U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[ x ] Annual report under section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the fiscal year ended June 30, 1997.or
[ ] Transition report under section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the transition period
from to
Commission file number33-16531-D
INTERNATIONAL AUTOMATED SYSTEMS, INC.
(Name of small business issuer in its charter)
Utah 87-0447580
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
512 South 860 East, American Fork, Utah 84003
(Address of principal executive offices)
Registrant's telephone number, including area code:(801) 763-9965
Securities registered pursuant to Section 12(b) of the Act: None
Title of each class Name of each exchange
on which registered
N/A N/A
Securities to be registered under section 12(g) of the Act: None
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days. x Yes No
Check if disclosure of delinquent filers in response to Item 405 of
Regulations S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ x ]
State the registrant's net revenue (loss) for its most recent fiscal year:
$(1,427,751).
The aggregate market value of voting stock held by non-affiliates of the
registrant on June 30, 1997, was approximately $ 16,028,478
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: as of June 30, 1997, there
were outstanding 15,255,361 shares of registrant's Common stock, no par value
per share.
Documents incorporated by reference: Exhibits, Item 13.
PART I.
THE COMPANY
Exact corporate name: International Automated Systems, Inc.
State and date of incorporation: Utah- September 26, 1986.
Street address of principal office: 512 South 860 East
American Fork, Utah 84003.
Company telephone number: (801) 763-9965
Fiscal year: June 30
BUSINESS AND PROPERTIES
A. OVERVIEW
International Automated Systems, Inc., a Utah corporation (hereinafter
"Registrant" or "Company") based in American Fork, Utah, seeks to design,
produce and market products based on high technology. The Company has
developed and is currently offering an automated self-service check-out
system. This system allows retail customers to ring up their purchases
without a cashier or clerk. The system is primarily designed for grocery
stores, but may be applicable in other retail establishments.
The Company has an Automated Fingerprint Identification Machine ("AFIM")
which has the capability of verifying the identity of individuals. Potential
AFIM applications include products for employee time-keeping and security, and
access control. Registrant purports that its identity verification system has
a variety of uses and applications for both commercial and governmental users.
The Company also purports that it has developed technology that transmits
information and data using different wave patterns, configurations, and timing
in the electromagnetic spectrum. The Company refers to this technology as
digital wave modulation ("DWM"). The Company believes that if the technology
is implemented and applied commercially, the technology has the capability to
increase significantly the amount of information which can be transmitted.
The Company is continuing the development of this technology and the
commercial feasibility of the technology has not been demonstrated.
Registrant believes that it has many competitors in the communications,
information data transfer, and data storage industries which have greater
capital resources, more experienced personnel, and technology which is more
established and accepted in the market place.
The first anticipated product using this technology for commercialization is
an high speed modem. The modem is projected to be faster than modems
currently in use. Generally modems are used for purposes of transmitting data
over telephone lines, on telecommunications systems, and over wireless mediums
such as satellite transmissions and other line- of-sight transmission
mediums. The Company has a modem prototype. Additional development to
achieve a commercial product is on going. In addition, the Company intends to
apply the digital wave modulation technology in other areas. The Company has
not established a plan or order of priorities for any future commercial
product development. Because this technology is sophisticated and new, the
Company may not be successful in its efforts to have commercial exploitable
products because of difficulties and problems associated with development.
Possible problems could be inability to design, construct and manufacture
commercial products; and the Company's lack of funding and financial resources
and experienced personnel. Competitors may develop technologies which are
superior and will make obsolete the DWM technology even before the Company has
completed its development of any commercial products. Further, cost will be a
factor in both the development and the commercialization of any new product.
It is anticipated that if a commercially viable modem is developed, the
Company will have to expend funds to introduce the product into the market and
to formulate and place into action any marketing plan. Costs to offer new
products and to establish the proper marketing strategy will be significant.
The Company has not made any projections regarding any anticipated costs.
There are risks that the no commercially viable products will be developed
from the technology and any products developed may not be accepted or
successful in the marketplace. Further, the Company may not have sufficient
funds to develop, manufacture, and market any products.
Background.
The Company, was organized under the laws of the State of Utah on September
26, 1986. In April 1988 the Company filed a registration statement for a
public offering under the provisions of the Securities Act of 1933 ("1933
Act") to sell a maximum of 1,074,000 units at a price of $.50 per unit. Each
unit was comprised of one share of common stock and one common stock purchase
warrant. The Company sold approximately 200,000 units at the offering price
of $.50 per unit realizing total proceeds of approximately $100,000. All
warrants expired without exercise.
Over time the Company for the most part acquired its different technologies
from its president.
Automated Self-Service Check-Out System.
In 1988 a patent was granted for the automated self-service check-out system
(hereinafter referred to as "Self-Check System" or "System"). In retail
operations customers using the System check-out the items selected for
purchase. For approximately three years a form of the Self-Check System was
used in a grocery store in Salem, Utah.
Description of the Self-Check System.
The Self-Check System is an automated check-out system for customers of
retail establishments and provides for self-service check-out lines, stations
or lanes. The System has a scanner to read the bar codes of items purchased
and a scale to weigh the items scanned and placed in the receiving basket. As
each item is scanned by the bar code reader, the scale verifies the accuracy
of the item scanned and placed in the basket by comparing the weight of the
item scanned with the weight change recorded in the receiving basket. If the
weights differ or if other problems arise, a clerk is summoned to assist the
customer and resolve any problem.
The Self-Check System is designed to replace clerk operated cashier
registers that are used in retail and grocery stores. In addition, the
Self-Check System, when fully and completely implemented, is intended to allow
a store manager to maintain accurate inventory on a contemporaneous basis.
The contemporaneous inventory assists in reordering and restocking. It is
believed that the System may simplify price verification and may provide
customers with better and faster service.
Operation of System.
The Self-Check System operates as follows. Customers make their selections
for purchase. A customer places the grocery cart at the head of the System,
removes the products from the grocery basket and scans the bar codes on the
products across the reader. The bar code provides the product description,
weight and price. This information is then relayed on an item by item basis to
the computer and the computer transmits the data in its memory to the
check-out terminal. The product information, item description and price, is
then displayed on the screen. A running subtotal for all items purchased is
also shown. Each item scanned is placed into a receiving basket or cart on a
sensitive scale. The weight of the item scanned and placed in the receiving
basket is compared to the weight for that item as recorded in the computer.
The computer compares the weight of the scanned and place in the basket with
the weight for that item in the database. If the weight differs, an error
code is displayed and an attendant is summoned to assist the customer or to
override the System. Once all the items are scanned, a final tally is made.
Payment is then made to the attendant either through a debit card, check or
cash. An attendant may be supervising multiple check-out terminals.
The Self-Check System interfaces with computers and data is transferred back
and forth between the check-out terminals and the main computer. The interface
may be compatible with various scanners and scales so the Self-Check System
may be adaptable to equipment already from other manufacturers. The System
allows one clerk to handle simultaneously multiple check-out stations or
lanes.
Possible Advantages.
Management believes the Self-Check System may have several possible
advantages over conventional retail check-out systems to operators and
customers. For operators the advantages are: reduced labor costs, more
accurate inventory, theft reduction and theft deterrence. Also, the retailer
can serve customers during peak traffic. For customers the advantages are:
faster service, greater convenience, less time waiting in line and more
privacy. A retail establishment may not need as many cashiers with the
Self-Check System.
Management believes that the market for the Self-Check System may include
several types of retail establishments, including grocery stores, drug stores,
discount stores, and fast food restaurants. If operating properly the
Self-Check system lessens the impact of having too many attendants or
cashiers available. Customer traffic volume is difficult to predict and
retail operators wanting to satisfy reduce the time customer wait in line must
have sufficient clerks or cashiers available.
The Self-Check System uses proprietary software developed by the Company.
The System also offers a hand-held unit to be used for price verification and
taking physical inventory counts. The hand-held unit reads the bar codes and
verifies the price in the database. This hand-held unit also is used to take
physical counts for inventory control. The System may also include a check-in
station at the loading dock. Items delivered are checked and the prices
verified against purchase orders allowing greater control. Price verification
can be done using the hand-held unit while the products are on the shelf.
For the Self-Check System to operate efficiently at least 95% of the items
offered for sale must have bar codes. In the past few years virtually all
packaged goods have bar codes. Items purchased across the counter, such as
bakery, meat and deli products usually have no bar code. Grocery stores or
other retail operations using the System may have to install scales and
labelers to place bar codes on items with no bar code. As an option the
Company offers scales and labelers for produce and delicatessen items which
interface with the Self-Check System.
Management believes that the Self-Check System may help reduce theft. For
instance, one clerk cannot check-out another clerk's or friend's purchases
using incorrect and understated prices. A portion of the theft in supermarkets
is attributable to employees doing what is called "sweet hearting" by
checking-out the purchases of other employees or friends at reduced prices.
Possible Marketing as a Franchise.
The Company has under consideration forming a wholly-owned subsidiary to
market franchise rights to the System. It is anticipated that franchises would
be sold on a store-by-store basis. To sell franchises the Company must comply
with both federal and state franchise statutes and regulations. The Company
will have to make appropriate filings with federal and state agencies. A
System would be designed to fit the particular needs and requirements of an
establishment. It is anticipated that a franchise would consist of the
necessary equipment to operate the System and the software to implement and
operate the System. The price to purchase a franchise will vary according to
the size of the store or retail operation.
The Company is installing a System in a 25,000 square foot store under
construction in Salem, Utah. It is anticipated that the store will open
during the first months of 1998. The store is owned by Neldon Johnson, the
company's president, and will operate under the name of U-Check. The store
may be considered as a pilot project for the System as it will test the
effectiveness and consumer acceptance of the System in a retail grocery store
environment. Mr. Johnson will purchase the equipment from the Company at a
price yet to be determined, but the price should exceed the Company's cost for
the equipment and system components. Also, the Company and Mr. Johnson will
enter into a software licensing agreement for the System.
Automatic Fingerprint Identification Machine.
The company has an Automated Fingerprint Identification Machine ("AFIM")
which verifies an individual's identity. The AFIM digitizes the unique
characteristics of a person's fingerprint and then stores the information on a
magnetic strip similar to the strip on the back of a credit card or on other
storage medium. The identity verification process is simple, quick, easy, and
reliable. AFIM connects to and operates with a personal computer. AFIM has
unique software, lens, and lighting. Management believes that AFIM is better
than other bio-metric and fingerprint based identification systems. The
Company is continuing to make modifications to the AFIM technology.
Operation.
To use the AFIM the person whose identity will be verified has the
fingerprint read by the AFIM. The finger is placed on the lens and AFIM reads
the print, digitizes, and stores the digitized fingerprint. To verify a
person's identity AFIM reads the fingerprint and compares it to the digitized
fingerprint on the magnetic strip or other medium. The stored number must be
accessed so it can be compared with the actual fingerprint. A match verifies
the person's identity. The AFIM is connected to a personal computer which
processes the information read by the AFIM and makes the comparison to the
digitized fingerprint on the magnetic strip. The Company believes that it has
the ability to connect AFIMs in series so that multiple stations or readers
can be connected and operated by a single personal computer.
Possible Commercial Applications.
Different commercial applications of the AFIM are under development. One
application is a time clock. The digitized fingerprint stored on the magnetic
strip on the back of a card like a credit card must match the person's
fingerprint who is recording his arrival at or departure from the workplace.
Because the AFIM system validates the identity of the person using the time
clock, fellow workers can not make in or out entries for other workers.
Also, AFIM with appropriate software may be used with a database of
fingerprints. The fingerprint is read by the AFIM and then verified against
the database for identification and, where appropriate or required, for access
control purposes. Searching the database requires additional time to verify
the identity of the individual using the fingerprint stored in the database.
To date the full marketing of the AFIM time clock has been delayed as
development of the product is continuing and modifications to the AFIM are
made.
The Company has no comprehensive study or evaluation to determine the
reliability of the AFIM or the frequency of false positives. A false positive
is where a verification is sought and the person is identified as correct when
it is not the person claimed. Management believes, based on the limited
experience available, that AFIM does not yield false positives or false
negatives at unsatisfactory levels.
In addition, the Company intends to develop an AFIM version that, if
successfully completed, will read and simultaneously digitize thumb prints and
fingerprints on four fingers. To have this capability the Company will have to
develop a different lens and to write software to read and to process a full
set of fingerprints at one time. The Company believes a market for the
full-print AFIM may exist.
Another application of the AFIM technology is door or entry security. The
AFIM would read a card on which the fingerprint of the person seeking entry
would be encoded. The fingerprint of the person seeking entry as read by the
AFIM would have to match the fingerprint digitized and encoded on the card.
To be successful the Company believes that the door security adaptation must
be compatible with or adaptable to other door entry security systems already
in place. Development is ongoing.
Another product based on AFIM technology is identity verification on
computer networks or identification when data is transmitted or accessed.
Under development is a smaller version of the AFIM that would fit into the
tower or case of a personal computer or workstation. The AFIM would read the
fingerprint to validate the identity of the user. Depending on the system
protocols the person would then be allowed access to data, files, information
or programs. Also, the identity verification, if development is completed,
may validate the identity of the person either receiving or sending
information.
For future development and possible commercialization of the AFIM technology
and the possible application the Company may attempt to enter into licensing
agreements or joint ventures. Presently the Company is merely considering the
possibility of licensing agreements or joint venture agreement. At this time
there are no agreements to which the Company is a party for licensing,
royalties, or joint venture projects.
Competition.
The AFIM based products compete with a broad spectrum of products which
verify identity. Competitors offer products based on some form of
bio-metrics. Some competitors offer fingerprint based systems. The success of
these other entities and the system used may, individually or collectively,
significantly affect the Company's attempt to commercialize AFIM. The Company
has no market studies to determine its relative position with its competitors
in the market place. Some competitors have been in business longer, have more
experienced personnel, have greater financial resources, and better name
recognition in the marketplace.
Possible Advantages.
The Company believes that when development is completed, AFIM products will
be quicker, more reliable, and more cost-effective than other identification
systems. The Company has no empirical data or statistics to support its
belief.
Digital Wave Technology.
Digital Wave Modulation technology may provide a new way of transmitting
data. Basically different wave patterns are generated on the magnetic
spectrum which may increase flows of data and information transmission and
communication. More data will be transmitted in a shorter time period and
speed may be increased.
DWM technology is based on the transmission of symmetrical, asymmetrical,
and reference waves that are combined and separated. The Company has a modem
prototype that has the capability of sending and separating combined multiple
waves. Depending upon frequencies and other factors the Company believes it
can achieve transmission rates in excess of modems currently in use. Data
transmission speed will depend on such factors as the transmission medium,
frequencies used, and wave combinations. The rate of data transmission varies
significantly depending on the communications medium used. When using plain
old telephone system commonly known as "POTS" transmission rates will be
slower. DWM is not compatible with the technology used in other modems.
