*AV* -- IMES --- This is a stock which has gotten a very low keyed presentation on this thread by myself. I have not been overly outspoken about IMES and have not tried to force feed it to the community. As a Semiconductor Manufacturing Process Engineer, my area of expertise, I follow a great deal of "what if scenarios" and follow emerging concepts. Such is the case with IMES. It also doesn't hurt to know the history of the CEO at IMES. Well, the time has come, another moment of truth. While the stock has yet to perform to the expectations of iour community over the past months, the following is why I was and still remain excited by this company.
I present the story, in its entirety, for your review and consideration. I can only ask each and every one of you to make a copy of it and forward to the person you most respect and believe to be best suited to give you an honest and comprehensive opinion of what the long term implications for this company and what it has to offer the industry. Only then can you comfortably make an informed decision. This stock is not about to run away today or tomorrow but it definitely has a future.
You are witnessing the emergence of something great or the start of a dramatic fizzle. I doubt very highly that this company will be mediocre. It will be something like the next INTC, DELL or MSFT or it will be a gigantic crap shoot failure like SPCL, BRE-X, VLNT but without the dishonesty that is associated with these symbols.
Unfortunately, a mad dash to this stock will create a massive manipulation of the price of this stock. So if you decide to get involved please make sure you do not get involved in an artifically high price because of some herd mentality or MM shenanigans.
This is what I have been waiting for and this is where I am going to make a stand. All my chickens are not in this basket but I am making a decision to trust 20+ years of personal experience that this company can and will deliver something the industry wants and will clamor for.
It is a show of faith and confidence in my chosen profession and the willingness to back up that belief.
Please, no one should follow me into this stock blindly (I am already positioned for the most part) without feeling 100% comfortable. I am too biased to be trusted here on face value. You need to truly get supporting DD for sources you deem of the utmost reliability before going any further.
As a matter of fact, being too close to the subject and possibly blinded by my own DD, I not only welcome but encourage anyone to present as many opposing agruments as possible. I will not challenge any of them but rather try to integrate the salient points and views into my personal perspective.
Andrew
BTW-Just to be very very clear: I am not soliciting nor recommending this stock and I already have a position in this stock averaged somewhere around 40 cents, to the tune of 25,000 shares. I stand a great deal to gain if this stock is manipulated favorably. However, it is just a $10,000 investment in a company, which if successful, could trade to $40 for a 100X gain over the next 4-6 years. This is the risk capital on the table and the potential gain for all to see. While I very rarely average up, a strategy used by some savvy investors on this thread, I may make an exception in this case and go for more shares.
International Meta Systems, Inc. (IMES)
International Meta Systems, Inc. (IMS) is no newcomer to
demanding design problems, having produced a series of advanced
microprocessors over the last decade. Currently a 60-person
company, IMS has previously designed processors for Apple
Computer, Inc., including one that could emulate both the Motorola
68040 and Intel 486 instruction sets. The Company is now
positioned to generate revenues. IMS has successfully completed an
integral part of the chip design process including, a substantially
improved cell library, fully adaptable to multiple design processes
that is in high demand by the whole industry. IMS management is
not aware of other products with the design enhancement features
available with IMSLIB. This product allows electronics companies
to take their chip designs, and therefore products, to market quicker,
cheaper, and with better performance. IMS's product is particularly
applicable to the fast growing System-on-a-Chip business.
The Problem: While developing the Meta 6000 (M6000)
microprocessor, IMS found that its biggest problem revolved around
cell libraries, a conglomerate of individual elements that are a
fundamental part of chip design. The Company discovered that
existing cell libraries weren't adequate to meet new design
requirements, were hard to merge with the other chip technology,
and contained outdated elements that tended to stall synthesis tools
(circuit design aids), resulting in reduced production, cost
overruns, and critical time-to-market delays. Many of these
existing libraries contain elements designed years ago that don't
convert well into new high-speed/high-density technologies (0.25
microns and less.) Rather than discard those older elements and start
from scratch, developers worldwide have often chosen to salvage
and adapt them, often causing chip designs to be twice the desired
size and 2/3 to 1/2 the desired performance.
