TECHNOLOGY ACCELERATION FUND

2018 APPLICATION

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TABLE OF CONTENTS

Technology Acceleration Fund (TAF)……….……………………………....………………………………………………1

Program Description……………………………………………………………………..……………….………………………2-3

A. Overview B. Funding & Eligibility

C. Terms of Investment

D. Use of TAF Loan

E. Economic Impact

Program Policies & Procedures……………………………………………………………………………………….……..4-5

F. Evidence of Match Commitment

Review Process……………………………………………………………………………………………………………………….…6

Post-Award Procedures………………………………………………………………………….…………………………………7

G. Funding Agreement

H. Funds Disbursement

I. Reporting

J. Project Tracking & Management

Timetable & Directions for Proposal Submission…………………………………..…………………………………8

Forms & Templates………………………………………………………………………………………………………………9-13

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TECHNOLOGY ACCELERATION FUND (TAF)

Period of Performance: Up to 12 months from contract execution Size of Award: Up to $50,000 Eligibility: Science and technology companies located in, or willing

to relocate to, Southeastern Pennsylvania Company Match: 1:1 (cash or in-kind contribution; ≥50% must be cash) Form of Investment: Secured Convertible Loan, 8% Interest, 5-year Term Submission Format: Online/Email Application Fee: $250 Fee Payable to: Ben Franklin Technology Partners SEP Email Application and Materials to: kate@sep.benfranklin.org 215-972-6700 ext. 3226

Mail Fees to: Kate Srinivasan, Client & Partner Relations Ben Franklin Technology Partners Southeastern Pennsylvania 4801 S. Broad Street, Suite 200 Philadelphia, PA 19112

Funding for this program is made possible by the Commonwealth of Pennsylvania, Ben Franklin Technology Development Authority.

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PROGRAM DESCRIPTION

A. Overview The Technology Commercialization Group (TCG) and Investment Group (IG) of BEN provide a comprehensive set of programs and services to accelerate the commercialization of new technologies, foster the growth of early stage and established technology companies, accelerate the transfer of university and research institution technology into industry, and provide resources to promote translational research. This is accomplished through funded company projects that can partner the region’s enterprises with universities, government or private solution providers; by working with area universities to develop consortia approaches that apply discrete research and development strengths to solve problems; and by piloting new approaches that enable the market to inform and connect to discoveries. TCG, through its Technology Acceleration Fund (TAF) program, seeks to address the lack of early-stage technology commercialization funding and to leverage funds typically available under programs such as SBIR, STTR, etc., by providing loans up to $50,000 to support proof-of-concept and prototyping projects. The success of this new level of funding will be assessed based on an increase in any Federal funding to the company, or the increased attractiveness of the company to providers of investment capital, such as the BEN Investment Group. Collaboration with regional research institutions is encouraged but not required. B. Funding & Eligibility Loans through the Technology Acceleration Fund are up to $50,000

Loans are made to the company expressly for projects with potential commercial applications for

which this funding will provide critical capital to achieve this goal

The loan must be matched 1:1, with a cash and/or in-kind contribution from the company. The

minimum cash match is 50%. The company match may be applied to complementary needs of the

project, as approved

Companies located in, or willing to relocate to, Southeastern Pennsylvania are eligible for this

program

C. Terms of Investment The award is in the form of a loan at a rate that tracks the BEN Investment Group, currently 8%, with

a term of five years

Convertible debt option; convertible at next round

Security is needed in the form of lien on assets or Negative Pledges consistent with our investment

documents

Right to participate in any next round of funding, up to $500,000

Repayment must start by the second Anniversary

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There is a $250 application fee, payable to the BEN, upon acceptance of the award. This fee is

waived if the company has already submitted an application to the BEN Investment Group.

Companies are required to commit matching funds of a minimum of $1 (cash or in-kind

contribution) for every $1 funded by BEN, with minimum cash match of 50%. Note that companies

providing increased cash match will be more competitive.