DWM can be used to transmit over any analog media including wireless.
Because wave frequencies may be higher when sent through the air, wireless
data transmission using DWM technology may transmit information at higher
rates.
Preliminary evaluations indicate that DWM technology may be used for data
storage media which are magnetic based, such as floppy disks, hard drives,
video cassettes, tapes etc. Because various forms of magnetic media store in
analog format, DWM may increase the storage capacity of some magnetic based
devices. DWM storage enhancement applications have not been fully developed
and tested and may ultimately prove infeasible and impractical.
DWM must be developed from a prototype to a commercially viable product.
Even though the Company has a prototype, the Company makes no assurance that
the DWM technology can be developed into a commercially viable product or
products.
If the research and development of the modem is successful and the Company
then has a commercially viable product, the Company will consider various
alternatives. It may seek a joint venture partner or it may license the
technology to another company and attempt to structure a royalty payment to
the Company in the licensing agreement. No plan has been adopted regarding
the manufacturing, marketing, or distributing of the modem, when and if
commercialization is achieved. No assurance can be given that the
commercialization efforts for the modem will be successful or that the Company
will be able to effectively penetrate and capture a share of the modem
market. Any possible ventures are predicated on the Company developing a
commercially viable product. Presently, the Company's efforts regarding DWM
are directed primarily toward the DWM modem.
Management believes that because of the increased amount of information that
can be transmitted, other applications in the telecommunications industry may
be feasible and beneficial. Again because of the sophisticated and high
technology nature of this technology other applications may not ultimately be
successful.
The Company is a development stage company and its business is subject to
considerable risks. The Company activities have not developed sufficient cash
flows from business operations to sustain itself. The Company is small and
has an extremely limited capitalization. Many of its actual and potential
competitors have greater financial strength, more experienced personnel, and
extensive resources available. Also, the Company is engaged in technological
development. It is expensive to do research and development on new products
or applications of new or existing technology. Resources can be used and
depleted without achieving the desired or expected results. Also, because of
the rapid development of technology the Company's products may become
obsolete. Some of the Company's technology is revolutionary in that it is
based on unconventional technological theories. The Company's business
activities are subject to a number of risks, some of which are beyond the
Company's control. The Company's future is dependent upon the Company
developing products technologically complex and innovative products. The
Company's future depends on its ability to gain a competitive advantage.
Product development based on new technology is complex and uncertain. New
technology must be applied to products that can be developed and then
successfully introduced into and accepted in the market. The Company's results
could be adversely affected by delay in the development or manufacture,
production cost overruns, and delays in the marketing process.
To the extent that this report contains forward-looking statements actual
results could vary because of difficulties in developing commercially viable
products based on the Company's technologies. The Company undertakes no
obligation to release publicly the revisions of any forward-looking statements
or circumstances or to report the non-occurrence of any anticipated events.
Management of the Company has had limited experience in the operation of a
public company and the management of a commercial enterprise large in scope.
The Company's business, if its technological development is successful, will
require the Company to enter new fields of endeavor and even new industries.
The Company has not adopted a definitive plan establishing any order of
product development or the priority it will follow in attempting to enter
markets. Entry into new markets will have many risks and require significant
capital resources. If the Company seeks funds from other sources, such funds
may not be available to the Company on acceptable terms. Success will be
dependent on the judgment and skill of management and the success of the
development of any new products.
The Company's success depends, and is expected to continue to depend, to a
large extent, upon the efforts and abilities of its managerial employees,
particularly Neldon Johnson, President of the Company. The loss of Mr.
Johnson would have a substantial, material adverse effect on the Company. The
Company has no employment contract with Neldon Johnson.
The Company is not insured against all risks or potential losses which may
arise from the Company's activities because insurance for such risks is
unavailable or because insurance premiums, in the judgment of management,
would be too high in relation to the risk. If the Company experiences an
uninsured loss or suffers liabilities, the Company's operating funds would be
reduced and may even be depleted causing financial difficulties for the
Company.
Patents and Trade Secrets.
The Company has been assigned or will be assigned the rights to four U.S.
patents and to three patents pending. One patent granted in November 1988
deals with the Self-Check System. The patent pertains to an apparatus
attached to a computer which has in its database the weights and prices of all
items for sale. Another patent pertain to the AFIM technology and two patents
relate to the DWM technology. On June 17, 1997, the second patent was issued
by the U.S. Patent office with patent number 5,640,422. The three patents
pending relate to the DWM technology.
The Company has not sought or received an opinion from an independent patent
attorney regarding the strength of the patents or patents pending and the
ability of the Company to withstand any challenge to the patent or any future
efforts by the Company to enforce its rights under a patent or patents against
others.
The Company believes that it has trade secrets and it has made efforts to
safeguard and secure its trade secrets. There can be no assurance that these
safeguards will enable the Company to prevent competitors from gaining
knowledge of these trade secrets and using them to their advantage and to the
detriment of the Company.
The Company relies heavily on its proprietary technology in the development
of its products. There can be no assurance that others may not develop
technology which competes with the Company's products and technology.
Future Funding
Because the Company is a development stage company it will continue to need
additional operating capital either from borrowings or the sale of additional
equities. The Company has no present plans to borrow money or issue
additional shares for money. In the past the Company has received funds from
Neldon Johnson and his relatives in the form of contributed capital. The
Company issued no shares of stock for these contributions. For fiscal year
1997 these contributions were approximately $1,401,695. Without these funds
the Company most likely would have been unable to continue operations. No
assurance can be given that these contributions to capital with no shares
being issued will continue. No agreements or understandings exist regarding
any future contributions.
General
Registrant's principal executive offices are located at 512 South 860 East,
American Fork, Utah 84003 and its telephone number is (801) 763-9965.
The Company was founded in 1986 by Neldon Johnson to engage in the
supermarket business. Since its formation the Company has developed
technologies which are in different stages of development.
From its inception the Company's primary activity the development of
different technologies. To date the Company has not marketed a commercially
acceptable product.
Employees
The Company has twelve full-time employees and twelve part-time employees.
Warranty
The Company's products has not set any warranty provisions but it is
anticipated that the Company's warrant will be similar to warranties for
competitive products in the market or industry. Typically warranties for
electronics products are limited.
Marketing
The Company has no full-time marketing personnel. Previously the Company
entered into agreements with independent marketing representatives or
entities. Because the development of the AFIM time clocks was delayed, the
agreements with the independent marketing representatives have become stale.
Approximately eighty representatives purchased an AFIM time clock at a price
of $2,500. Most of the representative paid a down payment of $400 to $800 and
the remaining balance was due within 90 days. The payments were suspended
pending completion of modifications to the AFIM. The Company at its expense
intends to retrofit any AFIM units previously purchased by the marketing
represe
ntatives. The retrofit will require all modifications and changes to the time
clock to be made to the units. The Company believes that the cost to retrofit
the units will not be significant.
For the marketing of the Self-Check System the Company may sell franchises
or may offer the equipment comprising the System to retailers. After the
System has been operating for a time in the store located in Salem, Utah, the
Company may develop a more definitive marketing plan and strategy.
For the DWM technology the Company has not determined any definite marketing
plan. The Company may seek joint venture partners, may license the product to
others, or may seek to establish distribution channels. It is anticipated
that any marketing efforts will require time and capital to develop.
Competition
Because the Company's products are distinct, its products will face
different competitive forces. AFIM competes with all forms and systems of
identity verification. End users have different needs including cost,
sophistication, degree of security, operational requirements, time for
individual verification and convenience. The Company believes that no firm
dominates the identity verification market.
If the Company successfully completes the development of a commercially
viable modem, the Company will face competition from large, well-established
firms. These firms offer products with immediate name recognition and are
established in the market place and are compatible with other modems.. The
Company believes because of the speed at which its modem may operate it may
have a competitive advantage. The Company has no marketing studies or market
research reports to determine the acceptance of the modem in the market place
or the best marketing strategy to follow. Further, no assurance can be given
that the Company will be successful in its further development of the DWM
produc
ts.
The Company has no market share for any products at this time.
In marketing the Self-Check System the Company faces competition from major
companies with established systems in the point of sale terminal market.
Further, the process of customers checking out their purchases is a novel
concept which is untested. Overcoming reluctance to change may be difficult.
In addition, the System may not be compatible with or applicable to all types
of retail operations. The Company will determine any marketing strategy it
may pursue after the store in Salem, Utah, has been in operation. The Company
may rely on prospects known to management or developed by word of mouth. The
Company may develop a franchise program as a means to market and distribute
the Self-Check System
Manufacturing and Raw Materials
For production of the initial AFIM units the Company did the assembly. If
the Company were successful in its marketing efforts and demand for the AFIM
were to increase, the Company intends to use independent contract assemblers.
AFIM is comprised of off the shelf components and proprietary components
developed by the Company which are then assembled. The Company's proprietary
software controls AFIM's operations. The Company has no agreement with any
independent contract assemblers. The Company has entered into agreements
regarding the AFIM technology, but these agreements have been inactive pending
further AFIM development.
Management believes that the supplies and parts are readily available from
sources presently used by the Company or from alternative sources which can be
used as needed. The Comany has no backlog. During fiscal 1997 inventory of
$108,093 relating to AFIM parts was written off.
The Self-Check System is comprised of off-the-shelf parts and components.
These parts are assembled into the Self-Check System. The Company's
proprietary software ties together the individual components and operates the
System. Scanners, video display terminals, and computers are available from
several sources. The software and circuit boards used in the System are
proprietary components developed by the Company. The circuit boards were
specifically developed to interact with the various peripherals, the main
computers and the check-out terminals. The circuit boards will be
manufactured by the Company from off-the- shelf components and parts which the
Company believes are readily available from a variety of sources. Only one
Self-Check System has been assembled.
Research and Development
The Company's primary activity is the development of its technologies. The
industries may be subject to rapid and significant technological change.
Future growth for the Company may be dependent on its ability to innovate and
adapt its technologies to the changing needs of a marketplace. In the past
the Company's activities have primarily consisted of its efforts in research
and development. During fiscal years ended June 30, 1997, 1996 and 1995,
research and development expenses were $658,198, $382,327 and $39,430.
respectively. Although no precise dollar amount has been determined, the
Company will continue to allocate resources to product development. The
Company expenses development costs as they occur. The Company intends to work
closely with prospective customers to determine design possible enhancements
and modifications.
Immediate Plans
Over the next twelve months the Company intends to continue the research and
development of its technologies. For the DWM technology and the fingerprint
identification technology the Company's goal is to complete the development of
one or more products that can then be marketed. For the Self-check System the
Company will implement the test program at the store in Salem, Utah. The
Company may determine its marketing strategy based on the results from the
operations. The Company has no immediate plans to increase or decrease the
number of employees.
Acquisition of Technology
The Company exchanged 6,000,000 shares of common stock and 1,000,000 shares
of Series 1 Class A Preferred Stock for technology related to AFIM and DWM as
well as $468,458 of obligations owed to the Company's president. The
transaction took effect as of June 30, 1996. The shares of Preferred Stock
have ten votes for each share and vote with the common stock on all matters.
Government Regulation
The Company's activities may be subject to government regulation. If the
Company franchises the Self-Check System it will have to comply with
applicable federal and state law. Depending on the nature of its activities
in data transmission, the Company may need approval or authorization from the
Federal Communications Commission.
Year 2000
The Company does not anticipate incurring any substantial expenses to modify
its software or operations to adjust for the year 2000.
Item 2. Description of the Property and Facilities
The Company leases offices, warehouse and manufacturing space comprised of
approximately 10,000 square feet in American Fork, Utah. The lease is on a
month to month basis and the monthly lease is $1,000.
Item 3. Legal Proceedings
In July 1996 the Company and its president were named as defendants in a
purported class action lawsuit seeking damages for violations of the
anti-fraud provisions of the federal securities laws. The Company intends to
vigorously defend the lawsuit.
The Company in August 1996 became aware that the U. S. Securities and
Exchange Commission ("SEC") issued a private formal order of investigation to
determine if there have been violations of the federal securities laws. In
particular, the formal order addresses possible violations of the registration
provisions of the 1933 Act and the anti-fraud provisions of the Securities
Exchange Act of 1934 ("1934 Act"). The Company can not determine the status
of the SEC investigation.
In April 1997 the Company was named in a defendant in an action caption
Alarm Control Company v. International Automated Systems, Incorporated. The
complaint claims breach of contract and seeks $60,000 plus interest from the
Company. The action was in the Third District Court of Salt Lake County,
State of Utah. The Company intends to vigorously defend the lawsuit.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders.
PART II.
Item 5. Market for Common Equity and Related Stockholder Matter
Presently Registrant's common stock is traded on the NASD Electronic Bulletin
Board under the symbol "IAUS". The table below sets forth the closing high
and low bid prices at which the Company's shares of common stock were quoted
during the quarter identified. The trades are in U. S. dollars but may be
inter-dealer prices without retail mark-up mark down or commission and may not
even represent actual transactions.
High Low
Fiscal 1997
June 30, 1997 $6.375 2.875
March 31, 1997 7.75 2.75
December 31, 1996 8.68 4.00
September 30, 1996 27.00 4.50
Fiscal 1996
June 30, 1996 47.50 10.00
March 31, 1996 35.00 12.50
December 31, 1995 17.00 5.00
September 30, 1995 7.00 2.875
The Company's shares are significantly volatile and subject to broad price
movements and fluctuations. The Company's shares should be considered
speculative and volatile securities. On June 30, 1997, the Company had
approximately 780 shareholders of record. The stock price may also be affected
by broader market trends unrelated to the Company's activities.
As of September 30, 1997, Registrant had 15,255,361 shares of common stock
issued and outstanding. Of these shares approximately 2,770,351 shares were
free trading shares. There were approximately 4,274,261 shares of common
stock held by non-affiliates of that amount approximately 1,503,910 are
restricted but most of these shares may be available for resale pursuant to
the provisions of Rule 144 promulgated under the 1933 Act. As of September
30, 1997, at least 200 shareholders hold not less than 1,000 restricted shares
of common stock and have held the shares for not less than two years. At
least twenty-two shareholders own not less than 10,000 or more restricted
shares of common stock and have held the shares for not less than two years.
These shareholders satisfy the two year holding period under Rule 144
promulgated under the 1933 Act. Rule 144(k) allows a restricted legend to be
removed after two years have elapsed from the date of purchase and provides
that certain provisions of Rule 144 are not applicable.
