Iowa State University Research Foundation, Inc.

Transcription

1 Iowa State University Research Foundation, Inc. Annual Report July 1, 2008 to June 30, 2009

2 A Contents A Message from the Director... 1 Technology Activity... 4 Technology Reporting: Inventions, Copyright Subject Matter, and Proprietary Plant Germplasm... 4 Patent Activity... 6 Commercialization: Marketing and Licensing... 8 Protecting Our Intellectual Property SBIR/STTR Activity Technology and Germplasm Financial Information Revenues Expenses Income Distribution ISURF Contributions to ISU Fiscal Year 2009 Financial Statement ISURF Board of Directors and Staff Exhibits... 20

3 A Message From the Director Performance Financially, the Research Foundation saw a decrease in net assets over the previous year of $7.2M due to the loss in market value of investments. Net income from operations was a gain of $1.2M, the same as in 08. Total operating revenues were $9.4M compared to 08 revenues of $9.5M. ISURF disbursed $7.6M to ISU and ISU inventors and authors in 09 compared to $9.6M in 08. Marketing and Licensing Activities During 09, ISURF marketed 27 technologies and germplasm lines for the first time, compared to 23 in 08. A total of 50 technologies and germplasm lines were actively marketed in 09. Seventeen technologies and germplasm lines were licensed/optioned for the first time in 09. In 09, ISURF entered into one option agreement with a start-up company located in Iowa. Most of ISURF s licenses are non-exclusive licenses. As shown on Table I, page 9, 75 of the total 84 licenses and options signed in 09 were non-exclusive agreements. We continued to make ISU technologies available to Iowa-based companies to help in the growth and diversification of the economy of the State. Figure I illustrates total sales of products (goods and services) for calendar years 1999 through 2008, based on licensed ISU technologies. The Iowa-based companies sales increased to $103M in 2008, an increase of $19M over 2007 sales. Sales of non-iowa-based companies were $559M a 19% increase over 2007 sales of $468M. Iowa-based sales were 16% of all sales for The figures do not include the sale of agricultural seeds or products that no longer enjoy protection by patents held by ISURF. Figure II illustrates more directly the actual sales based on licensed ISU technologies by Iowa-based companies from 1999 to ISURF Annual Report

4 Figure I. Sales of ISU Technologies* by Licensed Companies *Non-patented plant germplasm not included 700, , ,000 Annual Sales X $1, , , , , Calendar Year Non-IA Companies IA Companies ESTIMATED SALES BY IOWA COMPANIES WERE OVER $100M Figure II. Sales of ISU Technologies* by Licensed Iowa Companies *Non-patented plant germplasm not included 120, ,000 80,000 Annual Sales X $1,000 60,000 40,000 20, Calendar Year ISURF continues to make ISU-developed plant germplasm available by licensing to seed and grain producers. Germplasm available in 09 included soybean, corn, popcorn, oat, and amaranth, although most of the licensing activity was with foodgrade, specialty soybeans. Figure III illustrates the level of germplasm activity by Iowa companies for the last ten years. Total royalties from all commercially-licensed germplasm were $403K in 09, an increase of $123K over 08. A total of 67 licenses were executed this year for germplasm compared to 31 in ISURF Annual Report 2009

5 Figure III: Sales & Use of ISU Specialty Soybean Germplasm by Iowa Companies Bushel Seed Planted/Sold or $ Royalties IA seed bu. IA seed $ Royalties Recognition In the 07 survey conducted by the Association of University Technology Managers (AUTM), ISURF ranked fifth among 161 U.S. universities in the number of license and option agreements signed to transfer the research results of the university. ISURF also ranked eighth in the number of licenses and options yielding income, 17th in gross license income, and was tied in 50th place for invention disclosures received. Sincerely, ISURF RANKED 5TH AMONG 161 U.S. UNIVERSITIES IN NUMBER OF LICENSES AND OPTIONS SIGNED IN 07 IOWA STATE UNIVERSITY RESEARCH FOUNDATION, INC Kenneth Kirkland, Ph.D. Executive Director ISURF Annual Report

