick Williamson TD Williamson, Inc.

Roy Williams Chairman, Greater Oklahoma City Chamber

Duane Wilson LDW Services, LLC

Michael LaBrie Secretary, McAfee & Taft Howard Barnett, Jr. Oklahoma State University - Tulsa

Don Wood Norman Economic Development Coalition

www.i2E.org facebook.com/OKGOVCUP twitter.com/i2E_Inc

A Letter From the President It might surprise you to know that some of the most advanced research and development into the production and performance of infrared sensors critical to U.S. military, law enforcement and Homeland Security agencies is being done right here in Oklahoma.

Ardmore-based Amethyst Research, Inc., has developed a high-tech hydrogenation process that dramatically improves the performance of silicon wafers used to create low-light optical and imaging equipment. ARI’s R&D has been backed by $7 million in contracts from federal agencies that have a vital interest in reducing cost and boosting production of the imaging equipment.

In this issue of i&E magazine, we profile ARI, its contribution to military and Homeland Defense efforts, as well as the unique story of how such a high tech R&D company became an Oklahoma-based operation.

Our business advisors work with a diverse roster of companies across Oklahoma that are developing new technologies that solve big problems for the markets they serve.

One of those is Innovative Equine Technologies that has created a rapid diagnostic test and medical device for an often-fatal horse disease called Laminitis.

Our profile of Norman-based Innovative Equine Technologies in this issue reveals just how prevalent this disease is and how its technologies halt the progression of Laminitis before it reaches a critical state.

Another i2E client that is carving a out niche in a large market is LandMasters Energy Management Systems, LLC. The Tulsa-based company has developed software that reduces the time required and frequent mistakes made in determining mineral royalty ownership on lands leased for oil and gas production.

For Oklahoma City-based Otologic Pharmaceutics, the market it serves is that of human health and the devastating toll on people worldwide from the loss of

hearing. Therapeutics developed by Otologic Pharmaceutics will reduce the instance and severity of noiseinduced hearing loss, which is good news for hundreds of thousands of U.S. military veterans.

At Collinsville’s Crossroads LED, the challenge was to create large arrays of computer controlled LED lighting for amusement parks, race tracks and other entertainment venues. Demand for the Crossroads LED technology was so great that orders began pouring in before the papers of incorporation were even filed.

Elsewhere in this issue of i&E magazine, we are proud to showcase recent honors and certifications that i2E has received. In September, the State Science and Technology Institute (SSTI) honored us for our economic development efforts with the 2010 Excellence in Technology-based Economic Development award.

In early November, we became one of the first companies to receive the Seal of Excellence from the Standards for Excellence Institute for successfully completing its certification program for non-profit organizations.

Finally, we profile the Entrepreneurs’ Organization, a new – and growing – group of business leaders here in Oklahoma.

I hope you find the time you spend with this edition of i&E magazine both rewarding and encouraging about the high-tech developments ongoing in our state.

Fall 2010 i&E

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Profiles Innovative Equine Technologies

THREE DEGREES OF SEPARATION

FROM A KILLER DISEASE I

nnovative Equine Technologies was founded in 2008 to prevent the loss of another Barbaro, winner of the 2006 Kentucky Derby who died of a hoof disease called Laminitis.

Two weeks after Barbaro won the Kentucky Derby he shattered a bone in his right hind leg in the Preakness Stakes and had to be put down nine months later.

“People don’t realize that it wasn’t the injury that killed Barbaro,” said Mark Williams, Chief Executive Officer of Innovative Equine Technologies. “His fractured leg was healing, but he developed Laminitis in his front legs and had to be put down. It was a heartbreaking loss to the equine industry.”

The Norman-based company has developed new technologies to diagnose and treat Laminitis, which afflicts up to 2 million horses worldwide annually.

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“When Laminitis infects the foot of a horse, the inside wall of the hoof starts to separate from the outside wall, and it hits the main bone of the hoof capsule,” Williams said. “There is significant structural change in that hoof and it becomes incredibly painful to the horse. It is irreversible and the prognosis is usually euthanasia.”

Timely diagnosis and treatment are critical to the survival of a horse. If the infected hoof can be cooled to near freezing and kept in that state for 72 hours, progression of Laminitis usually can be halted.

Innovative Equine Technologies has created a patented equine cryotherapy device called the EQ3, which cools a horse’s hoof to approximately 3 degrees Celsius. It also has developed a rapid field diagnostic test that allows veterinarians to quickly diagnose Laminitis so that cryotherapy can be applied before the disease has progressed.

Together, the diagnostic test and cryotherapy device should effectively stop Laminitis.

It took about a year for the company to develop the EQ3, which it sells to equine veterinary clinics for $28,000 each.

The treatment protocol calls for three days of cryotherapy, which generates $500 in revenue per day for each clinic using the device.

The company projects sales of 200 to 250 of the devices within five years, plus $15 million in annual recurring revenue from its diagnostic field test. The EQ3 is being manufactured entirely in Oklahoma, with companies in Perry and Oklahoma City contributing to the device.

Innovative Equine Technologies co-founders are Williams, Dynah Korhummel, vice president of sales, and Edmond equine veterinarian Dr. Brook Mayberry. The company was launched with $500,000 in financial backing from an angel investor and has since been awarded $100,000 in proof-ofconcept financing by i2E through the OCAST Technology Business Finance Program. i2E has played a pivotal role in the development of the company’s business plan and processes as it seeks investment capital to fully develop its business, Williams said.

