MATRIC Annual Report 2004 · (MATRIC) is an independent, nonprofit, 501(c)(3) corporation headquartered in West Virginia. World-class scientists in the areas ... statement was adopted,

The Mid-Atlantic Technology, Research and Innovation Center(MATRIC) is an independent, nonprofit, 501(c)(3) corporationheadquartered in West Virginia. World-class scientists in the areas

of chemistry and chemical products, biosystems, and software systemspartner with higher education, industry, and government to conduct life-changing research and development and to commercialize resulting productsand services. With superior leadership from a quality professionalmanagement team, a committed board of directors, and an expert council ofscientific advisors, MATRIC is well positioned to make an impact locally,nationally, and internationally.

Letter from the Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Letter from the President & CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Laying the Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-6

Volunteer Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-12

Professional Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-16

Start-Up Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17-18

Public Relations and Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19-20

Business Development: Chemistry and Chemical Products . . . . . . . . . 21-25

Business Development: Biosystems . . . . . . . . . . . . . . . . . . . . . . . . . . 26-30

Business Development: Software Systems . . . . . . . . . . . . . . . . . . . . . 31-33

Commercialization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34-36

MATRIC Outsourcing Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37-38

2004 Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . 39-40

Designed & produced by Intelligen

Edited by 2fish LLC

Charleston, WV

MATRIC | L i fe -Changing Research and Development | www.matr ic.cc | ANNUAL REPORT 2004 | 1


Dear Friends of MATRIC,

After 16 months of existence, Mid-Atlantic Technology, Research & Innovation Center (MATRIC) isnow poised to ascend to a new level of maturity as we look forward to 2005 and beyond.

Clearly our best decision to date was to appoint Keith A. Pauley as full-time president and CEO.Since he began on April 1, 2004, Keith has provided truly outstanding leadership and vision asyou will learn from this year-end report.

We have also been fortunate to engage Dr. Parvez Wadia as our chief technical officer. Dr. Wadia,an MIT graduate, served in leadership roles for both Union Carbide and Dow researchorganizations for more than 30 years. His credentials, experience, and reputation bring immensevalue to MATRIC.

This leadership team is supported and often led by Dr. George Keller, Dr. Dwight Sherman, JohnSkaff, and other committed volunteers with impressive technical and scientific credentials. This groupand our strong board of directors ensure our ability to compete at the highest levels in our threebusiness areas.

State Senator Brooks McCabe has become an important and effective advocate for MATRIC in theWest Virginia legislative arena. His work to date and commitment for future support are invaluableand deeply appreciated. We also are thankful for the contribution to MATRIC by outgoing directorof economic development, David Satterfield. At the federal level, we have received significantsupport from Congresswoman Shelley Moore Capito in addition to encouragement and pledges ofsupport from Senators Robert Byrd and Jay Rockefeller.

While we have made great progress, we face many challenges before we can safely conclude thatwe have fulfilled our vision to become a leading nonprofit research center with a major local,national, and international economic impact from created technologies.

Our future looks promising but is clearly subject to the vagaries of the marketplace in which weoperate. I am confident that we shall meet the challenge.

Very truly yours,

Thomas E. PotterChairman of the Board


Dear Friends,

During the past year, MATRIC has embodied the words of Edison—an opportunity disguised as hardwork. However, in a state with a blue-collar reputation like West Virginia, we neither miss theopportunity nor shy away from hard work to achieve an end as promising as MATRIC.

In 1999 The Dow Chemical Company acquired Union Carbide, a large local employer. Since thattime, more than 150 doctorate-level researchers and approximately 900 other-degreed staff werereleased. The potential for local brain drain was more than a negligible concern. Yet under thecreative leadership of Dr. George Keller and many others, this concern became a catalyst for avision—a vision for MATRIC, a multidisciplinary nonprofit research and development center muchlike the Research Triangle Institute (RTI) in North Carolina. RTI was formed in 1959 by a group ofinsightful local business leaders in response to the decline of the textile industry and was backed byfour local universities. In the 45 years since its inception, RTI has grown to employ over 2500people in 30 countries and has earned worldwide renown. MATRIC, too, boasts effectivepartnerships with five universities statewide and possesses a vision to grow a research center ofnational and international repute that will eventually match the size and scope of RTI.

Clearly, the potential economic impact of MATRIC is enormous. In the future we envision thatMATRIC will employ hundreds of scientists and engineers with higher salaries and better benefits;will license MATRIC-developed technologies to West Virginia-based businesses, enabling them tooffer new products and services thereby adding jobs to existing companies; and will create anattractive climate in West Virginia for other high technology companies.

With an amazing opportunity and tremendous vision, the past year has been filled by the hardwork associated with creating a new organization, recruiting key personnel, establishing customerrelationships, and proposing research contracts. Each will be discussed in some detail within thisreport, but suffice it to say that the effort of so many leaders from across the state has positionedMATRIC to take the next steps toward its exciting future.

I hope the vision of a world-class research organization in the heart of West Virginia inspires you asit does me! More important, I hope it will inspire your children and grandchildren. The future of ourstate depends on the creativity and innovation embodied by MATRIC.

Yours truly,

Keith A. PauleyPresident and CEO

Opportunity is missed by most people because

it is dressed in overalls and looks like work.

–Thomas Edison



LAY ING THE FOUNDAT IONAn announcement on August 4, 1999,revealed that Union Carbide would soonbecome a wholly-owned subsidiary of TheDow Chemical Company. Union Carbide,a homegrown West Virginia company thatbecame a world leader in the chemicalindustry, conducted its research anddevelopment in South Charleston;however, following the acquisition muchof these research efforts wereconsolidated to other Dow locations, suchas Michigan and Texas.Consequently, in thepast four years Dowhas released more than150 doctorate-levelresearchers andapproximately 900other-degreed staff fromthe South Charlestonresearch complex.Among them are world-class scientists who have created new andinnovative technologies for this scientificcommunity that collectively holds morethan 30,000 patents. The cumulativetechnology value creation from the R&Dcomplex spanning the past 50 years is inexcess of $18 billion.

In January 2002 Mike Agee, a Dowofficial, announced to BIDCO’s board ofdirectors that Dow had determined toopen the former Union Carbide TechnicalCenter facilities to other companies andintended to market globally the newlynamed South Charleston Technology Park.The park sits in South Charleston, itslocation since 1949 when the firstresearch laboratory was built. It was thisfirst-rate research facility that brought anumber of PhD-level researchers and otherhighly trained scientists and chemists to

the community to develop, test, andcommercialize many of the processes thatdramatically changed or influencedthe petrochemical industry worldwide.Because much of the work at thefacility was proprietary, the communitywas generally unaware of the depthof the research conducted by thescientists; however, the value they broughtto the community—both individually andcollectively—was always known.

The South Charleston Technology Parkconsists of 650 acres and various facilitiesfrom office buildings, laboratories, andpilot plants to sites ready for newconstruction. The Marshall UniversityGraduate College is located adjacent tothe site and shares an interconnectedroad, which constitutes open access to thepark. While portions of the park areoccupied by Dow, EDS, CDI, Bayer, andothers, many of the facilities (includinglabs, office space, and numerous buildingsites) are currently available.

Soon after Dow’s announcement inJanuary 2002, Dr. George Kellerdescribed to the BIDCO board theResearch Triangle Institute (RTI), a private,nonprofit contract research companyheadquartered in the Raleigh-Durham

Because much of the work at the South CharlestonTechnology Park was proprietary, the community wasgenerally unaware of the depth of the researchconducted by the scientists; however, the value theybrought to the community—both individually andcollectively—was always known.


area of North Carolina. Formed in thelate 1950s, today RTI has its own 180-acre campus in the midst of the well-established Research Triangle Park. As ofDecember 2004 it maintains eightregional offices in the United States, fiveinternational offices, and one internationalsubsidiary; employs more than 2500people; and generates revenues ofapproximately $300 million annually incontract research for clients ingovernment, industry, academia, andpublic service. RTI and Research TrianglePark were created by local private sectorleaders who wereconcerned aboutthe migration ofthe best andbrightest workersto other statesdue to theimpendingdemise of thetextile industry inthe 1950s.Bankers, business leaders, utility companypresidents, and leaders in the highereducation community consulted withpolitical leaders of the state, created andfunded a foundation to provide seedmoney, and established working groups;and RTI was born.

