8.0. EDSR 04-14-2003 Item Itt 8
City of
Elk
River
MEMORANDUM
TO: Economic Development Authority
FROM: Heidi Hall, Economic Development Assistant
DATE: April 14, 2003
SUBJECT: Consider Business Incubator Lease Extension for
KnowledGenetica
Attachment
• KnowledGenetica Power Point Presentation
• KnowledGenetica Newsletter, March 2003
• • KnowledGenetica Press Release, March 28, 2003
Prior to the EDA's consideration to extend KnowledGentica s sublease,Joe Roushar, Chief Technology
Officer, will provide the EDA with a ten-minute company update (see attached Power Point presentation)
followed by a brief question and answer session.
Background
KnowledGenetica became an Incubator tenant in May of 2002, subleasing 2,267 SF of space.
For the past year, the company has made timely cash rent payments in the amount of
$566.75 per month.
KnowledGenetica is developing a universal human language translator that will be utilized
through computer software. The software has a number of key applications for commercial,
government, military, and personal use.
Issue
Mr. Roushar has requested that the EDA consider a six-month sublease extension for
KnowledGenetica. At the end of the 6-month extension, Mr. Roushar forecasts that the
company will expand within the City of Elk River.
Staff Recommendation
Staff recommends that the EDA consider granting a 6-month sublease extension to
KnowledGenetica.
•
•
•1 1
KnowledGenetica Update
r ~�
Elk River, MN
April 14,2003
Progress is steady
• We completed round 1 Cony. Bridge
. • We are managing cash carefully
• Product development is progressing
•We are approaching new customers
•We are adding staff and advisors
w- We are getting the word out
Apnl 14,2003 Elk Rlver,Minnesota 2
Financing is Proceeding
April, 1999 to April, 2002
Self-funded—Revenues of$250K/Year
April 2002 to Present
Cony.Bridge Loan Term 1 —Raised$250K
•Private investors&community development funds
Moving Forward
Cony.Bridge Loan Term 2—Seeking$250K
SBIR/STTR Research work+SBA Loan CO}
April 14,2003 Elk River,Minnesota 3
i
1
•
1u r(CCI
Keeping Expenses Low
We have kept our burn-rate low through
equity-based contracts with workers
Facility and operating expenses
manageable
Used equipment where possible
Frugal purchase decisions for new
equipment
Fpn114,2003 Elk River,Minnesota 4
11- 7 C'C'
Alpha and Demo Progressing
Alpha and Demo capabilities growing
Alpha and Demo performance improving
•
Ability to tailor technology for customers
with special needs:
Air Force Intelligence needs
•KNIFE and KODES
DARPA needs
•Compact Translator Module
Opal 14,2003 Elk River,Minnesota 5
Corporate & DoD Opportunities
Meetings with UnitedHealth
Group
Air Force SBIR - $100,000.00
• DARPA STTR - $70,000.00
•Collaboration with U of M
April 14,2003 Elk River,Minnesda B
•
2
s
New Advisor and Technicians
Joel Wiest is advisor and investor
Former Target CFO
David McKoskey and Ed Watts
Computational Linguists
Interns Veli-Matti, Seth & Josh
Quality assurance and software
development
April 14,2003 Elk River,Minnesota ]
Publicity Opportunities
International Business Development
Conference—Minneapolis—May 21st,2003
llnt'1 Business Development Conf
41st Annual Meeting of the Association for
Computational Linguistics Sapporo,Japan
July 7-12,2003
April 14,2003 Elk River,MinnBSIXd 8
1CU
Objectives
Extend Lease in current
Elk River space for 6 months
Expand into larger Elk River
space thereafter
April 14,2003 Elk Rlver,Minnesota 9
i
3
w
• .,
An Update of KnowledGenetica Corporation
Volume 2.1 March 2003
Contributions to Homeland Defense Welcome to a New Advisor
KnowledGenetica is introducing a system that will KnowledGenetica is pleased to ; "&`
dramatically increase US ability to ferret out and announce that Joel Wiest, a :' '`
prevent future terrorist plots. The system will scan seasoned corporate financial `ial`.
documents such as intercepted communications, expert, has joined our Advisory .:Y– ` $
intelligence reports, lists of travelers and bills of "
9 p Board. A former CFO of Target ��
lading for potentially dangerous materials, and make Corporation, Joel is currently ' ,f-,......—,
connections that would be impossible for human as the Controller for =,4
analysts because of the sheer volume of information. :'-
Kaybee Toys in Massachusetts.
