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Archive for Monday, April 20, 2009

KTEC leader serving on board of company that received state funding

Taylor, company leader says no money changed hands

April 20, 2009

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— The Kansas Technology Enterprise Corp. loaned a San Francisco-based pharmaceutical company $100,000 while KTEC’s leader served on its board of directors, according to records filed with the Securities and Exchange Commission.

The annual report for Urigen Pharmaceuticals Inc. for the year that ended June 30, 2008, also states that Tracy Taylor, KTEC president and chief executive officer, received $37,500 in compensation for serving as chairman of Urigen’s board.

Taylor and Urigen officials deny that was the case.

“Absolutely not,” Taylor said Monday. “Not one dime, not one share.”

The company’s founder, Dr. William Garner, and chief financial officer Martin Shmagin supported Taylor and said they’d be happy to sign an affidavit that Taylor receives no compensation for being on Urigen’s board. They said for accounting purposes the company’s SEC filing included how much compensation was accrued, but that Taylor had made it clear he did not want to be paid.

Garner said Taylor has agreed to serve on the board as a favor.

“No good deed goes unpunished,” Garner said.

According to the SEC filing, Urigen, which specializes in the development of products for urological ailments, on Jan. 5, 2007, entered into an unsecured promissory note with KTEC Holdings Inc. in the amount of $100,000. Under the terms of the note, Urigen was to pay 12 percent interest.

KTEC was started in 1987 to assist in the creation and growth of technology businesses in Kansas. Urigen has Kansas connections, Taylor and Garner said. Garner grew up in Kansas and the company has conducted clinical trials in Kansas, he said. Urigen had an office at the Enterprise Center in Johnson County from 2005 to 2008, according to KTEC.

“We have spent a lot money in Kansas,” Garner said.

Meanwhile, KTEC is fighting for its life.

Gov. Kathleen Sebelius earlier this month vetoed its $12 million appropriation, saying that its functions could be brought under the Kansas Department of Commerce.

A recent assessment of KTEC found that the agency should continue as a stand-alone agency, but that changes were needed to make it more effective.

Taylor, who makes about $280,000 per year with KTEC, has also been under fire for not responding to legislators’ inquiries for information.

Comments

printerman 4 years, 11 months ago

Why doesn't Tracy Taylor resign? Why isn't the board of directors asking for his resignation?

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printerman 4 years, 11 months ago

I agree with "offended". BTW, TomL. How do you know so much about KTEC? Do you work there?

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offended 4 years, 11 months ago

TomL - With all due respect, your points could be made without the personal attacks. MW is a competent professional and a good person. She has made substantial contributions to small businesses in Kansas and the state is fortunate to have someone with her background and experience in that role. She facilitates the process but does not make the investment decisions and is not responsible for the failure to disclose conflicts and the general lack of transparency that is the central issue at hand. The aspersions you cast add no value to this discussion and are definitely not appropriate in a public forum.

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TomL 4 years, 12 months ago

This comment was removed by the site staff for violation of the usage agreement.

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Bob_Keeshan 4 years, 12 months ago

So in order to save Tracy Taylor's job, Republicans like Kevin Yoder are promising layoffs and furloughs of other state employees.

It's funny, when these guys run for election they promise to run government like a business. Who knew they meant a business like Enron or AIG?

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solsken66 4 years, 12 months ago

$280,000.00 salary. This is a government position paid by the taxpayers' of Kansas. There are probably more state employees who receive a very nice check paid by the people of Kansas. Now is not the time to hear about these excessive amounts of money being paid to government officials when many Kansans are diligently being frugal or trying to find employment after being laid off.

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rooster 4 years, 12 months ago

It doesn't just smell. It stinks!

Where the he!l is the oversight. I can't believe this organization is still operating. The KTEC is done!

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Ravens 4 years, 12 months ago

I think TomL and JCobb raise questions which have to be answered.

This thing smells.

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Orwell 4 years, 12 months ago

Well, this tells us quite a bit about why Taylor has been so selective about providing requested info to our elected reps. From this story it looks like KTEC sent about 100K of taxpayer money out to this dubious outfit; in exchange, Kansas apparently got the really special opportunity to supply (human?) guinea pigs for clinical trials.

I hear David Wittig's looking for a cellmate.

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TomL 4 years, 12 months ago

Wow.. Mr. Garner is willing to risk his career for Tracy Taylor. If it is just accounting and does not intend to pay Tracy, then he better restate the financials and explain to the SEC why he is doing so. If he is planning on paying Tracy in the future and not doing so now to help Tracy avoid conflict of interest, then this is kickback and collusion. Mr. Garner you better come clean and ask for immunity if Tracy coerced you. Pray tell us how Mr. Taylor whose prior board experience is penny stock companies, and locating "real estate" for Sprint is helping you with commercializing pharma. Or it is that he got you a loan when you needed it and lets you get away without paying interest as long as you accrue 38K per year for Tracy payable on demand in the future. You both should go to jail.

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JCobb 4 years, 12 months ago

This comment was removed by the site staff for violation of the usage agreement.

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KU_cynic 4 years, 12 months ago

An unsecured promissory note to finance a pharmaceutical company with no revenues and with two products still in clinical trials? Let's see, what's the financial term for that? Oh yeah, sucker deal!

Here's a link to the company's 10-K for the fiscal year ending June 2008:

http://biz.yahoo.com/e/081014/urgp.ob10-k.html.

In particular, I love the following qualifying language:

"The explanatory paragraph and note 2 to our consolidated financial statements state the following conditions, which raise substantial doubt about our ability to continue as a going concern: we have incurred operating losses since inception, including a net loss of $4.84 million for the fiscal year ended June 30, 2008, negative cash flows from operations of $2.69 million for the fiscal year ended June 30, 2008, and our accumulated deficit was $9.64 million at June 30, 2008. We anticipate requiring additional financial resources to enable us to fund the completion of our development plan. These funds may be derived from the sale of a current license, licensing and distribution agreements outside the U.S., corporate partnerships, and/or additional financing.

If we are unable to obtain the required additional financial resources to enable us to fund current development projects or the completion of the strategic opportunities that may be available to us, or if we are otherwise unsuccessful in completing any strategic alternative, our business, results of operation and financial condition would be materially adversely affected and we may be required to seek bankruptcy protection."

Does that sound like a company that should be able to raise money via debt merely on its promise to repay? Of course not. Does 12% sound like a fair rate of interest?

Taylor should be toast, as should any other KTEC official who signed off on such a loan.

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compmd 4 years, 12 months ago

If Taylor didn't get the money, then didn't this company lie to the SEC? Also, where is the money now?

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rooster 4 years, 12 months ago

Nice very nice. The KTEC leadership is fraudulently filling it's own pockets on the taxpayer dollar. Then they decline to address concerns that our legislators have.

Time to oust the leadership of the KTEC if it is going to continue to recieve any more of our tax dollars.

If you are a republican you should be chiming in to support the firing of the KTEC leadership over the wasteful spending of our tax dollars. You want to cut wasteful spending here's your chance. I'm willing to bet all we hear is crickets though.

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