Given the similar situation in theKanawha Valley, BIDCO leadershipbelieved RTI could be a model for localopportunity. With access to not only asuperlative facility but also many of theworld-class scientists and technicians whoworked there, the initiative began. A teamof volunteers from business, scientific, andhigher educational communities (ultimately50 to 60 individuals) was convened.Results from a SWOT (Strengths,Weaknesses, Opportunities, Threats)analysis confirmed that a researchinstitute modeled after RTI was indeedfeasible in West Virginia. A visionstatement was adopted, and a three-year

business plan for the new institute wascompiled. RTI was consulted twice duringthe process, and Reid Maness, RTI’spublic affairs officer, visited on twooccasions to share the RTI story and offerencouragement.

With advice from Charles RyanAssociates, a name for the institute wasdeveloped. In August 2003, with theassistance of Steptoe & Johnson, the Mid-Atlantic Technology, Research &Innovation Center (MATRIC) wasincorporated. Shortly thereafter an

impressive board of directors wasassembled and officers were designated.Members and officers serve on avoluntary basis, motivated only by theirdesire to make a positive change in theeconomy. Crucial participation fromhigher education is illustrated by thecommitment of four university presidentswho serve on the board and makeMATRIC an institutional priority throughspecific involvement and agreements.Additionally, a notable council ofscientific advisors was formed. Advisorsare regional scientists and technologistswith significant expertise in the scientificindustries. A full-time president and CEO,Keith A. Pauley, was appointed in April2004. Pauley brought the experience andvision needed for success. In November2004, 501(c)(3) status was received,making MATRIC a nonprofit organizationand positioning the center for continuedgrowth in 2005.

Bankers, business leaders, utility company presidents,and leaders in the higher education communityconsulted with political leaders of the state, created andfunded a foundation to provide seed money, establishedworking groups, and RTI was born.



VOLUNTEER LEADERSHIPMATRIC was formed with the assistanceof an outstanding group of volunteerleaders from throughout the state of

West Virginia. From incorporation in August2003 to hiring the first employee in April 2004,these volunteers acted as corporate members withregard to operation and other activities.

Executive Committee of theBoard of Directors

The executive committee met biweekly in 2004and provided superior leadership for MATRIC’sstart. Thomas E. Potter served as chairman; Dr.George E. Keller II and Dr. P. Dwight Shermanserved as vice chairmen. John C. Stumpperformed duties as secretary and Paul E.Arbogast as treasurer. Other members of theboard who volunteered to lead certaincommittees were also members of the executivecommittee.

Thomas E. PotterChairmanOf CounselJackson Kelly PLLC

Charleston, WV

Thomas E. Potter is agraduate of West VirginiaUniversity, an attorney, and a

retired member of Jackson Kelly PLLC. He continues hisinvolvement with the firm as a consultant andpractitioner on a limited basis. Over the years, Potterbecame actively involved in the legal, political,governmental, and civic affairs of West Virginia andthe Charleston area, serving as chairman for theCharleston Area Chamber of Commerce, CharlestonRenaissance Corporation, the Business and IndustrialDevelopment Corporation (BIDCO), the NationalInstitute for Chemical Studies, Capital Market Inc.,Advantage Valley Inc., Charleston Rotary Club, and theYMCA. He is currently chairman for MATRIC. Potterreceived the Spirit of the Valley Award for leadershipand volunteer work in the Kanawha Valley; was

awarded Order of Vandalia, West Virginia University’shighest award; and was inducted to MarshallUniversity’s Business Hall of Fame.

Dr. George E. Keller IIVice ChairmanVice PresidentNewCarbon LLCCharleston, WV

Dr. George E Keller II is afounding member of MATRIC.He holds PhD and MS

degrees in chemical engineering from Penn State and aBS in chemical engineering from Virginia Tech. Beforeretirement, Keller served as senior corporate researchfellow and manager of the Separations and ProcessFundamentals Skill Center in Union Carbide’s R&Ddepartment. The group was nationally recognized andawarded the Kirkpatrick Honor Award, whichrecognizes the top commercialized chemicalengineering technologies in the world. He was electedto the National Academy of Engineering in 1988,named a fellow of the American Institute of ChemicalEngineers, and served on the National ResearchCouncil’s Board on Chemical Science and Technology(BCST). Keller has lectured in more than 30 universities;authored, coauthored, and edited more than 30publications; and, with colleagues, holds 21 U.S.patents. He is vice president of NewCarbon LLC, acompany focused on producing high-tech carbonproducts from coal, and chairs the Advisory Committeefor the College of Engineering and Mineral Resourcesat West Virginia University.

Dr. P. Dwight Sherman Jr.Vice ChairmanRetiredSouth Charleston, WV

Dr. P. Dwight Sherman Jr.holds a PhD from BrownUniversity in physical organic

chemistry and a BSc degree in chemistry fromUniversity of New Hampshire. He joined Union


Carbide Corporation as a research chemist in 1968and retired from the corporation in 2001 havingserved as director of regional public affairs. Shermanis a board member on a number of educational,economic development, and charitable organizations.Current active projects include The Education Alliance,Governors Council on Literacy, The NatureConservancy, Marshall University Graduate College,United Way, and the Business and IndustrialDevelopment Corporation (BIDCO). He is a foundingmember of MATRIC and currently serves as vicechairman of the board of directors.

John C. StumpSecretaryMember AttorneySteptoe & JohnsonCharleston, WV

John C. Stump is a memberattorney at Steptoe & JohnsonPLLC, where he concentrates

his practice in the areas of project finance, economicdevelopment, utility regulation, and corporate law. Heis a member of the West Virginia State Bar and theNational Association of Bond Lawyers. In addition tohis service as secretary of the board for MATRIC,Stump is active in several economic developmentorganizations, school and fraternity alumniassociations, and local charities. He received his legaleducation at Washington and Lee University School ofLaw, where he was named Best Trial Advocate, andcompleted his undergraduate degree with honors infinance and accounting at West Virginia University.

Paul E. ArbogastTreasurerSenior Advisor & ConsultantErnst & Young LLPCharleston, WV

Paul E. Arbogast is agraduate of MarshallUniversity, a CPA, and a

retired partner of Ernst & Young LLP, where he servedas managing partner for the Charleston (WV) officefrom 1988 to 2001 and currently serves as a senioradvisor and consultant to the firm. Arbogast is a boardmember for the West Virginia Council EconomicDevelopment Corporation and MATRIC, where heserves as treasurer and chairman of the Budget andFinance Committee. He is president and CEO of TheWest Virginia Roundtable Inc. and an emeritusadvisory member for the Greater Kanawha ValleyFoundation after 15 years of service in variouscapacities. He serves as co-chair for the West Virginia

Business/Labor Leaders Coalition, member of theboard of trustees for the Marshall UniversityFoundation, advanced member of the HealthcareFinancial Managers Association, and member on theWest Virginia Hospital Association’s Task Force onHospitals’ Financial Condition.

John F. McGeeManaging PartnerMcGee EnterprisesCharleston, WV

John F. McGee is president ofCharleston Newspapers(Charleston, WV), a position

he has held since 1970. In the past, he served as aconsultant to Thompson Newspapers; publisher of theCharleston Daily Mail; president of ClayCommunications Inc.; chief operating officer of theCharleston Daily Mail (Charleston, WV), Beckley PostHerald (Beckley, WV), Monroe Enquirer-Journal(Monroe, NC), Shelby Star (Shelby, NC), WWAY-TV(Wilmington, NC, and Beaumont, TX), and WAPT-TV(Jackson, MS). McGee also served in the United StatesArmy, earning multiple awards. He sits on the board ofdirectors for the Southern Newspaper PublishersAssociation, South Carolina Publishers Association,Raleigh News & Observer (Raleigh, NC), Citizens &Southern National Bank (Columbia, SC), and UnitedNational Bank (Charleston, WV). He is president of theWest Virginia Press Association and a member of theAmerican Newspaper Publishers Association. He holdsa BS in business and political science from DavidsonCollege.

