Patent Publication Number: US-2003229560-A1

Title: Method for investor disclosure

Description:
RELATED APPLICATIONS  
     [0001] This application claims priority from U.S. Provisional Application Serial No. 60/374,330, filed Apr. 22, 2002, entitled “Method For Realtime Investor Oversight”. 
    
    
     
       BACKGROUND OF THE INVENTION  
       [0002] The present invention pertains to the field of investing, and more particularly, to a process of disclosing information of corporate activities to an investor. Traditionally, investment is the commitment of present funds for the purpose of deriving a future return in the form of income.  
       [0003] Trust by the American investing masses has made U.S. equity markets the largest, deepest and most liquid in the world. That trust has been engendered largely by a regulatory framework based on the premise that full and fair disclosure of a corporation&#39;s business and financial status produces an honest market.  
       [0004] However, historically, concerns regarding the credibility and adequacy of financial reporting have caused skepticism amongst investors as to the fairness of the U.S. securities markets. While corporate and financial regulations such as the Securities Act of 1933, the creation of the Securities and Exchange Commission (“SEC”) in 1932, and Regulation S-K were intended to facilitate public faith in capital markets, and to create the assumption that corporations will accurately disclose all information necessary for investors to make an informed decision regarding the purchase or sale of securities, investors have remained justifiably skeptical.  
       [0005] In the 1970s, the inclusion of “soft” projections in SEC filings became a permissible practice. These once banned projections allow corporations to provide forward-looking information that is often an optimistically favorable forecast. In 1980, the Management Discussion and Analysis Requirement made the inclusion of such forward-looking “soft” information in filings a requirement. In 1995, Congress passed the Private Securities Litigation Reform Act, which improved safe harbor guidelines that protected executives making such forward-looking statements in instances where those statements are accompanied by meaningful cautionary language. Furthermore, these safe harbors require that investors bringing suit based on incorrect forecasts prove that the forecasts were purposely misleading.  
       [0006] Currently, not all disclosure is mandatory. Based on the premise that the more useful information that investors have, the lower the corporation&#39;s cost of capital, corporations can gain investor relations credibility by voluntarily disclosing a range of information, varying from performance measurements used to run the business to data pertaining to intangible assets that are not recognized in financial statements.  
       [0007] Today, investors are clamoring for even more information. Most Chief Disclosure Officers are intimately aware of the ever more complex nature of disclosure requirements and restrictions. Internationalism, technology, and changes in the investor community have shaped disclosure practices.  
       [0008] All of the presently available investor disclosure methods suffer from a number of disadvantages. For example, current investor disclosure is highly tailored to what the corporation feels the investor wants to see. Furthermore, current investor disclosure methods do not make the investor aware of all the factors that must be weighed in corporate decisions, and current investor disclosure is difficult for the non-financial specialist to understand. Investors also rarely have the time or opportunity to observe, in real-time, corporate operations, the corporation&#39;s current financial status, or to interact with corporate officials.  
       [0009] It is therefore an object of this invention to provide an improved method for investor disclosure of corporate operations.  
       [0010] It is therefore another object of this invention to provide reality-based investor disclosure information in real-time.  
       [0011] A further object of this invention is to provide investors with the ability to obtain a greater understanding and awareness of a corporation&#39;s position and current financial status, thereby empowering investors to think like owners.  
       [0012] Another object of this invention is the ability of the investor to digitally submit feedback to, and receive correspondence from, a corporation&#39;s management.  
       [0013] These and other desirable characteristics of the present invention will become apparent in view of the present specification, including the claims and drawings.  
       SUMMARY OF THE INVENTION  
       [0014] The present invention is directed to a method of disclosing corporate operations to investors or potential investors (“investors”) in real-time. More specifically, the present invention is related to a method of disclosing information and captured images of corporate operations, transmitting the information to investors, and providing investors with the opportunity to access the information and captured images in real-time, along with the ability to digitally communicate with corporate management.  
       [0015] The present invention provides investors with the ability to, in real-time, assess operational effectiveness, evaluate financial strength, monitor the performance of management, and determine the credibility of the corporation&#39;s representations. The present invention is also capable of providing investors with the opportunity for open book management, whereby the investor may access, in real-time, current financial statements, including balance sheets, income statements, cash-flow statements, along with sales, marketing, capital, inventory, and compensation plans and organizational chart.  
       [0016] The method includes using capturing technology, including, but not limited to, web cameras, digital cameras, PDA devices, robot cams, or any digital image-capturing or digital converting device, to capture a continuous stream of captured images over pre-designated time-based intervals. The captured images are transmitted to the investor so that the investor may receive the information via, but not limited to, a digital network, the Worldwide Web or Internet, personal computers, televisions, PDA devices, wearable computers, cellular phones, and virtual reality interfaces. An interface menu presents investors with disclosure links that allow investors to focus on specific areas of interest.  
       [0017] The interface menu also provides investors with the opportunity to use the digital technology to provide feedback to, and establish correspondence with, corporate management regarding matters such as the received captured images and associated information. Likewise, corporate management may notify or respond to investors using the associated digital technology. 
     
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
     [0018] For a more complete understanding of this invention, reference should now be had to the embodiment illustrated in greater detail in the accompanying drawings and described below by way of example of the invention.  
     [0019]FIG. 1 is a flow chart showing the input, processing, and output of corporate information and captured images in accordance with an embodiment of the invention.  
     [0020]FIG. 2 is a block diagram showing an interface menu in accordance with an embodiment of the invention.  
     [0021]FIG. 3 is a flow chart showing the input of company operation information, the functions of the Chief Disclosure Officer, and the outputted information. 
    
    
     DETAILED DESCRIPTION OF THE ILLUSTRATED INVENTION  
     [0022]FIG. 1 illustrates an investor disclosure system  100  for obtaining and presenting corporate information and captured images to investors in real-time. Key public corporate information  10 , such as, but not limited to, quarterly and annual reports, financial statements, core business, industry, cash position, off-balance sheet activities, legal proceedings, and contingent liabilities are compiled for possible disclosure in the system  100 . This information may be found and compiled in a variety of forms, including digital and paper-based formats.  
     [0023] In the preferred embodiment of the present invention, the system  100  also contains a compilation of non-key public corporate information for full disclosure, such as open book management information  12 . Open book management information  12  may include information such as government filings, including Securities and Exchange Commission, Internal Revenue Service, and Environmental Protection Agency filings. The open book management information  12  may also include, but is not limited to, officer information, history, mission &amp; vision statements, officer statements, competition analysis, press releases, employee/union overviews, information on other corporate locations, corporate communication to employees, and customer feedback.  
     [0024] The system  100  may also provide the investor with access to information regarding the corporation that was created or compiled by independent third-party sources  14 . Similar to key public corporate information  10  and open book management information  12 , independent third party information  14  may be collected in various forms, including digital and paper based-formats. Information from third-party sources  14  may be obtained from television, radio, newspapers, the Worldwide Web or Internet, and may also include outsider opinions and analysis of the corporation, industry rumors, complaints, industry indicators, and corporate rankings from sources such as Dun &amp; Bradstreet, BBB, Bloomberg L. P., and Fortune 500.  
     [0025] Once the relevant information for the investor disclosure system  100  is compiled, but prior to disclosure to the investor, the corporate information  10 ,  12 ,  14  undergoes verification  16 . During verification, the corporate information is analyzed for accuracy, and may undergo standard appraisal methods in which inaccurate or misleading information is discarded. Although the preferred embodiment of FIG. 1 illustrates the verification  16  process as following the compilation of information  10 ,  12 ,  14 , the verification  16  process may be performed at any time prior to disclosure to the investor.  
     [0026] With the goal of presenting only key facts while still providing all information necessary for the investor to make an informed decision regarding the purchase and sale of securities, the preferred embodiment of the present invention includes analyzing  18  the corporate information. The process of analyzing  18  the relevancy of the compiled information may also occur simultaneously or prior to the information undergoing verification  16 . In the preferred embodiment, the analyzing  18  process eliminates all irrelevant and non-critical information prior to the disclosure to the investor.  
     [0027] In addition to compiling information  10 ,  12 ,  14 , the investor disclosure system  100  also allows the investor to view captured images of corporation operations in real-time. Such captured images may be obtained through the use of capturing technology  15 , including, but not limited to, web cameras, digital cameras, PDA devices, robot cams, or any digital image-capturing or digital converting device, and may be recorded in a variety of forms, including, but not limited to, analog or digital formats. The capturing technology  15  captures a continuous stream of captured images over pre-designated time-based intervals. In the preferred embodiment of the present invention, these continuous captured images provide the investor with the opportunity to regularly update, at the investor&#39;s convenience, the current status of corporate operations in real-time by downloading or printing the captured images  15 .  
     [0028] A captured image not only allows the investor to observe real-time corporate operations for investment related purposes, but also allows the corporation to oversee its own operations. Such images allow the corporation the opportunity to address on a real-time live basis the concerns, questions or problems that a branch, franchise or affiliate has by being able to actually see what the problem is via the capturing technology. The company can then direct an immediate solution to any problem after reviewing the live information. The corporation may also use this real-time information for training purposes.  
     [0029] Once all of the corporate information has been compiled, information or captured images not already in a digital format may undergo digitizing  20 . Digitizing  20  may occur with the use of devices such as, but not limited to, a scanner or translator, whereby printed, filmed, or spoken information is converted or processed into a digital format for computer storage, access, modification, or re-usability, and which is capable of being transmitted to an investor. Although FIG. 1 illustrates the digitizing  20  process occurring after verifying  16  and analyzing  18 , digitizing  20  may occur simultaneously with or prior to verifying  16  and analyzing  18 , as would be appreciated and understood by those skilled in the art. Once digitized, the compiled information  10 ,  12 ,  14  and captured images  15  may be uploaded to a target location, such as a computer network server.  
     [0030] The compiled corporate information and captured images may also undergo organizing  22 , whereby the information and captured images are incorporated into a logical and retrievable database. Depending on whether the organizing  22  of the compiled information occurs prior to, simultaneously with, or subsequent to digitizing  20 , this database may be in a digital or paper-based format. Organizing  22  may also aid in arranging the investor disclosure interface menu  200 , as depicted in FIG. 2 and discussed hereinafter, in a user-friendly format.  
     [0031] If necessary, the compiled information and captured images may also undergo a simplification  24 , whereby the information or captured images are simplified in a manner, such as a logical database, that is readily understandable by the investor. In the preferred embodiment, the format of the visual presentation of the logical database allows the investor to easily navigate and comprehend the investor disclosure menu  200  and associated corporate information.  
     [0032] Prior to investor disclosure, the preferred embodiment of the present invention also includes the review and approval  26  of the compiled information  10 ,  12 ,  14  and captured images  15  by corporate officials. Keeping with the spirit of the present invention, the goal of the reviewing and approval procedure  26  is not to censor information, but to present only key facts that are critical to understandable, true, and fair corporate disclosure. Although FIG. 1 illustrates the review and approval  26  procedure occurring after the digitized  20  information has undergone simplification  24 , the review and approval procedure may occur at any time prior to investor disclosure, as will be understood and appreciated by one of ordinary skill in the art.  
     [0033] Once the compiled information and captured images are in condition for reception by the investor and have undergone any necessary verification  16 , analysis  18 , digitization  20 , organization  22 , simplification  24 , and review and approval  26 , that information and captured images are transmitted  28  for viewing by the investor.  
     [0034] The transmitted  28  disclosure information and captured images are then received  30  by the investor. The equipment necessary for investor reception  30  are dependent on the method of transmission  28 , but may include, among other things, personal computers, televisions, PDA devices, Worldwide Web or Internet compatible devices, wearable computers, cellular phones, and virtual reality interfaces. Preferably, access to transmitted  28  information and captured images of corporate operations will also incorporate security measures that protect the privacy and security of the corporation&#39;s officers and employees.  
     [0035] The preferred embodiment of the present invention also includes communication  32  capabilities for the interactive communication  32  between investors and corporate officials and representatives. This communication  32  provides the opportunity for both real-time communication  32  and messaging so that the investor has the opportunity to provide corporate officials with both feedback regarding the transmitted information and captured images, along with the ability to participate in real-time conversations via, for example, an investor online chat room.  