6 Technology Activity Technology Reporting: Inventions, Copyright Subject Matter and Proprietary Germplasm ISURF received 95 new disclosures in 09. This represents an increase of 8 disclosures (9%) from 08. Figure 1A provides a categorical breakdown of the various technologies disclosed in 09. Figure 1A: 09 Disclosure Distribution by Category Total = Bio Ag Tech Phys/Eng Chem/Eng Seed/Germplasm Figure 2A reflects a 35% increase of the disclosures classified as biotechnology-life sciences and agriculture (38) from 08 (28); and represents 40% of the total 09 disclosures. Over the last 8 years the biotechnology-life sciences and agriculture category has ranged from a high of 49 disclosures received in 02 to a low of 23 disclosures received in 04. Disclosures received in the classification of physical sciences-engineering decreased in 09 (32) from 08 (34), and represented 34% of all disclosures received in 09. Chemical-chemical engineering remained the same as in 08 (12). Plant germplasm experienced a slight increase in 09 (13) from 08 (11). Figure 2A provides a comparison of the disclosures in these categories over the last 5 years. An eight-year historical table of disclosure data by category can be found in Exhibit B. Plant germplasm disclosures have had the greatest fluctuation in disclosures over the last 8 years, with a high of 61 in 05 and a low of 11 in 02 and ISURF Annual Report 2009

7 Figure 2A: Disclosures Received by Category Biotech Life Sci & Ag Phys/Eng Chem/Eng Plant Germplasm The sources of external research funding resulting in 09 disclosures include U.S. Federal agencies, industry, commodity groups, foundations, and the State of Iowa. In 09 the number of disclosures from all sources except industry increased from 08. Industry-sourced disclosures decreased from 13 in 08 to 8 in 09, and foundation-sourced disclosures increased from 6 in 08 to 10 in 09. Fifty-nine percent of the total 09 disclosures resulted from research projects funded by U.S. Federal agencies; 8% from industry, 14% from commodity groups, 11% from foundations, and 11% from the State. Twenty percent of the disclosures received no external project funding and 21 disclosures (22%) received funding from multiple sources. The table in Exhibit B shows the sources of funding over 8 years. IN 09 INTELLECTUAL PROPERTY DISCLOSURES WERE 59% FEDERALLY FUNDED, 8% INDUSTRY FUNDED, AND 11% STATE FUNDED One measure of the inventiveness of ISU researchers is provided in a comparison to other research universities of the number of disclosures received per $10M in research expenditures. Using data from the annual surveys conducted by the Association of University Technology Managers, ISU researchers continue to outperform (when ISU germplasm disclosures were included) the averages for Iowa State s peer land grant institutions (University of Illinois data includes Chicago and Urbana; and University of California, Davis data were not available since their data are compiled with the full University of California system) and the averages of all participating U.S. universities. Since 03, ISURF s non-germplasm disclosures per $10M has fallen below the average per $10M compared to of all U.S. universities. In 07, the 82 non-germplasm disclosures brought ISU to 3.1 disclosures per $10M compared to 4.0 AUTM average and 3.6 land grant average. The following Figure 3A provides a five-year comparison with and without ISU s germplasm disclosures. ISURF Annual Report

