A Special Report: New Horizons Foundation s Innovate Lea County Conference

Transcription

1 A Special Reprt: New Hrizns Fundatin s Innvate Lea Cunty Cnference This is a summatin f bth the presentatins and the briefing materials prvided at New Hrizns Fundatin s April 23, 2016, cnference fr lcal, reginal and state leaders and fficials in the public and private sectrs. The cnference fcus was n the backgrund and status f NHF s strategies and prgress fr further strengthening and diversifying the innvatin ecnmy f Lea Cunty and its surrunding regin in the Permian Basin. A cmmunity s ability t create technlgy, turn it int a prduct, and get value frm it will be the standard that determines its success in the 21st century. The Knwledge Seekers, Creating Centers fr the Perfrming Sciences W. Arthur Prter, Ph.D. Page 1 f 24

2 Table f Cntents Intrductin 3 Executive Summary 5 Opening Remarks 6 Prgress Reprt 8 Creating Technlgy. 11 Turning Technlgy int Prducts. 13 Getting Value fr Technlgy 16 Tw Examples.. 19 A Business Owner s Cmments.. 21 Final Thughts. 23 Page 2 f 24

3 Intrductin On April 23, 2016, New Hrizns Fundatin (NHF) hsted the Innvate Lea Cunty cnference n the campus f New Mexic Junir Cllege in Hbbs, NM, t brief lcal, reginal and state leaders n its prgress and accmplishments since its frmatin five years ag. This reprt cnveys a summary f thse briefings. The stated missin f New Hrizns Fundatin is t prmte, develp, and administer technlgical innvatins fr applied scientific, educatinal, and ecnmic wealth creatin fr public benefit and ecnmic grwth. It is a 501 (c)(3) rganizatin that was frmed in 2011 via a partnership between the Lea Cunty Cmmissin and New Mexic Junir Cllege, with the primary gal f further strengthening and diversifying the ecnmy f Lea Cunty, and als t fster investment and drive innvatin in Lea Cunty and the surrunding Permian Basin. Attendance at the cnference included apprximately 50 individuals frm bth the private and public sectrs with an interest in learning mre abut hw NHF is wrking t access new technlgies t stimulate investment and innvatin in the ecnmy f Lea Cunty and the surrunding regin f sutheast New Mexic, as well as in the vast, il-rich Permian Basin f eastern New Mexic and West Texas. Attendees included business wners and executives; lcal, cunty and state elected fficials; and ecnmic develpment leaders frm Lea and neighbring Eddy Cunty. The cnference was pened by Rn Black, NHF Bard President, fllwed by a detailed prgress reprt by Dale Gannaway, NHF Executive Directr, wh then intrduced a panel f three NHF staff executives wh addressed cre issues in the develpment f an innvatin-based ecnmy: 1. Tim Wittig, NHF Technlgy Manager: Finding Prven Technlgy t Expand and Diversify Our Ecnmy Page 3 f 24

4 2. Lance Andersn, NHF Patent Cunsel: A Mdel fr Innvatin 3. Gary Panknien, NHF Entrepreneur-in-Residence: Getting Value frm Technlgy Panknien als presented an verview f the lcal develpment pprtunities f tw technlgies that have already been identified and accessed by NHF under its new agreement with the U.S. Department f Defense. Cld Spray technlgy: A Test Services Agreement with the Army Research Lab (ARL) that will allw Pemc f New Mexic t wrk directly with the ARL Cld Spray Team t develp prcesses, techniques and capabilities fr utilizatin in the diversificatin f Pemc s capabilities and custmer base acrss the Permian Basin and beynd; and Sund Suppressin technlgy: A Scpe f Wrk and license agreement fr the ARL s Vrticity Muffler technlgy giving NHF the rights t c-develp the prttype f the muffler in Lea Cunty fr use by the military fr their vehicles and exclusive use by NHF fr all nn-vehicular use in the cmmercial market. Garry Buie, CEO and President f Pemc f New Mexic, spke infrmally at the cnference abut his experiences wrking with the NHF staff t identify and further develp the Cld Spray technlgy that NHF has accessed at the ARL. The cnference cncluded with infrmal remarks by NHF Bard member Dr. David Schmidly, immediate past-president f the University f New Mexic and a widely recgnized authrity n the many ways new research and technlgies are driving the mdern-day innvatin ecnmy. Page 4 f 24