Sales pursuant to the provisions of Rule 144 sold into the trading market
could adversely affect the market price. The Company's shares trade on the
NASD Electronic Bulletin Board. The per share price in an auction market is
based in part on supply and demand. If more shares are available for sale
into the market by holders of restricted shares who satisfy the conditions of
Rule 144 and in particular subsection 144(k), the market price of the shares
of common stock of the Company will be adversely affected.
DIVIDENDS
Registrant has not declared or paid any dividends to holders of its common
stock. In the future it is unlikely that the Company will pay any dividends.
Item 6.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
General
Historically, the Company's activities have been dominated by its research
and development. As a result there have not been revenues and costs
associated with operations. The Company has limited experience regarding
profit margins or costs associated with operating a business.
Results of Operations
Fiscal year ended June 30, 1997
Operations during the year ended June 30, 1997, pertained to research and
development and other activities. Research and development expenses were
$658,198 increasing by $275,871. The increase was attributable to development
regarding of the Company's technologies. General and administrative expenses
increased from $356,554 to $660,360 during fiscal 1997. The increase was a
result of product development and research. For 1997 fiscal year total income
was $19,043; cost of sales was $123,818, which included a write down in the
carrying value of inventories of $108,093; total expenses were $1,328,670
resulting in a net loss of $(1,427,751). The net loss increased from
$(687,189) to $(1,427,751) because of the increased research and development
expense and general and administrative expenses. For fiscal 1997 the loss per
share was $(0.09) compared to $(0.04) for the same period a year earlier.
Revenues decrease because of the continuing delays in product development.
Fiscal year ended June 30, 1996
For the year ended June 30, 1996, the Company had revenues of $96,922 compared
to revenues of $6,000 for the year ended June 30, 1995. The Company had sales
of $88,922 during fiscal 1996. Cost of sales was $51,297 compared to nil a
year earlier. Total operating expenses were $740,729 compared to $206,356 a
year earlier. General and administrative expense increased from $165,078 to
$356,554 for an increase during fiscal 1996 of $191,476. Research and
development expense increased from $39,430 to $382,327 in fiscal 1996 for an
increase of $342,897. These increase were attributable to additional
development of the Company's products.
For the year ended June 30, 1996, the Company had a net loss of $(687,189)
compared to a net loss of $(201,222) a year earlier. The net loss per share
was $(.04) in fiscal 1996 compared to $(.01) in fiscal 1995.
Liquidity and Capital Resources
The Company's liquidity is substantially limited given the current rate of
expenditures. More funds will be required to support ongoing product
development, finance any marketing programs, and establish any distribution
networks. As of June 30, 1997, the Company has current assets of $141,736
and total assets of $486,987. Current liabilities were $41,012 and total
liabilities of $47,233. The current ratio of current assets to current
liabilities is approximately 3.4. If the Company continues to have a negative
cash flow or if the Company is unable to generate sufficient revenues to meet
its operation expenses, the Company will experience liquidity difficulties.
In the past the Company's president and others advanced funds to the Company
to fund its operations. Mr. Johnson and the Company have no formal agreement
as to any future loans or advances. The Company has no line of credit with
any financial institution. The Company believes that until it has operations
and revenues consistently, it will be unable to establish a line of credit
from conventional sources.
The Company is unable to predict when any products will commence to
contribute to revenues. No assurance can be given that the objectives will be
achieved.
Prior Adjustment
The financial statements have been restated to adjust the accounting for the
issuance of stock rights to acquire 50,261 shares of common stock, at a grant
price less than market value to certain individuals. The restatement affected
a decrease in net income by $120,283 for the period ended June 30, 1995, and
$6,750 for the period ended June 30, 1994. The adjustment has no effect on
income taxes for the periods mentioned. The financial statements have been
restated to reflect the adjustment.
Stock issuance
The Company issued a total of 69,261 shares of common stock to nine people
for services rendered and for the exercise of stock rights. The individuals
have had a prior relationship to the Company either as a consultant or as an
employee.
This report contains forward looking statements regarding the Company's
plans, objectives, expectations and intentions. All forward looking
statements are subject to risks and uncertainties that could cause the
Company's actual results and experience to differ materially from such
projections. Such risks include delays in product development, the
development of marketing and distribution channels, and market acceptance of
its products. Other risks may be beyond the control of the Company.
Item 7. Financial Statements
The financial statements are filed as part of this Annual Report on Form
10-KSB.
<PAGE>
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
MEMBER OF AICPA DIVISION OF FIRMS Fax (801) 532-7944
MEMBER OF SECPS 345 East 300 South, Suite 200
MEMBER OF SUMMIT INTERNATIONAL ASSOCIATES Salt Lake City, Utah 84111-2693
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders
International Automated Systems, Inc.
We have audited the accompanying balance sheet of International
Automated Systems, Inc. (a development stage company) as of June 30,
1997, and the related statements of operations, stockholders'
equity, and cash flows for the years ended June 30, 1997 and 1996,
and for the period from September 26, 1986 (date of inception)
through June 30, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our
audits. The financial statements of the Company from September 26,
1986 through June 30, 1990 were audited by other auditors whose
reports, dated October 21, 1988 and April 30, 1991, were qualified
subject to the effects of such adjustments, if any, as might have
been required had the outcome of the uncertainties referred to in
Note 1 been known. Our opinion, in so far as it relates to the
period from September 26, 1986 through June 30, 1990, is based
solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits and the reports
of the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other
auditors, the financial statements referred to above present fairly,
in all material respects, the financial position of International
Automated Systems, Inc. as of June 30, 1997, and the results of its
operations and its cash flows for the years ended June 30, 1997 and
1996, and for the period September 26, 1986 through June 30, 1997,
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. The Company is a
development stage enterprise engaged in developing technology
related to production of electronic security and communication
equipment. As discussed in Note 1 to the financial statements, the
Company's operating losses since inception and the deficit
accumulated during the development stage raise substantial doubt
about its ability to continue as a going concern. Management's plans
concerning these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
August 12, 1997
INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JUNE 30, 1997
ASSETS
Current Assets
Cash and cash equivalents $ 7,758
Receivable from sales representatives,
net of allowance for doubtful
accounts of $40,783 -
Prepaid expenses 14,813
Inventory 108,092
Related party receivable 11,073
---------
Total Current Assets 141,736
---------
Property and Equipment
Computer and electronic equipment 137,162
Furniture and fixtures 20,982
Automobiles 21,657
Leasehold improvements 18,238
--------
Total Property and Equipment 198,039
Accumulated depreciation (74,288)
--------
Net Property and Equipment 123,751
--------
Other Assets
Patents, net of accumulated
amortization of $24,867 211,500
Franchises 10,000
--------
Total Other Assets 221,500
--------
Total Assets $486,987
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 30,426
Current portion of long-term debt 4,045
Accrued payroll expenses 6,541
----------
Total Current Liabilities 41,012
----------
Long-Term Note Payable 6,221
----------
Total Liabilities 47,233
----------
Stockholders' Equity
Preferred stock, Class A, no par
value, 5,000,000 shares
authorized, 1,000,000 shares
issued and outstanding 292,786
Common stock, no par value,
45,000,000 shares authorized,
15,255,361 shares issued and
outstanding 2,839,727
Deficit accumulated during the
development stage (2,692,759)
----------
Total Stockholders' Equity 439,754
----------
Total Liabilities and
Stockholders' Equity $ 486,987
==========
The accompanying notes are an integral part of these
financial statements.
INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
Cumulative
For the Period
September 26,
1986 (Inception)
For the Years Ended Through
June 30, June 30, 1997
1997 1996 As Restated
----------- ----------- -----------
Revenue
Sales $ 19,043 $ 88,922 $ 107,965
Equipment lease income
from related party - 8,000 20,000
----------- ----------- -----------
Total Revenue 19,043 96,922 127,965
Cost of Sales, including
write down of carrying
value of inventories of
$108,093 during 1997 123,818 51,297 175,115
----------- ----------- -----------
Gross Profit (Loss) (104,775) 45,625 (47,150)
----------- ----------- -----------
Operating Expenses
General and administrative
expense 660,630 356,554 1,282,641
Research and development
expense 658,198 382,327 1,336,001
Amortization expense 9,842 1,848 26,747
----------- ----------- -----------
Total Operating Expenses 1,328,670 740,729 2,645,389
----------- ----------- -----------
Net Operating Loss (1,433,445) (695,104) (2,692,539)
Other Income and (Expense)
Interest income 7,247 9,187 18,346
Interest expense (1,553) (1,272) (18,566)
----------- ----------- -----------
Net Other Income
and (Expense) 5,694 7,915 (220)
----------- ----------- -----------
Net Loss $(1,427,751) $ (687,189) $(2,692,759)
=========== =========== ===========
Net Loss Per Share $ (0.09) $ (0.04) $ (0.17)
=========== =========== ===========
Common Shares Used In
Per Share Calculation 16,255,361 16,186,100 16,255,361
=========== =========== ===========
The accompanying notes are an integral part of these
financial statements.
INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Accumulated
During
Preferred Stock Common Stock
Stock Development
Shares Amount Shares Amount
Rights Stage
--------- --------- ---------- --------- ---------
- -----------
<S> <C> <C> <C> <C>
<C> <C>
BALANCE - September 26, 1986 - $ - - $ -
- - $ -
Stock issued for cash
September 1986 -
$0.002 per share - - 5,100,000 11,546
- - -
September 1988
(Net $38,702 of
offering costs) -
$0.32 per share - - 213,065 67,964
- - -
December 1988 (Net
$6,059 of offering
costs) - $0.32 per
share - - 33,358 10,641
- - -
March 1989 (Net $4,944
of offering costs) -
$0.32 per share - - 27,216
8,681 - -
June 1989 (Net $6,804
of offering costs)
$0.32 per share - - 37,461
11,950 - -
Stock issued for services
September 1986 -
$0.002 per share - - 300,000
679 - -
June 1989 - $0.32 - - 5,000 1,595
- - -
Net loss for the period
from September 26, 1996
through June 30, 1990 - - -
- - - (192,978)
--------- --------- ---------- --------- ---------
- -----------
BALANCE - JUNE 30, 1990 - - 5,716,100
113,056 - (192,978)
Stock issued for cash
January 1994 - $0.40
per share - - 59,856
23,942 - -
May 1994 - $0.20 per
share - - 137,500
27,500 - -
Stock issued for services
April 1991 - $0.10 per
share - - 300,000
30,000 - -
January 1995 - $1.00 per
share - - 100,000
100,000 - -
Stock issued to satisfy
liabilities
June 1991 - $0.03 per
share - - 2,700,000
78,101 - -
Purchase and retirement
of treasury stock
December 1991 - $0.49
per share - - (5,000)
(2,425) - -
December 1992 - $0.49
per share - - (1,856)
(900) - -
Net loss for the period
from July 1, 1990
through June 30, 1995 - - -
- - - (257,808)
--------- --------- ---------- --------- ---------
- -----------
BALANCE - June 30, 1995
As Previously Reported - - 9,006,600
369,274 - (450,786)
Prior Period Adjustment
- Error for
failure to record
compensation related
to grant of stock rights
May 1994 - $0.50
per share - - - 6,750
13,500 (6,750)
June 1995 - $3.00
per share - - - 95,283
31,761 (95,283)
August 1995 - $5.00
per share - - - 25,000
5,000 (25,000)
--------- --------- ---------- ---------
- --------- -----------
BALANCE - June 30, 1995
As Rrestated - - 9,006,600 496,307
50,261 (577,819)
Stock issued for cash
January 1996 - $3.86 per
share (Net of $24,387
of deferred offering
costs) - - 179,500 693,613
- - -
Stock issued as part
of reorganization
- Note 2
Various dates -
$0.02 per share 1,000,000 292,786 6,000,000 175,672
- - -
Net loss - - - -
- - (687,189)
--------- --------- ---------- --------- ---------
- -----------
BALANCE - June 30, 1996 1,000,000 292,786 15,186,100 1,365,59
50,261 (1,265,008)
Stock rights exercised
May 1997 - - 36,761 -
(36,761) -
June 1997 - - 13,500 -
(13,500) -
Stock issued for services
May 1997 - $4.13 per
share - - 14,000 57,750
- - -
June 1997 - $2.94
per share - - 5,000 14,690
- - -
Contributed Capital - No
shares issued - - - 1,401,695
- - -
Net Loss - - - -
- - (1,427,751)
--------- --------- ---------- --------- --------
- ------------
BALANCE - June 30, 1997 1,000,000 $ 292,786 15,255,361 $2,839,72
- - $ (2,692,759)
========= ========= ========== =========
======== ============
The accompanying notes are an integral part of these financial statements.
<PAGE>
INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Cumulative
For the Period
September 26,
1986 (Inception)
For the Years Ended Through
June 30, June 30, 1997
1997 1996 As Restated
----------- ----------- -----------
Cash Flows From Operating Activities
Net loss $(1,427,751) $ (687,189) $(2,692,759)
Adjustments to reconcile
net income to net cash
provided by operating activities:
Allowance for doubtful accounts 39,193 1,590 40,783
Amortization 9,842 1,848 26,747
Depreciation 33,099 22,816 74,288
Stock based compensation 72,440 - 331,747
Change in assets and liabilities:
Inventory 123,822 (231,914) (108,092)
Sales representatives receivable (8,914) (31,869) (40,783)
Prepaid expenses (7,554) (7,259) (14,813)
Accounts payable (11,655) 33,599 30,426
Deferred revenue - (8,000) -
Accrued liabilities 4,605 1,936 6,541
----------- ----------- -----------
Net Cash Used By Operating
Activities (1,172,873) (904,442) (2,345,915)
----------- ----------- -----------
Cash Flows From Investing Activities
Purchase of property and equipment (25,274) (96,215) (178,682)
Purchase of rights to technology (69,059) (135,892) (236,367)
Organization costs - - (1,880)
Purchase of franchise rights (10,000) - (10,000)
Proceeds to related party (11,073) - (11,073)
----------- ----------- -----------
Net Cash Used By Investing
Activities (115,406) (232,107) (438,002)
----------- ----------- -----------
Cash flows From Financing Activities
Proceeds from issuance of
common stock - 693,613 912,346
Proceeds from advance from
controlling shareholder 753,937 1,116,216 1,870,153
Payments for treasury stock - - (3,325)
Payments for stock offering costs - - (56,509)
Proceeds (payments) from net
borrowings from related party - (134,029) 78,101
Payments on note payable (3,747) (3,453) (9,091)
----------- ----------- -----------
Net Cash Provided By Financing
Activities 750,190 1,672,347 2,791,675
----------- ----------- -----------
Net Increase (Decrease) In Cash (538,089) 535,798 7,758
Cash and Cash Equivalents at
Beginning of Period 545,847 10,049 -
----------- ----------- -----------
Cash and Cash Equivalents at
End of Period $ 7,758 $ 545,847 $ 7,758
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
INTERNATIONAL AUTOMATED SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
NOTE 1--ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
ORGANIZATION - International Automated Systems, Inc. (the
"Company") was incorporated in the State of Utah on September 26,
1986. The principals of the Company have been involved in the
research and development of electronic security and communication
equipment as well as an automated self check-out system for
retail stores for the past nine years. The Company is deemed to
be in the development stage and its activities to date, consist
of obtaining the rights to certain technology involved with an
automated self check-out system for retail stores, developing
other electronic security and communication equipment and
developing a business plan.