8 Figure 3A: Disclosures per $10M Research 7.0 No. Disclosures ISU with Germplasm ISU without Germplasm AUTM Avg. *Land Grant 10 Average *Land Grant includes: Iowa State University, University of Arizona, University of Illinois-Chicago & Urbana, Michigan State University, University of Minnesota, North Carolina State University, Ohio State University, Purdue University, Texas A&M University, and University of Wisconsin-Madison APPROXIMATELY 40% OF NON- GERMPLASM DISCLOSURES RESULT IN U.S. PATENT APPLICATION FILINGS One hundred ninety-five disclosures were inactivated from the portfolio after unsuccessful attempts at licensing, unfavorable evaluations by staff or patent attorneys, or commercialization difficulties. ISURF currently maintains a portfolio of 456 invention disclosures. Some of these disclosures are put on "hold" because of incomplete information. The majority of the remaining disclosures are being actively evaluated, prepared for patent applications, marketed through the plant germplasm program, and/or explored to match with potential licensees. Patent Activity Forty patent applications, including continuations, divisionals and converted provisional applications were filed with the U.S. Patent & Trademark Office during 09. This is a decrease of thirteen applications over last year s 53 patent application filings. Of the 40 patent applications filed, 20 were in biotechnology-life sciences and agriculture, 16 were in physical science and engineering, 4 were in chemical-chemical engineering, and none were in plant germplasm or consumer products. Exhibit B provides detailed information on the categories filed over an eight-year period. Provisional patent applications are applications that can be filed with the patent office, which give us one year to file a "regular" patent application. We file provisional applications on inventions where we (i) want to delay the actual application to prolong the effective patent life by a year without jeopardizing the priority date, (ii) are not sure of the commercial value at the moment, and/or (iii) want to preserve a filing date because of a pending or previous public disclosure by the inventors. ISURF filed 23 provisional patent applications in 09 compared to 37 in 08. ISURF currently has 154 patent applications (not including provisional applications) pending in the U.S. Patent Office (see Exhibit A for a ten-year history). 6 ISURF Annual Report 2009

9 Twenty-three patents were issued in 09, a decrease from 27 issued in 08. We continue to see an increase in the pendency for patent applications in the U.S. patent office. The issued patents cover most of our technology categories. Twelve (52%) of the issued patents are in biotechnology-life sciences and agriculture, 7 (31%) are in physical science and engineering, and 4 (17%) are in chemical-chemical engineering. The following Figures 1B, 2B, and 3B provide a comparison of 6 years of disclosure, application, and patent activity for the categories of biotechnology-life sciences and agriculture, physical science and engineering, and chemical-chemical engineering. Figure 1B: Biotechnology-Life Sciences and Agriculture Technologies Disclosures Applications Patents OVER THE LAST 8 YEARS, 303 TECHNOLOGIES WERE LICENSED OR OPTIONED FOR THE FIRST TIME Figure 2B: Physical Science and Engineering Technologies Disclosures 20 Applications Patents ISURF Annual Report

10 Figure 3B: Chemical-Chemical Engineering Technologies Disclosures Applications Patents NEW TECHNOLOGIES AND GERMPLASM LINES WERE MARKETED FOR THE FIRST TIME IN 09 ISURF currently maintains a portfolio of 388 active patents. For the majority, we are actively seeking industrial licensees for commercial development. Twenty-five issued patents expired or were abandoned during 09. Fourteen expired at the end of their maximum available patent life. Twenty-one of the expired or abandoned patents were formerly licensed or optioned. Commercialization Marketing Assessment of the commercial opportunity for technologies disclosed to ISURF is the first step in the marketing process. If the technology has commercial utility, an assessment of the licensing opportunity is made based on the comparative advantages of the technology and the intellectual property protection available. Identification of the barriers to the enforcement of the intellectual property or to the commercial use of the technology is also considered. Unless a start-up company is expected to license a technology, technologies having commercial potential are marketed to a targeted group of companies using nonconfidential descriptions. Our inventors, on-line search programs, publications, and third-party market information are among the resources used in identifying particular companies. In 09, 10 new soybean lines were marketed for the first time and 17 new technologies were identified as having commercial potential and marketed for the first time. Contacts with companies are made through personal contacts, electronic and regular mailings, and trade shows. Companies may view all available technologies on our web site. In June 2004, an electronic technology notification service was initiated. This service allows companies to register to receive s on new technologies related to their area of interest. We currently have 329 subscribers to this service, of which 268 are outside of ISU. 8 ISURF Annual Report 2009