5 Executive Summary: A New Way Frward in the Permian Basin The NHF cnference demnstrated that its principal accmplishments t date have been in attracting a strng executive staff and in gaining access t the research discveries and cutting-edge technlgies flwing frm federal research labs. The executive staff s knwledge and expertise in the new innvatin ecnmy was evident in the cnference briefings, while the relevance f federal research technlgies t the ecnmic stability and grwth f Lea Cunty and the Permian Basin was the centerpiece f the cnference. The briefing centered n the Master Cperative Research and Develpment Agreements (CRADA) that NHF under the leadership f its Washingtn, D.C.-based Technlgy Manager Tim Wittig has entered int with the Department f Defense s Army Labratries, and hw several f thse new technlgies are already being explred and develped by businesses based in Lea Cunty. The business grwth and new jb pprtunities that will emerge frm NHF s new agreement with the ARL are particularly relevant t a relatively small rural cmmunity whse lcal ecnmic frtunes have histrically been clsely tied with ne industry sectr. NHF Bard member David Schmidly, the nw-retired frmer president f the University f New Mexic, Oklahma State University and Texas Tech University, speaking infrmally at the clse f the cnference, said: What s happening here is the best example f hw t mve entrepreneurship int a rural cmmunity that I ve ever seen in my entire experience. NHF prvided attendees with a packet f infrmatin t supplement presentatins n the federal research labs initiative, the imprtance f managing intellectual prperty, and the special challenges f managing new businesses in tday s knwledge ecnmy. This reprt cnveys the highlights f these presentatins and discussins. Page 5 f 24

6 Opening Remarks Rn Black, President f the NHF Bard f Directrs Rn Black currently serves as a member f the Bard f Trustees fr New Mexic Junir Cllege. He als is the Chairman f the Lea Cunty Cmmissiners. Black was a member f the riginal faculty f New Mexic Junir Cllege and nw serves in numerus public leadership capacities acrss Lea Cunty. Bard President Rn Black pened the cnference by affirming the purpse f New Hrizns Fundatin, which was frmed in 2011 as an rganizatin with the stated missin t prmte, develp, and administer technlgical innvatins fr applied scientific, educatinal, and ecnmic wealth creatin fr public benefit and ecnmic grwth. Recunting the fundatin s beginnings, he explained hw cmmunity leaders such as NMJC President Steve McCleery, wh is als the current Vice President f the NHF Bard, had recgnized an pprtunity t advance the reginal ecnmy that had been created by a new state law enabling clleges and universities in New Mexic t frm research fundatins. Black explained hw McCleery (wh has annunced his retirement as NMJC President by mid-2016) and nw-retired Rbert Rhdes and thers at the cllege seized the pprtunity t rganize what ultimately was chartered as a 501(c) 3 entity supprted by the cllege and the Lea Cunty Cmmissin. He explained that frm the beginning, the cre strategy f NHF has been t identify new research discvering and emerging technlgies that culd be adapted t the needs and pprtunities f the area s private sectr, in rder t attract new businesses t the cunty but als enable the grwth and expansin f lcal existing cmpanies. The ultimate utcme f the visinary initiative is designed t generate mre jb pprtunities and help diversify a lcal ecnmy that has lng been tied t the cyclical nature f the il and gas industries, nt nly by starting new technlgy-based businesses but als by helping existing businesses access and apply technlgies t expand and grw. Page 6 f 24

7 Black als cmmented that the histrically strng wrking relatinships amng the area s businesses, gvernment ffices, educatin institutins and ecnmic develpment ffices are grwing even strnger in the mdern-day research, technlgy and innvatin ecnmy. He called attentin t the cmplementary relatinship NHF has with the Lea Cunty Ecnmic Develpment Crpratin, whse Bard f Directrs Chairman, Tres Hicks, als serves n the NHF Bard. He said the NHF s greatest accmplishments at this pint are tw-fld: 1. Assembling an utstanding staff that can turn an idea int an actual prduct r business; and 2. Getting Cperative Research and Develpment Agreements signed with the Department f Defense giving NHF access t their labs and the ability t find new uses fr their research discveries in the civilian ecnmy. Bard President Black included in his remarks an anecdte abut hw cmmunity leaders in the early stages f rganizing the new fundatin had engaged a technlgy management firm t study and assess the regin s research and technlgy resurces and assets, and hw the firm s prject manager was led by the individual the newly frmed fundatin then hired in 2012 t serve as its Executive Directr, Dale Gannaway. Page 7 f 24

