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Summary form only given. Three years ago we proposed a two-stage process for generation of sub-millimeter radiation based on stimulated intercavity scattering. A key feature of this process is to use two sheet beams with a few kiloampere currents that propagate in two parallel sheet channels connected by a special waveguide. First channel operates as a planar FEM-oscillator at 4-mm wavelength. Powerful 4-mm radiation passes through the waveguide from the oscillator to the second channel where it is used as an electromagnetic undulator for the sub-mm FEL. To realize such a two-stage process at the ELMI-device we have to do reconstruction of the experimental set up and to carry out some additional investigations. These efforts include optimizing the magnetic field system of the channels, modification of the electrodynamic system of the FEM-oscillator, simultaneous generation and transport of two high-current sheet beams, etc. We have already realized experiments on two simultaneous beams and on 4-mm generation at the modified electrodynamics system. Results of these investigations are presented in this paper.