11 Licensing From the contacts made during marketing and received from other sources, the following agreements were executed: 15 technology license agreements, 2 option agreements, 52 license agreements for non-patented plant germplasm, 15 license agreements for patented AFA soybean varieties, 26 confidentiality agreements, 9 material transfer agreements, and 38 plant germplasm research and development agreements. 09 licenses and options (84) increased 35% from 08 (62) due to an increase in germplasm licenses (116%). Four administrative agreements were executed that amended existing licenses by adding new technologies or addressing royalty-sharing, joint ownership, inventorship, and/or management rights. Thirteen additional agreements that updated or altered existing agreements or agreements with Iowa State University were also executed. The new license agreements, option agreements and administrative agreements introduced to industry 17 ISU innovations never before exploited for commercial development and use. These innovations included 7 technologies and 10 soybean lines. Table I below provides a more detailed overview of 09 s 84 license and option agreements. A ten-year historical review can be found in Exhibit C. Table I: 09 Licenses and Options Total 09 Option to an Non-Exclusive Exclusive Description of 08 Commercial Agreements Agreements Exclusive License License License Germplasm to Iowa Growers IN 09, ISURF OPTIONED A TECHNOLOGY TO 1 START-UP COMPANY Germplasm to Non-Iowa Growers AFA Soybean Varieties to Iowa AFA Soybean Varieties to Non-Iowa Technology Agreements to Iowa Companies Technology Agreements to Non-Iowa Companies Total Commercial Agreements ISURF Annual Report

12 ISURF currently maintains a portfolio of 428 active license and option agreements, 161 of which are technology licenses and options. A summary of the categories currently in the portfolio is presented below. Table II: Portfolio of Active Agreements at Fiscal Year End License Agreements Plant Germplasm/not patented AFA Soybean Varieties/patented Other Option Agreements Total Active Agreements % OF LICENSES & OPTIONS IN 09 WERE NON-EXCLUSIVE Figure 1C provides a historical view of the activities at ISURF related to invention disclosures, patent applications, patents issued, and licenses executed for the last ten years. Figure 1C. History of Disclosures, Patent Applications*, Patents and Licensing Activity at ISURF *Provisional applications not included Disclosures Patent Applications (includes converted prov.) Patents Issued Total Licenses (excluding options) Licenses Non-Germplasm 10 ISURF Annual Report 2009

13 Protecting Our Intellectual Property ISURF continues to collaborate with the licensees of our technologies for corn gluten meal natural herbicide and ß-hydroxy-ß-methylbutyrate (HMB) nutritional supplement to enforce our rights against infringers. Due to the nature of these inventions, we anticipate continued enforcement efforts will be necessary in future years. Additionally, ISURF settled its suit for infringement of our lead-free solder patent. SBIR/STTR Proposal Assistance Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding increased slightly over 08, the fourth consecutive year that funding has risen. An emphasis placed on outreach and training activities including a monthly newsletter and workshops presented by Federal program managers in addition to providing proposal preparation support through the Office of Intellectual Property and Technology Transfer, has contributed to an increasing number of companies applying for funding. Twenty-three Iowa companies were assisted in the preparation of 28 proposals or administration of awards during 09, including eight Iowa State faculty or staff-related companies. In 09, twenty-one Iowa companies won twenty-seven new or continuing SBIR and STTR awards worth $6.4 million. The Departments of Agriculture, Defense and Energy, as well as the National Institutes of Health, the National Aeronautics and Space Administration, and the National Science Foundation are funding this year s Iowa SBIR/STTR award winners. The funded projects reflect Iowa s strengths in biotechnology, information systems, materials development and agriculture. Over $3.7 million in support was awarded for Navy and Air Force projects to enhance machining technologies, develop innovative sensors, and improve components with applications in electronics. An additional $1.8 million was received from the National Institutes of Health for diverse projects that range from the development of novel neuro-protective agents to improved influenza vaccines to medical monitoring devices. IN 09, 23 IOWA COMPANIES WERE PROVIDED SUPPORT IN PREPARING 28 SBIR OR STTR PROPOSALS Figure 2C. Iowa SBIR/STTR Award Dollars $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $ Nineteen Phase I awards were received by Iowa companies in Iowa companies also received eight Phase II awards in The majority of funding was awarded by the Department of Defense and the National Institutes of Health. ISURF Annual Report