In addition to his contributions
If the US government had possessed this tool prior to 1/1to the Board of Advisors, Joel
9/11", we would have had a much greater ability to has invested in KnowledGenetica.
spot and stop the terrorists, possibly preventing loss
of life.
Seed Round 1 Complete! 1
Over the past 20 years KnowledGenetica's founder We are pleased to announce the completion of our 1
has been perfecting a system that can understand first round of seed capital financing. We successfully
the context and intent of text. Because of its huge raised $250,000.00 through a convertible bridge
common-sense knowledge base and its brain-like loan. The investors are a combination of qualified
processing techniques, our Language Interpreter private investors and community development funds,
S Module can get inside a person's head based on including the Anoka Sherburne County Capital Fund,
what they say or write. No other system has achieved The Central Minnesota Seed Fund, and the Elk River
the accuracy we can achieve in interpreting context Investors Club. We are now preparing to enter our
and intent. Our greatest innovation, however, is not second term of the Bridge Loan offering in which we
just our ability to achieve such high accuracy, it is our will seek another $250,000.00. This is part of our
ability to do it instantly – no delay – no interminable overall financing strategy.
processing bottlenecks.
Upcoming Events
Add to that our "Indications and Warnings" database KnowledGenetica will be presenting company and
and correlation tools, and we can analyze as much product information on May 21st at the International
information in the blink of an eye as thirty intelligence Business Development Conference hosted by U.S.
analysts can analyze in a year. The puzzle pieces Senator Norm Coleman and Minnesota Governor Tim
were there before 9/11. We just could not possibly,
with human analysts alone, have associated the Pawlenty. For info. see http://www.ibdconference.com.
dozens of relevant puzzle pieces among millions of .........104,
similar but useless pieces. No amount of agency ,,.��•���
consolidation will make analysts able to get through
that much information. We need to empower them Inn Business Development Conference
with high-performance tools to apply their knowledge
and automatically find the pieces and put together the After that, we are taking the Sydney Demo on a
puzzle. The system will eventually be able to do this world tour culminating in a presentation at the 415t
in many languages. Annual Conference of the Association for
Computational Linguistics (ACL) in Sapporo, Japan.
KnowledGenetica is collaborating with the University
of Minnesota to compete for SBIR and STTR --,
research grants with the US Air Force and the :
Defense Advanced Research Projects Agency —
• (DARPA) in the subjects of Indications and Warnings
tools and Commercial Off-the-shelf Translation tools.
Volume 2.1 KnowledGenetica Newsletter March 2003
Development Status several companies including Retek. Ed is assisting
We have achieved huge advances in performance as with our knowledge acquisition effort specializing in
we implement the patent-pending ISYL (I Speak Your lexical and syntactic knowledge extraction.
Language) interpreter software aimed at the call
center market. In our first demo of the prototype in Veli-Matti Puurunen: Veli-Matti is an intern serving
January, we showed tremendous performance as our Quality Assurance and Testing specialist. He
advantages over our closest competitors, processing is a full-time exchange student at Hamline University,
sentences averaging 15 words in length in 1.5 St. Paul Minnesota coming from Oulu, Finland. He is
seconds on a 1 gigahertz Wintel laptop computer. primarily engaged in developing our Testing Tools
The process includes sending "activation" waves that and QA database, including the standards, processes
resemble electrical impulses in the human brain and procedures needed for us to comply with ISO
through our neural style knowledge network. Since 900x, a requirement for marketing our products to
January, we have reduced the processing time to 100 customers in the European Union.
milliseconds (1/10 of a second), successfully Seth Flynn: Seth is a Java Developer and an intern.
processing hundreds of thousands of real-world He is currently a student at Southwestern State
knowledge concepts to understand the text. University in Minnesota. He is working on web
interfaces for our Knowledge Supervisor tool for
The context information is manual knowledge entry and review.
stored in a database that
contains hundreds of Educational CD
thousands of molecules of JP KnowledGenetica has updated our educational CD
knowledge. The molecules Y product"NeuroPedia" to operate
are logical propositions on operating systems up to
about relations between °• a Win2K and XP. This educational
objects and concepts that enable deep context . CD provides you with insights
analysis in our ISYL software. This database °°" °a into the design and theoretical
currently contains more than 500,000 molecules. ! ,ter« base of our ISYL (I speak your
•
language) interpretation and
We have also reduced the time required to compile translation products.