BASIS OF PRESENTATION - The accompanying financial statements
have been prepared on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities in
the normal course of business. As shown in the financial
statements, during the years ended June 30, 1997 and 1996, the
Company incurred net losses of $1,427,751 and $687,189,
respectively, and as of June 30, 1997, the Company's losses
accumulated from inception totaled $2,692,759. These factors,
among others, indicate that the Company may be unable to continue
as a going concern for a reasonable period of time. The financial
statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or
the amount and classification of liabilities that might be
necessary should the Company be unable to continue as a going
concern. The Company's ability to continue as a going concern is
dependent upon its ability to generate sufficient cash flow to
meet its obligations on a timely basis, to obtain additional
financing as may be required, and ultimately to attain successful
operations. Management is in the process of negotiating various
sales agreements and is hopeful these sales will generate
sufficient cash flow for the Company to continue as a going
concern.
FINANCIAL INSTRUMENTS - The Company considers all highly liquid
debt instruments purchased with an original maturity of three
months or less to be cash equivalents. The Company has entered
into a sweep account arrangement whereby excess funds are
invested in U.S. Government obligations on a daily basis. Those
investments are considered cash equivalents at June 30, 1997.
The amounts reported as cash and cash equivalents, accounts
receivable, prepaid expenses, accounts payable and notes payable
are considered to be reasonable approximations of their fair
values. The fair values presented herein were based on market
information and management's estimates.
CONCENTRATION OF CREDIT RISK - The Company's sales relate to its
automated fingerprint identification machines which are sold
primarily throughout the United States.
INVENTORY - Inventory consists of raw materials and finished
goods pertaining to the Company's automated fingerprint
identification machine. Inventory is valued at the lower of cost
or market, with cost being determined using the first-in first-
out method. Inventory consisted of the following at June 30,
1997:
Raw materials $ 68,507
Finished goods 39,585
--------
Total Inventory $108,092
========
A write down of $108,093 was recorded to reduce inventory amounts
to its fair market value.
RECEIVABLE FROM SALES REPRESENTATIVES - Sales representatives are
independent contractors of the Company who locate potential
buyers of the automated fingerprint identification machine. As
part of their agreement with the Company, they each purchased a
machine for $2,500 with a $400 to $800 down payment required. If
the remaining balance is not paid within 90 days a $1,000 finance
charge is added to the outstanding balance. The income relating
to the finance charge will not be recognized until payments are
received. The Company has established a payment plan whereby the
sales representatives can pay $90 a month until the balance is
satisfied; these payments have been suspended until further
modifications to the automated fingerprint identification machine
are completed. Since no payments have been received during fiscal
year 1997, no collections are expected by Management and all
receivables are over 90 days, an allowance for doubtful accounts
has been established in the amount of $40,783 relating to these
accounts, of which $39,193 and $1,590 was charged to bad debt
expense during the period ended June 30, 1997 and 1996. The
Company has no other trade receivables at June 30, 1997.
PROPERTY AND EQUIPMENT - Property and equipment are recorded at
cost and are depreciated using the straight-line method based on
the expected useful lives of the assets which range from five to
ten years. Depreciation expense for the years ended June 30, 1997
and 1996 was $33,099 and $22,816, respectively.
Effective July 1, 1996, the Company adopted statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of" (SFAS 121). SFAS 121 requires that impairment losses
be recorded when indicators of impairment are present and
undiscounted cash flows estimated to be generated by those assets
are less than the assets' carrying amount. The adoption of this
standard did not have a material impact on the Company's
operating results or financial position.
REVENUE RECOGNITION - Sales are recognized upon delivery and
acceptance of the automated fingerprint identification machine.
ADVERTISING COSTS - Advertising costs are expensed when incurred.
Advertising expense was $16,898 and $117,813 for the years ended
June 30, 1997 and 1996.
INCOME TAXES - The Company recognizes the amount of income taxes
payable or refundable for the current year and recognizes
deferred tax assets and liabilities for the future tax
consequences attributable to differences between the financial
statement amounts of certain assets and liabilities and their
respective tax bases. Deferred tax assets and deferred
liabilities are measured using enacted tax rates expected to
apply to taxable income in the years those temporary differences
are expected to be recovered or settled. Deferred tax assets are
reduced by a valuation allowance to the extent that uncertainty
exists as to whether the deferred tax assets will ultimately be
realized.
LOSS PER SHARE - Net loss per share is computed using the
weighted averaged number of common shares outstanding during the
period. Such computation includes all common and common
equivalent shares as if they were outstanding for all periods
presented, using the treasury stock method. The preferred stock
has been considered to be equivalent of common stock; therefore,
the preferred stock was added to the number of common shares
based on voting rights.
USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates.
RECLASSIFICATION - Certain previously reported amounts have been
reclassified to conform to the June 30, 1997 presentation. These
reclassifications had no effect on previously reported net
income.
NOTE 2--REORGANIZATION
In November 1996, the Company entered into a reorganization
agreement with Mr. Neldon Johnson, which was effective June 30,
1996. Mr. Johnson, prior to the reorganization, owned a majority
of the common stock of the company. The purpose of the
reorganization was to transfer ownership of all patents relating
to the automated fingerprint identification machine technology
and the digital wave technology owned by Mr. Johnson to the
Company and to satisfy $468,458 of a liability payable to Mr.
Johnson in the amount of $1,116,216 in exchange for the issuance
of 1,000,000 preferred shares and 6,000,000 common shares of the
Company. The remaining $647,758 which was advanced by Mr. Johnson
in June 1996 was a prepayment to be used by the Company for
future research and development to be performed for Mr. Johnson.
when the parties agree that the research has been performed, the
Company will invoice Mr. Johnson. During the year ended June 30,
1997 the advance of $647,758 was invoiced along with an additional
$753,937 which was paid during the year. However, the invoicing
of Mr. Johnson and the settlement of the advance will be accounted
for as the conversion of the advance to stockholders' equity as
additional paid-in capital for financial reporting purposes.
During the period of time that Mr. Johnson advanced the $468,458
to the company, he held a controlling ownership interest in the
Company, and he held an 80 percent interest in the transferred
technology through his ownership interest in the Company after
the transaction. The reorganization is therefore an exchange
between enterprises under common control and, accordingly, the
patents were recorded at Mr. Johnson's historical cost, which was
$0. The preferred and common shares are presented in the
accompanying financial statements as having been issued on the
various dates during the year ended June 30, 1996 when the
Company received the cash advances.
NOTE 3--PREFERRED STOCK
The preferred shares have equal dividend rights to the common
shares, are not convertible into common shares and have no
liquidation preferences to the common shares. Each preferred
share is entitled to the voting rights of ten common shares. The
proceeds from the issuance of the preferred and common shares
were allocated based on the respective voting rights of the
shares issued.
NOTE 4--RELATED PARTY TRANSACTIONS
During the year ended June 30, 1997, the Company advanced a
corporation controlled by the Company's controlling shareholder
$11,073. The advance was paid off in August 1997.
See Note 2 for various advances during the period ended June 30,
1997 and 1996 from Mr. Johnson converted to shares of preferred
stock and common stock.
The Company paid $134,029 in net short-term cash advances from a
shareholder during the year ended June 30, 1996. These advances
were utilized to finance the operations of the Company and the
research and development activities discussed in Note 7.
During the years ended June 30, 1997 and 1996, the Company leased
electronic equipment to a majority shareholder for use in his
store on a test basis. $200 and $8,000 have been recognized as
revenue for the years ending June 30, 1997 and 1996,
respectively.
NOTE 5--NOTE PAYABLE
At June 30, 1997, the Company had a note payable to a bank,
secured by a vehicle, with monthly payments of $394, including
interest at 8%, through November 1999 in the amount of $10,266.
Annual maturities of this note payable for the next three years
are as follows:
Year Ending June 30, Amount
------------------- ---------
1998 $ 4,045
1999 4,381
2000 1,840
---------
$ 10,266
=========
NOTE 6--INCOME TAXES
The Company did not have a current or deferred provision for
income taxes for the years ended June 30, 1997 and 1996. The
following presents the components of the net deferred tax asset
at June 30, 1997:
Operating loss carryforwards $ 203,254
Write off of inventory 32,429
Allowance for doubtful accounts 12,235
Accumulated depreciation/amortization (840)
---------
Net Deferred Tax Assets Before
Valuation Allowance 247,078
Less: Valuation Allowance (247,078)
---------
Net Deferred Tax Asset $ -
=========
The valuation allowance decreased $96,092 and increased $203,001
during the years ended June 30, 1997 and 1996, respectively. The
Company has net operating loss carryforwards of $677,513 that
expire, if unused, in years 2002 through 2012.
The following is a reconciliation of the income tax benefit
computed at the federal statutory tax rate with the provision for
income taxes for the years ended June 30, 1997 and 1996:
June 30,
1997 1996
---------- ----------
Income tax benefit at
statutory rate (34%) $ (485,435) $ (233,644)
Current operating loss
not recognized 727 74,216
Deferred tax valuation
allowance change (96,734) 140,557
Non deductible expenses/
taxable income 478,256 130
Effect of lower tax rates 103,186 18,741
---------- ----------
Provision for Income Taxes $ - $ -
========== ==========
NOTE 7--PATENTS AND FRANCHISE RIGHTS
The Company's policy on recording patent and franchise costs is
to capitalize legal fees incurred in obtaining patents and
franchises in the United States and other countries. Costs
incurred to develop the technology were recognized as research
and development expense by the Company when incurred. The patents
and franchises are being amortized on a straight-line basis over
a 17-year life.
NOTE 8--RESEARCH AND DEVELOPMENT EXPENSE
Research and development has been the principal function of the
Company. Expenses in the accompanying financial statements
include certain costs which are directly associated with the
Company's research and development of both the Automated
Fingerprint Identification Machine technology and the Digital
Wave Modulation technology. These costs, which consist primarily
of fees paid to individuals, materials and supplies amounted to
$658,198 and $382,327 for the fiscal years ended June 30, 1997
and 1996, respectively.
NOTE 9--OPERATING LEASES
The Company leases building and office equipment with lease terms
ranging from month to month to five years. These leases are
accounted for as operating leases.
Commitments for future minimum rental payments required under
operating leases are as follows:
For the Period
Ended June 30,
--------------
1998 $ 12,591
1999 12,591
2000 12,591
2001 11,148
Rental expense during the years ended June 30, 1997 and 1996
were $22,817 and $17,382, respectively.
NOTE 10--SUPPLEMENTAL CASH FLOW INFORMATION
During the year ended June 30, 1997 and 1996, the Company paid
$1,553 and $1,272 in interest.
As further discussed in Note 2, $1,401,695 and $468,458 of
advances from a related party have been converted to shares of
preferred stock and common stock during the years ended June
30, 1997 and 1996.
During the year ended June 30, 1997, the Company issued 19,000
shares with values ranging from $2.94 to $4.14 for various
services.
Since inception, the Company has issued 774,261 shares of
common stock valued at an average of $0.43 per share for
services.
During June of 1991, the Company issued 2,700,000 shares of
common stock to satisfy amounts owed to a majority shareholder
in the amount of $78,101.
NOTE 11--CONTINGENCY
On July 2, 1996, a class action law suit was filed against the
Company by shareholders for securities violations. The class
action has been brought on behalf of all persons and entities
who purchased shares of common stock from April 13, 1996 to
June 27, 1996. The suit is seeking damages incurred based on
the decrease in the Company's stock price because of alleged
material misrepresentations by the Company regarding new
technology developed by the Company. This action is in its
preliminary stages. The ultimate outcome of the litigation
cannot presently be determined. Accordingly, no provision for
any liability that may result upon adjudication has been made
in the accompanying financial statements, and the possible
effect it will have on future financial statements is unknown.
During the year ended June 30, 1997, a breach of contract
action was filed against the Company by a vendor whom the
Company contacted to design and build specialized computer
hardware and software. The suit is for $60,000. The Company
has filed a counter-claim for damages incurred due to alleged
defective and untimely performance. This action is in its
preliminary stages. The ultimate outcome of the litigation
cannot presently be determined. Accordingly, no provision for
any liability that may result upon adjudication has been made
in the accompanying financial statements, and the possible
effect it will have on future financial statements is unknown.
On August 13, 1996, the Company was served a formal order of
private investigation by the US Securities and Exchange
Commission (SEC). To date, the SEC has issued a subpoena
requiring the production of certain documents. The SEC staff
has advised that its inquiry should not be construed as an
indication by the SEC or its staff that any violations of law
have occurred.
NOTE 12--PRIOR PERIOD ADJUSTMENT
The accompanying financial statements have been restated to
correct an error in 1995 and 1994. The error was a failure to
account for the issuance of stock rights, to acquire 50,261
shares of common stock, with a grant price less than market
value. The effect of the restatement was to decrease net
income by $120,283 for the period ended June 30, 1995 and
$6,750 for the period ended June 30, 1994. The adjustment did
not have any effect on income taxes for the periods ended June
30, 1995 and 1994. The accompanying balance sheet and related
statements of operations, stockholders' equity, and cash flows
have been restated to reflect this adjustment.
<PAGE>
Item 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS
During the fiscal year 1997 there were no changes or disagreements with the
accountants, Hansen, Barnett and Maxwell.
PART III.
Item 9. DIRECTORS AND OFFICERS OF THE REGISTRANT
Directors and Officers
The executive officers and directors of the Company are as follows:
Name Age Position with the Company
Neldon Johnson 51 Chairman of the Board of Directors and
President
Ina Johnson 49 Secretary and Director
Donnel Johnson 32 Director and Vice-President
Christopher Taylor 28 Director
Stacy Curtis Snow 31 Director
Randale Johnson 28 Vice-President
All Directors hold office until the next annual meeting of shareholders of
the Company or until their successors have been elected. All officers are
appointed annually by the Board of Directors and serve at the discretion of
the Board.
Directors will be reimbursed by the Company for any expenses incurred in
attending Directors' meetings. The Company also intends to obtain Officers and
Directors liability insurance, although no assurance can be given that it will
be able to do so.