8 Prgress Reprt: A Strng Platfrm fr Sustained Prgress Dale Gannaway serves as the Executive Directr f New Hrizns Fundatin. In this rle, Gannaway wrks clsely with the Bard f Directrs and directs the NHF staff t utilize the fundatin s business mdel t prvide unique technlgy cmmercializatin capabilities fr Lea Cunty, New Mexic, and the Permian Basin. Executive Directr Gannaway began his reprt by thanking the NHF Bard, Lea Cunty Cmmissin and NMJC fr their visin in creating the fundatin, and fr their ability t lk ver the hrizn t see pprtunities and g int the future and create new pprtunities fr investment, innvatin and success. Drawing a parallel between the funding f the NHF nly five years ag and the funding f New Mexic Junir Cllege nearly 50 years ag, Gannaway said such initiatives call fr visin, curage and an innvative spirit. He turned t a qute displayed n the cnference screen (and als included in the cnference infrmatin packets). The qute is drawn frm The Knwledge Seekers, a bk published tward the end f the 20th century abut creating the mdern innvatin ecnmy in the cming 21st century. The qutatin illuminates the value and the pwer f NHF s strategy t identify and access available research discveries frm a wide range f research labs and institutins and find ways t bring these technlgies back t Lea Cunty and put them t practical use in the creatin f a new innvatin ecnmy. The qutatin speaks fr itself: A cmmunity s ability t create technlgy, turn it int a prduct, and get value frm it will be the standard that determines its success in the 21st century. The Knwledge Seekers, Creating Centers fr the Perfrming Sciences W. Arthur Prter, Ph.D. Befre delivering his reprt n the prgress f NHF, Gannaway intrduced Mark Schinnerer, President f the Bard f Directrs f the Carlsbad Department f Develpment in Page 8 f 24

9 neighbring Eddy Cunty, and thanked him fr his interest in NHF s initiatives. He als praised the state s new Innvate New Mexic strategic plan, which was included in attendees infrmatin packets. Mving t the prgress being made by the NHF Bard and staff, Gannaway prvided attendees with a list f agreements NHF has signed with the Department f Defense giving NHF access t its research labs, which receive $40 billin annually in federal funds fr research. First and fremst in imprtance is the new agreement with the DD s Army Research Lab: Several Master Cperative Research and Develpment Agreements (CRADA) with Army Labratries, giving the fundatin access t Army, Navy, Air Frce r Marine research labs, including their peple, resurces and capabilities. Fr example, the Master CRADAs between ARL and NHF allw any cmpany that wishes t wrk with NHF the pwer t access the labs thrugh the NHF/ARL agreement. A CRADA with accmpanying pre-negtiated license agreement fr the Army Research Lab s (ARL) Vrticity Muffler technlgy, giving NHF the rights t c-develp the prttype f the muffler in Lea Cunty fr use by the military fr their vehicles and exclusive rights fr all nn-vehicular use in the cmmercial market. The ARL engineer has already cme t Lea Cunty t begin wrk n the develpment f the prttype with NHF and a lcal manufacturer. The license agreement with the ARL with pre-negtiated terms fr the rights t exclusively license any ARL-develped muffler technlgy develped under the CRADA that NHF wants t license. This agreement is the first f its kind fr ARL, which has never signed such an agreement with any utside rganizatin. A Test Services Agreement (TSA) with ARL that will allw Pemc f New Mexic t wrk directly with the ARL Cld Spray Team t develp prcesses, techniques and capabilities fr utilizatin in the diversificatin f Pemc s capabilities and custmer base acrss the Permian Basin and beynd. A Master CRADA with the Armament Research, Develpment, and Engineering Center (ARDEC) at Picatinny Arsenal/Benet Labratries in Rckaway, New Jersey, and Albany, New Yrk, respectively. This agreement gives the fundatin access t ARDEC and its peple, resurces and capabilities as well. Page 9 f 24