The equine industry is a big market in Oklahoma, which in 2009 boasted a horse population of 326,000. That ranked fourth nationally, trailing only Texas, California and Florida, according to the American Horse Council.

The economic impact is large, as well. The American Horse Council Horse estimates that the equine industry adds $766 million annually to the state’s economy.

Nationally, the equine population is estimated at more than 9 million, which means there are millions of animals as important to their owners as was Barbaro.

“If you can identify your horse’s problem sooner than later, it can be the difference between an uneventful recovery and the untimely loss of your horse,” Williams said. “That’s our mission at Innovative Equine Technologies.”

The EQ3 cryotherapy device cools a horse’s hoof to approximately 3 degrees Celsius.

Mark Williams, CEO Year started: 2008 Location: Norman Employees: 3

Product or technology: The company has designed and manufactured a veterinary medical device as well as a diagnostic blood test for the equine industry.

Market: Equine veterinarian industry that includes 6,000 equine veterinarians in the United States alone.

Future plans: Innovative Equine Technologies plans to create another device that would use breath analysis to test the health of animals crossing state and national borders. It also is looking at development of additional rapid diagnostic blood tests.

Funding: Awarded proof-of-concept funding from i2E and is working to obtain matching funds for the TBFP award financing. Original funding at the company’s launch included $500,000 from an angel investor.

Successes: Launching and commercialization of its cryotherapy device known as the EQ3, as well as being awarded proof of concept financing from i2E.

innovativeequinetechnologies.com

Fall 2010 i&E

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Profiles LandMasters Energy Management Systems

SOFTWARE ROYALTY B

efore the first drill bit bites into the surface at a new oil or gas well site, mineral owners must be determined through meticulous courthouse title searches and drilling leases signed.

It’s an expensive, time consuming, laborintensive process that can hold up plans to drill on property for months or even years.

Land acquisition costs can run to the millions of dollars for a single drilling project.

“Hundreds of mineral owners can own rights in one project, making this a complex and challenging task to be completed accurately,” said Nancy Curtis, founder and Chief Executive of Tulsa-based LandMasters Energy Management Systems, LLCS. Curtis has created a Web-based software solution to the problem that confronts oil and gas exploration companies and the landmen, attorneys and others employed to determine land ownership and negotiate drilling leases.

She is an attorney and former landman who grew weary of the whole process after a particularly vexing project.

“I worked nights, weekends and through the Thanksgiving and Christmas holidays to com-

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plete four division order title opinions,” Curtis said. “Subsequently, I knew there must be a better way to compile the vast amount of information necessary to complete these opinions.”

So, she decided to do something about it by creating collaborative, Web-based software to improve the process.

“I was told by several people that ‘it can’t be done,’” Curtis said. “They were wrong.”

LandMasters was founded in 2009 to develop and market the software.

Curtis spent 10 months developing software that provides a collaborative environment in which multiple users can input data and comments simultaneously. It can track team players and create a historical record for management review, providing a new level of oversight and accountability in the land acquisition process.

The software can also help landmen and the companies for which they work meet regulations in some states that require that they work under the supervision of an attorney. Companies can include attorneys as project team members and allow their input and oversight into the process.

“I was told by several people that ‘it can’t be done,’” Curtis said. “They were wrong.”

Nancy Curtis, Chief Executive Member Year started: 2009 Location: Tulsa Employees: 1 Product or technology: A fully integrated database that offers management tools for well operators and other land professionals, utilizing cloud computer technology.

Market: Companies involved in the exploration and production of oil and gas.

i2E’s Richard Gajan worked with Curtis to review the LandMasters business plan and help identify industry competitors. No similar applications have yet to be deployed, despite the obvious pent-up demand for the type of software LandMasters has developed.

“Recently, I discussed LandMasters with the VP of Land for an Oklahoma-based oil and gas company,” Curtis said. “They recently spent $1.5 billion in lease acquisitions, which include a $450 per diem for each of the 350 landmen on the project. The company is seeking a software application like LandMasters to manage costs and operations.

“I was informed that those who wish to work for the oil company will be required to purchase the software program.”

LandMasters will sell its application as a subscriptionbased software-as-a-service product, which means that companies won’t be required to buy and install software on their computers. All team members will have immediate access to field project notes and data, including scanned leases, deeds, assignments and other documents.

“Real time management reduces errors that contribute to drilling delays, thereby exponentially increasing productivity and cash revenues,” Curtis said. “With the major oil and gas companies requesting software similar to LandMasters, I believe industry acceptance will be easier for this type of product than other newly introduced software products. “LandMasters hopes to be the first to market.”

Future plans: LandMasters is focused on marketing its software product to oil and gas operating companies, but plans to expand its market to include landmen, brokerage houses, royalty owners, mineral managers and bank trust departments. It also plans to add a module to assist landmen and others with the complex issues surrounding the heirship and distribution of Native American Lands.

Funding: The company has two confirmed investors and one pending.

Successes: LandMasters won $2,500 as third-place winner in the 2010 Tulsa Entrepreneurial Spirit Awards. Curtis anticipated a full deployment of the software in November. landmastersonline.com

Fall 2010 i&E

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Profiles Crossroads LED

A BRIGHTER FUTURE O

Crossroads LED produces single and multicolor LED arrays such as this that are designed for high output amusement park lighting and exterior and interior entertainment venue accent illumination. The multicolor LED system can generate seven vibrant colors and six special effects that chase, scan and fade the LEDs.

