© February 2003 Confidential Information Business Plan Presentation Mobius Microsystems Inc. 3430 E. Jefferson Ave. #140 Detroit, MI 48207 313.205.3489

© February 2003 Confidential Information

Business Plan Presentation

Mobius Microsystems Inc.

3430 E. Jefferson Ave. #140

Detroit, MI 48207

313.205.3489

www.mobius-microsystems.com

[email protected]

Pryor-Hale Business Plan Competition

Ann Arbor, MI

February 7, 2003

2

Overview

• Vision

• Management Team

• Technology

• Industry and Market

• Competition

• Marketing and Sales Strategy

• Financials

3

Vision

Mobius Microsystems TechnologyEnables electronic system developers to produce less expensive, smaller, more functional, and more reliable products that consume less power.

Our CustomersWill reap orders of magnitude improvements in the products they build and lead their industries in end-product performance, functionality, and value.

VISION MANAGEMENT TECHNOLOGY MARKET COMPETITION STRATEGY FINANCIALS

4

Management Team

Michael S. McCorquodale, CEO and CTO• Electrical Engineering Doctoral Fellow, U of M• Notable patents, publications, engineering design awards, and experience• Vision of how microsystems technology and Mobius will change the world

Jeffrey G. Wilkins, COO• MBA 2003, U of M• Business Development, Velocys, Inc. (Battelle Memorial Institute spin-off)• The commitment and experience to turn Mobius’ vision into reality

James E. Vincke, CFO• B.S.E., M.S.E., MBA, U of M • Mechanical Dynamics, Inc. CFO during $30M IPO• Veteran experience and financial acumen


5

Electronic Systems Today

To build cell phones, PDA’s, and other electronic systems today, a number of core technologies must be assembled on a printed circuit board: electronic, digital, analog, mechanical, etc.

Printed Circuit Board

Digital Microprocessor

Memory

Mixed-SignalCircuits

Mechanical Sensor

Crystal Oscillator

AnalogCircuits


6

The Problem

These systems are• Large (package sizes)• Expensive (package costs)• Power-hungry (signal across a board requires 10x power)• Complicated (interface issues)• Less reliable (interconnect issues)• Limited in functionality (size and power constraints)


7

PCB

The Solution: Microsystems

Microsystems are intelligent miniaturized systems comprising sensing, processing, and actuating functions integrated onto a single chip. They are smaller, cheaper, lower power, simpler, more reliable, and more functional.

Printed Circuit Board

Digital Microprocessor

Memory

Mixed-SignalCircuits

Mechanical Sensor

Crystal Oscillator

AnalogCircuits


8

Semiconductor Clock Generation

Every microprocessor, microcontroller, and PLD requires a clock signal to operate

So what makes it run at 1GHz?

Clock frequency signal from off-chip crystalAMD Athlon Processor(1 GHz)

fclk


9

State of the Art vs. Mobius’ DMC


Existing Clock Solutions• Crystal-based• Off-chip component• Fixed frequency• Large• Power-hungry

Mobius’ DMC• MEMS-based• On-chip• Tunable frequency• Small• Low-power

vs.

crystalelectronics

Mobius’DMC

10

The Mobius DMC in Action…

Example: iPAQ PDA Using Current Technology Using Mobius’ Technology

Clock Hardware Costs ~$1.00 ~$0.45

Clock Space Requirements 323mm2 on circuit board 0.09mm2 on semiconductor

Clock Power Requirements 32mW 4mW

Tuning Range Fixed (w/o add. electronics) 62.5MHz to 1GHz


What Mobius can do for Compaq• Reduce total cost• Reduce component inventory• Increase battery life• Increase functionality• Decrease time to market• Increase share of total system revenueCOMPAQ iPAQ Pocket PC

11

PackagedSemiconductor

SemiconductorDesign

Semiconductor Intellectual Property

• Blocks (blueprints) that are placed into larger designs

• Manufacturing handled by customer

• Low COGS

• Successful Technology Model: ARM, MIPS, Rambus, Parthus

Mobius’ DMC IP


13

Industry and Market Overview

• Semiconductor Industry: $151B (2002)– CAGR: 8% – Cyclical, Mature

• System-On-Chip Market (SoC): $32B– CAGR: ~ 25% to 30%– Wide array of end products

