AWID Seeks to Move Beyond FCC Problems

By Mark Roberti

FCC gives consent decree as reader maker licenses technology to former employees and prepares to bounce back from its recent woes.

Applied Wireless Identifications Group (AWID) announced today that the U.S. Federal Communications Commission (FCC) has adopted a consent decree and concluded its investigation of the company’s failure in the past to have its UHF interrogators certified as compliant with U.S. regulations. AWID has agreed to implement an FCC Compliance Plan, and has appointed an FCC compliance officer to lead and manage all compliance efforts. “It means this issue is behind us, and AWID is poised for a bright future,” Larry Kellam, AWID’s CEO, told RFID Journal.

AWID ran into problems early this year when some of its customers in the United States discovered the readers they purchased from AWID were not certified by the FCC, as required by law. In response, AWID stopped selling the readers and fired company founder and CEO Donny Lee (see AWID Halts Sales of RFID Readers).

Larry Kellam

Since April, AWID has been working to have its readers certified, and to resume sales of those products. Kellam says the company now has 80 to 85 percent of its interrogators newly certified. “Revenue has started to come back over the last eight to 10 weeks,” says Kellam. “Based on everything we saw in July, sales revenue will be about equal to our run rate of last year. We have a backlog of orders, so we should start exceeding last year’s run rate next month. Our customers were patient and have stayed with us, which is the good news.”

The run rate to which Kellam refers is the extrapolation of revenue collected for July to a full year. As the privately held company works to recover from the certification debacle, it is seeking a bridge round of financing from its existing investors. It may also raise new funding as it tries to regain its footing and develop new products in a highly competitive market.

This week, the company laid off 10 of its 53 employees, including President Jeff Jacobsen, Chief Technology Office Roger Stewart and VP of Marketing Louis Sirico.

AWID had been developing a new UHF EPC Gen 2 reader chipset, which it dubbed Tahoe. This chipset essentially shrunk most of the components on the reader’s printed circuit board down to a few microchips, providing the advantage of being able to make readers smaller and at a lower cost. AWID has agreed to license the Tahoe reader chipset to AnyTag Inc., a new company Jacobsen is currently setting up.

AWID will continue to sell both its 125 KHz and 13.56 MHz access-control technology and its EPC Gen 2 UHF reader modules and readers for use in the supply chain. It will also continue to support readers already sold. The company will not sell UHF readers using the Tahoe chipset, but will instead either offer readers with components on a printed circuit board or license chipsets from other technology companies.

AnyTag, meanwhile, will sell readers based on the new chipset. Jacobsen says that because of the research and development done at AWID, AnyTag could have demonstration readers ready by the end of the year, production models by April 2007 and the line in full production by July.

“Our intention is to take the entire team that has been part of the development of patents and technology, and launch a new reader company in the UHF market,” says Jacobsen, who has a long track record of raising money for startups. “We’ve put together an agreement with AWID to exclusively license technology. We’re talking with venture capitalists. Everyone [at AWID] did a fantastic job under difficult circumstances. They are trying to give us the opportunity to soar on our own.”