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rders for LED lighting products began pouring in to Crossroads LED even before the papers of incorporation were completed in February – and business continues to flourish for the electronic engineering and manufacturing company based just outside of Owasso in Collinsville.

“We had not even advertised, we had not even finished our website when we had the first order from an amusement park ride manufacturer in Ohio,” said Dana Stefanoff, Crossroads LED president and co-founder with her husband, Buddy. “I had to do a mad dash to Oklahoma City to make sure we had everything in order.”

Crossroads LED designs and manufactures high output LED lighting displays that are used by the automobile aftermarket industry, amusement parks, race tracks and other entertainment venues. LEDs are solid state electronic devices that emit light when electricity is passed through them.

In its first year of existence, Crossroads LED won contracts to produce long-lasting LED displays for amusement parks from Ohio to New Mexico as well as the massive Texas Motor Speedway outside of Fort Worth.

The project for the Texas speedway used 5,540 amber LEDs separated into 8-foot and 3-foot arrays. When completed in time for a NASCAR race in the spring, the LED system turned into flashing caution lighting along the entire spectator fence that lines the speedway.

“It was our first large contract and brought us recognition both locally and nationally,” Dana Stefanoff said. “It was the first-of-itskind project and is one of the longest controlled LED arrays in operation. It is one of the designs in our patent-pending portfolio.”

With the success of the Texas Motor Speedway project, Crossroads LED is seeking contracts for other racing venues, as well as amusement park ride manufacturers. It has secured contracts to provide lighting for two

of the three largest original equipment manufacturers of amusement rides in the industry.

All this has been accomplished by a husband-and-wife team operating out of their Collinsville home. The business has taken over their garage and two bedrooms, where they will operate until capital is secured to expand into a freestanding building and add new employees.

Buddy Stefanoff is an electrical engineer and long-time LED industry veteran who designs the colored light displays and circuit boards that power them. He previously operated a company that focused on the automotive industry, but saw a niche in amusement parks and entertainment venues and co-founded Crossroads LED with Dana.

The Stefanoff ’s sought i2E’s assistance in developing their business soon after launching it, and describe the assistance they have received from executive advisor Richard Gajan as “invaluable.”

“We have received input and guidance that have allowed us to avoid some of the pitfalls into which some new start-up companies stumble,” Dana Stefanoff said. “i2E has been an advocate for our company and has made itself available to assist in aiding us in multiple ways. We would not be at this stage in our company were it not for the assistance of i2E.” The Stefanoffs emphasize the quality of their products and their dependability in delivering them on time to their customers. They are establishing manufacturing processes while working out of their home in anticipation of future demand and a bigger location.

“We have worked out many of the manufacturing issues on the small scale, which will leap-frog us when we have the funding available for the large scale,” Dana Stefanoff said. “We wholeheartedly believe that we are limited only by our imaginations.”

The yellow caution lighting system shown here at Texas Motor Speedway was created by Crossroads LED using 5,540 amber LEDs separated into 8-foot and 3-foot arrays.

Dana D. Stefanoff, President Year started: 2010 Location: Collinsville Employees: 2 Product or technology: LED lighting arrays designed by Buddy Stefanoff, vice president and senior design engineer. The LED arrays consist of thousands of LED lights, circuit boards and controllers.

Market: Amusement and entertainment venue lighting Future plans: New markets include interior design (curio, bar and under-cabinet lighting) and gun range (security/safety lighting). As soon as growth capital is secured, the company plans to add four additional employees immediately and additional employees as company growth dictates.

Funding: The company has been entirely self-funded and has not secured investment capital to date. As second place winner in the 2010 Tulsa Entrepreneurial Spirit Awards, Crossroads won $5,000.

Successes: Crossroads LED has secured the business of two of the three largest original equipment manufacturers of amusement rides in the United States; a major project for the Texas Motor Speedway project was successfully completed June 4. crossroadsled.com

Fall 2010 i&E

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Profiles Otologic Pharmaceutics, Inc.

COMBATING HEARING LOSS T he global cost of hearing loss is staggering, with more than half a billion people worldwide suffering from mild to moderate hearing loss, says David Karlman, CEO of Oklahoma City-based Otologic Pharmaceutics, Inc. (OPI).

In the United States, nearly 50 million people age 20 to 69 have experienced hearing loss.

Among the U.S. military personnel and veterans, the statistics are even more disheartening. By the end of basic training, an estimated 10 percent of Marines experience some level of noise induced hearing loss. Fully 25 percent of soldiers who leave Iraq because of combat injury return with a disabling hearing loss.

Financial costs of hearing loss are huge, as well. The Office of Naval Research reports that the U.S. military spends $1.5 billion annually in compensation, retraining and equipment replacement costs due to hearing and balance disorders. “The Veterans Administration spends nearly $100,000 an hour, 24 hours a day, 7 days a week, treating hearing loss among military veterans,� Karlman said.

The lifetime cost for one person with hearing loss is estimated to be more than half a million dollars, according to the Department of Health and Human Services.

Otologic Pharmaceutics was created to help reverse those disturbing numbers.

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Founded three years ago as a collaboration between the Oklahoma Medical Research Foundation (OMRF), the Hough Ear Institute and the American BioHealth Group, OPI is developing new technologies that will improve the lives of those suffering from hearing loss.

“We have promising technology that, in pilot studies, suggests that it can help prevent and treat acute noise induced hearing loss,” Karlman said. “We have an exciting future and a worthy calling to cure one of the most debilitating diseases known to mankind.”