D. Use of TAF Loan TAF loans must be committed fully by the company for the services identified in the application. These funds may be used for personnel, supplies, prototype development, and other direct R&D expenses; as well as technical feasibility assessment, field testing, travel and other efforts related to the project. TAF loans cannot be used for indirect expenses. E. Economic Impact The major goal of TAF assistance to a company is to stimulate economic growth in the Commonwealth. The development of innovative new products and manufacturing processes is foreseen as potential outcomes of this funding. Through this program, the Commonwealth seeks to encourage new and existing companies to grow and prosper in Pennsylvania. Accordingly, companies awarded funding through the TAF program will be surveyed annually by BEN for five years to assess derived economic impact.

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PROGRAM POLICIES & PROCEDURES

F. Evidence of Match Commitment

Evidence of match commitment, typically a letter, must be submitted with the proposal from each

source of support for the project. These commitments may be contingent on award of the funding. A

copy of the letter should be addressed to Anthony P. Green, Ph.D., Vice President, Technology

Commercialization Group. As we review your proposal, full evidence of the match and its terms will be

required to be submitted for review.

Companies will be required to commit matching funds of a minimum of $1 (cash or in-kind

contribution) for every $1 funded by BEN

A minimum of 50% Cash Match is required

Commitment Letter

Commitment letters should follow the format and address the same points as the sample letter that

follows:

Company Letterhead

Dear__________,

This letter represents a commitment by (name of company) to provide $

___________ in matching support for the project entitled "______________”. Of

this support, $_______ is a cash payment to carry out its work on this project. We

are also providing $________ of in-kind support; including the salary cost of

personnel, use of company equipment, materials, and other services devoted to this

project.

In addition, our company will be receiving $______________________ from (name

of funding source) to support our work on this project. This support is documented

in the attached letter from (name of funding source).

All funding is for the period ending ________________.

Our company agrees to abide by the program policies and procedures.

Sincerely,

Signature

Title

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University-Company Agreements

NOTE—University-Company collaborations are encouraged, but not required to receive funding.

However, if collaboration is proposed, evidence of the following is required:

1. Sponsored Research

Prior to award, the company must show evidence of a current signed contract with the university

partner for the specific services stated in the project work plan. Typically, this involves developing a joint

statement of work and agreement involving the university principal investigator (PI), the university

sponsored research office, and the company representative. A joint statement of the proposed work

should accompany the application.

2. Intellectual Property

The company retains complete ownership of all technology developed before the start of funding, as

well as any technology developed by its employees during the project. For new technology developed by

the research institution, or collaboratively, by the company and the research institution, BEN requires

that the company negotiate an agreement with the university regarding ownership rights to any

intellectual property developed by the university partner in servicing this contract prior to BEN final

funding approval. BEN will review the IP agreement between the institution and the company.

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REVIEW PROCESS

The evaluation of investment applications is expected to be completed approximately six weeks from

submission. The time may vary, depending on the volume of applications.

BEN maintains the confidentiality of proposals. All staff and reviewers sign non-disclosure agreements

with BEN. Proposals should include enough information for reviewers to make informed decisions on

the merits of the proposed work. All proprietary information should be clearly marked.

Both technical and commercialization reviews are made to ensure that proposals are based on sound

scientific and technical principles, that the development and commercialization program is reasonable,

and that the proposals are likely to create positive economic benefits and employment in Pennsylvania.

While product development timelines vary widely, projects demonstrating steady progress toward

timely commercialization and job creation receive priority consideration.

Application evaluation criteria include:

Significance of the commercial opportunity

Qualifications of the company

Adequacy and achievability of work plan and milestones

Near-term (3-5 years) timelines for commercialization

Estimated quantitative company financial impact of the development

Plan for follow-on funding addressed

Alignment with BEN Investment requirements and goals

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POST-AWARD PROCEDURES

G. Funding Agreement

BEN will enter into a funding agreement with the company. Prior to award, the company must show

proof of match and where appropriate, the company must show proof of having negotiated and

executed an agreement with the institutional partner. Investment proceeds may be disbursed as

described below after final execution of the contract.