our knowledge base from its temporary form in a
relational database to its optimal native form. While Visit our office or Peruse our Web Site
the conversion process used to run all night (9 hours) Our offices are located at 16820 Hwy 10, Suite 120.
we can now compile our neural style knowledge The offices are part of the Elk River New Economic
network in minutes. If you are interested in seeing a Development Effort. Call us to schedule a visit. Our
demonstration of the technology, please call us to set web site is located at www.knowledgenetica.com. Our site
up a time and place. provides more information on our company's focus and a
directory of our key resources.
Welcome to New Personnel
We are still preserving our capital expense rates so About KnowledGenetica
our interns are part time staff members and other KnowledGenetica is an investor-owned company.
new team members have come aboard on contracts People interested in more information should contact
for combinations of cash and equity. Joe Roushar at KnowledGenetica, (763) 274-1000.
David McKoskey: David is a computational linguist KnowledGenetica Corporation was formed in 1999 to
with roots in knowledge extraction and speech develop software that readily understands people rather
recognition. He has worked for Linguistic than forcing them to adapt to the computer. Imagine
Technologies, Inc. and other technology companies calling a company to inquire about the status of an order,
in the Twin Cities area. He is currently working on his and NOT being forced to listen to an extensive menu of
PhD at the University of Minnesota. David is assisting options and then press or say a number which may get you
with our knowledge acquisition effort by designing to the next step. KnowledGenetica's patent-pending
new mining and knowledge extraction tools. technology provides a simple and elegant answer to the
difficult challenge of managing and reducing call center
Ed Watts: Ed is a computational Lexicographer with operational costs.
experience in translation and localization (the
process of making software usable in different Published by:
bypeople of different cultures). Ed has KnSw/edGeneR/co
languages
p p � 16820 Hwy 10,Suite 120,Elk River,MN 55330
experience performing his multi-lingual wizardry for Voice:(763)274-1000 Fax (763)274-1118
Friday, March 28, 2003 — Elk River, Minnesota
Elk River Company gives big boost to Homeland Defense
KnowledGenetica, a high-tech beneficiary Add to that our "Indications and
of Central Minnesota community Warnings" database and correlation tools,
development efforts, is introducing a and we can analyze as much information
system that will dramatically increase US in the blink of an eye as thirty intelligence
ability to ferret out and prevent future analysts can analyze in a year. The
terrorist plots. The system will scan puzzle pieces were there before 9/11. We
documents such as intercepted just could not possibly have associated
communications, intelligence reports, lists the 50 relevant puzzle pieces among
of travelers and bills of lading for millions of similar but useless pieces
potentially dangerous materials, and using human analysts. No amount of
make connections that would be agency consolidation will make analysts
impossible for human analysts because able to get through that much information.
of the sheer volume of information. We need to empower them with high-
performance tools to apply their
If the USg overnment had possessedknowledge this knowled a and automatically find the
tool prior to "9/11", we would have had a pieces and put together the puzzle. The
much greater ability to spot and stop the system will eventually be able to do this in
• terrorists, preventing thousands of many languages.
deaths, dramatic economic hardships and
two wars. Who is KnowledGenetica?
How Does it Work? KnowledGenetica is a start-up company
in Elk River, Minnesota founded by Joe
KnowledGenetica's founder, over the past Roushar. Joe is a computer software
20 years, has been perfecting a system engineer, a linguist and former US Army
that can understand the context and Intelligence Officer. The company was
intent of text. Because of its huge founded in early 1999, and currently has
common-sense knowledge base and its a team of 8 working on delivering tools
brain-like processing techniques, our that will make the world a safer place.
Language Interpreter Module can get
inside a person's head of based on what KnowledGenetica is working with the Air
they say or write. No other system has Force through the Small Business
achieved the accuracy we can achieve in Innovative Research program to seek
interpreting context and intent. Our funding for this revolutionary tool, as well
greatest innovation, however, is not just as with other US Government parties
our ability to achieve such high accuracy, interested in multi-lingual translation and
it is our ability to do it instantly — no delay other capabilities that will contribute to the
— no interminable processing bottlenecks. long-term well-being of US citizens.