The Otologic Pharmaceutics story began with a conversation between Dr. Richard Kopke, CEO at the Hough Ear Institute, and Karlman, who has founded and operated multiple startups, including three health care related companies.

“Dr. Kopke told me a compelling story about this very promising technology that needed a business leader,” Karlman said. “I saw the opportunity to take these science-based assets that have great potential and provide a strong business focus needed to take them to market.”

Kopke serves as OPI’s Chief Medical Officer, and Dr. Robert Floyd, a longtime scientific researcher at OMRF, serves as its Chief Science Officer. The company owns 19 patents in its portfolio of intellectual property.

OPI’s first technology it is attempting to commercialize combines two proven compounds in pill form, which should shorten the time required for FDA approval.

“We’re excited about the potential for people suffering from hearing loss,” Karlman said. “We’ve got a world class team and promising technology that offers hope to them. We are building for the long-term, and our long-term goal is to cure hearing loss.”

Led by Executive Advisor Rick Rainey, i2E has provided OPI with business planning, networking opportunities and relationship building, Karlman said. OPI also was awarded $200,000 in proof-of-concept financing through the OCAST Technology Business Finance program that is managed by i2E. The company also is seeking investment from the i2E-managed Oklahoma Seed Capital Fund, and pursuing SBIR, STTR and U.S. Army grants.

David Karlman, Chief Executive Officer Location: Oklahoma City Year Started: 2009 Office location: Oklahoma City Individuals working on technology: 10 Product or technology: Using technologies created and tested by founding entities Oklahoma Medical Research Foundation, Hough Ear Institute and American BioHealth Group, Otologic Pharmaceutics has created therapeutic solutions that treat hearing disorders.

Market: The 600 million individuals that suffer from mild to moderate hearing loss; military and the 30 million Americans who work in noise insulting environments.

Future plans: The company’s goal is proving clinical efficacy of technologies that both prevent and treat hearing loss. OPI strategic technology plan is built on three platforms that include a pill that prevents and treats acute noise induced hearing loss; sensory cell replacement through regeneration; and sensory cell replacement using adult stem cells.

Funding: Otologic Pharmaceutics has been awarded $412,000 through i2E’s proof-ofconcept program, along with matching funds from founders.

Successes: The company has identified two promising drug candidates that results from a pilot study suggest that when combined can prevent and treat hearing loss caused by acoustic trauma. otologicpharmaceutics.com

Fall 2010 i&E

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isitors to the infrared materials laboratory on the campus of Amethyst Research Inc. in Ardmore behold a futuristic sight when entering the room: a giant particle accelerator dominates half of the lab, directly across from a transparent “clean room.”

ARI has developed high-tech processes that improve the performance of infrared sensors used by the military, law enforcement and Homeland Security agencies. It uses both the clean room and the particle accelerator to enhance silicon wafers for use in low-light optical and imaging equipment.

“This is where we do all our processing of materials,” said Dr. Terry Golding, motioning toward the clean room that was occupied by four people in white laboratory coats.

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A group of 11 aides from the Oklahoma Congressional delegation stood just outside the clean room and peered through the plastic curtain as Dr. Golding, ARI’s co-founder and Chief Technology Officer, described what they were watching.

The presence of almost a dozen Congressional aides on a guided tour of ARI’s campus on this morning in late August was a testament to the importance to federal interests of the sensor-related technology developed by the company. Infrared sensors are vital to the nation’s defense because they are used in night-vision goggles, missile guidance systems and other low-light imaging equipment.

“We help provide a value-add to these sensors,” Dr. Golding said. “The processes we use allow the yield rates to be improved, the performance to be improved. The technology is unique to ARI, with multiple patents pending and in-house know-how.”

ARI uses a process it calls “hydrogenation” to improve the performance of infrared sensors without damaging the material. The highly skilled workers in the clean room were performing the hydrogenation process as Dr. Golding and his entourage looked on through clear plastic walls.

Scientist prepares a wafer sample for analysis using Fourier Transform InfraRed (FT-IR) spectroscopy.

“The most conspicuous characterization tool is the elephant sitting over there. It’s a 2-megaelectron volt particle accelerator.”

An Amethyst technician aligns a sample for ion-beam analysis.

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Infrared picture of Airman watching night helicopter operations

“After the hydrogenation process, we take it over to our characterization tools,” Dr. Golding continued, turning to face the opposite wall in the building. “The most conspicuous characterization tool is the elephant sitting over there. It’s a 2-megaelectron volt particle accelerator.”

To the untrained eye, the particle accelerator looks remarkably similar to the machine that reduced a pair of siblings to the size of ants in the movie “Honey, I Shrunk the Kids.”

ARI’s technicians use the particle accelerator to analyze individual wafers to determine their composition and check for impurities and defects.

The U.S. government has enthusiastically invested in promise of ARI’s hydrogenation process via contracts that have fueled development and refinement of the process. The company is funded by the National Science Foundation, the U.S. Army, the Air Force and Navy, as well as the Defense Advanced Research Projects Agency, better known as DARPA. ARI also has state funding in the form of a $1.5 million EDGE grant awarded last year in collaboration with Oklahoma State University and the University Multi-spectral Laboratory to begin manufacturing wafers for use by the sensor industry. And with $500,000 in OCAST and ONAP programs that are also in partnership with the University of Oklahoma and Oklahoma State University.

The manufacturing of large array wafers for sensor use is a failure-prone endeavor, with a success rate of only 5 to 10 percent, said Dr. Wayne Hol-

land, Senior Research Scientist for ARI who addressed the Congressional group on specifics of the company’s hydrogenation process.

