IOWA INNOVATION CORPORATIONANNUAL REPORT 2014

A DVO C A T E .

C O M M U N I C A T E .

A C C E L E R A T E .

INNOVATIONIOWA.COM // 309 COURT AVENUE SUITE 222 // DES MOINES, IA 50309

IN 2014, THE IOWA INNOVATION CORPORATION HIT ITS STRIDE. With our many partners throughout Iowa’s innovation ecosystem, we made critical connections that assisted innovation in numerous ways. We did this by ensuring funding is available from proof of concept through next stage needs; we communicated with companies that have received innovation funding to identify

ongoing challenges and opportunities; we facilitated conversations about an advanced manufacturing center; and so much more.

This report provides a snapshot of the past year. But more than that, it is the foundation for another great year. We look forward to what 2015 has to bring.

WORKED TO BETTER PREPARE IOWA COMPANIES to apply for Small Business Innovation Research/Small Business Technology Transfer (SBIR/STTR) federal research grant opportunities. We gathered feedback from our partners and reviewed best practices from around the country to revise and strengthen the SBIR/STTR Outreach Program. Ultimately success will be measured by an increase in both the number of successful applicants and amount of federal research dollars coming into the state.

> The bottom line: We provided 7 companies a total of $23,383 in professional grant writing technical assistance through the SBIR/STTR Outreach Program.

IMPLEMENTING a mentoring program that will be available to assist companies in a variety of ways including linking them to resources that can assist in marketing, market research, leadership development, etc. The mentoring program is expected to roll out in the first quarter of 2015.

Iowa is fortunate to have many entities working together in the name of

innovation. Much of what we do is in conjunction with valued partners

including the Iowa Economic Development Authority, the University of

Iowa, Iowa State University, University of Northern Iowa, Iowa’s community

colleges, and various private partners. This is worth remembering as we

review the past year’s accomplishments.

AS WE LOOK TO 2015, WE HAVE MANY OPPORTUNITIESINCLUDING:

COMPLETED THE i6 GREEN CHALLENGE GRANT awarded through the Department of Commerce - Economic Development Administration. We executed this grant in partnership with Iowa State University and the Iowa Economic Development Authority to identify promising technologies at Iowa State University and assist with commercialization.

> The bottom line: Ultimately, 18 companies and/or project received funds. Three of the companies we worked with received additional follow-on private funding and at least six products have been commercialized and are in the marketplace today.

2014YEAR IN REVIEW

In 2014, the Iowa Innovation Corporation

ESTABLISHED A MONITORING PROGRAMto build relationships with innovative companies that have received financial assistance from the Iowa Economic Development Authority’s portfolio of innovation programs. We travel the state to meet one-on-one with each company, monitor their progress and identify ways we can assist in helping the company move forward.

> The bottom line: More than 125 companies that have received funding from the Iowa Economic Development Authority’s portfolio of innovation programs will be visited by June 30, 2015, to evaluate and monitor their status since receiving innovation program funding. The Iowa Economic Development Authority’s Technology Commercialization Committee, which recommends innovation program fund awards, is being kept apprised of the progress. A full report will be given in early FY2016.

THE FUTURE | Iowa Innovation Corporation

Foundations in LearningMonitoring Program

“The Iowa Innovation Corporation reached out to us through its monitoring program and took the time to learn about our company’s strategic needs. Their programming support, guidance, and networking came at just the right time to help our company navigate the SBIR Phase 2 submission process.”

— Dr. Carolyn Brown

PREPARING for a potential new i6 project to create the Innovation Iowa Commercialization Center, a l center that expands the previous i6 project to create a true statewide effort to promote the commercialization of innovative technologies. While we wait for word from the Department of Commerce on whether we have received the grant, we continue look for other ways we can continue to expand the commercialization model.

EXAMINING ways to facilitate industry applied research. We’ll approach this in the same way we reviewed our SBIR/STTR Outreach program. We’ll solicit feedback from our partners, as well as review best practices from around the country.

PARTNERED WITH IOWA STATE UNIVERSITY’S CENTER FOR INDUSTRIAL RESEARCH AND SERVICE (CIRAS) TO HELP HIGH-GROWTH BUSINESSES SUCCEEDWe are able to identify high-technology companies that have the potential to source manufacturing from existing companies. This will allow CIRAS to effectively serve manufacturers that are outside their target market but a strong fit for their services.

> The bottom line: The partnership, which began in July, formalizes collaboration between the Iowa Innovation Corporation and Iowa State University, and allows both to leverage each other’s expertise for the good of Iowa companies.