14 Technology and Germplasm Financial Information Revenues The total income from technology and germplasm licensing activity, which includes license fees, royalties (earned royalties based on sales and minimum royalty payments), plant seed sales, material transfer agreement fees, patent expense reimbursement from licensees, and research support leveraged through licensing activities was $9.3M for 09, a decrease of $200,000 from 08. Over $400,000 was from plant germplasm licenses, an increase from 08 s $279,000, with income of $8.9M from other licenses and agreements. Option fees brought in $154,000 reflecting a decrease of $95,000 from 08. Table III provides a categorical breakdown of our licensing income from the various sources. Table III: Income Related to Licensing Activity Category Royalty Income* (x US $1,000) Licenses Plant Germplasm/not patented AFA Soybean Varieties Patented Other 1,477 3,044 11,588 6,032 2,226 4,317 7,424 17,513 8,800 8,680 Option Agreements Administrative & MTA Agreements Total for All Agreements 2,099 3,589 12,103 6,820 2,798 4,935 8,064 18,124 9,465 9,342 *Figures include license/option fees, earned royalties on sales and guaranteed minimums, research support leveraged through licensing, proprietary seed transfer fees, material transfer agreements, and patent expense reimbursement. Of the 428 active license and option agreements in ISURF's portfolio, 264 generated income in 09. Sixty-six agreements (25%) produced income over $10,000 and 37 agreements (14%) produced from $5,000 to $10,000 in 09. The remaining 161 agreements (61%) produced less than $5,000 each. Figure 1D shows that the majority of our non-plant germplasm licenses and options generating income continue to produce $5,000 or less in income annually. A ten-year historical table is provided in Exhibit C. 12 ISURF Annual Report 2009

15 Figure 1D: Non-Plant Germplasm Licenses and Options Generating Income $10K & more $5-$10K less than $5K Income includes license/option fees, royalties, guaranteed minimum royalties, research support leveraged through licensing, and patent expense reimbursement, but not income from educational materials and germplasm licensing. Expenses 09 technology and germplasm expenses (patent/legal costs, royalty sharing, licensing and infringement/litigation expense and research support payments) of $7.3M were lower than 08 s $7.6M due to a decrease in patent prosecution expense. Patent prosecution expense (disclosure, application, patent, foreign, and patent maintenance) of $1.1M is slightly lower than 08 s $1.4M. Foreign filing expense is generally dependent on our licensees requests, and ISURF is reimbursed for nearly all of those expenses. Foreign filing expense in 09 was $289,000 compared to 08 s $206,000. Figure 2D provides a historical view of the technology and germplasm related income and expense. Expenses for patent applications and other legal matters were not dependent on patent income. Other expenses, such as royalty sharing to inventors and academic units were directly dependent on income. Figure 2D: Technology and Germplasm Related Income and Expense 62% OF ACTIVE LICENSE AND OPTION AGREEMENTS GENERATED INCOME IN 09 $US X 1, Total Income Total Expense ISURF Annual Report

16 Reimbursement of our patent prosecution expense from our licensees has averaged 48% over a five-year period. Figure 3D provides a five-year comparison of expense reimbursement and patent prosecution expense. Table IV provides a five-year overview of income and expense for our technology and germplasm activity. Figure 3D: Reimbursement of Patent Expense - 5 Year 1,600 1,400 $U.S. X 1,000 1,200 1, Patent Prosecution & Maintenance Expense Expense Reimbursement U.S. PATENT PROSECUTION COSTS FOR PATENTS ISSUED IN 2009 RANGED FROM $9,000 TO $42,000, AND AVERAGED $22, Table IV: Technology and Germplasm Related Income and Expense $U.S. X 1,000 INCOME Royalty Income 4,019 7,214 17,659 8,580 8,833 Expense Reimbursement Research Income TOTAL 4,935 8,064 18,124 9,465 9,342 EXPENSE Patent Prosecution & Maintenance 1,208 1,316 1,252 1,356 1,122 Licensing Infringement/Litigation General Legal Royalty Sharing to ISU Parties 1,633 2,760 8,407 3,477 3,141 Royalty Sharing to Others 747 2,218 2,138 2,605 2,904 Research Support - ISU TOTAL 4,096 6,552 12,319 7,558 7,340 Net Income (Expense) 839 1,512 5,805 1,907 2,002 Income Distribution From income received in 09, ISURF disbursed $2.3M to current and former ISU inventors and authors. Another $1.8M was distributed to six different academic units in royalty sharing. Table V summarizes the royalty sharing paid to the individual academic units since ISURF Annual Report 2009