Background of Executive Officers and Directors
Neldon Johnson is the co-founder of the Company and the primary inventor of
the Self-Check system, AFIM, and the DWM technologies. Mr. Johnson directs
the Company's research and development program. Mr. Johnson studied physics
and mathematics at Brigham Young University in Provo, Utah, and graduated from
Utah Technical College's Electronics Technology Program in 1964. He has taken
training courses and has taught courses in electronics programming, microwave
and wave switch programs. From 1965 to 1968 he worked for American Telephone
and Telegraph, Inc., as an engineer.
From 1983 to the present, Mr. Johnson has been developing the Self-Check
System. Also, from 1975 to 1990 he worked at a Ream's Grocery Store and had
management responsibilities for operations. Mr. Johnson has real estate
holdings, one of which is a grocery store of 20,000 square feet presently
under construction in Salem, Utah.
Ina Johnson is the wife of Neldon Johnson. She has been a bookkeeper for
the past 25 years. She has been the secretary and treasurer of the Company
since 1988. Recently she resigned as treasurer of the Company, but remains
the secretary.
Donnel Johnson is the son of Neldon Johnson and Ina Johnson. He has been a
director of the Company since May 1996. He received a bachelor's degree in
Electrical Engineering from Brigham Young University in 1991. He has been an
employee of the Company since 1991.
Christopher Taylor received an Associates of Science Degree from Utah Valley
State College in 1992. He was a sergeant in the U. S. Army. Since 1992 Mr.
Taylor has worked on projects relating to Registrant's products and
technology. Presently Mr. Taylor supervises production and product inventory
control and debugs software.
S. Curtis Snow graduated from Brigham Young University in 1991 receiving a
Bachelor's Degree in design engineering. Since 1991 Mr. Snow has worked on
several projects relating to the Self-Check System and AFIM.
Randale P. Johnson is the son of Neldon Johnson and Ina Johnson. He has
been an officer since June 1996. His responsibilities include marketing and
administration. Mr. Johnson who will hold an associate degree in Computer
Science and has four years of experience in the computer industry. He joined
the Company in 1996.
None of the officers or directors of the Company has during the past five
years, been involved in any events such as petitions in bankruptcy,
receivership or insolvency, criminal proceedings or proceedings relating to
securities violations.
Significant Employees and Managers
Monty Hamilton, age 57, is an employee having responsibilities for
marketing. Mr. Hamilton holds a Master of Business Administration and a B.S.
degree in Banking and Finance from the University of Utah. He joined the
Company in 1996. From 1987 to 1995 Mr. Hamilton was an account executive with
a securities broker-dealer.
Item 10. Executive Compensation
Currently the Company has no employment agreement with any of its officers,
directors or employees. During the year ended June 30, 1997, Neldon Johnson,
who is an officer and a director of the Company, received benefits of $ 3,168.
Mr. Johnson received no other compensation for his services to the Company.
That same amount is attributable to his wife Ina Johnson, who is an officer
and a director of the Company. Mr. Johnson received no salary.
Employment Agreements
The Company has no employment agreements or contracts with any employees.
Each employee has signed a non-disclosure agreement with the Company. The
Company has no stock option or incentive plans. There are no warrants or
options issued or outstanding as of June 30, 1997.
Item. 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's Common Stock as of June 30,
1997, by (i) each person known by the Company to own, directly or
beneficially, more than 5% of the Company's Common Stock, (ii) each of the
Company's directors, and (iii) all officers and directors of the Company as a
group. Except as otherwise indicated, the Company believes that the
beneficial owners of the Common Stock listed below, based on information
furnished by such owners, have sole investment and voting power with respect
to such shares, subject to community property laws, where applicable.
Name and Address of Number of Percent (1)
Beneficial Owner Shares Owned
Neldon Johnson
512 South 860 East
American Fork, Utah 10,900,000 71
Donnel Johnson
512 South 860 East
American Fork, Utah 47,400 .3
Christopher Taylor
512 South 860 East
American Fork, Utah 700
S. Curtis Snow
512 South 860 East
American Fork, Utah 6,000
Randale Johnson
512 South 860 East
American Fork, Utah 37,000 .2
Directors and Officers as a Group
5 persons 10,991,100 72
(1) Based on 15,255.361 shares of common stock issued and outstanding, but
does not include the 1,000,000 shares of Series 1 Class A Preferred Stock held
by Neldon Johnson. Each share of the Series 1 Class A Preferred Stock has
ten votes per share and votes with the shares of common stock on all matters.
Mr. Neldon Johnson has approximately 83 per cent of the voting control of the
Company when the voting power of the shares of preferred stock and common
stock are taken together. Other than Mr. Neldon Johnson the Company is
unaware of any other persons holding five per cent or more of the Company's
issued and outstanding securities.
Item 12. Certain Relationships and Related Transactions
The Company effective as of June 30, 1996, exchanged 6,000,000 shares of
common stock and 1,000,000 shares of Series 1 Class A Preferred Stock for
technology related to the Automatic Fingerprint Identification Machine and the
Digital Wave Modulation as well as $468,458 of obligations owed to the
Company's President. The transaction is a related party transaction. No
independent appraisal regarding the value of the exchange was available.
The Company's Self-Check System is being installed in a grocery store under
construction in Salem, Utah. The store will operate under the name of
U-Check. Mr. Neldon Johnson, the Company's president, owns the real property
and the business of U-Check. Articles of Incorporation have been filed for
U-Check, Inc. No written agreement has been entered into between the Company
and Mr. Johnson. Mr. Johnson will purchase the equipment from the Company at
a price yet to be determined, but the price should exceed the Company's
costs. In addition, the Company and Mr. Johnson will enter into a written
software licensing agreement for the Self-Check System.
During fiscal 1997 the Johnson family contributed funds to the Company in
the amount of $1,401.695. The Company issued no shares for the funds
received.
PART IV
Item 13. Exhibits and Reports on From 8-K
a. Exhibits
3.(i) *Certificates of Articles of Incorporation
3.(ii) *By-laws.
3.(iii) *Notification of Series 1 Class A Preferred Stock
4.(i) *Specimen Certificate of Common Stock.
4(ii) *Form of Warrant Purchase Option to be issued to
Underwriter.
10.(i) *Consulting Agreement with Wilson-Davis
10.(a) *Agreement with Company Officer
10.(11) *Assignment of Patent.
99(1) *Patent No. 5,598,474
(2) Patent No. 5,640,422
27 Financial Data Schedule
*This document was previously filed with the Commission and is incorporated in
this report by reference.
b. Reports on Form 8-K.
During the quarter ended June 30, 1997, Registrant filed no report on Form
8-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
INTERNATIONAL AUTOMATED SYSTEMS, INC.
Neldon Johnson
NELDON JOHNSON
Title: President, Chief Executive Officer, and Chief
Financial Officer (Principal
Executive and Financial Officer)
Date: October 27, 1997
<PAGE>
DIRECTORS
Neldon Johnson
NELDON JOHNSON
Title: Director
Date: October 27,
1997
Ina
Johnson
INA JOHNSON
Title: Director
October 27, 1997
Donnel Johnson
DONNELL R. JOHNSON
Title: Director
Date: October 27, 1997
Christopher J. Taylor
CHRISTOPHER J. TAYLOR
Title: Director
Date: October 27,
1997
S. Curtis Snow
S. CURTIS SNOW
Title: Director
Date: October 27,
1997
</TABLE>
United States Patent
Johnson
Patent Number: 5,640,422
Date of Patent: *Jun. 17, 1997
Inventor: Neldon P. Johnson, American Fork, Utah
Assignee: International Automated Systems, Inc., American Fork, Utah
[*] Notice: The term of this patent shall not extend beyond the expiration
date
of pat. No. 5,517,528.
Appl. No.: 533,618
Related U.S. Application Data
(Citations omitted)
References Cited (Citations Omitted)
Primary Examiner-Stephen Chin
Assistant Examiner-T. Ghebretinsae
Attorney, Agent, or Firm-J. David Neldon
Abstract
<TABLE>
<CAPTION>
<S> <C> <C>
A method and apparatus for single signal, multiple channel digital
information transfer through waves with time slot allocation. The
apparatus
consists of one or more transmitting devices and one or more receiving
devices. Multiple source signals are each allocated a unique time slot
between successive synchronization waves. Digital signals from each
source are converted to analog information waves having a positive wave
segment and a negative wave segment. The ratio of the amplitude of the
positive wave segment to the amplitude of the negative wave segment, the
positive-to-negative ratio, for each signal source, is a function of the
magnitude of the source digital. The sum of the amplitude
of the positive wave segment and the absolute value of the amplitude of the
negative wave segment, the positive-to-negative offset, is maintained at a
pre-set value at transmission. The total signal, which consists of
successive
synchronization waves interspersed with information waves for each signal
source, each within its allocated time slot, is transmitted to the
receivers
which extract the positive-to-negative ratio and positive-to-negative
offset for
each signal source, calibrate the received signals and generate output
signals
which reproduce the transmitted inputs.
53 Claims, 6 Drawing Sheets
Drawing Sheet
Fig. 1. Drawing sheet.
Fig. 2. Drawing sheet.
Fig. 3. Drawing sheet.
Fig. 3. Drawing sheet.
Fig. 4. Drawing sheet.
Fig. 5. Drawing sheet.
Fig. 6. Drawing sheet.
DIGITAL COMMUNICATIONS MODULATION METHOD AND APPARATUS
REFERENCE TO PRIOR FILED CO-PENDING APPLICATION
This application is a continuation-in-part application for a prior filed
and co-pending U.S. Patent application. The Serial No. of the prior
application
is 08/285,030 and the filing date is August 2, 1994.
FIELD OF THE INVENTION
This invention relates to methods and apparatuses for modulation of
electromagnetic waves for information transfer and more particularly to
methods
and apparatuses for modulating electromagnetic waves for digital
information
transfer.
BACKGROUND OF THE INVENTION
There are several principal modulation methods for electromagnetic
signals
used in communications. The ones that are most widely used are frequency
modulation (FM), amplitude modulation (AM), pulse width modulation (PWM)
and
phase modulation (PM). There have also been some other less widely used
methods
for transmitting and receiving information by means of electromagnetic
signals.
The demands of modern information transfer, in particular computer
networking
and multi-media communications, have increased the need to transmit more
and
more information on limited channels of communication. With the ever
increasing
capacity of digital computers, there is an ever increasing demand for
modulation
methods to enhance the volume of digital data that can be transmitted and
received.
Methods have been developed for increasing the amount of information that
can be transmitted and received. One such method is described in U.S.
Patent
No. 4,387,455 to Schwartz. This method utilizes several different
modulation
systems at the same time over the same channel. However, this method uses
FM
and AM modulation and requires several cycles for each digital bit.
Similarly
the device disclosed in U.S. Patent No. 4,103,238 to Deming, provides for
three
modulation patterns to be transmitted simultaneously on a single carrier
wave.
Again, multiple cycles are required for each digital bit. The deficiencies
of
these methods are typical of efforts to increase the amount of information
transmitted.
The method disclosed in U.S. Pat. No. 4,584,692 to Yazuka relies on the
same common modulation methods but introduces polarity modulations as a
means of
enhancing the amount of information that can be transmitted. The polarity
of
the waves is modulated to encode information and then the original wave and
the
modulated wave are compared to allow decoding of the information. This
results
in a modest increase in the amount of information that can be transmitted
over a
single signal.
Various methods designed specifically for digital information transfer
provide some enhancement of the data transfer capabilities. The method
disclosed in U.S. Pat. No. 4,001,728 to Schneider is a method of
transmitting
digital signals through the use of pulse width modulation on an incremental
ramp
wave. A method of transmitting multiple digital signals on a single
carrier
wave is disclosed in U.S. Pat. No. 4,347,616 to Murakami. Another method
providing for the simultaneous transmission of multiple digital signals
independently modulated is disclosed in U.S. Pat. No. 3,805,191 to Kawai.
The method disclosed in U.S. Pat. No. 3,890,620 to Toman provides for the
modulation of a carrier wave at prescribed time intervals with digital
information. This method, however, points up the limitations of attempts
to
enhance existing methods of digital information transfer. Incoming digital
data
must first be stored and then it is recalled for transmission at a rate
compatible with the carrier wave modulation. The receiver then extracts
the
digital information from the signal by synchronization with the
transmitter.
The resultant signal is subject to interference at both the carrier
frequency
and the modulation frequency.
U.S. Pat. No. 5364536 to Tsujimoto discloses a means of modulating a
"data
burst" on a carrier signal. Tsujimoto uses a modulation scheme to add a
sync
burst to the modulated carrier signal. This is accomplished by taking a
delayed
version of the data burst and the non-delayed data burst and taking the
difference. This creates an artificial null in the frequency spectrum of
the
signal. This null spectrum sync burst is added to the signal before signal
transmission. Thus for Tsujimoto, the sync burst becomes a signature burst
for
identifying the data burst. This method, as with the other known methods,
relies upon the modulation of a carrier signal. It also does not provide
for
allocating time slots to multiple information signals. Also, for Tsujimoto
the
output digital signal is not calibrated. Instead, the signal strength of
the
carrier wave is calibrated. The null spectrum sync burst is not used for
calibrating the received signal.
The present invention is a method and apparatus for transmitting digital
communications. The present invention's primary advantage over traditional
modulation techniques is the quantity of digital information that can be
transmitted and received. Both FM and AM modulation were developed for
transmitting analog signals and, for that reason, are cumbersome in
transmitting
digital signals. The present invention is designed specifically for
transmitting digital signals.
This method does not require a carrier wave to transmit the information.
Depending upon the information signal sources and the frequencies utilized,
thousands of times more information can be transmitted. In FM systems
hundreds
and even thousands of cycles are required for just one bit of information.
This
is also true for AM modulation systems. The present invention provides for
the
placement of two bytes or more of information in each and every cycle.
Another
advantage of the present invention is the enhanced signal to noise ratio.
One objective of the present invention is to provide a digital
information
transfer method which does not require a carrier wave.
Another objective of the present invention is to provide a method and
apparatus which substantially increases the amount of digital information
that
can be transmitted on a single signal.
A further objective is to provide a method and apparatus for transmitting
and receiving multiple channels of information on a single communication
signal.
A still further objective of the present invention is to provide a method
and apparatus for continuously synchronizing a transmitter and receiver so
that
multiple channels of information can be reliably transmitted on a single
communication signal by allocation of time slots to each channel.
A still further objective is to provide a method and apparatus for
received signals to be calibrated by the receiver to compensate for signal
attenuation, losses, noise, distortion and interference, and thereby to
provide
for very accurate read out of the digital information transmitted.
A still further objective is to provide a method and apparatus for
digital
information transfer which can utilize either a common synchronized
transmitter
or a plurality of remote synchronized transmitters and can utilize either a
common receiver or a plurality of receivers.