10 A Partnership Intermediary Agreement with ARDEC that gives it sme unique capabilities fr intrducing technlgies t the Department f Defense frm cmpanies and individuals in the private sectr. Gannaway als shared an update n NHF s activities in the first quarter f 2016: Cnducted briefing f Gvernr Susana Martinez and Lt. Gvernr Jhn Sanchez and his staff at a January 25 meeting in Santa Fe. Led an NHF Technlgy Expeditin t visit Defense Department research labs with Lt. Gvernr Sanchez, his Chief f Staff, State Rep. David Gallegs, and thers n March 24. Launched the Vrticity Sund Suppressin muffler prject and develpment in Lea Cunty with ARL engineer Mike Scanln. Signed Memrandum f Understanding with Pemc f New Mexic t launch the Cld Spray service peratins in Lea Cunty Cntinued wrk t finalize the NHF/Picatinny Arsenal Technical Services Agreement t launch wrk between NHF Entrepreneur-in-Residence Gary Panknien, n behalf f New Hrizns, and Richard Fng and his team f Energetics Experts at Picatinny Arsenal. Page 10 f 24

11 Building the Innvatin Ecnmy Three Perspectives 1. Creating Technlgy: Finding Prven Technlgy t Expand and Diversify Our Ecnmy Tim Wittig, NHF Technlgy Manager Tim Wittig maintains an ffice fr the fundatin in Washingtn, DC. He is a well-recgnized Intellectual Prperty Attrney wh pssesses vast knwledge f the DD Labs and understands hw t draft, negtiate and utilize Cperative Research and Develpment Agreements that allw NHF and its clients access t technlgies, peple and capabilities within the Department f Defense Labs. Summary f Key Pints Federal Technlgy Is an Enrmus Surce f Available Technlgy Creating, funding, develping and nurturing a research institutin seemed t Lea Cunty leadership an expensive way t g The federal gvernment s labs was a better apprach There are mre than 700 federal labs They receive mre than $60 billin each year Why Federal Labs Are Such a Gd Surce f Cmmercially Useful Technlgy The labs research everything After finding an answer, the labs try very hard t turn the science int wrking slutin The labs de-risk technlgy Our target is a federal labs slutin t a cmmnly experienced Lea Cunty prblem, with the research cmplete, the cncept prven, the prttype built and the patents applied fr Every step tward a cmmercial prduct that the federal gvernment pays fr as it develps a slutin fr a federal prblem reduces the risk f applying that slutin t a Lea Cunty prblem Page 11 f 24

12 Dealing with the Federal Gvernment Is Always a Treat Wrking with the labs requires speaking their language and using their agreements: Cperative Research and Develpment Agreements Patent License Agreements, Test Service Agreements Partnerships Intermediary Agreements Educatinal Partnership Agreements And s n The Heavy Lifting Has Already Been Dne Master Agreements have been negtiated New tasks can be added withut renegtiatin Licensing terms have been apprved in advance Access t well ver 8,000 scientists and engineers nw pen Billins f dllars f federal lab facilities available fr Lea Cunty businesses If needed, the same can be dne fr thers Army, Navy, Air Frce, Crps f Engineers, Cast Guard, Department f the Interir, Agriculture, Hmeland Security, etc. The DD Labs Are Easy t Deal With if Yu Knw Where They Are and What They D We can help find the pckets f research that are imprtant t Lea Cunty businesses We perate technlgy expeditins that take Lea Cunty business wners t federal labs where slutins exist t check the quality and fit f thse slutins t Lea Cunty prblems By partnering with NHF, businesses can seriusly de-risk the effrt t bring new cmmercial activity t Lea Cunty and beynd The Task fr Lea Cunty Cmpanies is t Identify Prblems Shared by Many T make this wrk, Lea Cunty businesses need t identify prblems with sufficient cmmercial interest (either bradly r fr their wn business) t make it wrth the effrt t adapt federal technlgy t a new prduct r service The fundatin is ready t wrk with a Lea Cunty business t: Identify the lcatins f ptential slutins Create agreements t extract the technlgy Utilize gvernment persnnel and equipment t adapt the slutin Marshal ther resurces t mve cmmercializatin frward Page 12 f 24