“If you were able to manufacture wafers with a 99 percent yield, what would that do to the price?” he asked before answering his own question. “It would go down from about $500,000 to $50,000. That’s the government’s motivation in pursuing this process.”

ARI’s Congressional show-and-tell day came about six months after it opened a second, 6,000 square foot facility on its campus that will expand its capabilities into wafer manufacturing.

Amethyst’s wafer manufacturing process that it expects to begin in 2011 will use materials created entirely in the United States, a key point for federal agencies and contractors.

Currently, some materials used to create the silicon wafers are available only from foreign suppliers, Dr. Golding said.

“What we will be doing next year is growing our own infrared materials on silicon with a much larger usable area and getting rid of foreign dependence,” Dr. Golding said.

“That’s a critical national security problem.

If the foreign source, which is Japan, decides to restrict supply of the substrates, then our entire Department of Defense platform is in jeopardy. The problem is not just Japan. We just recently saw China stopping supply of semiconductor materials to Japan, that again would shut down our national capability.

In just five years, ARI has grown from a startup housed in an Ardmore business incubator to a bustling company with 22 employees. It expects to grow that workforce to 40 within two years, Dr. Golding said.

“We’ve put together a very, very special team of experts on infrared sensors,” he said.

The ARI story begins in 1994 when Golding worked as a research scientist at the U.S. Army Center for Night Vision at Fort Belvoir, Va. A native of Watford, England, Dr. Golding had earned his Ph.D. from the Cavendish Laboratory at Cambridge University, writing a thesis related to electronic and optical properties of materials that also were of interest to the U.S. Army for infrared sensors.

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“I believe that we can create a major economic engine with the associated creation of high tech jobs for the State if we can provide the correct platform and coordinate our resources. There are great possibilities.”

– Dr. Terry Golding

laboratory, he saw an opportunity to develop several process that would improve the performance of infrared sensors.

In 2004, Dr. Golding began searching for an investor to back the startup and a location to host a new company. He found both when he met Sallie Reddy, a Tishomingo native and angel investor.

“She was a Native American and suggested that she would provide start-up funds if I located the company in southern Oklahoma,” he said. “I also had been looking at southern Oklahoma due to its close proximity to the high-tech north Dallas region and its proximity to Oklahoma City, and the significant assets in Oklahoma of both University of Oklahoma and Oklahoma State University.

Reddy eventually provided the seed funds for the company – and more. In 2006, she and Dr. Golding, ARI’s co-founders were married.

“It looks like I managed to sell her the business idea – and myself,” he said with a laugh.

Gary Schmidt soon joined the company as chief operating officer, and Ardmore was selected as headquarters.

“We engaged the Ardmore Development Authority almost as soon as we had shaken hands on launching ARI,” Dr. Golding said. “We engaged with Wes Stucky, Brien Thorstenberg and their terrific team. I cannot say enough about the incredible support, assistance, advice and opportunities Ardmore and Oklahoma have provided us.”

The Ardmore economic development agency provided incubator space for the new company in the Southern Oklahoma Technology Center, as well as assistance

Dr. Khalid Hossain performs material analysis using atomic force microscopy (AFM).

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in capturing federal funds to fuel operations.

Thorstenberg said the company’s presence in Ardmore provided the catalyst for the Development Authority to construct a 47-acre technology park that will feature a 5,000 square-foot business incubator and clean room.

“While ARI won’t move into the incubator, it plans to use the clean room,” Thorstenburg said. “And there is the possibility that several of their strategic partners will be located in the incubator or in the technology park.”

Amethyst Research Inc. also became a client of i2E, which helped in drafting and honing its business plan and provided proof-of-concept funding in the form of an OCAST Technology Business Finance Program award.

Rob Kuester, ARI’s Manager of Facilities, competed in the 2006 Governor’s Cup business plan competition with a business plan developed around ARI’s concept. He worked part-time for the company and was hired as a full-time employee after graduating from the University of Central Oklahoma. “i2E was instrumental in our early days,” Dr. Golding said. “It helped us with our business plan and the relationship has continued on from there. i2E is one of the most respected innovation accelerator support organizations in the country.”

Dr. Golding also cited OCAST, the Oklahoma Manufacturing Alliance, the UML, the University of Oklahoma, OSU and the Oklahoma Nanotechnologies Applications Project for contributions to the company’s growth.

“We are very pleased with how this has grown,” he said.

After watching an animated demonstration of how the particle accelerator determines the purity of silicon wafers, the congressional aides were ushered to waiting vehicles for the return trip to their offices.

“Our congressional delegation has been very supportive of establishing this wafer production capability in Oklahoma,” Golding said after the group departed the ARI campus. “The parties in Washington have provided Amethyst support to initiate this project and get it to critical mass where we are creating jobs here in Oklahoma and ensuring we are seated here and will remain here.”

The Oklahoma Sensor Alliance Not only has Amethyst Research Inc. attracted the attention of federal agencies with its process to improve sensors used in low-light imaging equipment, it is also a significant hub for efforts to launch an Oklahoma Sensor Alliance.

On the same day in late August that ARI co-founder and Chief Technology Officer Dr. Terry Golding guided 11 Oklahoma congressional aides on a walking tour of the company’s campus in Ardmore, the third organizational meeting was held of what he hopes will become a formal entity.

Seated around the ARI conference table were representatives from Oklahoma State University, OSU’s University Multispectral Laboratory, the University of Oklahoma, the Ardmore Development Authority and federal contractors Lockheed Martin and BAE Systems.