Charles E. RyanChairman & CEOCharles Ryan Associates

Charleston, WV

Charles E. Ryan is a graduateof West Virginia University,the chairman and CEO of

Charles Ryan Associates, and one of the country's mostsuccessful integrated marketing pioneers. He is a 30-year veteran in advertising and public relations havingfounded four successful communications firms inVirginia and West Virginia and consulted nationallywith Fortune 500 companies. Ryan was named theWest Virginia Ernst & Young Master Entrepreneur of theYear in 1997. The Public Relations Society of Americahas honored him with a Lifetime Achievement Award,and West Virginia University awarded him its AlumniAchievement Award. He was inducted to the WestVirginia Business Hall of Fame in 2002.


John E. SkaffRegional ManagerQuantum ResourcesSouth Charleston, WV

John E. Skaff is regionalmanager for QuantumResources, an Aramark

company. He is responsible for the operation ofbranches in West Virginia, Alabama, Michigan, andSouth Carolina as well as the development of strategicalliances with key customers in existing and newvertical markets. He has been in the engineering,information technology, and scientific outsourcingindustries for 27 years. Skaff spent 24 years as seniorvice president for CDI Corporation and one year asvice president with Swift Engineering, a MatsushitaInternational holding. He currently serves on the boardof directors for the Charleston Area Alliance, MATRIC,and Chemical Alliance Zone. In 2002 he was namedto Who's Who in West Virginia Business. Hepreviously served on the board of directors forCharleston Regional Chamber of Commerce andGoodwill Industries. He also completed an appointmentby the Governor as West Virginia LotteryCommissioner. Skaff is a graduate of MarshallUniversity.

L. Newton Thomas Jr.RetiredCharleston, WV

L. Newton Thomas Jr. is agraduate of Cornell Universityand the former senior vice

president of ITT Carbon Industries Inc. During his longcareer with the family-owned business, purchased byITT Corporation in 1977, he served in numerousprofessional management positions. Thomas alsoserved as president of the West Virginia MiningInstitute, director of the Kentucky Coal OperatorsAssociation, director of the Bituminous Coal OperatorsAssociation, president of the Kanawha Coal OperatorsAssociation, and president of the Southern CoalProducers Association. Through the years he has beenactive in many civic and charitable organizations andcurrently serves as director of the Clay Center for theArts and Sciences of West Virginia Inc.; president ofthe Daywood Foundation; trustee of the JacobsonFoundation, Claude Worthington Benedum Foundation,and the Carbon Fuel Foundation; advisory boardmember of the Greater Kanawha Valley Foundation;secretary/treasurer for the West Virginia Council forCommunity and Economic Development; member of the

West Virginia Public Port Authority; treasurer/directorof the National Youth Science Foundation; vicechairman and director of Advantage Valley; director ofthe Chemical Alliance Zone, The Education Alliance,and West Virginia Roundtable; and board member ofUnited Way of Central West Virginia and MATRIC.

Board of Directors

MATRIC’s board of directors is comprised ofsome of the most outstanding and progressiveleaders in the state of West Virginia. Thepresidents of four universities and manyexecutives from some of the largest companiesin the state make up this governing board,which meets quarterly.

Mr. Mike AgeeRetiredCharleston, WV

Dr. Dan AngelPresidentMarshall UniversityHuntington, WV

Mr. Paul E. ArbogastSenior Advisor & ConsultantErnst & Young LLPCharleston, WV

Dr. Hazo Carter Jr.PresidentWest Virginia State UniversityInstitute, WV

Mr. Stan CavendishPresident of WV OperationsVerizonCharleston, WV

Mr. Michael ComerPresidentHuntington Banks – WVCharleston, WV

Mr. Clifton F. DedricksonBusiness Development LeaderThe Dow Chemical CompanySouth Charleston, WV

Mr. Mark DempseyPresidentAEP West VirginiaAmerican Electric PowerCharleston, WV


Dr. Betsy DulinDeanCollege of Information Technology and

EngineeringMarshall University Graduate CollegeSouth Charleston, WV

Mr. Allan FowlerVice President – WV OperationsThe Dow Chemical CompanySouth Charleston, WV

Mr. William B. GoodePresidentCharleston Area AllianceCharleston, WV

Mr. Thomas GraffCEOBowles Rice McDavid Graff & LoveCharleston, WV

Mr. David C. HardestyPresidentWest Virginia UniversityMorgantown, WV

Mr. Charles HendrixRetiredSouth Charleston, WV

Mr. J. Rudy HenleyPartnerMcCabe-Henley-Durbin, NAICharleston, WV

Dr. Paul HillExecutive DirectorEPSCoRCharleston, WV

Dr. Carl IrwinDirectorIndustries of the FutureWest Virginia UniversityMorgantown, WV

Dr. George E. Keller IIVice PresidentNewCarbon LLCCharleston, WV

Dr. John MaherExecutive Director – Chemical Alliance ZonePresident – Rampant Technology Partners LLCCharleston, WV

Mr. John F. McGeeManaging PartnerMcGee EnterprisesCharleston, WV

Mr. Keith A. PauleyPresident & CEOMATRICCharleston, WV

Mr. Thomas E. PotterOf CounselJackson Kelly PLLCCharleston, WV

Mr. David RamseyPresident & CEOCAMC Health SystemsCharleston, WV

Mr. Charles E. RyanChairman & CEOCharles Ryan AssociatesCharleston, WV

Dr. P. Dwight Sherman Jr.RetiredSouth Charleston, WV

Mr. John E. SkaffRegional ManagerQuantum ResourcesSouth Charleston, WV

Dr. Charles StebbinsUSAF RetiredCharleston, WV

Mr. John C. StumpMember AttorneySteptoe & Johnson LLPCharleston, WV

Mr. L. Newton Thomas Jr.RetiredSouth Charleston, WV

Mr. Scott VuchetichMcJunkin CorporationCharleston, WV

Dr. Parvez WadiaChief Technology OfficerMATRICCharleston, WV

Mr. Dana E. WaldoWest Virginia Roundtable Inc.Charleston, WV

Dr. Edwin WelchPresidentUniversity of CharlestonCharleston, WV


Council of Scientific Advisors

West Virginia is home to first-rate scientists andengineers who have volunteered to adviseMATRIC on technology issues. This group, ledby the chief technology officer, is the council ofscientific advisors.

Mr. Kenneth AtkinsUnion Carbide Fellow RetireePolymer Science; Polymer Foam Technology

Dr. Eugene CilentoDeanWVU College of Engineering and Mineral

ResourcesBiomedical Engineering

Dr. Duane DombekUnion Carbide Fellow/Dow RetireeCatalysis Information Management

Dr. Betsy DulinDeanCollege of Information Technology and

EngineeringMarshall University Graduate CollegeEnvironmental Engineering

Mrs. Sharon HallPresidentCAMC Health, Education, and Research

InstituteMedical Research

Mr. Charles HendrixUnion Carbide Fellow RetireeIndustrial Statistics; Experimental Strategies

Dr. Paul HillExecutive Director EPSCoRChemistry

Dr. Louis KapicakUnion Carbide/Dow Associate Director RetireeCatalysis; Project Management

Dr. George E. Keller IIUnion Carbide Senior Fellow RetireeSeparation Processes; Long-Range Research

Management

Dr. Eldon LarsenUnion Carbide Retiree; Professor of

Engineering ManagementMarshall UniversityThermodynamics; Process Development

Dr. John MaherUnion Carbide/Dow Manager Retiree;Executive Director – Chemical Alliance Zone;President – Rampant Technology Partners LLCCatalysis; Advanced Materials; Project

Management; Intellectual Property

Mr. Thomas MaliszewskiUnion Carbide/Dow RetireeEngineering Project Management

Dr. Jeffrey L. PetersenDepartment of ChemistryWest Virginia UniversityInorganic and Organometallic Chemistry;Structural and Catalytic Aspects

Dr. James SchreckUnion Carbide/Dow RetireeProcess Chemistry; Project Management

Dr. P. Dwight Sherman Jr.Union Carbide/Dow Associate Director RetireeAnalytical and Process Chemistry

Mr. Larry SimpsonUnion Carbide Senior Fellow RetireeFluid Dynamics; Heat Transfer

Dr. Jack SmithUnion Carbide/Dow RetireeFundamental Chemistry; Information

Technology Research

Dr. Alfred StillerDepartment of Chemical EngineeringWest Virginia UniversityCarbon Chemistry; Environmental Engineering;Biomedical Engineering; Engine Design

Dr. Garth Thomas Jr.ChairDepartment of Chemical EngineeringWest Virginia University Institute of Technology



MATRIC features a top-quality management team with depth of experience in both publicand commercial research and development. The organization is led by Keith Pauley,president and chief executive officer, who previously developed technology for the U.S.Department of Energy and the National Aeronautics and Space Administration (NASA) formore than 15 years. Dr. Parvez Wadia joined MATRIC in July 2004 as vice president andchief technology officer. He previously served as director of R&D for The Dow ChemicalCompany subsequent to holding the position of vice president of R&D for Union CarbideCorporation.

