Executive Summary 

Franklin Telecommunications Corp, (the company) was founded on April 1, 1980 by Frank W. Peters to design and build disk drives 

for the then newly  introduced PC by IBM. Sales the first quarter were $300k, then $3M, $6M &19M for the 3 following years. 

The Company went public in 1986 by acquiring a communications public company in Irvine CA. The Company moved into design, 

manufacture and market high speed communications products and subsystems, including wide area networks ("WAN"),  Local Area 

Networks ("LAN") and telecommunications equipment. The Stock was selling at $1.00.  The products were designed around the 

PC and Linux platforms. The Company entered the Voice over Internet Protocol business in 1994 by designing the first 

“Phone to Phone” system. Others had a Computer to Computer and Computer to phone device. We (the Company) installed 

4 hubs in the US (NY, Atlanta, Chicago & LA) as a demonstration facility. 

We held a meeting atop the Manufactures Hanover building in NY on Thursday Oct 23, 1997 and invited about 150 “Wall St” 

brokers and fund managers to attend the Sunset dinner. As it turned out the market crashed over 500 point on the DOW that 

day, this,  as it turned out was “BLACK Thursday).  However, the show went on without a hitch and the stock went 

from $0.80 to $10.00 within a week. The company introduced a Data Voice Gateway ("DVG") allowing the Company 
to provide 'telephone to telephone' long distance telephone service over the Internet and frame relay circuits. From the end user's 

standpoint, there is no hardware or software required, other than a standard telephone. The functional use is similar to using a long 

distance calling card today. 

In June 1998, the Company entered into a joint venture agreement with Megaburst for the operation of telephone services 

for NATO troops in Bosnia. Operations commenced in August 1998 during that time General Wesley Clark was head of 

NATO.  After his retirement he  interviewed for a board seat at Franklin. 

FRANKLIN TELECOMMUNICATIONS CORP.

The  History

The predecessor of  Franklin Telecommunications Corp. (FTC) and it’s operating subsidiary, Franklin Datacom, Incorporated (FDI), was Franklin Systems, founded in 1975.  At that time, the founder, Frank W. Peters, envisioned a series of products based upon the emerging technology of personal computers.  Experience at both IBM and Jacquard Systems, the first intelligent terminal manufacturer, spawned the ideas behind Franklin Systems.  The company was founded five years before IBM introduced the PC and its’ first product was a Store and Forward Message Switch designed for Telex and TWX applications.  Franklin’s product was based on the S100 Bus personal computer, which was the forerunner of the PC.  It was sold to a number of banking and public sector institutions; such as, First Interstate, Wells Fargo, Bank of America, State Bank of India, the American Armed Forces Radio and Television Service and many others.

Franklin Systems, Franklin Data Systems and finally Franklin Telecom have all been offshoots of the same basic premise:  Open new frontiers in communication technology by utilizing the PC to the fullest.  To that end, Franklin Telecom, as a private California Corporation, acquired ABM Computer Systems in 1987 and went public as Franklin Telecommunications Corp.  ABM was a California based manufacturer of data communication boards.  Franklin combined ABM’s hardware expertise with its’ own experience in packet switching and protocol software development into Franklin.

Franklin Telecommunications is publicly traded over-the-counter under the symbol FTEL, (Stock symbols changed over the years to FCM for the American Stock Exchange then FKLT on the OTC).  During the fiscal year of 1989, Franklin Telecommunications divested it’s operations as an OEM supplier and value added reseller of personal computers and peripherals in order to concentrate on it’s new data communications business, as was aired on the Financial News Network (FNN) hosted by Bill Griffith,  now the host of  CNBC Power Lunch.