A still further objective is to provide a method and apparatus for
digital
information transfer which will increase the signal to noise ratio of the
received signals in comparison to other known methods.
SUMMARY OF THE INVENTION
The present invention provides a method and apparatus for increasing the
amount of digital information that can be transmitted over an
electromagnetic
signal. The apparatus of a preferred embodiment of the present invention
includes computer circuits and transmission and receiving devices.
Embodiments
of the apparatus can include multiple transmitters at multiple locations or
a
single transmitter which is accessed by each signal source. Under either
embodiment, each signal source is allocated a time slot for each successive
cycle between synchronization pulses. If multiple transmission locations
and
transmission apparatuses are utilized, each such transmission apparatus is
equipped with an analog receiver for receiving synchronization pulse
transmissions from a master synchronization pulse transmitter. Each remote
signal source is allocated a unique time slot between successive
synchronization
pulses for transmission of information simultaneously with other remote
signal
sources which are each allocated a different time slot between the
successive
synchronization pulses. Likewise, if a common transmission location and
transmission apparatus is utilized, each signal source that accesses the
system
is allocated a unique time slot between successive synchronization pulses
which
are generated by the master synchronization pulse transmitter.
For each signal source, the digital value of the source signal during its
allocated time slot, is converted, under a preferred embodiment, to an
analog
pulse, called an information pulse, which is comprised of a positive wave
segment and a negative wave segment, with the sum of the amplitude of the
positive wave segment and the absolute value of the amplitude of the
negative
wave segment of the information pulse, hereafter referred to as the
information
pulse positive-to-negative offset, being a pre-selected value, and the
ratio of
the amplitude of the positive wave segment to the amplitude of the negative
wave
segment of the information pulse being a function of the value of the
digital
input. In other words, under a preferred embodiment, the
positive-to-negative
offset is held constant, and the value of the digital input determines the
ratio
of the amplitudes of the positive and negative wave segments.
Under other embodiments, the reference value for the measurement of the
amplitudes of the positive and negative segments can be any positive or
negative
value.
Within the allocated time slot for the information pulse, the
transmission
apparatus generates the information pulse with its positive and negative
components. The positive-to-negative offset is the calibration control for
the
signal and is set at a constant value. Whether the embodiment utilizes
remote
transmission locations and apparatuses or a common transmission location
and
apparatus, an information pulse is generated for each signal source for
each
cycle of its allocated time slot.
The information pulse generated for each signal source is transmitted in
that time slot for each successive cycle of the synchronization pulses.
These
transmissions may be from remote locations or from a common location and
may be
wireless or may be transmitted via any of the well known media.
The period of each information pulse is determined by the ability of the
receiving circuits to handle them, but will generally be as small as
possible to
reduce the effects of noise and distortion.
The receiving apparatus calibrates each information signal for each
channel respectively by using the information pulse positive-to-negative
offset
for the information signal as measured by the receiving apparatus,
adjusting the
positive-to-negative offset to the known value at transmission, and then
computing the ratio of the amplitude of the positive wave segment to the
amplitude of the negative wave segment. This ensures that the effects of
signal
attenuation, losses, noise, distortion and interference are minimized. The
calibrated amplitudes ratio is then used with the known function that was
used
to generate the amplitudes ratio at the transmission location, to generate
an
output digital signal.
The receiving apparatus also preferably performs a zero crossing
reference
check to enhance calibration. This is best accomplished if a brief zero
wave
segment is placed in each information pulse between the positive and
negative
wave segments. Then preferably the initial step in calibration is a zero
correction for the zero wave segment. After the zero wave segment in the
received information pulse is corrected to zero, the rest of the
calibration
process is completed. This zero correction enhances the effectiveness of
the
subsequent proportional calibration.
The synchronization pulses provide for continuous synchronization of the
transmitting apparatus and the receiving apparatus so that channel tracking
integrity is maintained at all times. A common receiver can be utilized
from
which the various channels of information are disseminated to users or a
plurality of receivers can be utilized at various points of use or
dissemination.
BRIEF DESCRIPTION OF THE DRAWINGS
Fig. 1: A schematic of a transmission apparatus of the invention for
remote transmission.
Fig. 2: A schematic of a receiving apparatus of the invention.
Fig. 3: A schematic of a transmission apparatus of the invention for
common transmission.
Fig. 4: An illustration of an example of a total transmitted and
received
signal.
Fig. 5: A schematic of a transmission apparatus of the invention for
remote transmission with a circuit for combining two signals.
Fig. 6: A schematic of a transmission apparatus of the invention for
common transmission with a circuit for combining two signals.
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS
Referring first to Fig. 1, there is indicated generally therein a
schematic of a preferred embodiment of a transmission apparatus 1 of the
invention. This embodiment of the transmission apparatus is utilized for
remote, simultaneous transmission of digital signals. Under this
embodiment,
the transmission apparatus comprises a digital to analog signal generator
2, a
composite signal generator 4, a master control circuit 15, a control
receiver
14, a remote master synchronization pulse generator 8, a synchronization
pulse
receiver 5, and a transmitter 10.
Under this embodiment, a digital input 3, for each signal source, is
input
to its respective transmission apparatus 1. Synchronization pulses 7 of a
selected uniform wave form and frequency are generated by the master
synchronization pulse transmitter 8 and are transmitted to each of the
remote
transmission apparatuses 1 where it is received by the analog
synchronization
pulse receiver 5. The synchronization pulses can be either voltage pulses
or
power pulses. Each of the signal sources is allocated a time slot between
the
successive synchronization pulses by the remote master control circuit 15
and
the digital value of each signal source at each of its successive allocated
time
slots is converted to an analog information pulse 9, the
positive-to-negative
offset 6 of which, under a preferred embodiment, is a pre-set value and the
ratio of the amplitude 41 of the positive segment 39 and the amplitude 42
of the
negative segment 40 of the information pulse 9 is a function of the digital
value of the source signal 3. For some embodiments the ratio of the
amplitudes
is simply proportional to the value of the input digital signal. For other
embodiments, the ratio of the amplitudes of the positive and negative
segments
of the information pulse is determined through the use of an algorithm
based
upon the digital input value.
In preferred embodiments, the output signal from the digital to analog
signal generator 2 is an analog information pulse 9 which has a pre-set
positive-to-negative offset 6 and for which the ratio of the amplitude 41
of the
positive segment 39 and the amplitude 42 of the negative segment 40 is a
function of the digital value of the input signal. Under preferred
embodiments,
the information pulse is a voltage pulse, but under other embodiments the
information pulse may be a power pulse.
Under a preferred embodiment for a remote transmission apparatus 1 as
shown in Fig. 1, the composite signal circuit 4 may receive continuous
transmissions or discrete transmissions of the information pulse, and, by
monitoring the synchronization pulses 7 and the control signal from the
control
receiver 14, passes the information pulse to the transmitter 10 only during
its
allocated time slot.
Referring now to FIG. 3 which shows another preferred embodiment of the
transmission apparatus, a common transmission apparatus 12 simultaneously
accepts digital signals 3 from one or more sources. A synchronization
pulse
circuit 13 generates synchronization pulses 7 of a pre-set magnitude, wave
form
and frequency. The master control circuit 15 allocates each signal source
a
time slot between successive synchronization pulses. For each cycle of the
synchronization pulse, an information pulse 9 is generated for each input
signal
within its allocated time slot by the digital to analog signal generator 2.
The
composite signal circuit 4 may receive continuous transmissions or discrete
transmissions of the information pulse, and, by monitoring the
synchronization
pulses 7 and the control signal from the control receiver 14, passes the
information pulse to the transmitter 10 only during its allocated time
slot.
The information pulse for each signal source is transmitted by the common
transmission apparatus 12 to the receiving apparatus 16 shown on FIG. 2.
Whether an embodiment of the transmission apparatus providing for the
remote and separate transmission of analog information pulses 11 for signal
sources as shown in FIG. 1 or an embodiment providing for the transmission
of
information pulses for signal sources from a common transmission apparatus
as
shown in FIG. 3, is used, the total signal 17 as illustrated in FIG. 4, is
the
same for the same source signals. Under the embodiment shown in FIG. 1,
the
synchronization pulses are transmitted by the master synchronization pulse
generator 8, and each of the time slotted information pulses 11 are
transmitted
from the various remote transmission apparatuses 1. The total signal
received
by a receiver 16 then consists of successive synchronization pulses 7
coming
from the master synchronization pulse generator 8 interspersed with the
time
slotted information pulses coming from the various remote transmitters 10.
Under the embodiment shown in FIG. 3, the total signal received by a
receiving
apparatus 16 is comprised of the successive synchronization pulses
interspersed
with the time slotted information pulses coming from the common transmitter
10.
Under a preferred embodiment, the synchronization pulses are of a
uniform,
rectangular and positive voltage wave form, with a uniform frequency
selected as
desired. The synchronization pulses allow a receiving apparatus 16 to
continuously verify the time slots of the incoming signal 17 so that the
respective information pulses can be extracted from the correct assigned
time
slots or channels. The minimum frequency of the synchronization pulse will
be
dependent upon the nature of the information being transmitted over the
various
channels. For example, approximately 1,000 television channels can be
transmitted with a single signal with this invention as it is limited only
by
minimum frequency at which successive audio and video signals must be
received
to produce the desired resolution for video and audio reproduction. Other
types
of media or signal types have different requirements which will affect the
minimum frequency of the synchronization pulse. The frequency of the
synchronization pulse, therefore, would be adjusted depending upon the
application.
Under a preferred embodiment, the information pulse has a sinusoidal
waveform. This allows the signal to be transmitted with a narrow
bandwidth.
However, other embodiments may utilize a variety of waveforms for the
information pulse.
Under preferred embodiments, both for the remote transmission apparatus
as
shown in Fig. 1 and the common transmission apparatus as shown in Fig. 3,
the
information pulse generated by the digital to analog signal generator has a
zero
crossing reference 43 between the positive and the negative segments.
Under
preferred embodiments, this zero crossing reference is a brief zero wave
segment
between the positive and negative segments, which is used by the receiving
apparatus to check the zero point of the received information pulse at this
interim segment. The brief zero wave segment makes it easier for the
receiver
calibration circuit 29 to find the exact zero crossing. This enhances the
signal to noise ratio because even if there was some non-symmetrical noise
added
to the signal, the effect on the zero crossing would be less than for the
other
wave segments. A zero correction at this interim segment then enhances the
effectiveness of the other calibration techniques, which, under preferred
embodiments, involve proportional calibration using the information pulse
positive-to-negative offset.
For the common transmission apparatus shown in FIG. 3, the master control
circuit 15 monitors and tracks all of the incoming signals and allocates
time
slots or channels for the respective information pulses for each of the
accepted
incoming signals. Referring to FIG. 4, the total signal 17 that is
transmitted
by the transmission apparatus is comprised of synchronization pulses 7 of a
selected uniform wave form and frequency and information pulses 11 for each
information channel. The time between the respective synchronization
pulses 38
is determined by the nature of the signals being transmitted and the total
number of channels being transmitted. For the remote transmission
apparatus
shown in FIG. 1, one master control circuit 15 monitors and tracks all the
source signals and allocates time slots or channels for each of the
accepted
signals and transmits this control information to a control receiver 14 for
each
remote transmission location and transmission apparatus 1.
Other embodiments of the invention, whether for remote transmission as
shown in FIG. 5 or for common transmission as shown in FIG. 6, provide for
further enhancement of the amount of information that can be transmitted by
incorporating a first digital to analog convertor 18, a second digital to
analog
convertor 19, and an added signal generator 20, which allows a first
digital
byte input 21 and a second digital byte input 22, such as the video and
audio
signals for a television transmission, to be converted from digital to
analog
and then added and converted into a single information pulse by the added
signal
generator 20. The total signal for a given time slot or channel is then a
combined signal that can be transmitted as one.
The embodiments shown in FIG. 5 and FIG. 6 could also be used to combine
two input signals with one being converted to a positive analog signal and
the
other to a negative analog signal by the digital to analog convertors 18 &
19.
While for preferred embodiments, the synchronization pulses and the
information pulses are voltage pulses, other embodiments may utilize power
pulses. Also, while for preferred embodiments the ratio of the amplitude
of the
positive wave segment to the amplitude of the negative wave segment of an
information pulse is directly proportional to its corresponding digital
input
value, other embodiments may provide for the ratio to be determined by an
algorithm based on the digital input value.
FIG. 4 illustrates the total signal 17 transmitted and received, whether
remote transmission (FIG. 1) or common transmission (FIG. 3) is utilized.
The
total signal 17 consists of one or more information pulses 11 within their
respective time slots 36, interspersed between successive synchronization
pulses
7. The period, magnitude and wave form of the synchronization pulses 7 is
uniform and adjustable. Each signal source is admitted to the network by
the
master control circuit 15 and allocated a time slot 36. Unallocated time
space
37 between synchronization pulses is available for subsequent allocation to
other signal sources.
Other embodiments may provide for interaction between the master control
circuit 15 and the synchronization pulse generator 8 (FIG. 1) or 13 (FIG.
3) so
that the frequency of the synchronization pulses is adjusted, based upon
the
number of channels being transmitted.
Referring now to Fig. 2, there is indicated generally therein a preferred
embodiment of a receiving apparatus 16. This embodiment comprises a
receiving
circuit 23, a control circuit 24, a positive-to-negative ratio sample hold
circuit 25, positive-to-negative offset sample hold circuit 26, a
positive-to-negative ratio analog to digital convertor 27, a
positive-to-negative
offset analog to digital convertor 28, and a calibration circuit 29. For
embodiments
of the transmission apparatus as shown in FIG. 1, which provide for the
remote
transmission of time slotted signals, the receiving apparatus 16 receives
the
incoming total signal 17. The receiver control circuit 24 uses the
synchronization pulses to allocate and maintain channel separation. The
receiver control circuit 24 may also control which signals are allowed to
pass
through the receiving circuit 23. The receiving circuit 23 first makes a
zero
check for the zero crossing reference 46 of the received information pulse
30
and makes a zero correction of the received information pulse. The
receiving
circuit 23 then determines the positive-to-negative offset 35 of the
information
pulse and the ratio of the amplitude 44 of the positive wave segment 31 to
the
amplitude 45 of the negative wave segment 32 for each time slot or channel.
The
positive-to-negative offset sample hold circuit 25 extracts the maximum
positive-to-negative offset value for each time slot or channel for each
cycle
of the received channel signal. Likewise, the positive-to-negative ratio
sample
hold circuit 26 extracts the maximum positive-to-negative ratio value for
each
channel. The receiver control circuit 24 establishes the channel time
slots for
the positive-to-negative offset sample hold circuit 25 and the
positive-to-negative
ratio sample hold circuit 26.