MATRIC is organized into three business areas and a supporting commercialization office,as illustrated in the organizational chart below. While MATRIC’s rapid growth hasallowed the organization to employ ten staff members by the end of 2004, several keypositions (e.g., chief financial officer) will be filled in 2005.

PROFESS IONAL MANAGEMENT


Each staff member demonstrates thequality of leadership attracted to theorganization.

Keith A. PauleyPresident & CEO

Keith A. Pauley wasappointed president and CEOof MATRIC in April 2004. He

brought more than 16 years of technical experience inthe development of high technology systems for variousgovernmental and commercial customers. Pauleyprovided management and technical leadership forNASA, the U.S. Department of Energy, and the U.S.Department of Defense as well as General Motors,Boeing, and Lockheed-Martin. He supported nuclearresearch for the Pacific Northwest National Laboratoryfor nine years and managed the $500 milliontechnology development program for the space shuttleand space station at the Johnson Space Center forseven years. Pauley holds a BS and an MS in nuclearengineering from Oregon State University.

Dr. Parvez WadiaVice President & ChiefTechnology Officer

Dr. Parvez Wadia joinedMATRIC in July 2004 to serveas chief technology officer

and vice president. He earned a doctor of sciencedegree in chemical engineering from the MassachusettsInstitute of Technology (MIT) with a minor in businessadministration from the Sloan School of Management.He also holds a master’s degree from MIT and abachelor’s degree from the Indian Institute of Technologyand participated in executive education at HarvardUniversity. Wadia enjoyed a distinguished 30-yearcareer with Union Carbide Corporation and The DowChemical Company during which he held a variety oftechnical and senior executive management positions,including vice president of R&D and externaltechnology. He has served on the board of directors formany organizations, including the Industrial ResearchInstitute, the WV State EPSCoR Committee, the NationalResearch Council, and the Union Carbide Foundation.

Paul HelmickExecutive Director ofCommercialization

Paul Helmick serves asMATRIC’s executive director ofcommercialization. He leads

the efforts to start new business and develop businessopportunities from intellectual property owned orlicensed by MATRIC. Helmick is also CEO of PremierStrategies LLC, a business brokerage and managementconsulting firm, and serves as acting executive directorfor the WV Venture Connection, a nonprofitorganization focused on expanding venture capital andangel investment activity in the state. He is experiencedin managing high-growth, high technology businessesand has been involved in numerous mergers andacquisitions. Helmick sits on the board of directors forthe Charleston YMCA and was recently named toWho’s Who in West Virginia Business 2004.

Dr. Duane DombekVice President, Chemistryand Chemical Products

Dr. Duane Dombek gainedmore than 25 years ofexperience in industrial

research, project management, technical leadership,and technical writing/editing while serving as researchchemist, senior research scientist, and group leader forUnion Carbide Corporation and knowledgemanagement leader for The Dow Chemical Company.Additionally, Dombek authored proposals yieldingmore than $7 million in external funding, holds 10U.S. patents, and authored more than 30 refereedtechnical publications. He completed a post-doctoralfellowship and holds a PhD in inorganic chemistry fromIowa State University, and he earned a BA in chemistrywith a minor in mathematics from Southwest MinnesotaState University.

Paul AubrySenior LaboratoryTechnician, Chemistry and Chemical Products

Paul Aubry holds a BA inbiology from MiddleburyCollege in Vermont. He served


in the USA Peace Corps for two years designing andsupervising the construction of sanitary water supplies forrural villages in eastern Malaysia. A laboratorytechnician for Union Carbide Corporation for more than25 years, he worked on numerous and varied projectsranging from bench-scale to large-scale production. Heleft Dow (after the merger with Union Carbide) tomanage a golf store. He currently serves as seniorlaboratory technician for the chemistry and chemicalproducts business area of MATRIC.

Dr. Nye ClintonSenior Research Scientist,Chemistry and Chemical Products

Dr. Nye Clinton holds a PhD inchemistry from the University ofMassachusetts and conducted

an NSF post-doctoral fellowship at Indiana University.Before retiring in 2002, he gained 30 years of industrialexperience as technology manager of Glycol Ethers,technology manager of UCON Fluids, and technologymanager of Amerchol at Union Carbide Corporation. Inaddition to his involvement with MATRIC, Clinton is activeas a tutor and board member for Putnam LiteracyVolunteers.

Tom MaliszewskiSenior Research Engineer,Chemistry and ChemicalProducts

Tom Maliszewski is acorporate fellow of UnionCarbide Corporation, where

he served 28 years in process design engineering,manufacturing, and plant support engineering. Hejoined The Dow Chemical Company via merger withUnion Carbide and served two years as senior processengineering associate in global process engineering.Maliszewski holds a BS in chemical engineering fromPurdue University, where he was named OutstandingPurdue University Chemical Engineering Alumni in2003. A registered professional engineer and amember of the American Institute of ChemicalEngineers, Maliszewski joined MATRIC in 2004 toassist in the development of research grant applicationsand the evaluation of research opportunities.

Dr. James SchreckSenior Research Scientist,Chemistry and ChemicalProducts

Dr. James Schreck obtained29 years of experience assenior chemist, project

scientist, technology manager, and associate directorwith Union Carbide Corporation and senior resourceleader with The Dow Chemical Company. He earned aPhD in organic chemistry from the University ofMinnesota and holds 35 U.S. patents.

Jason CooperVice President, Biosystems

Jason Cooper earned a BSand an MS in computerscience from West Virginia

University. He has eight years of combined commercialand government software systems experience. Beforejoining MATRIC to lead the biosystems business area,Cooper performed verification and validation ofInternational Space Station software. He will completea PhD program in biomedical engineering at DukeUniversity’s Pratt School of Engineering in 2005.

Mary S. HelmickExecutive Assistant

Mary S. Helmick is executiveassistant to the president andCEO of MATRIC. She is the

administrator of daily office duties and providessupport to the board of directors and the executivecommittee. Helmick also served as a founding memberof Premier Strategies LLC and has been instrumental ininitiating and maintaining day-to-day administration ofthe company. She garnered years of experience inexecutive administration positions with CornerStoneTechnology Group, Citynet Corporation, and the WestVirginia Baptist Convention.



S TART-UP CAP I TAL IZAT IONIn 2004 MATRIC developed start-up capital fromfive sources: direct-charge projects,appropriations, private grants, donations, andloans.

Direct-Charge Projects

Of the four project awards secured by MATRICin 2004, one produced revenue. This projectcentered on providing direct support to the TitanCorporation’s independent verification andvalidation effort at the National Aeronautics andSpace Administration (NASA) facility inFairmont, West Virginia. MATRIC staff operatedunder a small contract to identify the scope ofwork to be performed on the next generationlaunch vehicle, called the Crew ExplorationVehicle.

Appropriations

MATRIC received funding from the state of WestVirginia in 2004. The first was a budget digestappropriation from Senator Brooks McCabe inthe amount of $25,000. The second was a grantof $100,000 from the West VirginiaDevelopment Office.

MATRIC also was informed that a $150,000United States Economic Development Initiativegrant was approved with assistance byCongresswoman Shelley Moore Capito. Fundswill target the renovation of facilities at the SouthCharleston Technology Park (formerly the UnionCarbide Technical Center) and will be receivedin 2005.