H. Funds Disbursement

BEN will provide the company with the required invoicing format and allowable substantiating

documentation

After execution of the funding agreement, an advance in an amount up to 50% of the contract value

may be invoiced immediately to begin work

Funds will be disbursed upon receipt of invoices and substantiating documentation, submitted by

the company. All invoices except for the advance must show that the company is meeting the

required $1 to $1 match

Company may submit invoices monthly or quarterly, as expenses are incurred, up to a maximum of

90 percent of the investment amount

The remaining 10 percent may be invoiced together with the final project and expenditure reports,

which are required at the end of the project period

Invoices are normally processed and checks mailed to recipients within three weeks of the receipt of

the invoice by BEN

I. Reporting

Award recipients are required to submit a final project report and expenditure report within 30 days

from the conclusion of the project period. The Final Project Report is a brief narrative of the project

accomplishments, milestones and future commercialization plans. The Expenditure Report requires an

accounting for the project expenditures and match of the company and/or participating organizations.

J. Project Tracking & Management

BEN will actively monitor the project during the funding period and until repayment is completed. A TCG

Manager will conduct periodic site visits, and will be available for advice and consultation. Companies

are encouraged to contact their Manager or the staff of BEN throughout the year. Companies are

required to submit quarterly financial statements.

The Commonwealth of Pennsylvania requires an annual performance survey of BEN funded companies.

The survey includes information on the number of jobs created, the number of products

commercialized, annual revenues, and the amount of private dollars raised. Companies are required to

keep accurate and verifiable records which can be submitted annually. BEN will survey the company for

five successive years following the conclusion of the project period.

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TIMETABLE & DIRECTIONS FOR PROPOSAL SUBMISSION

Timetable

Proposals will be accepted on a rolling basis.

A complete submission includes:

A detailed technical proposal, with budget and milestones

Match commitment letter

A copy of the company’s most recent financial statements, if available (to include at least a balance

sheet and income statement)

Recommended Inclusions:

1. Proposal Cover Page

2. Company Information Form (This form will be emailed to you when formally applying)

3. University Partner Information (If Applicable)

4. Non-Confidential Executive Summary

5. R&D Proposal

6. Technical and Commercial Activities:

Project overview and expected outcome for funding

Technology description and target applications

Value Proposition

Competitive advantage vs Market options

Data (Mechanical/lab, Preclinical, Clinical)

Intellectual Property

Company/ Development timeline

7. Attachments

Project Milestones and Budget

Management Team, Resume/Curricula Vita

Letter(s) of Commitment from Funding Source

Company / University Agreements

Financial Statements (most recent completed)

NOTE—The following forms and templates are not required, but are offered as guidelines for

completeness and for your convenience.

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COVER PAGE

TECHNOLOGY ACCELERATION FUND APPLICATION

BEN FRANKLIN TECHNOLOGY PARTNERS OF SOUTHEASTERN PENNSYLVANIA

PROJECT TITLE: ______________________________________________________

Name of Principal Contact Person: Title:

Company: Telephone:

Address: ________________________________________________________________

City: _______________________________

State:___________ Zip:_________ Telephone: _________________________

E-Mail: Web Site Address: ________________________

KIZ Company: Yes __ No __ If yes, which KIZ?

Participating Organizations: Name all companies, universities, and other institutions participating in the

project, along with each participating organization’s address and contact information.

Participating Organization/Faculty Address & Contact Information

_____________________ ____________________________________

_____________________ ____________________________________

Amount Requested from BFTP/SEP: $ *

Total Project Budget: $ *

*Please make sure these amounts match those listed on your project budget sheet.