17 Table V: Royalty Sharing with Academic Units ($US) Academic Unit ( Yr Total Agriculture/ 197, , , , , , , ,946 3,041, ,063 5,145,576 Exp. Station Engineering 16,137 13,577 5,605 7,321 27,281 9,301 9,784 50,095 16,176 6, ,630 Veterinary 58,038 31,587 33,434 44,438 41,071 39,399 36, ,325 56,927 84, ,984 Medicine Liberal Arts 12,369 4,129 7,129 10,941 9,482 25,462 5,587 6,540 13,642 10, ,692 & Sciences IPRT (2) 170, , , , , ,191 1,016,914 21,889 9,410 16,012 3,656,447 Ames Lab 936, ,450 1,095,380 3,027,951 Provost , ,581 8,026 All Units Total (3) 454, ,110 1,041, , , ,352 1,309,699 1,557,916 4,134,063 1,791,891 12,798,306 (1) Units receiving less than $1,000 total are not listed. (2) Sharing to IPRT includes royalties for Ames Laboratory for and prorated royalty shares from inventions that, regardless of Colleg the inventors, (i) received for their development research funding from the Department of Commerce via a grant to CATD, (ii) at least one o is affiliated with an IPRT center, or (iii) received for their development any funding at all from the Iowa Manufacturing Technology Center, the Iowa Industry Incentive Program, or other IPRT sources. (3) Total royalty sharing may not match figures in "Detailed Financial Statements" due to "accrual" vs. "cash" accounting methods. In addition to royalty sharing with academic units and disbursement of research dollars, ISURF's activities also benefit the units in other ways, such as royalty sharing with inventors affiliated with the units and directly supporting projects with activities that might strengthen or rescue patents, and/or promote the licensing of our technologies. Also, ISURF has provided the university with a research grant every year but one since 99: from 99 through 01, the grants were $500,000 each year; from 02 through 06, the grants were $750,000 each year, and in 07 the grant was $1,250,000. No grants were disbursed in 08, but a research and economic opportunities fund of $9.5M was developed as of July 1, 2007, for use by Iowa State s Vice President for Research and Economic Development. In 09, $2.5M was transferred to the VPRED. As of June 30, 2009, this fund, after market adjustments, was $4.7M. Table VI provides a summary of the benefits ISURF has provided to the academic units. IN 09, ISURF DISBURSED $7.6M TO ISU AND ISU INVENTORS AND AUTHORS Table VI: Grants, Research Support and Royalty-Sharing to Academic Units and Affiliated Individuals from 09 Operations Royalty Agreement Royalty ISURF Sharing Leveraged Sharing to Funded Unit Iowa State Unit to Unit Research Unit Inventors Projects Total ($US) College of Agriculture/Exp. Station 573,063 1, ,787 1,153,707 College of Engineering 6,353 12,358 18,711 College of Veterinary Medicine 84,091 92, ,436 College of Liberal Arts & Science 10,411 10,411 20,822 IPRT 16,012 22,313 38,325 Ames Lab 1,095,380 1,540,140 2,635,520 Provost and Extension 6,581 6,581 13,162 OIPTT N/A N/A 847, ,419 Iowa State General Research Support N/A N/A 2,694,421 2,694,421 Total (1) 1,791,891 1,857 2,262,935 3,541,840 7,598,523 (1) Total in "Royalty-sharing" may not match figures in "Detailed Financial Statements" due to "accrual" vs. "cash" accounting methods. ISURF Annual Report