The positive-to-negative offset analog to digital converter 27 converts
the values obtained by the positive-to-negative offset sample hold circuit
25
for each channel to digital. The positive-to-negative ratio analog to
digital
converter 28 converts the values obtained by the positive-to-negative
sample
hold circuit 26 for each channel to digital. Under a preferred embodiment,
the
analog to digital converters 27 and 28 are special flash analog to digital
converters.
Other embodiments of the invention may use the analog value of the
positive-to-negative offset to calibrate the received analog signal. For
those
embodiments this will preferably occur after the zero check and correction
is
made. The calibration is made to the wave before the analog
positive-to-negative
ratio is extracted and converted to digital. For those embodiments
only one analog to digital converter is required in the receiver.
A preferred embodiment uses a special flash analog to digital circuit
developed for the present invention. The circuit consists of several sets
of
flash analog digital circuits. The flash consists of two arrays. The
first
array consists of ten flash circuits vertically and six horizontal for
sixty
circuits in all. The first set of ten is the most significant number, with
six
being the least significant. This allows it to measure a number as large
as
999,999, but, however, larger arrays can be used for any size number.
A calibration circuit 29 compares the digital values from the
positive-to-negative
offset analog to digital convertor 28 for each channel with the
transmission digital value for the positive-to-negative offset and a
calibration
factor is determined which accounts for losses or noise. The
positive-to-negative
ratio values from the positive-to-negative ratio analog to digital
convertor 27 for each channel are then calibrated through the use of this
calibration factor and the digital output signals 47 are generated. In
this way
the original digital signals input to the transmission apparatus are
obtained
for each channel. The reproduced signals 47 for each signal source are
then
available for use or dissemination by the intended users.
Under a preferred embodiment of the invention, a master control circuit
15 monitors a multi-media network to determine the time slot to be
allocated to
the various incoming signals. A signal source wanting to use the network
would
first address the master control circuit 15 to request access to the
network.
The main control circuit then allocates a time slot that is not being used.
Referring again to FIG 1, under a preferred embodiment of the invention,
if an acceptable initiating signal is received by the master control
circuit 15,
the incoming signal is allocated an unused time slot channel. Successive
cycles
of the time slot then carry the latest information pulse for the source.
The
converted analog signals for each channel are updated with each
synchronization
cycle.
The receiving apparatus 16 can be deployed at a single location with
information dissemination occurring from the single location or can be
deployed
at a plurality of locations with users tuning in to the desired signals.
Under a preferred embodiment, depending upon the type of signal source of
the respective channels, the minimum frequency of the synchronization pulse
is
the minimum frequency that will permit an acceptably accurate reproduction
of
the input digital signal. For data transmission applications which require
precise reproduction of transmitted data, the frequency of the
synchronization
pulse must be at least as high as the frequency of the change of the
digital
source signal.
An embodiment of the invention provides an apparatus and method that
would
allow substantially faster computer networks. Substantially more computers
could be added to any given network without degrading the network's speed.
In
computer networking the present invention will speed up the data transfer
rates
and make computer networking more efficient. It will allow for more
computers
to be used on a network without degrading the network. It will also allow
monitors, hard drives, printers and other devices at separate addresses all
to
be connected together by a single link. This link could be wire, fiber
optics,
or wireless communication, with each component allocated a time slot
channel.
Another embodiment of the invention provides for enhancement of
interactive robotics. Each component of a robotics device would be
controlled
by a single signal with each component accessing a time slot channel. This
would make it possible for work to be accomplished in a hazardous area
without
exposing the operator to physical risk associated with the environment and
wearing a suit as designed with sensors to detect movement, touch and
sight, and
then transmit these movements or essential perceptions to the robot. The
robot
would then transmit back what it was doing, and what it was sensing. The
operator in the suit would then feel what the robot was feeling, what it
was
seeing and what it was doing instantaneously.
Another embodiment of the apparatus and method provides for the
transmission of voice data to specific addresses based upon the time slot
channel allocated.
Another embodiment of the invention provides for the simultaneous
transmission of a large number of video recordings. Thousands of video
recordings can be transmitted simultaneously allowing users to make a
selection
of any of the videos at any time.
Another embodiment provides for radio and television signal transmission.
The present invention greatly increases the channel capacity for the band
width
allowed. Furthermore, this embodiment of the invention allows the routing
of
specific channels to specific locations. This allows users to access a
tremendous video library from their homes. It, likewise, allows users to
access
books at public and private libraries. It allows students to complete
school
work at home and to interact with their instructors as well as other
students.
This allows more channels for radio, televisions and cellular telephones.
Furthermore, not only would the number of channels be increased, but
channels
would be of digital quality.
An embodiment of the invention enhances the operation of video recorders
by allowing them to operate on a digital format. This embodiment also
allows
the replacement of the revolving head with a fixed head, which makes them
more
reliable and more compact. Likewise, embodiments of the invention as
applied to
audio recorders allow audio recorders to be made digital.
Another embodiment of the invention provides for the expansion of the
capacity of cellular phone networks by assigning each call to an
unallocated
time slot for simultaneous transmission and then deleting the call from the
network upon completion of the call, making the channel available for other
users and other callers.
Under preferred embodiments of the invention, neither the
positive-to-negative
offset nor the positive-to-negative ratio would be modulated onto a
carrier wave. However, the present invention could be used to modulate a
carrier wave. In fact, under other embodiments of the invention, the
positive-to-negative offset and the positive-to-negative ratio could be
modulated
onto an FM, PM, or PWM carrier wave. For example, the positive and
negative
information pulse segments could be superimposed upon the peak for the
carrier
wave. This would allow the information pulses to be removed and the
information
recovered without affecting the information being transmitted by the other
modulation methods. After the pulses are recovered, the
positive-to-negative
offset and the positive-to-negative ratio would then be analyzed in the
same
manner as is provided for the preferred embodiments described above. The
process of adding the pulses to the respective carriers uses the process of
finding the high or the low points of each cycle and superimposing the
information pulses, if desired, to the selected points. Under such
embodiments,
a synchronization pulse would not ordinarily be used as the channel
identification would arise from carrier wave identification.
An embodiment of the present invention provides for the substantial
increase in the capacity of existing telephone systems. The simultaneous
transmission of numerous calls from a single signal could greatly increase
the
capacity of existing facilities. Alternatively switching circuits could be
much
smaller and would be able to provide more reliable service.
Another embodiment of the invention provides for home stereos to transmit
specific information to specific speakers. For example, one speaker could
be
for drums, one for the piano, one for brass instruments, one for strings.
One
could have the whole orchestra in the living room. Furthermore, the
components
could be connected by a single wire or the central unit could be entirely
wireless.
Another embodiment of the present invention provides for shelf tags in
grocery stores. Each electronic grocery store shelf price tag has its own
address for each item allowing for instantaneous update of item and price
changes. Each product has its own time slot and the transmission can be
wireless, allowing complete freedom of location for the shelf tags.
Other embodiments of the invention and other variations and modifications
of the embodiments described above will be obvious to a person skilled in
the
art. Therefore, the foregoing is intended to be merely illustrative of the
invention and the invention is limited only by the following claims.
CLAIMS
What is claimed is:
1. An apparatus for digital information transfer comprising:
a) means for allocating one or more source digital signals to
unique, repetitive time slots;
b) means for generating an analog information wave for each said
source digital signal, each said information wave having a positive wave
segment
and a negative wave segment and having a positive-to-negative ratio which
is a
function of the magnitude of the corresponding source digital signal as
measured
during the allocated time slot for the signal;
c) means for transmitting each of the analog information waves
within its allocated time slot;
d) means for receiving each of the analog information waves within
its allocated time slot;
e) means for extracting a positive-to-negative ratio for each
analog information wave received during its allocated time slot; and
f) means for generating an output digital signal for each
information wave received during its allocated time slot, said output
digital
signal having a digital magnitude which is a function of said extracted
analog
positive-to-negative ratio.
2. An apparatus as claimed in claim 1 further comprising:
a) means for transmitting each information wave with a pre-set
positive-to-negative offset;
b) means for extracting a positive-to-negative offset for each
analog information wave received during its allocated time slot; and
c) means for calibrating the output digital signal magnitudes by
comparison of the positive-to-negative offsets of the information waves as
transmitted and the positive-to-negative offsets of the information waves
as
received.
3. An apparatus as claimed in claim 1 wherein the means for
generating said analog information waves for said source digital signals
and the
means for transmitting the information waves within the allocated time
slots are
deployed at a plurality of transmission locations.
4. An apparatus as claimed in claim 1 wherein the means for
receiving the information waves the allocated time slots, the means for
extracting the positive-to-negative ratios for the analog information waves
received during the allocated time slots, and the means for generating
output
digital signals with digital magnitudes which are a function of said
extracted
positive-to-negative ratios for the information waves received are deployed
at a
plurality of receiving locations.
5. An apparatus as claimed in claim 1 wherein the means for
generating analog information waves generates an information wave for each
said
source digital signal the positive-to-negative ratio of which is
proportional to
the magnitude of the corresponding source digital signal as measured during
the
allocated time slot for the signal.
6. An apparatus as claimed in claim 1 wherein the means for
generating output digital signals generates output digital signals having
magnitudes which are proportional to the extracted analog
positive-to-negative
ratios for the information waves received.
7. An apparatus for digital information transfer comprising:
a) means for generating synchronizing waves of pre-set wave form
and frequency;
b) means for allocating one or more source digital signals to
unique time slots between successive synchronizing waves;
c) means for generating an analog information wave for each source
digital signal, said information wave having a positive wave segment and a
negative wave segment, said information wave having a positive-to-negative
ratio
which is a function of the magnitude of the corresponding source digital
signal
as measured during the allocated time slot for the source digital signal,
and
said information wave having a pre-set positive-to-negative offset;
d) means for transmitting the information wave for each source
digital signal within its allocated time slot;
e) means for receiving the information wave for each source
digital signal during the allocated time slot for the source digital signal
as
referenced to successive synchronizing waves;
f) means for extracting a positive-to-negative offset and a
positive-to-negative ratio for each information wave received during its
allocated time slot;
g) means for generating an output digital signal for each
information wave received during its allocated time slot, said output
digital
signal having a digital magnitude which is a function of said extracted
positive-to-negative ratio; and
h) means for calibrating the digital magnitude of each output
digital signal by comparison of the positive-to-negative offset of the
corresponding information wave as transmitted with the positive-to-negative
offset of the information wave as received.
8. An apparatus as claimed in claim 7 wherein the means for
generating an analog information wave for each source digital signal and
the
means for transmitting the information wave for each source digital signal
within its allocated time slot are deployed at a plurality of transmission
locations.
9. An apparatus as claimed in claim 7 wherein the means for
receiving the information wave for each source digital signal during its
allocated time slot, the means for extracting said positive-to-negative
offset
and said positive-to-negative ratio for each information wave received
during
its allocated time slot, the means for generating an output digital signal
for
each information wave received during its allocated time slot which is a
function of the extracted positive-to-negative ratio, and the means for
calibrating the digital magnitude of each output digital signal are
deployed at
a plurality of receiving locations.
10. An apparatus as claimed in claim 7 wherein the means for
generating analog information waves generates an information wave for each
said
source digital signal the positive-to-negative ratio of which is
proportional to
the magnitude of the corresponding source digital signal as measured during
the
allocated time slot for the signal.
11. An apparatus as claimed in claim 7 wherein the means for
generating output digital signals generates output digital signals having
magnitudes which are proportional to the extracted analog
positive-to-negative
ratios for the information waves received.
12. An apparatus for digital information transfer comprising:
a) a synchronization wave generation circuit;
b) a circuit for allocating one or more source digital signals to
unique time slots between successive synchronizing waves;
c) one or more digital to analog signal generators for generating
an analog information wave for each source digital signal, which
information
wave has a positive wave segment and a negative wave segment and has a
positive-to-negative ratio which is a function of the digital magnitude of
the
corresponding source digital signal as measured during the allocated time
slot
for the source digital signal, and which information wave has a pre-set
positive-to-negative offset;
d) one or more transmitters for transmitting the information wave
for each source digital signal within its allocated time slot;
e) one or more receivers for receiving the information wave for
each source digital signal within the allocated time slot for the source
digital
signal as referenced to successive synchronization waves;
f) one or more circuits for extracting the positive-to-negative
ratio and the positive-to-negative offset of each information wave received
during its allocated time slot;
g) one or more analog to digital convertors for generating an
output digital signal for each information wave received during its
allocated
time slot, said output digital signal having a digital magnitude which is a
function of said extracted positive-to-negative ratio;
h) one or more circuits for calibrating the digital magnitude of
each output digital signal by comparison of the positive-to-negative offset
of
the corresponding information wave as transmitted with the
positive-to-negative
offset of the information wave as received.
13. An apparatus as claimed in claim 12 wherein the digital to
analog signal generators for generating an analog information wave for each
source digital signal within its allocated time slot and the transmitters
for
transmitting the information wave for each source digital signal within its
allocated time slot are deployed at a plurality of transmission locations.
14. An apparatus as claimed in claim 12 wherein the receivers,
the circuits for extracting the positive-to-negative ratio and the
positive-to-negative offset of each information wave received during its
allocated
time slot, the analog to digital convertors for generating an output
digital signal
for each information wave received during its allocated time slot, and the
circuits for calibrating the digital magnitude of each output digital
signal are
deployed at a plurality of receiving locations.
15. An apparatus as claimed in claim 12 wherein the digital to
analog signal generators generate an information wave for each said source
digital signal the positive-to-negative ratio of which is proportional to
the
magnitude of the corresponding source digital signal as measured during the
allocated time slot for the signal.
16. An apparatus as claimed in claim 12 wherein the analog to
digital signal generators generate output digital signals having digital
magnitudes which are proportional to the extracted positive-to-negative
ratios
for the information waves received.
17. An apparatus for digital information transfer comprising:
a) means for generating synchronizing waves of pre-set wave form
and frequency;
b) means for transmitting said synchronizing waves to one or more
remote transmission locations;
c) means for receiving said synchronizing waves at each remote
transmission location;
d) means for allocating one or more source digital signals at each
remote transmission location to unique time slots between successive
synchronizing waves;
e) means for generating an analog information wave for each source
digital signal, said information wave having a positive wave segment and a
negative wave segment, said information wave having a positive-to-negative
ratio
which is a function of the magnitude of the corresponding source digital
signal
as measured during the allocated time slot for the source digital signal,
and
said information wave having a pre-set positive-to-negative offset;
f) means for transmitting the information wave for each source
digital signal from each remote transmission location;
g) means for receiving, at one or more locations, the information
wave for each source digital signal transmitted from each remote
transmission
location, the information wave being received within its allocated time
slot as
referenced to successive synchronization waves;
h) means for extracting a positive-to-negative offset and a
positive-to-negative ratio for each information wave received during its
allocated time slot at one or more locations;
i) means for generating an output digital signal for each
information wave received during its allocated time slot, said output
digital
signal having a digital magnitude which is a function of said extracted
positive-to-negative ratio; and
j) means for calibrating the digital magnitude of each output
digital signal by comparison of the positive-to-negative offset of the
corresponding information wave as transmitted with the positive-to-negative
offset of said information wave as received.