Private Grants

Most foundations have specific criteria that directfunding to specific program needs. MATRICfocused on requesting private grants fromfoundations whose criteria complemented its coremission, provided value to constituents served,

and helped expand the core capacity to conductlife-changing R&D and to create value, jobs, andwealth in the local economy. Of the 200qualified nationwide providers investigated,MATRIC initiated contact with more than 20 andwas declined by 12. Follow-up conversationsdirected the drafting of a more detailed responsefor five; funding and/or positive feedback wasreceived from three organizations.

In 2004 MATRIC received two significant grants:

Benedum Foundation $ 250,000 (3 years)

Clay Foundation $ 90,000 (3 years)

At year’s end, there was renewed interest fromone industry foundation regarding funding pathsoutside their traditional foundation framework.Additionally, an application to one grant makerin the amount of $100,000 has shown earlyindications of favor; the final decision will bedetermined in early 2005.

Donations

Various corporations and individuals havepledged a total of $540,000 of support for thenext three years.

Loans

MATRIC established two lines of credit toalleviate concerns about short-term cash flow.The first line of credit is from the Charleston AreaAlliance (CAA) Trust Fund and has a maximumvalue of $500,000. These funds may be usedon a revolving basis and are directly tied to apercentage of awarded contract value and jobscreated. The second line of credit is from FNBPrivate Banking, is valued at $100,000, andhas no additional requirements. These loans arelikely to be used to cover payroll and other start-up expenses for individual project contracts.



PUBL IC RE LAT IONS AND MARKET INGWith significant support from Charles Ryan Associates (CRA), MATRIC enjoyed a verypositive relationship with the media and community during its first year. A professional Website (www.matric.cc) was produced and maintained, and several promotional brochureswere developed by CRA staff.

Articles in the Charleston Gazette, CharlestonDaily Mail, The State Journal, and the Dominion-Post also featured MATRIC. See, for example:

• Celeste, E. (2005, January/February). TheMATRIC revolution. West Virginia Executive.

• Ginsberg, J. (2004, October 13). Researchfirm to get $20,000 donation. CharlestonGazette.

• Hohmann, G. (2004, June 14). Grouptapping experts: Organization seeks to buildon area’s strengths. Charleston Daily Mail.

• State briefs. (2004, July 28). CharlestonGazette.

An article written by president and CEO Keith Pauley wasfeatured in the November 2004 issue of Views and Visions,a publication of Bowles Rice McDavid Graff & Love.

Additionally, MATRIC produced a direct-mail piece thattargeted chemical companies in West Virginia. This

postcard emphasized the outsourcing modelfor chemical product R&D and the benefits ofthe state’s R&D tax credit.

Screen shot of MATRIC Web site

MATRIC direct-mail piece



CHEMISTRY AND CHEMICAL PRODUCTSCore Capabilities

Scientists and engineers in the chemistry andchemical products business area possess abroad range of technical capabilities inindustrial R&D ranging from fundamentalresearch to highly applied development in boththe process and product arenas. Many of theirscientific contributions have changed the basisof competition in the chemical, petrochemical,and related industries. Key technicalcapabilities include catalysis, processchemistry, advancedseparations, reactionengineering,computational/quantumchemistry, analyticalscience, polymer science,process safety, modelingand simulation, statisticalanalysis, experimentaldesign, transport phenomenon, materials ofconstruction, and process economics. Thesecapabilities are uniquely leveraged byassembling a highly successful multidisciplinaryteam approach using advanced technologiesand a systems approach to process synthesis.Core competencies are summarized as follows:

• Radical Process Innovation

Development of advanced separationstechnologies, radical process innovation,simulation, and synthesis to reduce capital andoperating costs in the chemical and polymerindustries

• Catalysis

Discovery, development, scale-up, andcommercial production of “best-in-class”heterogeneous and homogeneous catalysts forbatch and continuous processes

• Scale-Up and Technology Verification

Process and product pilot plant, demonstrationunit scale-up, and technological verification toachieve reduced cycle times and commercialrisk mitigation

• Techno-Economic Assessments and EmergingTechnology Evaluations

Identification and techno-economic assessmentsof emerging process and product technologies

• Intellectual Property

Generation of intellectual property and itsleveraging to create unique value andsustainable competitive advantage

• Process and Plant Improvement

Plant operations improvement and processsupport, including increased yield, capacity,asset utilization, product quality, reliability,inherent safety and reduced energy usage,and lower environmental impact

• Business Strategy, Technology Plans, andMarket Introduction

Business strategy and technology plandevelopment for successful market introductionof new products, processes, and technicalservices

These capabilities are uniquely leveraged byassembling a highly successful multidisciplinary teamapproach using advanced technologies and a systemsapproach to process synthesis.

B U S I N E S S D E V E L O P M E N T :


Strategic Programs

The specific technology thrusts and strategicprograms under development are as follows:

• Process and catalyst technology for ethyleneproduction from natural gas

• Biomass and wood-based raw materialsconversion technology to important chemicalbuilding blocks and other value-addedspecialty products

• Advanced inorganic membrane research andseparations technology with commercialapplications geared to new processes andhardware for air and water purification

• Process chemistry research to enhance theyield of products using alternate raw materialsand new catalysts

• Novel technology development for biologicalterror threat reduction and deactivation ofhighly toxic materials

• Flexible manufacturing technologies forspecialty chemicals

• Advanced catalytic technologies for mercuryremoval

• Advancements in new polymeric materialstechnology for highly demanding end useapplications

• Development of quantum and computationalchemistry tools for improved catalytic systemsand for predicting the behavior of veryreactive or energetic materials

• Development of process technology for nextgeneration coal gasification for the co-production of electric power and chemicals,hydrogen, or liquid fuels

• Carbon dioxide sequestration technologydevelopment

• Process analytical chemistry and chemicalforensics

MATRIC researchers Dr. George Keller and Dr. Jim

Schreck have identified breakthrough technology for

producing valuable chemical intermediates from

biomass. This project is directed to developing novel

nanoporous, inorganic membranes coupled with

innovative process concepts to reduce the energy usage

and capital investment in converting biomass-derived

sugars to chemical building blocks. A central need in

most biological routes is the requirement to remove

desired products from dilute aqueous streams. Removal

of large volumes of water requires substantial energy

and capital expenditures. Drs. Keller and Schreck

stated, “We remain optimistic that this project will

develop new cost-effective, high-performance

separation technology to isolate chemical

intermediates, building blocks, and valuable

byproducts from aqueous biomass conversion streams.”

The project seeks to discover nanoporous membranes

and uses fabrication technology from the Oak Ridge

National Laboratory (ORNL). Dr. Keller said, “These

membranes have many unique attributes, including a

high, stable flux at elevated temperatures and

pressures; the ability to operate at large trans-

membrane pressure drops; and a capability for online

back-flushing. Further, the ORNL fabrication process

allows for tailoring the membrane pore size over a

remarkably wide range.” The model system to be used

to demonstrate this technology is the hydrogenolysis of

biomass-derived sugars to ethylene glycol, propylene

glycol, and glycerol. In conjunction with improved

separations technology, this effort will integrate

optimized catalysts with reaction and membrane

operations in a holistic design.

The MATRIC research team is partnering with key

scientists at ORNL who are the experts in this kind of

membrane technology. In addition, the MATRIC-ORNL

project team has five other industrial participants to

provide active commercial perspectives and to

contribute in-kind support to the effort. MATRIC’s

industrial partners are leaders in their respective

businesses and include The Dow Chemical Company,

UOP LLC, Pall Corporation, PureVision Technology Inc.,

and BC International. Dr. Stanley Gembicki, vice

president and chief technology officer of UOP LLC, said,

“We are excited about our participation in this project,

and we are very interested in the potential outcome

from the proposed research.”