“The state has major users of increasing volumes of sensors in health care/biomedical research, aerospace and energy,” Dr. Golding said. “The Oklahoma Sensor Alliance can provide missing links between sensor users and sensor developers.”

Dr. Golding envisions a state sensor alliance that would connect all facets of Oklahoma’s private industry, institutions and universities with each other, conducting trade shows and educational events for entrepreneurs and interns, even developing courses on how to start new sensor companies.

The alliance most likely would be organized as a not-for-profit 501(c )3 and require about $120,000 annually to provide salaries for a dedicated staff.

“We are working to identify the best structure for the alliance,” Dr. Golding said. “We are actively looking to obtain seed funds and operational funds from the Economic Development Administration, the state and other sources.”

Partners in the organizational meetings with ARI have been OSU and its University Multispectral Laboratory, the Ardmore Development Authority and OCAST, Dr. Golding said.

The Oklahoma Sensor Alliance would be complementary to the Oklahoma Nanotechnology Initiative, working hand in hand, he said.

Some sensor work involves nanotechnology and advanced materials that are the focus of the nanotechnology organization.

“ONI and the Oklahoma Sensor Alliance, along with the universities, could help create a center such as a shared user facility,” Dr. Golding said. “This center would provide entrepreneurs access to equipment needed to develop prototypes of new nano and MEMS sensors while maintaining ownership of their intellectual property.”

“We’re looking to put some teeth into this effort. I believe that we can create a major economic engine with the associated creation of high tech jobs for the State if we can provide the correct platform and coordinate our resources. There are great possibilities.”

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Signed, Sealed and We Delivered Recently, i2E received national recognition for their economic development efforts and also became one of the first organizations in Oklahoma to earn a Seal of Excellence certification.

In its annual meeting in September, the State Science and Technology Institute (SSTI) named i2E winner of its 2010 Excellence in Technology-based Economic Development award in the Increasing Access to Capital category for their state-appropriated proof-of-concept fund.

SSTI is a national nonprofit organization that leads, supports and strengthens efforts to improve state and regional economies through science, technology and innovation.

SSTI’s Excellence in TBED Award honors exceptional achievement in addressing key elements critical to building successful technology-based economies, plus improving the competitiveness of existing industries and an integrated strategy toward technology-based economic development.

The Technology Business Finance Program, funded through the Oklahoma Center for the Advancement of Science and Technology, provides critical proof-of-concept funding to local startup companies.

In November, i2E was awarded the Seal of Excellence by the Standards for Excellence® Institute. The year-long certification process means that a jury of its peers found i2E in compliance with the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector®, established by the Standards for Excellence Institute, a program of the Maryland Association of Nonprofit Organizations.

In earning the Seal of Excellence certification, i2E’s programs and services, management, fundraising and financial practices were examined in depth by the Standards for Excellence Institute. i2E is one of the first Oklahoma organizations to be certified under the national Standards accreditation program that began in 2006.

“This seal shows we have taken every step to ensure we’re serving the community and operating according to the highest standards of accountability in the most upright way and we’re proud to display it,” said i2E President and CEO Tom Walker. “We undertook this rigorous process voluntarily and we are especially proud of our board and staff that helped us accomplish this national recognition.”

These honors come a year after i2E received an award of excellence by the International Economic Development Council. i2E was recognized with the IEDC’s Best Practices Award for Technology-based Economic Development in recognition of its comprehensive commercialization services.

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“This seal shows we have taken every step to ensure we’re serving the community and operating according to the highest standards of accountability in the most upright way and we’re proud to display it.”

– Tom Walker

Business Accelerator Opens for Business In Stillwater

The Michael S. Morgan Business Accelerator Building at the Oklahoma Technology and Research Park has opened for business.

The Michael S. Morgan Business Accelerator Building is a certified business incubator with 25,000 square feet of furnished offices, buildable lab space and common space. It is located on the campus of the Oklahoma Technology and Research Park in Stillwater, Oklahoma. As a business incubator, the Morgan Building offers not only space but also access to a myraid of business support services that greatly improve the chances of success for start-up and young companies.

A joint venture of Oklahoma State University, Meridian Technology Center and the City of Stillwater, the Oklahoma Technology and Research Park is designed to provide customized facilities for technology-based or knowledge-driven firms in all stages of development.

Site-ready spaces are available for long-term land leases and relocation incentives also exist.

For more information visit www.oktechpark.com or call Ron Duggins at 405-377-2220.

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Peering into Success Piyush Patel describes the Entrepreneurs’ Organization (EO) as the ultimate peer network for young business owners, who share successes and challenges along diverse entrepreneurial paths that have something in common.

“It can be a lonely job running a company,” said Patel, founder and CEO at Oklahoma City-based PL Studios, which provides digital animation software tutorials to the film and video gaming industries. “Networking with other people who also know it’s a lonely job makes it a little less scary.”

EO is a worldwide organization of 7,500 young business owners who meet on a regular basis in local chapters to learn and grow from each other’s experiences. The invitation-only group limits membership to business owners under the age of 50 whose business have annual revenue of at least $1 million.

The Oklahoma chapter claims 21 members in Oklahoma City and Tulsa. A founding member, Patel is the 20102011 Oklahoma chapter President and extols the value of the organization with the fervor of an evangelist.

“Some of these people are my closest friends,” Patel said of the Oklahoma EO group. “Years of sharing your highs and lows; what an incredible support they are.”

