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to grasp a portion of a lesson, then the teacher could replay the
unclear portion of the lesson in a step-by-step process to
reinforce or clarify key principles; conversely, if the class
appeared to understand the lesson, then the teacher could
continue with the lesson. The videodiscs also enabled teachers
to present the information contained in the videodiscs in more
than one manner.
By 1984, Systems had developed early prototypes of the
videodiscs, but it needed an additional $5-8 million to bring
them to market.
B. Creation and Operation of IRC and RIC
In 1984, Gordon Gould (hereinafter sometimes referred to as
Gould) was the president of Heritage Financial Corp. (hereinafter
sometimes referred to as Heritage Financial). Heritage Financial
was a securities firm; a broker-dealer, it sold stocks, bonds,
and other forms of investments.
In 1984, Gould met with Systems’ representatives about
raising the financial support Systems needed in order to expand
its research and development activities. Gould considered the
videodisc technology to be a “valid potential product for
investors”. After consulting with securities attorneys, Gould
and Systems agreed that the formation of two S corporations
represented the best way to (1) provide to Systems the additional
financing it needed, and (2) secure an equity investment in the
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