Key Staff and Contributors

The chemistry and chemical products business area is led by Dr. Duane Dombek. He holds a PhDin inorganic chemistry, has more than 25 years of experience, and holds 10 U.S. patents. Hejoins seven other contributors in this business area, which boasts a diverse multidisciplinarybackground with advanced degrees in chemical and nuclear engineering; physical, organic, andorgano-metallic chemistry; technology and business management; and information technology. Theaverage industrial experience of each member is more than 25 years, and each key contributorhas an accomplished track record of successful business-driven R&D to deliver significantcommercial value and a sustainable competitive advantage in the marketplace.

The following table illustrates a high-level mapping of core competencies to each of the keycontributors:

Core Competency Key Contributors

Radical Process Innovation Keller, Schreck, Maliszewski, Wadia, Dombek

Catalysis Schreck, Dombek, Wadia

Scale-Up and Technology Verification Keller, Maliszewski, Schreck, Clinton, Wadia

Techno-Economic Assessments Maliszewski, Keller, Pauley, Helmickand Emerging Technology Evaluations

Intellectual Property Keller, Schreck, Wadia, Dombek, Clinton

Process and Plant Improvement Clinton, Schreck, Maliszewski, Aubry

Strategy, Technology Plans, Pauley, Helmick, Wadia, Keller, Clintonand Market Introduction

Significant innovation often occurs at the edges of excellence across disciplines. Consequently,MATRIC’s approach to complex problem solving and new technology development is to leveragethe diversity of thought and multidisciplinary backgrounds of individual team members. In additionto the core group, MATRIC has an extensive network of world-class technical experts who arereadily available to join the team on an as-needed basis.

Strategic Relationships

A critical element of MATRIC’s future success is the development of strong relationships with keycustomers and technology partners. Partnerships are especially vital because businessopportunities exist beyond the walls of MATRIC while solutions lie within the organization.Providing a unique, value-added service that exceeds the expectations of customers and partnersis required to accomplish the mission of the organization.

MATRIC is developing active working relationships with key academic institutions, including WestVirginia University, Marshall University, West Virginia State University, West Virginia UniversityInstitute of Technology, University of Florida, California Institute of Technology, Miami University(OH), and University of Virginia. Strategic partnerships are also being sought with several nationallaboratories, including Oak Ridge (ORNL), Pacific Northwest (PNNL), National Energy TechnologyLaboratory (NETL), and the National Renewable Energy Laboratory (NREL). Other importantpartnerships, in various stages of development, include the Chemical Alliance Zone, RampantTechnology Partners LLC, the Center for Process Analytical Chemistry (CPAC), and the Mid-WestResearch Institute.


Several chemical and chemical-related companies are important to the business developmentefforts and long-term success. MATRIC is in dialogue with or has existing cost-sharing commitmentson joint R&D proposals from the following corporations: The Dow Chemical Company, UOP LLC,Pall Corporation, PureVision Technology, BC International, Engelhard, SABIC Americas Inc., OlinCorporation, Nalco, and MBI International. These corporations have strategic R&D needs thatalign well with MATRIC’s core technical competencies and key scientific capabilities.

In 2005 MATRIC intends to explore strategic partnerships and customer relationships outside NorthAmerica with a focus on potential opportunities in Europe, the Middle East, and the Far East.

2004 Proposal Summaries

Title Customer Status Total Duration(as of 12/04) Budget (months)

Ethane Oxidative Dehydrogenation DOE Awarded $ 2,200,000 48From Natural Gas to Ethylene

Proprietary Research for Specialty Contract R&D Awarded $ 80,000 ≤4Intermediates

Center for Applied Manufacturing NSF (PFI) No Award $ 600,000 24and Plant Utilization Studies(CAMPUS) Model

Flexible Chemical Manufacturing NSF (PFI) No Award $ 600,000 24System

Tannins and Related Compounds DTRA No Award $ 1,672,000 36for Biological Agent Deactivation

IGCC Polygeneration DOE-NETL No Award $ 560,000 18

Novel Platform for Reaction NSF No Award $ 3,650,000 60Elucidation

Biological Agent Deactivation by AFRL Submitted $ 720,000 12Tannins and Related Compounds

Biomass Conversion With Novel DOE, Office Submitted $ 4,800,000 36Inorganic Membranes and of BiomassInnovative Process Concepts Programs

Each proposal was submitted with specific partners, some of whom took a significant leadershiprole in its development and eventual execution.



B IOSYSTEMSB U S I N E S S D E V E L O P M E N T :

Core Capabilities

The biosystems business area relies on theinterdisciplinary expertise of staff andconsultants. Core capabilities encompassemergent fields where individual andcollective experience increases thepotential for success:

• Bioinformatics

Dr. Fredj Tekaiafrom the InstitutPasteur definesbioinformatics as“the mathematical,statistical, andcomputing methodsthat aim to solvebiological problems using DNA and aminoacid sequences and related information”(as cited byhttp://bioinformatics.org/faq). This is aparticularly interesting field since many ofMATRIC’s chemistry experts speak quitewell the language of polymers, monomers,and macromolecules. Combine the existingchemical fluency with biomedical andsoftware engineering—comparative andfunctional genomic research is reachable.

• Biostatistics

Loosely tied to bioinformatics, this fieldfocuses on the development andapplication of innovative statisticalmethods to problems of human health anddisease, including basic biomedicalsciences. MATRIC has access to world-class statisticians and will utilize thoseresources to pursue research in this arena.

• Counter-Bioterrorism

The organization is well-positioned toperform groundbreaking research for thefour counter-bioterrorism sub-missions, asdescribed by United States Air Force Lt.Col. Howard K. Mardis (2002): “The firstis to deter biological attack. If deterrencefails, the second is to support preemptiveefforts. If preemption fails and terroristssuccessfully execute a biological attack,

the third sub-mission is domestic response.The fourth and final sub-mission . . . isidentification of perpetrators and all theactions it can lead to—apprehension,prosecution, punishment” (p. 3).

• Medical Informatics

Data mining and decision support systemsknowledge are MATRIC’s strengths in thiscategory. As an interdisciplinary field,combined research staff can exploitseveral research opportunities. Dr. EdwardH. Shortliffe, Columbia University,summarizes medical informatics as “thescientific field that deals with the storage,retrieval, sharing, and optimal use ofbiomedical information, data, andknowledge for problem solving anddecision making” (as cited by http://www.cs.man.ac.uk/mig/links/what.medinfo.html).

MATRIC has access to world-classstatisticians and will utilize those resourcesto pursue research in biostatistics.


• Medical Instrumentation

This broad area of research is rapidly growing inthe United States; however, West Virginia remainsunderrepresented for instrumentation funding.MATRIC hopes to change that by nourishingexisting intellectual property, applying for patentsas appropriate, and performing necessary clinicalvalidation. A long-term vision is to lureinstrumentation manufacturing to the state.

Strategic Programs

• Observational Engineering

What began as a civil engineering technique isslowly filtering to the biomedical community. Theidea is to immerse a biomedical engineer ineveryday healthcare settings (e.g., emergencyrooms, clinics, and operating rooms) and allowthem to passively observe techniques, workflow,and instrument usage. As noted by Dr. DevorahKlein (2004), “Observational research involveswatching an event or series of events and notingareas that are problematic or hesitant” (p. 197).There is immense potential for intellectualproperty creation and unsolicited research usingthis method. This research method will be pilotedin collaboration with Charleston Area MedicalCenter (CAMC).

• Pharmaceutical Development

MATRIC plans to collaborate with toppharmaceutical companies to conduct contractR&D work, develop intellectual property relativeto new drug delivery mechanisms and newmedications, and investigate possibilities forprocess scale-up development and engineering inthe field.

• Community Outreach and Philanthropy

MATRIC is dedicated not only to scientific andacademic communities but also to end users. Toinitiate outreach, a rehabilitative engineeringcourse—like Duke University’s “Devices for Persons with Disabilities” course—is underdevelopment. Funded by NSF and local organizations, Duke’s program helps localfamilies in need by providing unique engineering solutions to identified problems. MATRICenvisions a similar program that would benefit the community, the participating academicinstitution, engineering students, and the organization itself.

If MATRIC’s biosystems researchers have their way,

invasive screening tools for bowel disorders like irritable

bowel syndrome (IBS) and inflammatory bowel disease

(IBD: Crohn’s disease and ulcerative colitis) may become

obsolete. The annual health care cost for these diseases

is estimated to be approximately $10 billion due in part

to the intensive nature of diagnostic techniques. Building

on a project piloted at Duke University, MATRIC

researchers plan to use a grid of surface electrodes to

measure the electrical activity of the colon.

