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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.