The EO concept was exported to Oklahoma from Dallas about three years ago by David Matthews, an Oklahoma City native who built and sold an audio-visual services company and now manages a venture capital fund.

“I joined the Dallas chapter of EO in 1994,” Matthews said. “The death of a friend in that chapter – a fellow Oklahoman named Bobby Blanchard – prompted me to launch the Oklahoma chapter as a legacy to him.”

The Oklahoma chapter now has 14 Oklahoma City members and seven in Tulsa. Typical monthly meetings last three hours with a scheduled member presentation and time budgeted in for unscheduled discussion on any business or personal challenge faced by a particular member.

“The issue could be, ‘I want to buy a new house, how should I structure this deal?’ Or, ‘I have a sick parent and what’s the best way to deal with that?’” Patel said. “Or it could be ‘my business partner just left,’ and we will allocate an hour for you to give us that story and for everybody to tell you how they dealt with a partner leaving.”

Added Matthews: “The No. 1 value of EO is the opportunity to learn from other entrepreneurs in a structured setting as a means of helping members enlarge their entrepreneurial capacity.”

When Patel was considering switching the business model at PL Studios from selling tutorial software on opti-

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David Matthews, left, brought the EO to Oklahoma, and current chapter president Piyush Patel has embraced the peer network concept.

cal disks to a subscription-based online approach, input from a fellow EO member who had successfully implemented a similar change in his own business provided the needed motivation.

“That was the catalyst,” Patel said. “I don’t know if I ever would have done that if it had not been for hearing his success story and him saying ‘I made the plunge and it worked.’ The EO has been my personal MBA program.”

Beyond local meetings and peer support, the EO group is known for offering “once in a lifetime” experiences for members. At the 2009 EO annual meeting in Dallas, the keynote speaker was former President George W. Bush, who made EO his first public speaking engagement after leaving office.

EO networking opportunities opened the door for Patel and 20 PL Studio employees recently to learn improvisation techniques at the famous Second City comedy club in Chicago.

“A once-in-a-lifetime opportunity,” Patel said. “It never would have happened had it not been for one EO friend calling another EO guy who got us in.”

The worldwide networking reach of the EO group was powerfully demonstrated to Patel last summer when his wife, Lisa, traveled to Russia to visit Tanya Golubeva, a key PL Studios employee who lives and works out of Moscow.

In advance of Lisa’s trip, Piyush discovered that the Entrepreneurs’ Organization had chapters in St. Petersburg and Moscow, two cities to which Lisa would be visiting.

Introductions were made in advance by an EO officer in Washington, D.C.

“My wife ended up having lunch with the EO guy in St. Petersburg, and then the chapter president in Moscow picked her up at the hotel, took her out all day long, took her to lunch and took her to dinner,” Patel said. “All we had in common was that we were all entrepreneurs and part of the same group.”

Both Patel and incoming chapter president Roy Georgia, co-founder of Oklahoma City-based MediaQuake, are i2E clients. i2E is a founding sponsor of the Oklahoma EO chapter, for which annual dues are $3,000 for individual members.

“That’s a small price to pay to have what I call a private board,” Patel said. “You can bring up issues with fellow EO members you would never bring up to your board of directors.”

Bottom line: EO is all about professional and personal growth, he said.

“The culture of the organization is that it is for people who really are life-long learners,” Patel said. “Everybody wants to do better; everybody wants to have a better company. At the end of the day, when you are working on becoming a better person, the by-product of that is you end up making more money.”

Entrepreneurs’ Organization Total members worldwide: 7,500 Total sales of all members worldwide: More than $124 billion.

Total number of workers that EO members employ worldwide: More than 1.3 million Total number of chapters worldwide: 118 Number of countries represented: 38 Average member age: 40 Average member sales: $18.4 million annually Average member employees: 191

“Once in a lifetime” experiences such as a trip to Los Angeles as a group provide networking and educational opportunities for EO members.

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The shaft and gear production cells at ts Muncie Power Produc in Tulsa utilize three oduct robots that deliver pr hine— from machine to mac a from raw material to finished part.

Working and living in communities across Oklahoma.

Supporting the manufacturers that support our technology growth.

Through our statewide network of manufacturing extension agents and applications engineers, we provide a full range of services to companies. The Oklahoma Manufacturing Alliance is the go-to source for assessing needs and finding solutions available through public and private resources.

We offer free technical assistance and business advice, helping manufacturers become progressively more successful. Services focus on improving the bottom line, while growing the entire company.

We live and work in communities across Oklahoma,

Company-Wide Assessments Lean Manufacturing Engineering and Technical Assistance Problem-Solving Resources Business-to-Business Collaborations New Products Development State Incentives Applications Export Assistance and New Markets Succession and Strategic Planning

taking our support to your workplace on your schedule.

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www.okalliance.com oklahoma-manufacturing-alliance

@OKAlliance

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PARTNERS

i2E: Turning Innovation into Enterprise www.i2E.org Our programs and services are possible because of the financial and in-kind support of our partners. These valued organizations are dedicated to the advancement of science and technology in our state and are strongly committed to Oklahoma’s prosperous economic future. i2E services Our services are designed to assist researchers and entrepreneurs in turning their innovations into exceptional home-grown business opportunities.

We do this by: • Providing hands-on product, market and business expertise designed to accelerate commercialization activities.

• Attracting and investing risk capital in advanced technologybased businesses.

• Promoting an innovation based economy and home-grown economic development. i2E delivers services statewide through operations in Oklahoma City and Tulsa. In 10 years of serving Oklahoma, 25% of the companies have been from rural Oklahoma and nearly 45% have been from areas outside of Oklahoma City and Tulsa.