The Company’s products consist of the following two groups:

1.            IP TELEPHONY (VoIP)

The Tempest Data Voice Gateway ® (DVG), was introduced in 1995. Franklin Telecom’s IP telephony solution,  supports communication between conventional telephony devices using an Internet Protocol (IP) data network (VoIP).  The Tempest ® DVG enables the use of an IP path as the intermediate connection between distant telephone circuits.  The telephone circuits may be a company’s private phone system, local PSTN lines or long distance lines.  A traditional telephone connection consists of a constant connection between two phones for the duration of a telephone call.  On a PSTN or trunk circuit, the call occupies 64,000 bits/second (64kbps) of bandwidth between the two ends, whether anyone is talking or not.  IP telephony technology compresses the voice-data or fax-data stream by a factor determined by the algorithm (codec) used, which in some cases can exceed a 10:1 compression ratio.  This significantly reduces the bandwidth needed for a call; conversely it permits a conventional 64 kbps circuit to handle multiple telephone calls.

The prevalence and existing infrastructure of IP connections make it a logical and economical medium for transporting voice and fax data.  IP is used worldwide for private and public networks.  The global Internet consists entirely of IP connections between millions of systems.  IP is a ‘packet’ protocol, communicating through the use of “data packets” which can be interleaved with other packets on the same circuit.  IP is independent of the underlying transmission technology – it works equally well on LANs, frame relay, and dedicated private lines.  Its advantages include:

1.      connectionless per-packet routing so that intermediate failures of circuits or routers will efficiently and automatically be avoided without failure of the link between two endpoints (as long as an alternate path is available).

2.     multiple session support, so that more than one communication can be carried on the circuit at the same time.

IP has predominantly been a data protocol used for sending files and messages between computers. IP telephony has the additional advantage of permitting data and voice packets to be interleaved on the same circuits.  The global Internet now carries voice/fax as well as email and web pages, without any concern for the type of data in each packet.

1.2          TEMPEST NETWORK COMPONENTS

 A Tempest ® DVG network consists of an IP network between at least two endpoints, and devices to convert between voice/fax telephone signals and compressed IP data packets.  The devices, known as ‘gateways’, are the DVG units.  Each Tempest DVG connects to analog or digital telephone lines and to an IP LAN.  A conventional router connects the LAN to a wide-area network with connections to other DVGs.  Multiple DVGs can be rack-mounted to support many simultaneous phone calls.

Additional optional components include the following:

1.      those of the AMAS System used for authentication, mapping and call detail record collection of calls made through the Tempest network.  

2.      components used for remote management of the processes and configurations of DVGs.

1.3          IP TELEPHONY STANDARDS

The Tempest ® DVG uses conventional telephony standards for connecting to the telephone network.  FX (“Foreign eXchange”) 2-wire circuits are the predominant type in the USA.  FXS (‘station’) emulates a central office (CO); it supports an analog station (phone) set or can be used to connect to the trunk side of a PBX or keyset.  FXO (‘office’) expects analog loopstart or groundstart lines from the central office; it can connect to the station side of a PBX or keyset.  Digital telephony support includes T-1 circuits, supporting 24 simultaneous phone calls. 

The compression/decompression algorithms (also known as codecs) used are G.723 for voice and G.711 for fax.  G.723 coding uses 5.3kbps, with a compression ratio of approximately 12 to 1, G.711 coding uses 64kbps, with a compression ratio of 1 to 1.  Digital Signal Processors (DSPs) used run at 33 MIPs.

An industry-standard Ethernet 10/100BaseT LAN port provides connection to the data network infrastructure.  The voice/fax data packets may be routed, bridged or tunneled through another network to a remote Tempest DVG where the voice/fax traffic is sent to a station (phone), central office or PBX.

The physical hardware can connect to either regular analog FXO/FXS telephone lines or T-1 circuits.  The DVG can be dialed into from the Public Switched Telephone Network (PSTN), from an office PBX extension or from an FXS phone with a direct connection to a DVG.

1.4          TEMPEST NETWORK APPLICATIONS

The Tempest DVG has several applications.  It is used as an intermediate connection between distant telephone circuits, which may be local telephone lines or connections to a company’s private phone system.  The major ones include:

1.     Telephone service between two or more locales

2.     Long-distance circuit replacement

3.     International connections between overseas countries and the US