18 ISURF Contributions to ISU Research and Economic Opportunities Fund (REOF) The REOF was established by ISURF in the office of the Vice President for Research and Economic Development on July 1, 2008 with initial assets of $9.5M. In 09, $2.4M was disbursed from this fund. Funding was provided for 24 faculty start-up packages and to support the Nutrition and Wellness Center and the Bioeconomy Institute. In 08, funding was provided for 22 faculty start-up packages and one retention package. In addition, funds were used to support the CyberInnovation Institute, the Center for Carbon Capturing Crops and the Nutrition and Wellness Center. Funding provided by ISURF in 06 and 07 was used to support a total of 18 start-up packages and 5 retention packages. The Iowa State University Seed Fund Since 1996, ISURF has funded the further development of nearmarket technologies disclosed by ISU inventors. Approval has been given by the ISURF Board to double this fund to $400K per year. This additional $200K will be used to establish the Iowa State University Seed Fund. A Seed Fund Document has been produced in cooperation with the Research Park and the Foundation. It is intended that investments will be made in selected start-up companies in exchange for an equity position. In addition, fellowship stipends will be provided to those scientists in the Technology Commercialization Fellowship Program and funding will be provided to selected new student businesses. The Foundation is soliciting contributions from donors in order to leverage ISURF s contributions to the fund. 16 ISURF Annual Report 2009

19 Fiscal Year 2009 Trademarks Financial Statement ISURF's 09 annual financial audit was conducted by D.D. Pyle Company (Ames, IA). The Audit Committee of the ISURF Membership reviewed the independent audit report. ISURF completed 09 with net assets of $19.9M, a decrease of $7.2M over 08. A net operating gain of $1.2M was realized, the same as 08. The net loss from investments with realized interests and capital gains was $2.5M, and a loss from investments with capital gains not yet realized for the year of $2.3M. An additional reduction to investment income is $24K payable to Ames Laboratory for current year interest realized by ISURF. Total expenditures (including grants) of $11.7M exceeded revenues (including investment, income or loss) of $4.5M for a net loss in assets of $7.2M. ISURF closed out the fiscal year with total assets of $29.1M and $9.2M in liabilities. ISURF's investments had a market value of $19.4M at the close of 09. Figure 1E provides a ten-year historical view of ISURF s investments. Figure 1E Investments Does not include income in money market accounts. $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 Amortized Cost (Book Value) $0 Market Value US$ X 1,000 Figure 2E compares net assets with investments market value and return on investment. Figure 2E Net Assets and Investments ,000 27,000 24,000 21,000 18,000 15,000 12,000 9,000 6,000 3,000 0 (3,000) (6,000) Net Assets Investment: Market Value Investment Income (realized and unrealized) ISURF Annual Report

20 Board of Directors ISURF Board of Directors and Staff As of June 30, 2009 Dr. James Bernard Interim Dean College of Engineering Iowa State University Dr. James Bloedel Professor & Chair Biomedical Science Iowa State University Mr. Curt Carlson President and CEO Visual Medical Solutions Dr. Joe Colletti Senior Associate Dean College of Agriculture & Life Sciences Iowa State University Dr. Gregory L. Geoffroy President Iowa State University Mrs. Ruth Harkin State Board of Regents Mr. John Hayes, Esq. Deere & Company (Retired) Dr. Steven Herrnstadt Associate Chair Department of Art and Design Iowa State University Mr. Warren R. Madden Vice President for Business and Finance Iowa State University Dr. Chris Minion Professor College of Veterinary Medicine Iowa State University Ms. Lynne Mumm Technology Commercialization Associate Institute for Physical Research and Technology (IPRT) Iowa State University Dr. David Oliver Associate Dean for Research College of Liberal Arts and Sciences Iowa State University Dr. Carla Peterson Associate Dean for Research College of Human Sciences Iowa State University Dr. Mark Power Professor Department of Finance College of Business Iowa State University Dr. Sharron Quisenberry Vice President Research & Economic Development Office Iowa State University Dr. Michael B. Roof Director of Bio-R&D Boehringer Ingelheim Vetmedica, Inc. Dr. David Sly President Proplanner Mr. Thomas E. Stuermer Communication and High Technology Division Accenture Mr. Steven E. Sukup Vice President Sukup Manufacturing Company Officers President: Mr. Steven E. Sukup Vice-President: Dr. David Sly Treasurer: Mr. Warren R. Madden Secretary: Dr. Sharron Quisenberry Executive Director: Dr. Kenneth Kirkland 18 ISURF Annual Report 2009