Disclaimer: The submission of the proposal shall not create any rights on behalf of the submitter,

contractual or otherwise. The submission of a proposal does not constitute or create any legally binding

or enforceable agreement or commitment on the part of TCG other than to maintain the confidentiality

of proposal information identified as confidential. No past or future action, or course of conduct by

TCG, will give rise to or serve as a basis for any legally enforceable duties or obligations on TCG other

than to maintain the confidentiality of proposal information identified as confidential.

By Authorized Official at Applicant Company:

Signature: Date:

Type or Print Name and Title:

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NON-CONFIDENTIAL EXECUTIVE SUMMARY

Proposal Title __________________________________________________________________

Company Name ________________________________________________________________

Research Institution _____________________________________________________________

Provide a two-page maximum executive summary of the project addressing each of the following:

A description of the technology and the project plan

An assessment of the market need, and differentiation

The company's business, major product/services, primary markets

Anticipated outcome and economic benefits of the project.

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PROJECT DESCRIPTION

Technical and Commercial Activities

A. Problem Statement

Identify the goals and objectives of the project.

Describe the present state of the technology that forms the basis of the project.

What is limiting in the current technology that makes improved technology desirable?

Identify competing technologies and the advantage(s) of the proposed technology.

B. Program of Work

Describe the stage of current product development efforts, e.g. prototype development,

preclinical animal studies, product testing, etc. Later, we may ask for copies of data, journal

articles and other support.

Describe in detail the specific work to be carried out.

Specify the role of each participating organization and where the work will be conducted.

Describe the roles of the key personnel in the project. Summarize the qualifications of the

project's management and technical team members, showing how their education and work

experience qualify them for the project. Append a resume for each team member. (Please

attach resumes to the end of the proposal.)

C. Commercialization Activities

Identify the target market(s) for the product/process to be developed in the project. Include

market size, potential penetration, target customers, and competition. What share of the

market does the company expect to capture?

Describe how the company will manufacture or produce the product or service developed in this

project. Include any subcontracting and how the company will conduct quality control.

Explain how the company plans to fund the commercialization of the product/process.

Provide a brief marketing plan which will be carried out from now until the product is

established. Include personnel, advertising and promotion, pricing policies, sales and

distribution strategy, etc.

D. Impact on Company

Summarize the nature of the company's business, including major products or services, and

describe how the results of this project will affect that business.

For existing companies with revenues, provide current gross annual sales figures and projected

increases in sales resulting from this project.

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COMPANY SUMMARY FINANCIAL RESULTS/PROJECTIONS

2016 Actual

2017 YTD

2018 Projected

2019 Projected

2020 Projected

Revenue

Fund Raising

Cost of Goods Sold

Gross Margin

Expenses

EBITDA (Not including fund raising)

Expected Jobs Within Company:

2016 Actual

2017 YTD

2018 Projected

2019 Projected

2020 Projected

PA FTE

Outside PA FTE

Total FTE

Industry – Academia Relationships

Address each of the following (if applicable). Use a maximum of one (1) page.

Has a contractual relationship between the company and the university/non-profit institution

been signed? (A copy is required before final BEN project approval)

Is there a signed intellectual property agreement between the company and the university/non-

profit institution? (A copy is required before final BEN project approval)

Describe any business relationship (e.g., employee, consultant) that the principals, directors,

officers, employees or advisors of the firm(s) have with the university or non-profit partner.

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BUDGET AND MILESTONES

BFTP Project Budget

Please provide a description of each expenditure from each source. The amounts here should coordinate with the BFTP Project Milestones.

Use of Funds Project Costs (including both BFTP Funds requested and Match)

Cash - BFTP

Cash - Other

Source of Cash In-Kind Total

Personnel (Name, Title, Hours, Hourly Rate and State Located)

0

0

0

0

0

0

0

Total Personnel 0 0 0 0

Consultants/Subcontractors (And State)

0

0

0

0

0

0

Total Consultants/Subcontractors 0 0 0 0

Other Direct Expenditures (including overhead)

0

0

0

0

Total Other Direct 0 0 0 0

Total Project Costs 0 0 0 0