United Software Security Inc. hopes to capitalize on the rising concern about computer crime.
Estimates of the number of dollars lost annually as the result of information theft, unauthorized use of computer terminals and other forms of computer crime range from the hundreds of millions to the billions.
In view of the growing problem, analysts have estimated that the market for computer security devices will reach $500 million next year and $3 billion annually by 1990.
"In the 1960s, computer security was accomplished by a lock on the computer-room door and a lack of understanding by all but a few as to how the information in these computers could be accessed," United Software's prospectus says.
But with millions of people using computers today, United Software and other companies see tremendous commercial potential in new ways of preventing computer crime.
LazerLock, a sort of electronic variable-combination lock, is the solution proposed by United Software, a McLean company incorporated in September 1983.
LazerLock uses a code that is embedded in the computer software and appears as a flashing light when access is restricted. A hand-held, portable, battery-powered decoder is used to "read" the light signal and display the code as numbers and letters. The person using the decoder then plugs the code into the computer and gains access.
The company says LazerLock provides flexibility because it can be used to restrict use of specific computer functions or access to different levels of data, and it can be applied to all types of computers and telecommunications equipment.
United Software hopes to raise $2.7 million, selling shares at $1 each, to finance development of the LazerLock, its first product.
The company is working on the final design and testing of a prototype LazerLock device, and is negotiating agreements with suppliers of component parts and the expected manufacturer, the prospectus says.
Two big risks the company notes in its prospectus are technological obsolescence and heavyweight competition:
"The concept of security for computer software and user data is relatively new and still evolving. The possible entry or expansion of major companies, including computer manufacturers, into the software security field could adversely impact the company's operations."
United Software's prospectus lists total unaudited assets of $522,229 and liabilities of $360,657 as of June 30, 1984. The company reported a net loss of $235,257 for the six months ended in June.