13 2. Turning Technlgy int Prducts: A Mdel fr the New Innvatin Ecnmy Lance Andersn, NHF Patent Cunsel Lance Andersn served fr mre than 10 years as in-huse cunsel and lead intellectual prperty attrney fr bth a large research university system and an early-stage venture capital cmpany. He versaw all facets f intellectual prperty develpment, management and transactins. His experience and backgrund cntribute t skill sets applicable t technlgy transfer and emerging technlgy. What Des Innvatin Mean? Summary f Key Pints A new idea, device r methd; r The act r prcess f intrducing new ideas, devices r methds We Are Living in a new Age f Innvatin with a much faster life cycle f trial and adaptin, cmpared t a mre gradual grwth rate and lwer levels f adaptatin and use. Current Federal Gvernment Plicies stress the strategic imperative f fueling the engine f private sectr innvatin as a key element f a New American Strategy fr Innvatin. The Building Blcks f the Innvatin Ecnmy Are Well Established The Bayh-Dle legislatin in the 1980s allwed and incented research universities t place greater emphasis n patenting discveries and transferring them int the cmmercial marketplace Tday, hundreds f research universities in the U.S. and beynd are engaged in the tech-transfer industry, cmpeting fr federal research dllars and als cmpeting fr pssible licensing agreements with businesses, investrs and entrepreneurs. The Typical University Cmmercializatin Mdel Frced t cmpete fr federal grants and ther surces f research funding, as well as manage the prcess f identifying patentable and marketable intellectual prperty and the challenges f finding licensing agreements and Page 13 f 24

14 equity partners befre cmmercializatin can begin a lng prcess with uncertain utcmes. The NHF Cmmercializatin Mdel NHF s mdel begins with the needs f the private sectr marketplace and cnnects thse needs with intellectual prperty that is available right nw frm ur natin s well-funded netwrk f hundreds f federal research labs, where, as my clleague Tim Wittig likes t say, All the heavy lifting has been dne. What Intellectual Prperty Means. any and all sftware, technlgy, materials, r infrmatin, including withut limitatin inventins (whether patentable r nt), imprvements, trade secrets, prprietary infrmatin, knw-hw, databases and data cllectins, inventin disclsures, technical data and custmer lists, custmer cntact infrmatin, custmer crrespndence and custmer licensing and purchasing histries, sftware, prduct designs, business plans, prduct radmaps, wrks f authrship, and dcumentatin relating t any f the freging. * *An actual definitin fr Intellectual Prperty in a recent Purchase Agreement fr a Business. Yu Must Cnsider All f the IP Rights in Tday s Innvatin Ecnmy Patents Trade secrets Trademarks Cpyrights Why IP Rights Are Imprtant IP cmprises a significant prtin f a firm s intangible assets, which is a critical element f any Purchase Price Allcatin In tday s innvatin-driven market, intangible assets make up the lin s share (sme 84% in 2015) f the S&P 500 Market Value Assessing the Rle Innvatin Plays in a Business Develp a basic fundamental understanding f the varius types f IP in yur prtfli. Gather intelligence cncerning cmpetitr IP strategies and prtflis. D nt priritize prtfli quantity ver quality. Page 14 f 24

15 Adjust yur business plan t ensure IP assets are applied prfitably acrss mst business activities. Seek ut new strategies and pprtunities t mnetize yur IP prtfli. Cnsider new methds f generating revenue frm yur current IP prtfli (e.g., licensing, selling, etc.), and acquiring IP t further bth ffensive and defensive psitins within the cmpetitive marketplace. Page 15 f 24

16 3. Getting Value fr Technlgy: 12 Steps t Euphria Gary Panknien, NHF Entrepreneur-in-Residence Gary Panknien, a Texas A&M electrical engineering graduate, has ver 45 years f experience at the CEO/COO, President and technical management level fr bth public and private cmpanies fcused n creative management in high-grwth, leading technlgy industries. Summary f Key Pints Step #1: Have a Gd Idea WOW, that s a gd idea N way, I dn t think s Are yu nuts? That s crazy Step #2: D Yur Hmewrk Knw the market Knw the cmpetitrs Why are they successful? Wh failed and why? What is the market size? Knw the histry Will it scale? What is the sustainability? Step #3: Listen t Yur Custmer Identify the custmer What are the custmer needs that yu address? Hw beneficial is yur slutin; what s the ROI? The custmers may nt knw what they want Step #4: Lk fr the Killers Are yu a ne-trick pny? Page 16 f 24

