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Technology Stocks : Innovacom (MPEG), [announced single chip MPEG-2 encoder] -- Ignore unavailable to you. Want to Upgrade?

To: Alex Dominguez who wrote (5326)	4/23/1998 3:39:00 AM
From: Rachel M. Kuecks	Read Replies (1) \| Respond to of 6297

You should be thrilled Alex, since you're privy to the real story (things are going great with HUGE surprises ahead) anything Dennis says to help lower the stock price gives you an opportunity to make that much more. BTW here are two posts from the ADI thread that shows that the ADI press releases put Innovacom's to shame. I love the bolded sentence. To: +Kevin Steele (109 ) From: +MWS Wednesday, Apr 15 1998 10:12AM ET Reply # of 156 Well that makes for a good story, but haven't we heard this before? News release, dated August 1993 (yes 5 years ago): Development of MPEG-1 Apogee chip series proceeding ADI Technologies Inc ADH Shares issued 7782793 1993-08-16 close $1.05 Monday Aug 16 1993 Mr Jean Monroe reports The company has been receiving orders for its MPEG-1 developers' board level product, specifically designed for use by ADI affiliated original equipment manufacturers (OEM) to facilitate their product definitions and designs. OEM design applications encompass board products targeting PC applications, cable set top boxes, video on demand services, CD-I players and certain strategic military applications. The company is proceeding with the development of its MPEG-1 Apogee chip series, which the company believes will set a new standard for delivering MPEG compression and decoding capabilities to a vast worldwide market. The Apogee M-1 product line is continuing on schedule for first quantity deliveries beginning late October of this year. Based on expressed interest and OEM discussions, the company anticipates it will capture a broad market share of the emerging multi-billion dollar multimedia digital compression markets. Note this line "The Apogee M-1 product line is continuing on schedule for first quantity deliveries beginning late October of this year." That year would be 1993. No future (now past) release explains why this didn't happen. What kind of a company gets 5 years behind on a delivery schedule? I also note that this company was "promoted" by the fabled George Chelekis in the 94-96 period. Is this company in the business of chip design or promotion? (Or both?) To: +Kevin Steele (114 ) From: +MWS Wednesday, Apr 15 1998 12:03PM ET Reply # of 156 Its one thing for a company to disappoint, but another to remain silent on its "disappointments". Why is there no disclosure in the form of news releases on these failures. Checking back on the news I see a cease trade order, a trading suspension, a delinquent filer notice... Are they "blue-eyed" or careless? 5 Years is a long time to wait for reengineering of "disappointments". A truly focused and professional engineering company would have an interest in a much faster design/production schedule. Note: "MPEG-1 and 2 development project on time ADI Technologies Inc ADH Shares issued 19159991 1996-06-26 close $3.8 Wednesday Jun 26 1996 Ms Jean Monroe reports A major milestone has been met on time in the company's joint MPEG-1 and 2 development project with Cadence Design Systems. ... Foundry selection is nearing completion with final selection expected to be made within the next two weeks. All design work is progressing on schedule and successful completions are anticipated by both ADI and Cadence. " End of news back in June of '96 You state that Cadence was "attracted" to them and that IBM has made "commitments" to them. Let's look at this more carefully: The cadence news: "ADI Technologies Inc ADH Shares issued 19719991 1997-08-06 close $1.1 Wednesday Aug 6 1997 Ms Jean Monroe reports ADI and Cadence Design Systems have mutually signed a letter of intent that sets out basic conditions for the establishment of a definitive agreement that is intended to establish a long term joint business relationship which will enhance the business of both parties. ... Under the proposed terms of agreement, CDN's initial project will be to prepare for fabrication ADI's Apogee D Series chips, the MPEG-1 and 2 decode only designs, for soonest return delivery of sample chips. ADI will bear financial responsibility to CDN for its work efforts and product delivery. Engineers are scheduled to begin work immediately at the facilities of ADI in Arlington Heights. Additionally, within the scope of the proposed agreement, appropriate due diligence and approval by the Cadence board of directors, CDN will have the right to acquire up to a 10% equity stake in ADI with the potential of earning an additional entitlement of 5% based upon certain conditions." Read "ADI will bear financial responsibility to CDN for its work efforts and product delivery." in the above news. In other words, ADH will PAY Cadence for its work. If I were a business manager at Cadence I would certainly be "attracted" to that contract with ADH. Especially if it has been sweetened by an option with "the right to acquire up to a 10% equity stake in ADI with the potential of earning an additional entitlement of 5% based upon certain conditions". An option costs Cadence nothing unless exercised. If ADI fails, Cadence loses nothing on the option but has still gained the revenue from the design contract. If Cadence had invested something in ADI or taken an equity stake for its contract work, then this would have represented a measurable "attraction" Cadence had to ADI apart from a contract payment. As for the IBM news: "ADI Technologies Inc ADH Shares issued 19719991 1996-10-07 close $2.9 Monday Oct 7 1996 Ms Jean Monroe reports The company's wholly owned subsidiary, Audio Digital Imaging, has selected IBM's custom semiconductor division's foundry services to provide fabrication and production of its state-of-the-art MPEG-2 and MPEG-1 audio/video chips. Assisted by its design partner, Cadence Design Systems, ADI conducted an exhaustive review of numerous foreign and US-based foundries. ...." So the "commitment" IBM has shown ADI is to SELL ADI production time in its foundry. Again, if I were a business manager at IBM, I would like to be paid for foundry time that might otherwise remain idle. There is little disclosure in this news regarding the the production deal. If a large production run duration was contracted wouldn't it be in ADI's interest to release this as news to its shareholders? I also don't know about the available of IBM foundry time. Are they looking for short production runs to fill in gaps in an otherwise busy schedule? OR are they looking for the next greatest chip design that will occupy the foundry for 18-36 months? If the latter is so, then IBM must be "disappointed" as the foundry was selected by ADI in 96. This isn't to say that ADI isn't developing a viable product with mass market appeal. The question I am raising is "Why should we believe their claims that they can make it happen this time?". And even if they are doing as they say, are they set to screw up and "disappoint" shareholders once again?

To: Alex Dominguez who wrote (5326)	4/23/1998 3:36:00 PM
From: Dennis Castleman	Read Replies (3) \| Respond to of 6297

You know the M & N keys are just to close together. Sorry about the type-O. I would have liked to have worked on just one well defined project, you know one with a design/test spec. But that's just not the way it's done. It's more like hey Dennis, I have a new idea and I want you to do this. Can you do it? Sure, I can do it given time. But what project do you want me to pull resources from to do it? I was not fired for not getting things done. I was fired because the were tired of me being right too many times. I was fired for saying that's a stupid deal why would you want to do that one to many times. I was fired for saying it won't work one to many times. I was fired for knowing to much. I was fired yea, I'm the one who turned down there offer to be a contractor. If I was dead weight, why did they offer me 2,500 a week to work as a contractor? Koz wanted a public company, and now he's scared I'm going to make it all public. And he should be scared.