The specific goal of this research is to develop improved

signal detection and processing techniques using an

electrical model of the colon. Electrode arrays, multi-

channel signal processing, and artificial neural network

algorithms will be investigated to enable improved

detection and analysis of the bowel signals. For

validation of the team’s research, it will be necessary to

demonstrate the noninvasive detection of the complete

colon myoelectrical signal in healthy human subjects. A

standard screening protocol also will be developed for

application in future studies of patients with IBD or IBS.

The MATRIC research team is complemented by two

outstanding collaborators. Dr. Joel Levien—chief

gastroenterologist at Charleston Area Medical Center

(CAMC)—is providing domain expertise, and Dr. Carlo

De Luca of Boston University—a pioneer in surface

electromyography techniques—is serving as a consultant

for this research. Jason Cooper, MATRIC’s vice president

of the biosystems business area, stated, “We are pleased

to have this opportunity to collaborate with Dr. Levien

and Dr. De Luca.” Cooper added, “MATRIC is exploring

other research opportunities with CAMC, a highly

competent clinical research organization.” When asked

about the project, Dr. De Luca said, “This is an interesting

potential use for surface electromyography that could

have very beneficial results.” MATRIC researchers could

not agree more.


Key Staff

The biosystems business area is led by Jason Cooper. Cooper holds a BS and an MS incomputer science from West Virginia University and will earn a PhD in biomedicalengineering from Duke University in 2005. He is responsible for nurturing businessrelationships, identifying and exploiting research opportunities, leading research teamsbased on available funding, and ensuring competitiveness.


A solid base of customer relationships is vital to the organization’s success. To that end,MATRIC is pursuing relationships that hold value for the current strategic thrust andresearch vision. Higher education partners include Marshall University College ofInformation Technology and Engineering, Marshall University School of Medicine,University of Boston, University of Pittsburgh – Center for Biomedical Informatics, and WestVirginia University (WVU) – Charleston Division. Additional relationships are beingdeveloped at both the national and local governmental levels, including Centers forDisease Control and Prevention, National Institutes of Health, West Virginia Department ofHealth and Human Services, and the West Virginia Medical Institute. Industrialpartnerships are also being pursued.

In collaboration with CAMC, WVU – Charleston Division, and Boston University, aproposal is under development for the National Institutes of Health – National Institute ofDiabetes, Digestive, and Kidney Diseases. The project targets noninvasive measurement ofbowel disorders using novel techniques.

In addition, the Marshall University School of Medicine is leading a research effort in thearea of myocardial infarction that provides a data mining opportunity for MATRIC.

2004 Proposal Summaries


Development of a NASA – LRC No Award $ 300,000 24Musculoskeletal ResistanceExercise/Training Device

Noninvasive Musculoskeletal NASA – LRC No Award $ 300,000 24Techniques

Astronaut Display Systems NASA – LRC No Award $ 300,000 24

Electromyographic NIH – NIDDK Submitted $ 275,000 24Technique to Screen forColon Disorders


REFERENCES

Klein, D. E. (2004, May/June). Clinical engineering management: Beyond broke: Three steps to improvehow your hospital buys, uses, and repairs equipment. Biomedical Instrumentation & Technology, 38(4),197-200. Retrieved January 5, 2005, from http://www.aami.org/publications/BIT/2004/04mj.cem.pdf

Mardis, H. K. (2002, April). Counter-bioterrorism US intelligence challenges. Air Force Fellows Program,Air University. Retrieved January 5, 2005, fromhttps://research.maxwell.af.mil/papers/ay2002/affellows/mardis.pdf



SOFTWARE SYSTEMSB U S I N E S S D E V E L O P M E N T :

Core Capabilities

The software systems business area isfocused on developing software solutionsfor the most complex systems in the world.With experienced staff, MATRIC hasexpertise in data mining, data fusion, andcritical control system software. Theindividuals have a significant track recordfor developing the architectures andprograms for thespace shuttle,International SpaceStation, nuclearindustry, anddefense systems.Contributions byMATRIC staff havesignificantly influenced the way criticalcontrol software is both developed andutilized. Core competencies aresummarized as follows:

• Data Mining

Development of data mining software tosearch large databases efficiently to solvetechnically relevant research problems(e.g., identification of terrorists or weaponsof mass destruction)

• Data Fusion

Development of software for data fusion totransform data into usable information(e.g., control displays for spacecraft thatsynthesize data channels from thousandsof sensors)

• Critical Control Software

Development of critical control softwarethat operates the most complex systems in

the world (e.g., guidance, navigation, andcontrol software onboard the InternationalSpace Station)

Strategic Programs

• Support for the assurance of softwaredeveloped by NASA and the U.S.Department of Defense

• Development of software tools thatassess the quality and safety of othersoftware systems

• Support for the development oftechnology to find terrorists in largedata sets for the U.S. Department ofJustice

• Development of display software forU.S. Department of Defense weaponsplatforms

Key Staff

The software systems business area uses ateam of experts cutting across MATRIC.Both Keith Pauley and Jason Cooper haveextensive experience developing andvalidating software for NASA. Dr. DuaneDombek and others in the chemicalproducts business area are excellentsoftware programmers and offer a uniqueset of skills to develop this business area.

Contributions by MATRIC staff havesignificantly influenced the way critical controlsoftware is both developed and utilized.



MATRIC highly values relationships with both potential customers and research partners.These relationships establish credibility to accomplish important projects and tasksassigned to MATRIC.

The software systems business area has established working relationships with NASA’sIndependent Verification and Validation Facility in Fairmont, West Virginia, as well as keyacademic institutions, including West Virginia University, Marshall University, WestVirginia State University, and West Virginia University Institute of Technology.

In addition, MATRIC has formed significant relationships with some of the largest primecontractors in the federal government market, such as the Titan Corporation, Northrop-Grumman, Lockheed-Martin, SAIC, and CSC. These companies will call on MATRIC tomeet specific small-business requirements on federal government contracts.

2004 Proposal Summary


Titan Business Titan Awarded $ 15,000 12Development Corporation

JIMO System Engineering NASA No Award $ 200,000 60

Ship Bridge Design U.S. Navy Submitted $ 30,000 12

IV&V Contract NASA Submitted $ 2,500,000 60

In space, mission failures are extremely dangerous to astronauts and spacecraft. Therefore, the National Aeronautics and Space

Administration (NASA) developed a safety and quality assurance process that covers all aspects of mission planning and

spacecraft design. One of the most important elements of modern spacecraft is the mission-critical software that operates the

complex systems onboard. NASA uses a thorough independent verification and validation (IV&V) process to assure the safe

operation of mission software.

In October 2004 Titan Corporation included MATRIC in a NASA proposal to support IV&V activities across all agency missions.

As the incumbent prime contract, Titan currently conducts nearly 80% of all software assurance at NASA’s IV&V Facility in

Fairmont, West Virginia. If the five-year, $200-million contract is won by the Titan team in 2005, MATRIC will have three major

responsibilities. First, MATRIC will have a primary role for all nuclear-related spacecraft, including a new start mission called

Project Prometheus. Second, MATRIC will be involved in the largest and most complex NASA systems used to support human-

rated vehicles, such as the space shuttle, International Space Station, and the new Crew Exploration Vehicle. Last, MATRIC will

focus its efforts on developing new software assurance technologies through NASA’s Software Assurance Research Program.

“Project Prometheus and the Crew Exploration Vehicle are the two largest and most significant new programs at NASA,” said

Keith Pauley, MATRIC’s president and CEO who previously served as a long-term NASA contract employee at the Johnson Space

Center in Houston, Texas, and the IV&V Facility in Fairmont, West Virginia. He added, “We are excited by the possibility of

aiding in such important work.”



COMMERCIAL IZAT ION

Key FocusMATRIC seeks to create rewarding, long-termfinancial returns on investment of time andtalent in commercializing new technologiesand scientific advancements and to selectbusiness cases that advance intellectualproperty in identified domains of expertise toprofitable commercialbusinesses thatprovide products andservices in acompetitivemarketplace.