Oklahoma Center for the Advancement of Science and Technology www.ocast.state.ok.us As the state’s only agency whose sole focus is technology, OCAST is a small, high-impact agency funded by state appropriations and governed by a board of directors with members from both the private and public sector. OCAST works in partnership with the private sector, higher education, CareerTech and the Oklahoma Department of Commerce.

Mission: To foster innovation in existing and developing businesses by supporting basic and applied research and facilitating technology transfer between research laboratories and firms and farms, as well as providing seed capital for new innovative firms and their products and fostering enhanced competitiveness in the national and international markets by small and medium-sized manufacturing firms in Oklahoma by stimulating productivity and modernization of such firms.

OCAST Programs: Oklahoma Applied Research Support (OARS) Oklahoma Health Research Program Oklahoma Nanotechnology Applications Project (ONAP) Plant Science Research Program R&D Intern Partnership Program Small Business Research Assistance Program (SBIR/STTR)

City of Oklahoma City www.okc.gov The City of Oklahoma City’s mission is to provide the leadership, commitment and resources to achieve our vision by: • Offering a clean, safe and affordable City.

• Providing well managed and maintained infrastructure through proactive and reactive services, excellent stewardship of public assets and a variety of cultural, recreational and entertainment opportunities that enhance the quality of life.

• Creating and maintaining effective partnerships to promote employment opportunities and individual and business success.

• Advancing a model of professionalism that ensures the delivery of high quality products and services continuously improves efficiency and removes barriers for future development.

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OCAST Inventors Assistance Service (IAS) OCAST Technology Business Finance Program (TBFP) Oklahoma Manufacturing Alliance Oklahoma Technology Commercialization Center (OTCC) Oklahoma Seed Capital Fund (OSCF)

Oklahoma Manufacturing Alliance www.okalliance.com

Greater Oklahoma City Chamber www.okcchamber.com

The Alliance is a not-for-profit organization providing a variety of support to Oklahoma industry. Through a network of Manufacturing Extension Agents and Applications Engineers, they provide hands-on resources for improving productivity, increasing sales, and reducing costs.

The Greater Oklahoma City Chamber works to create valueadded membership opportunities and a business climate that attracts new businesses and enhances growth and expansion opportunities for existing business.

Mission: To provide strategic assistance to Oklahoma manufacturers to help them become successful innovators in the global marketplace.

The Donald W. Reynolds Foundation www.dwreynolds.org The Foundation is a national philanthropic organization founded in 1954 by the late media entrepreneur for whom it is named.

Headquartered in Las Vegas, Nevada, it is one of the 50 largest private foundations in the United States.

Mission: The Foundation seeks to honor the memory of its benefactor by filling unmet needs and attempting to gain an immediate, transformational impact of communities in Arkansas, Nevada and Oklahoma. In pursuing its goals, the Foundation is committed to the support of nonprofit organizations and institutions that demonstrate sound financial management, efficient operation, program integrity and an entrepreneurial spirit.

In accordance with its articles of incorporation, the Foundation will cease to exist on or before June 30, 2044.

Mission: The Greater Oklahoma City Chamber is the voice of Business and the visionary organization in Oklahoma City. Their goals are (1) To create a business climate that attracts new businesses and enhances growth and expansion opportunities for existing businesses, (2) To create a community with an irresistible quality of life and (3) To create value-added membership opportunities and benefits.

Oklahoma Business Roundtable www.okbusinessroundtable.com The Oklahoma Business Roundtable, formed in 1991, is a 501(c) (6) non-profit organization. The Roundtable’s mission is to encourage and promote Oklahoma’s economic development.

The Roundtable accomplishes this by providing critical private funding in support of the economic development efforts of the Governor and Oklahoma Department of Commerce by encouraging business investment and jobs in Oklahoma.

Oklahoma Medical Research Foundation www.omrf.org

The Oklahoma Experimental Program to Stimulate Competitive Research www.okepscor.org Oklahoma EPSCoR’s central goal is to increase the state’s research competitiveness through strategic support of research instruments and facilities, research collaborations, and integrated education and research programs. They are funded through a three-year (FY2005-2008) $6M national Science Foundation Research Infra-Structure Improvement Grant matched by an additional $3M from the Oklahoma State Regents for Higher Education.

Mission: To contribute to sustainable research infrastructure with the purpose of preparing the state to compete nationally for large research center grants and form partnerships with business and industry.

Founded in 1946, the Oklahoma Medical Research Foundation is one of the nation’s oldest and most respected nonprofit biomedical research institutes. Located in Oklahoma City, OMRF fosters a worldwide reputation for excellence by following an innovative cross-disciplinary approach to medical research.

Presbyterian Health Foundation www.phf.com The Presbyterian Health Foundation is a major contributor to medical research and education in Oklahoma. In 1996, they began the PHF Research Park, in Oklahoma City, believing that a science based company with patented products discovered in the medical research laboratory of the University of Oklahoma ought to be launched here in Oklahoma City.

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OKLAHOMA CITY: Fortune Small Business Magazine’s “Best Place to Launch” a Business

Our value for startups and entrepreneurs extends far beyond our low cost of doing business. A stable & diverse economy, business-friendly partnerships and low cost of living are just a few of the benefits to working and living in Oklahoma City. As our list of accolades keeps growing, so does your potential success in Oklahoma City. Give us a call and find out how OKC can help launch your success.

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405-297-8900 | www.greateroklahomacity.com