18. An apparatus as claimed in claim 17 wherein the means for
generating analog information waves generates an information wave for each
said
source digital signal the positive-to-negative ratio of which is
proportional to
the magnitude of the corresponding source digital signal as measured during
the
allocated time slot for the signal.
19. An apparatus as claimed in claim 17 wherein the means for
generating output digital signals generates output digital signals having
magnitudes which are proportional to the extracted positive-to-negative
ratios
for the information waves received.
20. A method for digital information transfer comprising the steps
of:
a) allocating one or more source digital signals to unique,
repetitive time slots;
b) generating an analog information wave for each said source
digital signal, each said information wave having a positive wave segment
and a
negative wave segment and having a positive-to-negative ratio which is a
function of the magnitude of the corresponding source digital signal as
measured
during the allocated time slot for the signal;
c) transmitting each of the analog information waves within its
allocated time slot;
d) receiving each of the analog information waves within its
allocated time slot;
e) extracting an analog positive-to-negative ratio for each analog
information wave received during its allocated time slot; and
f) generating an output digital signal for each information wave
received during its allocated time slot, said output digital signal having
a
digital magnitude which is a function of said extracted
positive-to-negative
ratio.
21. Method claimed in claim 20 further comprising the steps of:
a) transmitting each said information wave with a pre-set
positive-to-negative offset;
b) extracting a positive-to-negative offset for each analog
information wave received during its allocated time slot; and
c) calibrating the output digital signal magnitudes by comparison
of the positive-to-negative offsets of the information waves as transmitted
and
the positive-to-negative offsets of the information waves as received.
22. Method claimed in claim 20 wherein the step of generating said
analog information waves for said source digital signals and the step of
transmitting the information waves within the allocated time slots are
performed
at a plurality of transmission locations.
23. Method claimed in claim 20 wherein the step of receiving the
information waves within the allocated time slots, the step of extracting
the
positive-to-negative ratios for the analog information waves received
during the
allocated time slots, and the step of generating output digital signals
with
digital magnitudes which are a function of said extracted
positive-to-negative
ratios for the information waves received are performed at a plurality of
receiving locations.
24. Method claimed in claim 20 wherein the step of generating
analog information waves generates an information wave for each said source
digital signal the positive-to-negative ratio of which is proportional to
the
magnitude of the corresponding source digital signal as measured during the
allocated time slot for the signal.
25. Method claimed in claim 20 wherein the step of generating
output digital signals generates output digital signals having magnitudes
which
are proportional to the extracted positive-to-negative ratios for the
information waves received.
26. A method for digital information transfer comprising the steps
of:
a) generating synchronizing waves of pre-set wave form and
frequency;
b) allocating one or more source digital signals to unique time
slots between successive synchronizing waves;
c) generating an analog information wave for each source digital
signal, said information wave having a positive wave segment and a negative
wave
segment, said information wave having a positive-to-negative ratio which is
a
function of the magnitude of the corresponding source digital signal as
measured
during the allocated time slot for the source digital signal, and said
information wave having a pre-set positive-to-negative offset;
d) transmitting the information wave for each source digital
signal within its allocated time slot;
e) receiving the information wave for each source digital signal
during the allocated time slot for the source digital signal as referenced
to
successive synchronizing waves;
f) extracting a positive-to-negative offset and a
positive-to-negative
ratio for each information wave received during its allocated time slot;
g) generating an output digital signal for each information wave
received during its allocated time slot, said output digital signal having
a
digital magnitude which is a function of said extracted
positive-to-negative
ratio; and
h) calibrating the digital magnitude of each output digital signal
by comparison of the positive-to-negative offset of the corresponding
information wave as transmitted with the positive-to-negative offset of the
information wave as received.
27. Method claimed in claim 26 wherein the step of generating an
analog information wave for each source digital signal and the step of
transmitting the information wave for each source digital signal within its
allocated time slot are performed at a plurality of transmission locations.
28. Method claimed in claim 26 wherein the step of receiving the
information wave for each source digital signal during its allocated time
slot,
the step of extracting said positive-to-negative offset and said
positive-to-negative ratio for each information wave received during its
allocated
time slot, the step of generating an output digital signal for each
information wave
received during its allocated time slot which is a function of the
extracted
positive-to-negative ratio, and the step of calibrating the digital
magnitude of
each output digital signal are performed at a plurality of receiving
locations.
29. Method claimed in claim 26 wherein the step of generating
analog information waves generates an information wave for each said source
digital signal the positive-to-negative ratio of which is proportional to
the
magnitude of the corresponding source digital signal as measured during the
allocated time slot for the signal.
30. Method claimed in claim 26 wherein the step of generating
output digital signals generates output digital signals having magnitudes
which
are proportional to the extracted positive-to-negative ratios for the
information waves received.
31. A method for digital information transfer comprising the steps
of:
a) generating synchronizing waves of pre-set wave form and
frequency;
b) transmitting said synchronizing waves to one or more remote
transmission locations;
c) receiving said synchronizing waves at each remote transmission
location;
d) allocating one or more source digital signals at each remote
transmission location to unique time slots between successive synchronizing
waves;
e) generating an analog information wave for each source digital
signal, said information wave having a positive wave segment and a negative
wave
segment, said information wave having a positive-to-negative ratio which is
a
function of the magnitude of the corresponding source digital signal as
measured
during the allocated time slot for the source digital signal, and said
information wave having a pre-set positive-to-negative offset;
f) transmitting the information wave for each source digital
signal from each remote transmission location;
g) receiving, at one or more locations, the information wave for
each source digital signal transmitted from each remote transmission
location,
the information wave being received within its allocated time slot as
referenced
to successive synchronization waves;
h) extracting a positive-to-negative offset and a
positive-to-negative
ratio for each information wave received during its allocated time slot
at one or more locations;
i) generating an output digital signal for each information wave
received during its allocated time slot, said output digital signal having
a
digital magnitude which is a function of said extracted
positive-to-negative
ratio; and
j) calibrating the digital magnitude of each output digital signal
by comparison of the positive-to-negative offset of the corresponding
information wave as transmitted with the positive-to-negative offset of the
information wave as received.
32. Method claimed in claim 31 wherein the step of generating
analog information waves generates an information wave for each said source
digital signal the positive-to-negative ratio of which is proportional to
the
magnitude of the corresponding source digital signal as measured during the
allocated time slot for the signal.
33. Method claimed in claim 31 wherein the step of generating
output digital signals generates output digital signals having magnitudes
which
are proportional to the extracted positive-to-negative ratios for the
information waves received.
34. An apparatus as claimed in claim 1 wherein the means for
generating an analog information wave for each said source digital signal
further includes a means for simultaneously generating and adding analog
signals
for two or more source signals for a single information wave.
35. An apparatus as claimed in claim 7 wherein the means for
generating an analog information wave for each source digital signal
further
includes a means for simultaneously imputing two or more source digital
signals,
generating an analog information signal for each source digital signal, and
combining the analog information signals of said two or more source digital
signals for a single information wave.
36. An apparatus as claimed in claim 12 further including one or
more additional digital to analog signal generators to permit the
simultaneous
input of two or more source digital signals and including a circuit for
combining the analog signals for said two or more source digital signals
for a
single analog information wave.
37. An apparatus as claimed in claim 17 wherein the means for
generating an analog information signal for each source digital signal
further
includes a means for simultaneously imputing two or more source digital
signals,
generating an analog information signal for each source digital signal, and
combining the analog signals for a single information wave.
38. Method claimed in claim 20 wherein the step of generating an
analog information wave for each said source digital signal further
includes a
step of simultaneously generating and adding analog signals for two or more
source signals for a single information wave.
39. Method claimed in claim 26 wherein the step of generating an
analog information wave for each source digital signal further includes a
step
of simultaneously imputing two or more source digital signals, generating
an
analog information signal for each source digital signal, and combining the
analog information signals of said two or more source digital signals for a
single information wave.
40. Method claimed in claim 31 wherein the step of generating an
analog information signal for each source digital signal further includes a
step
of simultaneously imputing two or more source digital signals, generating
an
analog information signal for each source digital signal, and combining the
analog signals for a single information wave.
41. An apparatus for digital information transfer comprising:
a) a synchronization wave generation circuit;
b) a circuit for allocating one or more source digital signals to
unique time slots between successive synchronizing waves;
c) two or more digital to analog signal generators for
simultaneously receiving two or more source digital signals which are
allocated
the same time slot, simultaneously generating an analog information signal
for
each of said two or more source digital signals;
d) a circuit for combining said analog information signals for a
single combined analog information wave, which combined information wave
has a
positive wave segment and a negative wave segment and has a
positive-to-negative
ratio which is a function of the digital magnitudes of the corresponding
two or
more source digital signals as measured during the allocated time slot for
the
source digital signals, and which combined information wave has a pre-set
positive-to-negative offset;
e) one or more transmitters for transmitting each combined
information wave within its allocated time slot;
f) one or more receivers for receiving the combined information
wave within the allocated time slot for the source digital signals as
referenced
to successive synchronization waves;
g) one or more circuits for extracting the positive-to-negative
ratio and the positive-to-negative offset of each combined information wave
received during its allocated time slot;
h) one or more analog to digital convertors for generating an
output digital signal for each combined information wave received during
its
allocated time slot, said output digital signal having a digital magnitude
which
is a function of said extracted positive-to-negative ratio;
i) one or more circuits for calibrating the digital magnitude of
each output digital signal by comparison of the positive-to-negative offset
of
the corresponding combined information wave as transmitted with the
positive-to-negative offset of the combined information wave as received.
42. An apparatus as claimed in claim 41 wherein the digital to
analog signal generators for simultaneously generating an analog
information
signal for two or more source digital signals within the allocated time
slot,
the circuit for combining the analog information signals for a single
combined
analog information wave, and the transmitters for transmitting the combined
information wave within its allocated time slot are deployed at a plurality
of
transmission locations.
43. An apparatus as claimed in claim 41 wherein the receivers
for receiving the combined information wave within the allocated time slot
for
the source digital signals as referenced to successive synchronization
waves,
the circuits for extracting the positive-to-negative ratio and the
positive-to-negative offset of each combined information wave received
during
its allocated time slot, the analog to digital convertors for generating an
output
digital signal for each combined information wave received during its
allocated time
slot, and the circuits for calibrating the digital magnitude of each output
digital signal by comparison of the positive-to-negative offset of the
corresponding combined information wave as transmitted with the
positive-to-negative
offset of the combined information wave as received are deployed at a
plurality of receiving locations.
44. An apparatus as claimed in claim 41 wherein the circuit for
combining the analog information signals for the two or more source digital
signals for a combined analog information wave generates a combined
information
wave the positive-to-negative ratio of which is proportional to the
combined
magnitude of the corresponding source digital signals as measured during
the
allocated time slot.
45. An apparatus as claimed in claim 41 wherein the analog to
digital signal generators generate output digital signals having digital
magnitudes which are proportional to the extracted positive-to-negative
ratios
for the combined information waves as received.
46. An apparatus as claimed in claim 1 wherein the means for
generating an analog information wave further provides for generating a
zero
wave segment between the positive wave segment and the negative wave
segment,
and the means for extracting a positive-to-negative ratio for each analog
information wave received during its allocated time slot further provides
for a
zero correction of the zero wave segment, thereby interposing an interim
zero
correction on the positive wave segment and the negative wave segment as
received.
47. An apparatus as claimed in claim 7 wherein the means for
generating an analog information wave for each source digital signal
further
provides for generating a zero wave segment between the positive wave
segment
and the negative wave segment, and the means for extracting a
positive-to-negative
offset and a positive-to-negative ratio for each information wave
received during its allocated time slot further provides for a zero
correction
of the zero wave segment, thereby interposing an interim zero correction on
the
positive wave segment and the negative wave segment.
48. An apparatus as claimed in claim 12 wherein the digital to
analog signal generators further generate a zero wave segment between the
positive wave segment and the negative wave segment, and the circuits for
extracting the positive-to-negative ratio and the positive-to-negative
offset of
each information wave received during its allocated time slot further
provide
for a zero correction of the zero wave segment, thereby interposing an
interim
zero correction on the positive wave segment and the negative wave segment.
49. An apparatus as claimed in claim 17 wherein
the means for generating an analog information wave for each source digital
signal further provides for generating a zero wave segment between the
positive
wave segment and the negative wave segment, and the means for extracting a
positive-to-negative offset and an analog positive-to-negative ratio for
each
information wave received during its allocated time slot further provides
for a
zero correction of the zero wave segment, thereby interposing an interim
zero
correction on the positive wave segment and the negative wave segment.
50. Method as claimed in claim 20 wherein the step of generating
an analog information wave for each said source digital signal further
includes
generating a zero wave segment between the positive wave segment and the
negative wave segment and the step of extracting a positive-to-negative
ratio
for each analog information wave received during its allocated time slot
further
includes the step of making a zero correction of the zero wave segment,
thereby
interposing an interim zero correction on the positive wave segment and the
negative wave segment.
51. Method as claimed in claim 26 wherein the step of generating
an analog information wave for each said source digital signal further
includes
generating a zero wave segment between the positive wave segment and the
negative wave segment and the step of extracting a positive-to-negative
ratio
for each analog information wave received during its allocated time slot
further
includes the step of making a zero correction of the zero wave segment,
thereby
interposing an interim zero correction on the positive wave segment and the
negative wave segment.
52. Method as claimed in claim 31 wherein the step of generating
an analog information wave for each said source digital signal further
includes
generating a zero wave segment between the positive wave segment and the
negative wave segment and the step of extracting a positive-to-negative
ratio
for each analog information wave received during its allocated time slot
further
includes the step of making a zero correction of the zero wave segment,
thereby
interposing an interim zero correction on the positive wave segment and the
negative wave segment.
53. An apparatus as claimed in claim 41 wherein the circuit for
combining said analog information signals for a single combined analog
information wave further generates a zero wave segment between the positive
wave
segment and the negative wave segment, and the circuits for extracting the
positive-to-negative ratio and the positive-to-negative offset of each
combined
information wave received during its allocated time slot further provide
for a
zero correction of the zero wave segment, thereby interposing an interim
zero
correction on the positive wave segment and the negative wave segment.
</TABLE> <PAGE>
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