The Solution: IMS found that the majority of companies within the
industry had the exact same problem. The Company therefore
decided to start clean and design a totally new, high-density library,
the IMSLIB, that easily merges with other technologies and can
work effectively with the current design tools in the market.
IMSLIB's cell composition and design characteristics were
developed specifically for use in 0.25 micron and smaller
technologies and with no dependence on earlier standard cell
libraries or technologies. IMS's remarkable technical achievement
represents a paradigm shift in thinking from current library designs.
Each cell was carefully selected for maximum performance and
placement within a dense layout. The resulting library is analogous
in design to a brick wall with standard cell sizes and easy pathways
for wire routing as opposed to the "rock wall" of other libraries with
their cluster of different shapes, sizes and messy routing lines. The
comparative ease in connecting these efficiently designed elements
of IMSLIB translates into a customer's technology on a chip of
smaller size, higher speed, and improved performance. And, this is
achieved with less cost and a shorter time to market.
The Opportunity: What IMS has achieved can be likened to
"striking oil." As the Company worked diligently on developing the
M6000, a huge, unexpected opportunity presented itself. They found
that the library they developed for the M6000 is not only a saleable
product but has an enormous market potential. Initial market
inquiries reveal a tremendous amount of interest from the industry.
Previously an R&D-stage company, IMS is NOW in a position to
receive significant revenues through sales of its IMSLIB and
associated design services. In addition to the marketing that will be
provided via strategic alliances, IMS has just formed its own
marketing team to aggressively promote its intellectual property and
services.
According to Scott Johnson of IMS "Design houses that are
attempting to get into 0.25-micron technology don't have real good
options. They can't get to the synthesis densities they want to
achieve without a good library." Currently, the design teams of
large companies have instead opted to sacrifice chip size and
performance. There is now a better alternative: Yes, the IMS
product is a radically new library, but what IMS is really selling is
improved time-to-market, cost, power and performance for their
customer's end-product chips. That has substantial value! In the
highly competitive, rapidly changing world of electronic products,
the market positions of many companies' products are greatly
enhanced if they can get them to market 6 months quicker.
Other Benefits: Many libraries are specific to a fabrication plant
(Fab) process. Therefore, most companies can't move their
intellectual property between Fabs, restricting their ability to shop
around for better pricing and delivery schedules. IMS has developed
tools and techniques that allow IMSLIB to be easily ported to any
customer's process, a unique selling point. Also of great interest is
the ability to use IMSLIB to support the existing libraries at
particular Fabs. Additionally, many companies will view IMSLIB as
a valuable insurance policy. By shortening the development
calendar, companies can have additional time to work on debugging
their potential errors. IMSLIB therefore serves to reduce risk and
helps to eliminate potential liability and returned products. This too is a unique selling point.
The Market: The emerging nature of the market presently makes
size definitions hard to determine, but the overall silicon design
industry is estimated to be about $120 billion per year. Annual sales
of existing design libraries represent a multi-billion dollar industry.
With this ever-expanding industry now being driven by synthesis
tools, synthesis-based library sales should grow very rapidly. The
typical customer for IMSLIB would be companies in the semi-
custom market who are synthesis-oriented and who need a quick
time-to-market. This semi-custom segment is projected to be a
whopping 90% of the overall market by the year 2000.
The Initial Strategy: Due to IMSLIB's compatibility with synthesis
tools, IMS is initially targeting tool vendors (Cadence, Avanti,
Synopsis, Quickturn, Speedsim, and others) to offer IMSLIB in
conjunction with their services. Again, initial interest is extremely
positive. IMS has already entered into a cooperative agreement to
provide Cadence Design Systems, the largest supplier of electronic
design automation software, with design and consulting services
related to the IMSLIB and design methodology.
