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On the 9th of October 1918, the two Danish engineers, Axel Petersen (1887-1971) and Arnold Poulsen (1889-1952) founded the Electrical Phono Film Company with a few capable and foresighted businessmen who would support the organization financially. Their aim was to explore the possibility of high-class recording and developing one of the first synchronized sound film systems in the world. Under primitive conditions, the two Danish engineers and their small staff had to solve a number of what were considered insuperable problems.

The invention of electrical recording by an Edison Phonograph and sound reproduction through earphones were the first conquests. The team had to engineer most of electrical and mechanical components itself and owing to the insufficient sensitivity of the film, the team had huge challenges in the field of optical and photographic recording.