• Cell phones, DVD, disk drives, WLAN• Texas Instruments, Motorola, Sony


14

System-on-Chip Explained

• System-on-chip provides a higher level of on-chip integration (also known as system-level integration)

• SoC’s combine a processing core, memory, and logic on a single chip

Microprocessor Core

Communications

Clock

Sensor

Analog FrontEnd

Memory

OtherSubsystems

Printed Circuit Board (PCB)


Microprocessor system-on-chipwith memory and communications

Clock

Sensor

Analog FrontEnd

OtherSubsystems

PCB

SoC

15

First Addressable Market

• The System-On-Chip (SoC) Market Segment– SoC: $32 Billion or (@ $20/unit) 1.6 Billion units/yr– One DMC unit per SoC manufactured– Currently $1.6B spent on clock generation in SoC

segment– Mobius’ DMC average selling price of $0.45/unit

• First Addressable Market: $720 Million


16

Why SoC?

SoC’s Market Dynamics and Needs

• Fast design cycles to meet product windows

• High acceptance of emerging technologies

• Comfort with IP and IP companies

• Medium to high volume

• Wide array of end products and markets

• Fabrication facilities (TSMC, IBM)


17

Competition

Competitive Landscape: 3 kinds of competitors• Discrete Crystal Clock Generation

Epson, NDK, Toyocom• Integrated Clock Manufacturers

Motorola, Analog Devices, and Texas Instruments• Hybrid Clock Manufacturers

Motorola, Analog Devices, and Texas Instruments

Currently no inexpensive, small, low-power, high-performance, tunable, reliable, and accurate on-chip solution exists for clock generation in the semiconductor market.


18

Mobius’ “Secret Sauce”

• Design cycle lead and microsystems development trade secrets

• Patent-protected intellectual property portfolio• Industrial membership and “first-look” rights to IP

from The University of Michigan Center for Wireless Integrated Microsystems (WIMS)

• “Product Hopping” development strategy


19

Marketing and Sales Strategy

Goal: De-facto standard in clock generation for SoC1. Establish IP partnerships with leading chip makers

• Existing IP partner programs (e.g. Altera, TSMC)

2. Educate the market on Mobius’ DMC product; Create $Free Technology “Buzz”

• Leverage existing relationships, conferences, tradeshows

3. Design wins pull sales through IP partnerships• Direct sales, technical sales reps • Get “designed in”


20

Business System

Revenue Model• Design License: Tiered $100,000 to $300,000

• Royalty: Tiered $0.15 to $0.50 per unit

• Annual Support & Maintenance: 15% of Initial License

• Services: Design Services for Customers


22

Financial Highlights

(500)

-

500

1,000

1,500

2,000

2,500

3,000

2003 2004 2005 2006 2007

Years

Dol

lars

(00

0's)

(5,000)

-

5,000

10,000

15,000

20,000

25,000Net Income

Cash Flow from Operations

Revenue

Financials

Revenue, Net Income, and Cash Flow from Operations


23

Investment Opportunities

Self-Fund Operations Until First Sale Is Made$114K Founders Investment (Q2 2003)

After First Sale (Q3 2003):Seeking $500K 1st Round InvestmentUses: Develop Professional Marketing & Sales Team

Hire Additional Engineering ExpertisePort to Additional Manufacturing ProcessesEnhance DMC

Milestone: 5 Reference Customer Relationships


24

Investment Opportunities

Potential $500K 2nd Round Investment(Q1 2004)

Uses: Open Sales Office in Munich

Continue to Develop Engineering Team

Commercialize Follow-on Technologies

Milestone: International Reference Customers

Working AFE Prototype


26

Closing

• $720 Million First Addressable Market

• The least-expensive, smallest, lowest power, high-performance clock generator available

• Cutting-edge microsystems know-how

• The flexibility of intellectual property

• Strong IP position and competitive advantage

• Committed management team

QUESTIONS?

Documents

© February 2003 Confidential Information Business Plan Presentation Mobius Microsystems Inc. 3430 E. Jefferson Ave. #140 Detroit, MI 48207 313.205.3489