System-on-a-Chip: The project with Cadence is focused on fast
time-to-market for System-on-a-Chip (SOC) designs. Jim Tully,
analyst for Dataquest in London, has labeled this technology "the
future of semiconductors." Market forces are rapidly accelerating
requirements for both OEMs and chip companies to move designs to
SOC. "Sales of system-chips are set to erupt. Now they amount to
only $4 billion, or 3% of the world market. By 2001, system chips
could total $70 billion - triple the size of today's microprocessor
market - and 26% of total chip sales." (Business Week/ December
15, 1997). SOCs are anticipated to be cheaper, more reliable and
require less power than the present multiple chip systems. Naturally,
they require a dense layout and effective merging of key elements.
The IMSLIB library is well positioned to become the leading choice
for new SOC designs.
Other Products/Services: In addition to the great potential of
IMSLIB, the Company has designed and developed high
performance custom macros (complete IMS designed circuits that
work ideally with IMSLIB) for key functions. The x86, 0.25 micron,
6 million transistor, 300Mhz, fully windows compatible core that is
in development is expected to be the core of future IMS SOC
designs. IMS also offers a complete consulting and design service to
support tailored use of IMS intellectual properties. The Company
plans to continue to advance into new deep sub-micron technologies
to develop the best products and services available anywhere.
Key Relationships: In addition to the cooperative arrangement with
the industry's largest tool vendor, IMS is partnered with a major
international semiconductor manufacturer with multiple foundries.
This international company has been working jointly with IMS on
the M6000 project.
*****************************************************
SPECIAL SITUATIONS
By Lawrence C. Oakley
International Meta Systems, Inc.
? Turnaround - moving towards significant revenues
? Strong portfolio of intellectual property
? Leading technology for cell libraries (group of individual
elements fundamental to chip design)
? Silicon design market is $120 billion
? Cell library market segment is large and growing rapidly
? IMES' "IMSLIB" cell library design has tremendous industry
interest
? IMSLIB enables a company to take its chip designs to market
quicker, cheaper, and with better performance
? Adaptable to multiple design processes; a new industry standard
? In partnership with SGS-Thomson Microelectronics
(semiconductor manufacturer with 1996 sales of over $4 billion)
? Cooperative arrangement with Cadence Design Systems (largest
supplier of software tools for silicon designs)
? Other products suitable to "System-on-a-Chip" business
(expected to reach $70 billion by 2001)
? Should be on NASDAQ early 1998
Key Facts
Business: Products for Semi-
conductor Industry
Listed: OTC Bulletin Board
Symbol: IMES
Price (12/26/97 Last): 13/32
52-Week Range: 11/32 - 2-1/16
Shares Out: 38,925,941
Approx. Float: 18 million shares
Effective Float: 10 million shares
Market Cap: $17.3 million
Overview
IMES developed a cell library, an essential part of microprocessor
design. It considers it the new industry standard. Instead of a
revenue stream to be realized far in the future, IMES is in a position
to generate revenues now. In fact, it already received $1 million
from one company (largest design-tool software provider, expected
to do $1 billion in sales next year) just for the non-exclusive right to
market the IMES product in conjunction with its own products.
The Technology
As it was developing its highly-advanced processor, IMES realized
that a key element of the design process, the cell library, wasn't up to the demands of the new high-density technology the company was
working with (0.25 micron & smaller). Existing libraries contained
outdated elements that snagged CAD software, causing frustration &
delay. Another problem was that these libraries, for the most part,
were custom to the individual fabrication plants and didn't allow
customers to take their intellectual property to different
manufacturers, severely limiting their options. IMES developed its
IMSLIB - It is not only friendly to design-aid (synthesis) tools, but is fully adaptable to multiple processes; an exciting achievement within the industry.
According to IMES' Scott Johnson, "Design houses attempting to
get into 0.25-micron technology don't have very good options. They
can't get to the synthesis densities we can reach without a good
library." What he means is that IMSLIB is the only good option for
the new technology. Companies that don't end up using IMSLIB
will have to settle for larger chips that perform slower (up to twice
the size and half as fast). More important, they have to settle for a
slower time to market as they deal with delays due to synthesis-tool
problems, a harder merging of elements and wire routing, and many
errors. Integrated Circuit Engineering Corp. estimates a product only
three months late in a market that would last two years loses about
36 percent of its potential. Six months late and you may miss the
whole window of opportunity. IMES offers its customers quicker
time-to-market (more revenue opportunity), lower risk, smaller chip
size, and better performance.
