Complete 2012 forensic audit documents - Kansas Bioscience ...

systematic level….Going forward, KTEC will be less involved in the bioscience industry.” 79
This coincides with KBA’s Interim President/CEO’s recollection that once KBA was fully
operational, KTEC ceased investment in bioscience.
Exhibit 39 details the pattern of KTEC’s $3.1 million investment in bioscience companies
between 2000 and 2009. KBA did not start making investments until 2006, so most of the
KTEC investments in bioscience companies were made prior to KBA availability of funds.
The Edenspace investment is a noted exception. 80 Before relocating to Kansas in 2007,
Edenspace was headquartered outside Washington D.C. in suburban Virginia. In 2006, the DOE
awarded Edenspace $1.9 million to fund development of corn hybrids. Edenspace also signed a
multi-year contract for biocellulosic fuels with its go-to-market partner, a current KBA client
company headquartered in Kansas. These successes required increased research capacity,
personnel and space. The facility in Virginia was inadequate and Edenspace needed a good
solution that met its need for growth.
Twelve different states courted Edenspace because of the strong future perceived in the
company’s technology and value: reducing the cost of cellulosic ethanol and gaining position as
an economically viable ethanol source. Edenspace heard about KTEC from a Kansas bioscience
company that had received assistance through KTEC and was encouraged to look at Kansas
more closely. Members of the Kansas economic development community – KTEC, Department
of Commerce, KBA and Junction City – pulled together and developed an attractive solution for
Edenspace in northeastern Kansas. In 2007, Edenspace relocated its headquarters and primary
energy crop development to a 10,500 square foot facility in Manhattan, Kansas.
KBA and KTEC did partner in one specific area. It was determined that there was a need for a
Federal Funding Specialist to assist Kansas entrepreneurs to gain access to Federal grants.
Therefore, in April 2010, KBA and KTEC jointly hired a Federal Research Funding Specialist.
The Federal Research Funding Specialist assists with the writing of proposals for federal funding
and provides professional management counseling and technical assistance to early stage
companies. Until KTEC’s recent dissolution, this position was paid for jointly by KBA and
KTEC with each organization reimbursing for expenses related to their individual client
companies. The position continues to be funded by KBA and those services are now generally
available only to KBA client companies.
PRIMARY FINDINGS AND RECOMMENDATIONS
This section represents issues and allegations reviewed by BKD for which we have adverse
findings and/or recommendations.
SCOPE LIMITATIONS
Thornton Computer
On April 13, 2011, Tom Thornton was notified by KBA’s General Counsel, Tariq Abdullah, that
BKD had formally requested his KBA-owned computer for forensic imaging and analysis. The
purpose of the request was to enable BKD to search the computer for any information, including
emails, documents, spreadsheets, presentations, etc., that would be relevant to the Forensic
79 Kansas, Inc. evaluation of KTEC dated April 8, 2009, p 67.
80 Kansas, Inc. evaluation of KTEC dated April 8, 2009, p 72.
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