17 D yu have t create a market? Sny Beta vs VHS Edisn DC vs Westinghuse AC Edisn natural rubber Step #5: Learn t Listen t. Custmer Salesman Market Staff. But dn t believe yur wn press Step #6: Hire Great Peple Yur Assets Breathe Have a hiring prcess Take yur time Cnduct team interviews Lk fr fit r faults Stress test Step #7: Be a Leader Management style Military r Mtivatr? Respect each ther Develp a creative envirnment Make sure everyne knws the plan Empwer yur staff It s OK t fail Check and validate Dn t wait t lng t change Step #8: Dn t Search fr the Guilty What s the prblem? D we have anyne wh can figure ut the prblem? Find a slutin Implement the slutin Check t make sure the prblem is fixed Learn frm the experience Try nt t d it again Page 17 f 24

18 Step #9: Knw Yur Numbers Cash flw is mre imprtant than yur Mther It s nt just the CASH Market dynamics Grwth patterns Cmpetitrs numbers Staff retentin Custmer retentin Step #10: Embrace Change The nly things fr sure are Death, Taxes and Change Blckbuster Kdak AT&T Step #11 Dn t Cunt the Mney til the Dealing s Dne Have an exit strategy IPO Merger Acquisitin Sell r Run the business Step #12: Have Fun and Remember If yu enjy what yu d, yu will never wrk anther day in yur life. Page 18 f 24

19 Cld Spray Technlgy Building the Innvatin Ecnmy: Tw Examples f NHF s New Mdel at Wrk This pprtunity has been made pssible by the Test Services Agreement with ARL that will allw Pemc f New Mexic t wrk directly with the ARL Cld Spray Team t develp prcesses, techniques and capabilities fr utilizatin in the diversificatin f Pemc s capabilities and custmer base acrss the Permian Basin and beynd. Benefits: Prven technlgy and prcess t build up metal surfaces Nw used primarily t repair aircraft cmpnents Develped t a cmmercial prduct Beginning t be deplyed in several applicatins in the il industry and beynd NHF is nw partnering with Pemc f New Mexic fr further develpment Jb training curse t be ffered thrugh NMJC Vrticity Muffler Technlgy This pprtunity has been made pssible by the Scpe f Wrk and license agreement fr the Vrticity Muffler technlgy giving NHF the rights t c-develp the prttype f the muffler in Lea Cunty fr use by the military fr their vehicles and exclusive use by NHF fr all nn-vehicular use in the cmmercial market. An ARL engineer came t Lea Cunty in late January t begin wrk n the develpment f the prttype with NHF and a lcal manufacturer. Benefits: Prven sund-suppressin technlgy Deplyed in Army applicatins, including Rifle silencers Fur-wheelers Nn-vehicular applicatins, such as Page 19 f 24

20 Reduces nise generated by an engine Drilling rigs Generatr sets Wrkver rigs Pwer tls Page 20 f 24

21 Building the Innvatin Ecnmy: A Business Owner s Cmments n His Wrk with NHF Garry Buie is President and CEO f Pemc f New Mexic, an ilfield repair and manufacturing firm based in Hbbs ding business thrughut the Permian Basin. Pemc has partnered with the NHF t further develp new technlgies the fundatin has identified at federal research labs under its new Cperative Research and Develpment Agreement (CRADA) with the Department f Defense. Buie attended the April 23 Innvate Lea Cunty cnference and spke infrmally abut his experience wrking with NHF leadership and staff ver the past several years, including being part f NHF s visits t varius federal research labs. A sampling f his cmments: Back in 2013, I wund up in Albany, New Yrk, n a trip rganized by New Hrizns t visit the Army s Benet Labratries. I had n idea f what t expect in ging t an Army lab, n idea at all. We walked int the lab, and everyne in this facility knew Tim Wittig. Evidently ver the years Tim has had a great relatinship with the lab. I really can t tell yu why I went, but I did, and it was prbably ne f the mst enjyable times f my life. This will give yu an idea f why I am here tday and why we at Pemc are ding what we are with this Cld Spray technlgy. I gt t see sme amazing things that in turn triggered in my mind that I culd see the relatinship between what was ging n in an ARL and that it culd transfer t what we are ding in Hbbs and the Permian Basin tday. Fr peple just thinking abut, having ideas, the ARLs are there t help yu; fr the entrepreneur with a wild idea, they can d the research fr yu, d the trial and errr, and that s what csts mney. Thrugh Dale and his team at the NHF, they are making it available t us the engineers, the facilities they can d it all and it cuts dwn n ur time and mney by using them. On a subsequent trip t ARL facilities in Bethesda, Maryland, I fund ut what they were ding f interest t ur business here in Lea Cunty, and since then, I ve fund the prcesses that are needed and hw far we can take this prduct tday. Page 21 f 24