Market Strategy
Management believes that in addition to its obvious customers, the
semiconductor industry's design-tool vendors, there are over 200
companies with multiple projects that could benefit from IMSLIB.
An average contract with any of these companies could range from
$300,000 to $1.5 million. The potential with tool vendors is
substantial. All have shown great interest thus far and the
relationship with Cadence should be particularly lucrative (Cadence
has a sales force of over 1,200.)
Other Products
IMES offers consulting and design services to support tailored use of
its intellectual properties. In addition to IMSLIB, it designed and
developed high performance macros for key functions. The x86,
0.25 micron, 6-million transistor, 300Mhz, fully Windows
compatible core now in development is expected to be the core of
future IMES System-on-a-Chip (SOC) designs. The project with
Cadence is focused on fast time-to-market for SOC designs. Jim
Tully, analyst for Dataquest in London, labeled SOC technology the
"future of semiconductors." Market forces are rapidly accelerating
requirements for both OEMs and chip companies to move designs to
SOC. Sales of SOCs now amount to only $4 billion, or 3% of the
world market. By 2001, SOCs could total $70 billion, triple the size
of today's microprocessor market and 26% of total chip sales
(Business Week 12/15/97). SOCs are anticipated to be cheaper,
more reliable, and require less power than present multiple chip
systems. The IMSLIB library and other IMES components are well
positioned to become the leading choice for new SOC designs.
Management
George Smith is CEO and founder. He was formerly the Principal
Director for military space shuttle operations and Director for
Systems Development at Aerospace Corp. Dr Lee Hoevel is
president. He was at IBM research 10 years and 10 years at
AT&T/NCR as Director of Advanced Architecture, Chief Architect
for the Workstations Products Division, and VP of R&D. Dr Hanan
Potash is VP Operations. He was VP Engineering at Systech Corp,
System Engineering Labs, Scientific Computer Systems, and
Director of Architecture at Unisys Microprocessor Group. Sigmund
Hartman is the Strategic Advisor. He was President of Software
and Executive VP for both Atari and Commodore. Mike Jordan is
the new VP Marketing. He was Application Development manager
for IBM Europe.
Financial Status (9/30/97)*
Total Assets: $1,897,593
Current Liabilities: $3,718,434
Long Term Debt: None
Shareholders Equity: ($1,820,841)
*Assets do not take into account the true market value of intellectual
property. One example is the advance payment of $1 million received from Cadence Design Systems subsequent to 9/30/97. IMES is in transition from its R&D stage and should have significant revenues in 1998.
Recommendation
I recommend IMES for both midterm and long-term appreciation.
This situation has the probability for outstanding revenues. I suspect some people have taken short positions - shorters love R&D
companies. In this case, they may be caught with their shorts down.
The investment community hasn't figured out what is developing
here. The true story, though a matter of public record, hasn't been
presented to make the right impact it deserves. Most still view IMES
as a company positioned to do battle with INTEL. That was the case
when I first wrote about IMES back in 10/93, but it is not today.
IMES is presently addressing key lucrative market niches that
INTEL is currently not able to successfully compete in. In fact,
IMES appears to be clearly positioned to be the leader with the new
standard in these niches. With the cooperative agreement with
Cadence, and possibly similar arrangements with other tool vendors
to come, IMES has the ability to tap significant market potential.
One reason for the temporary lack of investor interest is the recent
12/2/97 press release announcing the relationship with Cadence. It
made IMES sound as if it had only achieved a $1 million deal. The
company's preliminary prospectus, from which all of this data has
been obtained and provided to me by IMES's Investor relations firm,
states that this is an up-front payment giving Cadence the right to
market IMES's products and services to its customers. In my
opinion, the association with Cadence alone will make a big
difference in 1998. I expect IMES will implement similar
arrangements with other members of the industry. After the
financing is complete, the company should be listed on NASDAQ.
Contact
Call IMES's Investor relations firm at Dallas: 972-398-8500, or at
Denver 303-770-5625. |