21 Staff Kenneth Kirkland Nita Lovejoy Mary Kleis Eddie Boylston Renate Hippen Julie Minot Dario Valenzuela Kristine Johansen Donna Johns Peter Gudlewski Brian Tiffany Marc Johnson Tenann Everly Patsy Duncan Denise Birney Director, OIPTT Executive Director, ISURF Associate Director Technology Licensing Manager Technology Licensing Manager, Physical Sciences Engineering Licensing Associate I, Chemistry Licensing Associate, Germplasm Licensing Associate I, Life Sciences Biotechnology SBIR/STTR Program Administrator In-house Counsel Patent Administration Assistant Disclosure & Database Manager Accountant Contract & Information Specialist Disclosure Secretary Receptionist/Secretary ISURF Annual Report

22 Exhibit A Summary of Activity: Ten-Year History Category* Annual Activities: Disclosures Received Disclosures Inactivated Patent Applications Filed (1) Provisional Applications Filed Patent Applications Abandoned Provisional Applications Abandoned Patents Issued Patents Expired or Abandoned Licenses & Options Signed (2) Inventions Licensed/Optioned First Time (3) Portfolio Status: Active Disclosures Patent Applications in Progress Active Patents Active License/Option Agreements (4) *Numbers include inventions assigned to ISURF through activities such as collaborative research and in-licensing (1) Includes converted provisional applications (2) 09 figure includes 67 licenses for plant germplasm (3) 09 figure includes inventions added to existing licenses/options by administrative agreements amending existing licenses/options, and includes first time licenses for 10 new soybean lines (4) 09 figure includes 210 active licenses for non-patented plant germplasm and 57 licenses for AFA soybean varieties patented 20 ISURF Annual Report 2009

23 Exhibit B Detailed Disclosure and Patent Activity: Eight Years DETAILED DISCLOSURE AND PATENT ACTIVITY: 8 YEARS Intellectual Poperty Disclosures Reported Germplasm not patented AFA Varieties/Patented Bio-Life Sciences & Ag Physical Sciences-Eng Chemistry-Chem. Engineering Consumer Products Total Disclosures Received Total Disclosure Portfolio Disclosures Received by Source of Funding Federal Industry Commodity Foundation State No Funding Patent Prosecution U.S Provisional Patent Application Filings U.S. Patent Application Filings Bio-Life Sciences & Ag Physical Sciences-Eng Chemistry-Chem. Engineeri Consumer Products Plant Germplasm Total US Patent Appl. Filed U.S. Patent Application Filings First Filings Secondary Filings Patent Application Portfolio U.S. Patents Issued Bio-Life Sciences & Ag Physical Sciences-Eng Chemistry-Chem. Engineeri Consumer Products Plant Germplasm Total Patents Issued U.S. Patent Portfolio Technologies Licensed/Optioned First Time Germplasm not patented AFA Varieties/Patented Bio-Life Sciences & Ag Physical Sciences-Eng Chemistry-Chem. Engineering Consumer Products Total Technologies ISURF Annual Report

24 Exhibit C Licensing Activities at ISURF: A Ten-Year Summary Category * 09 License Agreements Plant Germplasm/not patented AFA Soybean Varieties/patented Other Option Agreements Total Commercial Agreements Other Agreements related to Licensing Activities: Confidentiality Agreements Material Transfer Agreements Plant germplasm R & D Agts Administrative Agreements** Miscellaneous Agreements*** *One "other" license for AFA patented trait devleopment includes a license to AFA varieties. **Administrative agreements include agreements amending existing licenses/options which add inventions or agreements addressing royalty-sharing, joint ownership, inventorship, rights. ***Figure includes new master agreements and amendments to existing agreements which do not fall under the above footnote. Commercialization Agreements Producing Income: A Ten-Year Summary Agreements with Income* over $10,000 / $5,000 - $10,000 / < $5,000 / Total No. of Agreements *Includes licenses, options, material transfer agreements and administrative agreements. Figures include license fees, royalties on sales and guaranteed minimums, research support leveraged through licensing activities, proprietary seed transfer fees, and expense reimbursement. 22 ISURF Annual Report 2009

25 310 Lab of Mechanics Ames, Iowa Phone: Fax: