Banking & Finance  February 11, 2015

Broomfield-based Colorcom, with troubled past, seeks to raise $4.2M

BROOMFIELD – Colorcom Ltd. filed a document recently with the Securities and Exchange Commission indicating that the company is seeking to raise up to $4.2 million in equity.

Co-founder Joe Doll said the Broomfield-based company is working to commercialize software technology it has been developing since 1987 that changes data from electronic sensors into continuous mathematical functions, technology he said eventually could be applied to make all electronics run more smoothly.

Colorcom and Doll – along with associated companies IFR Technologies Inc., Custom Design and Manufacturing Inc., and Richard Janoka – were sued in 2009 by then Colorado securities commissioner Fred Joseph, alleging that they offered securities without properly registering them with the state. Joseph also alleged that Colorcom had misled investors between 2004 and 2008 by, among other things, failing to disclose to them key information, such as other lawsuits to which the defendants had been party in the past.

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According to court documents, in 2010, a district court judge issued a summary judgment in favor of the state in regard to the registration of securities. The judge declined to issue summary judgment on all but one of the fraud allegations. The judge did issue a summary judgment for the state that Colorcom had failed to properly disclose to investors information relating to a 1999 order from the state of Iowa to cease and desist offering unregistered securities there. The company had, in fact, disclosed the cease-and-desist order, the Colorado court concluded, but did not properly disclose a requirement that Colorcom offer rescission to all Iowa investors.

As a result of the summary judgments in Colorado, an order of permanent injunction was filed enjoining Colorcom from violating securities law again lest it face contempt sanctions. Colorcom also agreed to offer rescission of up to $3.4 million to all Colorcom investors who invested between Dec. 1, 2004 and Oct. 31, 2008.

Doll said Wednesday that Colorcom is properly disclosing that 2009 case in Colorado to investors for its latest round of funding, although he declined to supply BizWest with copies of documents distributed to investors.

“We always have and always will disclose what we’re supposed to disclose,” said Doll, who noted that the company has raised about $20 million since 1987.

Doll denied any wrongdoing related to the 2009 case, and said Colorcom settled with the state and agreed to make the rescission offers to put the matter behind the company without going through a trial. He said the company ultimately had to pay about $220,000 in rescission to investors.

As for Colorcom’s “Pac-N-Zoom” technology, he said he’s hoping the first product will be brought to market this year as a way to showcase what the technology can do. That product is a cloud software program that could “filter out the noise” in video so that a computer could recognize specific objects, like a running man or a tornado, and allow users to drag and drop those objects into other videos.

Other interactive apps would come down the road, Doll said, if the technology can be proven in the marketplace.

BROOMFIELD – Colorcom Ltd. filed a document recently with the Securities and Exchange Commission indicating that the company is seeking to raise up to $4.2 million in equity.

Co-founder Joe Doll said the Broomfield-based company is working to commercialize software technology it has been developing since 1987 that changes data from electronic sensors into continuous mathematical functions, technology he said eventually could be applied to make all electronics run more smoothly.

Colorcom and Doll – along with associated companies IFR Technologies Inc., Custom Design and Manufacturing Inc., and Richard Janoka – were sued in 2009 by then Colorado securities commissioner Fred Joseph,…

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