ASSISTED THE IOWA INNOVATION COUNCIL AND THE COUNCIL’S ADVANCED MANUFACTURING WORKGROUPwith development of the Iowa Advanced Manufacturing Center concept and design recommendations.

> The bottom line: When finished the Center will serve as a statewide resource to maintain Iowa’s global competitiveness in the advanced manufacturing sector. To help realize this vision, we developed and managed the process to gather industry input via a series of focus groups as well as provided a facilitator to support the Advanced Manufacturing Workgroup through the design recommendation. We continue to pursue an Investing in Manufacturing Communities Partnership designation through the Economic Development Administration, which would increase the potential for federal funding opportunities to support the Center.

REBRANDED OUR EFFORTS AS INNOVATION IOWAWe are still operating as the Iowa Innovation Corporation, but the work we are doing is so much more than us. We are connecting and collaborating with organizations that have a distinct interest in ensuring that innovative ideas are nurtured.

> The bottom line: Collaboration is the only way Iowa’s innovation ecosystem will succeed. When the Innovation Iowa mark is used it is a sure sign that many partners are involved.

Rewall i6 Green Challenge Grant

“We applied for an i6 grant to develop our proof of concept. The award was important in helping us develop and test a production prototype.”

— David Phillips

Pure Oleochemicals got off to a great start. Their “good idea” was an inexpensive method to separate and purify fatty acids derived from vegetable and fish oils. They are also the only company who has inexpensively purified industrial quantities of oleic, linoleic, and linolenic acids as well as EPA and DHA from fish oils. Prior methods to purify these fatty acids were too costly or could only be used on a

small scale. The potential impact was large. More than $7 billion of these fatty acids were sold in 2012, but they had modest purities of 60-80%. Pure Oleochemicals was able to purify these fatty acids to purities of 99%. The difference is very important because the presence of impurities hinders what these fatty acids can be used for; Pure Oleochemicasl solved this problem. Large companies— potential customers — from across the country were excited about the technology. And then came the speed bump. While Pure Oleochemicals successfully completed the proof of concept stage, they hit an obstacle when trying to replicate the purifying process as they looked at commercialization. This slowed down the excitement as Pure Oleochemicals had to go back in the lab to find out why the purification process wasn’t working as it did in the beginning. They believe they have identified the problem as a technical inconsistency in the membrane they use, but they continue to look for solutions.

“This kind of challenge isn’t really unusual when a company is working to commercialize a new technology,” said Andy Meyer, Chief Operating Officer of Pure Oleochemicals. “We are in the process of exploring every option and every opportunity.”

As Pure Oleochemicals works through this challenge, they have continued to pursue federal SBIR/STTR funding opportunities through three different government agencies — National Institute of Health, National Science Foundation and the USDA. To do this, they applied for and received three separate technical grant writing assistance grants from the Iowa Innovation Corporation’s SBIR/STTR Outreach Program that allowed them to work with our partner Accelagrant. Accelagrant provided guidance throughout the application process, as well submitted the final grant applications. Officials from Pure Oleochemicals said initial feedback looks good for funding from at least two of the federal funding agencies. Andy Meyer says Accelagrant’s expertise and SBIR/STTR Outreach program technical assistance funds from the Iowa Innovation Corporation has a lot to do with this positive news. “The technical assistance funds from the Iowa Innovation Corporation really makes it viable to seek SBIR funding,” Meyer said. “It takes significant risk out of the application process.” Stay tuned as Pure Oleochemicals continues to move forward.

SBIR OUTREACHPURE OLEOCHEMICALS, INC.

INNOVATION FUNDING

Demonstration Fund:

$30,000

I6 Green Challenge Grant:

$70,000

3 SBIR/STTR Outreach

grant writing technical

assistance awards

SBIR concept review

Debi DurhamIowa Economic DevelopmentAuthority

Dr. Michael R. CrumIowa State University

David ConradUniversity of Iowa

Peter C. HemkenStrategy Development Partners LLCDuPont Company (retired)

Chris NelsonKemin Industries

Sarah HaskenA.Y. McDonald Industries

Robert G. Riley, Jr., Board ChairRiley Resource Group, CEO

Cara Heiden, Vice ChairWells Fargo Home MortgagePast Co-President

Jamie Zanios, Secretary/TreasurerNIACC, Vice President

IOWA INNOVATIONCORPORATIONBOARD OF DIRECTORS