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We view the record in the instant case in light of the
foregoing.
As 1984 began, Systems existed; IRC and RIC had not yet been
created.
Systems was developing interactive educational videodiscs
and seeking to exploit the technology. Systems needed an
additional $5-8 million to bring its videodiscs to market. IRC
and RIC were created in 1984 through the efforts of Systems and
Gould (Systems’ financial adviser); these efforts were motivated
by Systems’ need for additional financing.
Gould’s testimony makes it plain that IRC and RIC were
created to meet Systems’ need for financing research that Systems
wanted to do so that Systems could exploit interactive videodisc
technology. Gould selected IRC’s and RIC’s potential
shareholders in order to have these individuals contribute funds
to IRC and RIC, in order to have IRC and RIC satisfy a portion of
Systems’ financial needs. Gould was petitioners’ witness.
Gould’s testimony completely negates any thought that IRC and RIC
had the trade or business ideas and merely sought out Systems to
do research in order to enable IRC and RIC to exploit new
technology. A February 27, 1984, letter from John P. Clark
(hereinafter sometimes referred to as Clark) to Systems’
president shows that Clark, too, understood that Systems was
looking for a source of funds that Systems could use to advance
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