22 S, Pemc is in partnership with New Hrizns, and the federal gvernment, and New Mexic Junir Cllege, and the Cunty f Lea. I guess we are a team; we all have smething in this pt, which is great because I believe in the team cncept, in partnerships. S yes, it s neat, the Cld Spray technlgy is the neatest prcess yu ve ever seen. Yu can take a piece f glass and cver it with silica, whatever metal yu want. It takes guys that get yu utside the bx, and these guys have taken me even further utside the bx than what I was. The best part abut it all is that they have given me a fundatin t build upn. They have taught me mre in the last three years than I have prbably learned in the previus 30 years. I can tell yu mre abut what I have seen, frm miniature drnes t 3D printers befre they hit the market all there, available fr all f us. It helps us all, and the main thing is it will help Lea Cunty and the Permian Basin. Page 22 f 24

23 Building the Innvatin Ecnmy: Final Thughts and Cmment Rn Black NHF Bard President I m a dreamer, but I keep thinking abut that sund-suppressin muffler prject and hw New Hrizns has the rights t all the nn-vehicular uses f that technlgy. I like t get up early in the mrning t mw my lawn, and my neighbr mentined t me in a kind, nice way ne mrning that he and his wife like t sleep in a little late in the mrning. And s my dream nw is I can see a factry right here in Lea Cunty with maybe a thusand well-paid wrkers whse salary has nthing t d with the price f il, manufacturing millins f mufflers fr lawn mwers, chain saws, weed eaters and things like that. It may be a dream, but I dn t think it s impssible at all. And I think New Hrizns is in psitin t make thse kinds f things happen. Dale Gannaway NHF Executive Directr The private sectr creates ecnmic develpment and drives it, and New Hrizns Fundatin is a resurce fr cmpanies here t use. It will take an investment f yur time, take an investment f yur mney. It will take sme mental anguish, but yu guys are entrepreneurs and this is an entrepreneurial cmmunity. T bring this kind f capability t Lea Cunty in a rural area is smething the Bard shuld be very prud f, and New Mexic Junir Cllege very prud f, and yu as citizens f Lea Cunty shuld be very prud f. S I hpe yu ll take advantage f it. We re still develping the mdel, s please be patient with us. Each deal is ging t be separate and unique. We think it s an utstanding pprtunity. And we thank yu fr being with us tday. Page 23 f 24

24 Dr. David Schmidly NHF Bard Member I wrked fr the Texas Aggies fr 25 years, I spent 10 years at Texas Tech, five years at Oklahma State, and five at the University f New Mexic and in all f thse psitins, each f thse institutins had statewide respnsibility fr helping ecnmic develpment. What s happening here is the best example f hw t mve entrepreneurship int a rural area that I ve ever seen in my entire experience. If yu lk at the State f New Mexic, abut 20% f ur jbs are gvernment jbs. We have nt develped the private sectr in this state like we need t, in rder t slve a lt f the challenges we have in New Mexic. S, the private sectr is imprtant. At the UNM in Albuquerque, at Scrr where New Mexic Tech is, at Las Cruces where New Mexic State is, yu have a built-in pl f scientists and engineers that are paid fr by the taxpayers f New Mexic t create widgets and slutins t prblems. Thse cmmunities have a huge leg up n cmmunities like Hbbs, Carlsbad and all the places where yu dn t have this scientific capability. What this team f peple has dne is they have pened up mre pssibilities fr scientific develpment thrugh these federal gvernment labs, even mre than exists in Albuquerque, Scrr r Las Cruces. That is a huge step frward, and they have dne it in this entrepreneurial cmmunity, and I just want t applaud and be prud t be part f this cmmunity. And yes, I knw things are a little different than they were tw years ag, but I just want yu t knw there s sme real hpe here, there is sme real pprtunities fr entrepreneurs t engage this team f peple and like Rn s dream f that muffler factry it is a very real pssibility because f the kind f peple yu have in the cmmunity and because yu have New Hrizns. Nw factr in the ne great asset that a lt f cmmunities in rural areas dn t have, which is New Mexic Junir Cllege with its expertise in training peple fr the kinds f jbs that Garry Buie will be creating at Pemc, r even fr thse new jbs at Rn Black s muffler factry. Nw is the time t unleash the entrepreneurs f this cmmunity, and we can really build smething. ### Page 24 f 24