Key Actions

In 2004 MATRIC engaged in confidentialdiscussions and informal negotiationsregarding joint ventures, licensingagreements, business creation, mergers andacquisitions, and equity business partnershipswith more than 12 business entities andindividuals.

MATRIC continues to pursuecommercialization deals that either licenseexisting, internal intellectual property (IP) orallow the organization to partner with otherorganizations and individuals withcommercially viable IP. By augmentingpartners’ scientific, management, andbusiness talent, MATRIC can earnopportunities to secure equity positions inother entities.

Key Results

Based on a variety of decision criteria—scientific feasibility, time, cost, availableexpertise, potential equity—and thebackground, experience, maturity, andcredibility of individuals involved, six discussions relative to MATRIC partnership or

equity participation were initiated and arebeing advanced.

MATRIC expects to gain equity participationin 5 to 10 startup or existing businesses byyear-end 2005. As MATRIC’s for-profitsubsidiary and key scientific andmanagement talent achieve equity roles,

MATRIC will be well-positioned to successfullydevelop world-class ideas, take them tomarket, and prosper from it.

The Commercialization ProcessMATRIC is focused on applied research andthe development of resulting IP to yieldmarketplace-ready products and services.Currently, to determine the merit of aconcept, MATRIC’s management teamconducts an economic assessment to forecasteconomic impact of commercialization.However, as capacity grows to fund third-party assessment, the organization will bemore successful in earning equity positions instartups. That is, the ability to impart valuableseed-stage services (e.g., market research) toyoung companies will position MATRIC to (1)make better, more informed decisions about its involvement and (2) negotiate better deals given its demonstratedcommitment to the product and the startup.Both help MATRIC hone its focus onadvancing projects with higher potential forcommercial success. Relationships withcommercial business partners, universities,local entrepreneurs, and technical experts ofworld-class stature will aid this process.

MATRIC continues to pursue commercialization dealsthat either license existing, internal intellectual property(IP) or allow the organization to partner with otherorganizations and individuals with commercially viable IP.


Creating Opportunities, Wealth, and Jobs

Commercializing products and services based on sound IP positions (e.g., patents andtrademarks) will position MATRIC to seize opportunities, generate wealth, and create jobs.

An advantage for potential partners is MATRIC’s thorough understanding of the funding requiredto start and to grow a business (see the figure below for an illustration of the stages of capital

formation). Most commercialization opportunitiespresented to MATRIC are considered seed-stageor early-stage deals—those at the concept stagewithout development or testing of a prototype.They are opportunities with some risk. They mayhave technical merit and market possibility butlack a management team or revenue. In almostevery instance, MATRIC sees opportunities thatrequire financial funding for advancement.MATRIC is unique in that its senior managementteam has experience with venture capitalcompanies, understands the interests and

considerations of angel and early-stage investors, and brings a mature understanding of capitalformation as well as proven strategies and critical relationships to help launch a new business. Byaugmenting scientific and technical talent, enhancing the depth of the management team, andsharing strategies for early-stage capital formation, MATRIC proves a valuable partner on the pathto successful commercialization.

The commercialization office will focus on early identification of opportunities and will seekapplications, markets, management, and capital to illuminate two paths. First, MATRIC can createjobs and provide profits for future funding of the initiative by commercializing through a for-profitsubsidiary organization. Second, MATRIC can fund internal R&D efforts and establish futurerevenue streams by creating joint ventures, entering into equity- or revenue-sharing relationships,and/or establishing licensing agreements with local or national businesses that will take productsand services to market.

Resulting Economic Development

MATRIC’s commercialization efforts ultimately can be a catalyst for new business creation—apressing need in the region. Further, existing local businesses could utilize MATRIC’s expertise andR&D to move innovative, high-value products and services to market. Relationships with businesspartners, entrepreneurs, venture capitalists, and leading experts in identified markets are central tothis effort and remain a priority for the commercialization office.

Key Staff

The commercialization office is led by executive director Paul Helmick, an experiencedentrepreneur and recognized businessman who has started and grown several high-growth, hightechnology businesses. He also is CEO of Premier Strategies, a business broker and managementconsulting firm. In August 2004 he also was named acting executive director of the West VirginiaVenture Connection (WVVC), envisioned and chartered by Senator Jay Rockefeller. The WVVChelps grow venture/angel capital investments in West Virginia and equips entrepreneurs statewidewith the knowledge and resources to start and grow new businesses. Helmick's WVVC leadershiprole complements his position with MATRIC. Within MATRIC, he works closely with president andCEO Keith Pauley and vice president and chief technology officer Dr. Parvez Wadia to identify,select, and advance emerging opportunities into a portfolio of viable business cases that canbecome commercially successful with the assistance of MATRIC and its resources.

Stages of Capital Formation



MATR IC OUTSOURCING SOLUT IONSIn early 2004 MATRIC formed a for-profit subsidiary to perform routine analytical chemistryon samples from manufacturing facilities. MATRIC Outsourcing Solutions (MOS) was directedby its own board of directors, and Jeff Wood conducted day-to-day operations.

In March 2004 MOS secured its first contract with Ashland Oil in Catlettsburg, Kentucky.Under this contract, 53 samples were analyzed using mass spectroscopes at the SouthCharleston Technology Park. The successful project yielded the first revenue generated by aMATRIC organization.

MATRIC Commercial Research

Additional significant for-profit research activities were developed, requiring the expansion ofthe vision for MOS. The research activities parallel MATRIC’s core competencies but falloutside the scope of its tax exempt charter due to the focus on creating commercial productsand services. MOS was reorganized as MATRIC Commercial Research (MCR), a wholly-owned subsidiary of MATRIC with a commercial project portfolio. The following chartillustrates the nature of the relationship:

The following leaders were nominated to support MCR by serving on the board of directors:Mike Basile, Ross Dionne, Henry Harmon, Chris Jarrett, Steve Kawash, George Keller, andJohn Skaff.

In December 2004 MCR began work under its first contract to develop a new chemicalprocess for a major petrochemical company. The project will continue through 2005.

In addition, a robust commercialization model was developed to spin off technology-basedbusinesses. A portfolio of these businesses will position MCR to partner with investors,technologists, and existing businesses.



The following balance sheet was compiled by Cline and Associates CPA and isrepresentative of the assets and liabilities of MATRIC as of December 31, 2004. Thesenumbers have not been independently audited.

Current Assets:Cash and Cash Equivalences 65,350.27Pledges Receivable @ Net Present Value 52,656.44Due from MATRIC Outsourcing Solutions 36,562.32Benedum Foundation Grant Receivable 150,000.00Other Accounts Receivable 0.00

TOTAL CURRENT ASSETS 304,569.03

Noncurrent Assets:Equipment 9,311.63Less: Accumulated Depreciation (1,125.00)Deposits, Prepaid Expenses & Other Assets 0.00Web Site (Net of Amortization) 3,008.15

TOTAL NONCURRENT ASSETS 11,194.78

TOTAL ASSETS 315,763.81

Current Liabilities:Accounts & Tax Payable 10,073.53Deferred Revenue—Benedum Foundation Grant 150,000.00Deferred Revenue—Pledges Receivable 0.00Notes Payable—Current Maturities 6,000.00

TOTAL CURRENT LIABILITIES 166,073.53

Noncurrent Liabilities:Notes Payable—Noncurrent Portion 0.00

TOTAL NONCURRENT LIABILITIES 0.00

Net Assets:Unrestricted Net Assets 97,033.84Temporarily Restricted Net Assets 52,656.44

TOTAL NET ASSETS 149,690.28

TOTAL LIABILITIES & NET ASSETS 315,763.81

F INANCIAL POS IT ION2 0 0 4 S T A T E M E N T O F

P. O. Box 8396 | South Charleston, WV 25303Phone: 800.611.2296 or 304.720.1043 | Fax: 800.611.2296www.matric.cc

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MATRIC Annual Report 2004 · (MATRIC) is an independent, nonprofit, 501(c)(3) corporation headquartered in West Virginia. World-class scientists in the areas ... statement was adopted,