     [0036] In the preferred embodiment of the present invention, disclosure of corporate information via the investor disclosure system  100  would be performed by, or under the direction of, a corporate employee or agent, such as a Chief Disclosure Officer  150  (“CDO”), as shown in FIG. 3. The CDO  150  is responsible for managing, updating, overseeing, and/or performing a variety of tasks necessary for full investor disclosure. The CDO  150  starts the process by collecting information from the universe of corporate information  300 , and more specifically begins collecting or compiling key public corporate information  10 , open book management information  12 , information from independent sources  14  and captured images  15 . Under the direction of the CDO  150 , and in no particular order, the compiled information  10 ,  12 ,  14  and captured images  15  then undergo: organization  22 ; verification  16 ; analysis  18 ; digitizing  20 ; simplification  24 ; and review and approval  26  before being transmitted to the investor in the form of a logical database. Furthermore, the CDO  150  may receive feedback from, and interact with, the investor via, for example, an investor online chat room.  
     [0037] While the CDO  150  of the preferred embodiment of the present invention would be a full time employee or officer of the disclosing corporation, the CDO  150  position may also be filled by an out-sourced separate business entity.  
     [0038]FIG. 2 shows a block diagram of an electronic investor disclosure system interface menu  200  in accordance with the preferred embodiment of the present invention. The menu  200  provides investors with the option of accessing and viewing transmitted  28  corporate information and captured images using transmitting compatible technology including, but not limited to, Worldwide Web or Internet compatible devices, televisions, PDA devices, wearable computers, cellular phones, and virtual reality interfaces.  
     [0039] The menu  200  includes a navigation bar  50  that provides direct links to a variety of services and information. Because the interface menu  200  may be supported by the disclosing corporation or an outside contractor, the navigation bar may provide links to generalized information, such as services, research, products, support, reference, or contact information tailored to the services or business of the supporting entity.  
     [0040] The interface menu  200  of the preferred embodiment of the invention also includes a variety of corporate information links  52 ,  53 ,  54 ,  55 ,  56  that are related to the organization  22  of complied and transmitted  28  real-time corporate information and captured images. These information links  52 ,  53 ,  54 ,  55 ,  56  are tailored to specific areas of interest by the content of the information or captured images so that the investor may conduct an investigation directed at specific areas of interest. These areas of interest may pertain to, but are not limited to, corporate finances, news, operations, and management along with real-time captured images. Furthermore, these information links  52 ,  53 ,  54 ,  55 ,  56  may direct the investor to multiple subcategories that provide the investor with the opportunity to conduct an even more focused investigation of the corporation&#39;s disclosures or select specific captured images from and variety of corporate operations.  
     [0041] The interface menu  200  of the preferred embodiment of the present invention also provides locate boxes  62 ,  63 ,  64 . These locate boxes  62 ,  63 ,  64  provide the investor with a direct connection to an area of interest including, but not limited to, captured images from a specific capturing device or to the interface menu  200  of a different corporate entity without having to proceed through the information links  52 ,  53 ,  54 ,  55 ,  56  and any associated subcategories.  
     [0042] The preferred embodiment also includes an open book management disclosure link  58  that provides corporate information including, but not limited to: a mission statement; financial statements such as balance sheets, income statements, and cash-flow statements; sales and marketing plans; the capital plan; the inventory plan; an organizational chart; and compensation plan.  
     [0043] An additional feature of the preferred embodiment of the current invention is an investor&#39;s information page  60 . The Investor&#39;s information page  60  directs the investor to information pertaining to the investor&#39;s personal investments, finances, and/or investment portfolio. Using the Investor&#39;s information page  60 , investors may evaluate personalized information such as, but not limited to, how much money is in the investor&#39;s account, terms and rates, stock ownership, and beneficiary designations.  
     [0044] While the present invention has been illustrated in some detail according to the preferred embodiment shown in the foregoing drawings and descriptions, it will be understood that the invention is not limited thereto, since modifications may be made by those skilled in the art, particularly in light of the foregoing teaching. It is therefore contemplated by the appended claims to cover such modifications that incorporate those features that come within the spirit and scope of the invention.