investor presentation - mosys

July 2018

NASDAQ: MOSY

Investor Presentation

Safe Harbor Statement

This presentation may contain forward-looking statements about MoSys, Inc. (the Company) for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange act of 1934, as amended, including, without limitation, benefits and performance expected from use of its embedded memory and interface technologies and integrated circuit (IC) products, improving operational efficiencies, the timing of product development and shipments of the Company’s IC products, anticipated benefits andperformance expected from the Company’s IC products, growth in the size of the market addressed by the Company’s business, future markets and future business prospects. Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors. These factors include, but are not limited to the following:

❖ our inability to raise sufficient capital through our current common stock offering;

❖ a substantial increase in the number of shares of our common stock to be outstanding through our current stock offering, which may have a dilutive impact on the price of our common stock;

❖ a lack of working capital to aggressively fund product development and growth;

❖ a lack of working capital to repay the convertible notes due in August 2019, unless we raise sufficient capital through our current common stock offering;

❖ achieving additional design wins for our IC products through the acceptance of our IC architecture and interface protocols by potential customers and their suppliers;

❖ the timing of customer orders and product shipments;

❖ customer concentration;

❖ lengthy sales cycle;

❖ our ability to enhance our existing proprietary technologies and develop new technologies;

❖ achieving necessary acceptance of our IC products by equipment suppliers to the cloud networking, data center, security and other systems markets;

❖ difficulties and delays in the development, production, testing and marketing of our IC products;

❖ reliance as a fabless semiconductor manufacturer on our manufacturing partners to assist successfully with the fabrication of our ICs;

❖ availability of quantities of ICs supplied by our manufacturing partners at a competitive cost;

❖ level of intellectual property protection provided by our patents, the expenses and other consequences of litigation, including intellectual property infringement litigation, to which we may be or may become a party from time to time;

❖ vigor and growth of markets for cloud networking, data center, security and other systems served by our licensees and customers;and

other risks identified in MoSys’ most recent reports on form 10-K and form 10-Q filed with the Securities and Exchange Commission, as well as other reports that MoSys files from time to time with the Securities and Exchange Commission. MoSys undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.

Copyright © 2018 MoSys, Inc. All rights reserved. 2

Fast, Intelligent & Secure Cloud Networking

Industry Leading Serial Intelligent Memory ICs

❖Bandwidth Engine® - BE-1, 2, 3

Serial memory with intelligent statistics offload

❖Programmable Search Engine™ - PSE

Serial memory with integrated search-optimized

processors

Patented Serial Memory Technology

❖ Hold fundamental patents for serial memory

❖ Low-latency interface, protocol and memory

Established Customers & Ecosystem

❖ Leading OEMS in Cloud Networking and Security

❖ Accelerate high-speed FPGA data processing

❖ New opportunities in Test/Monitor, Smart NIC, Video

NASDAQ: MOSYISO 9001:2008 CertifiedHQ: San Jose, CA~125 Patents & Pending

Fabless semiconductor company enabling fast, intelligent and secure data throughput for cloud infrastructure OEMs


Cloud Services, Mobility, IOT, VideoUsers Demand Speed, Security and Consistency


OTT Video

Services4K→8K

Mobile3G→5G

IOTNew

ConsumerSocial Media

Business ServicesCRM, ERP, Office

Gaming

Huge TrafficMassive Device CountMany traffic Types

Distributed Intelligence

Prioritized Bandwidth

Security Everywhere

Cloud Applications

Data Centers

HPC

AI

Cloud Storage

MAPS

Database

emailHadoop

Higher Speed

Optimized Compute

per Application /

Workload

Network

Appliances / ServersSingle /few cards per System

Chassis Up to 16+ Cards per System

Router

Metro Switch

Security

Video

Smart NICLine Rate

Processing

NPU, ASIC, FPGA

Legacy Memory is Bottleneck at 100G+ SpeedLimited Access Rate, Too Many Pins, Board Area

Data Processing

FPGA

ASIC / ASSP

CPU + Accelerators

Line Rate

Data

Configuration

MemoryAccelerators

MemoryLarge Packet Buffer

Ba

ck

pla

ne

(C

ha

ss

is)

MemoryFast Buffer for

Low System Latency

Dat

a In

/ o

ut

MemoryLook up, Statistics

Data Processing Card Functions:

Router, Switch, Security, Monitor/Test, Video, Server Offload

Packet / Data Processing Cards

Data Processing Cards

MoSys’ Intelligent Serial MemoryEnables Fast, Efficient, Intelligent, Secure

Bandwidth

Engine

DRAMLarge Packet

Storage

Bandwidth

Engine

Memory

Access

Programmable

Search Engine

User-

Defined

Offload

Packet/DataProcessing

Engine/Switch

FPGA

High-Speed Serial Memories

Deliver Performance

Save Pins, Space, Power and Cost


Data ≥ 100Gb/s

→Memory Access Rate

→Reduce Pins, Space

Bandwidth

Engine

Protocol /Data

ParsingFPGA

Proven Ecosystem Accelerating Design Time & Lowering Risk for New Designs

❖ Proven Platforms and Ecosystem with Xilinx and Altera/Intel FPGAs

Xilinx® Virtex® -6, Virtex-7, UltraScale™Altera® Stratix® IV, Stratix V, Arria® 10

Bandwidth Engine® IC

SerDes

Interface

Rx

1T-SRAM

ALUMacro Functions

Bit Safe

TechnologyTx

MoSys Provides Reference Designs

to Speed Customer Design Process

MemoryController &

App Functions

GCI*PCS /

Framer

4, 8

4, 8

Rx

Tx

PSE-S30

PEPEPEPEPEPEPEProcessor

Engines

(PE)

1Gb MemoryTx

Rx

GCI

Tx

RxS

ch

ed

ule

r


*MoSys interfaceSource: Company Management

Applications Need High Access RateTarget Customers Throughout Cloud, Security, Data Center, Video…

8

Access

Aggregation

DC Security

Edge

Data Centers

Core

Wireless / Ethernet

DLAM

EPON / GPON

Edge Routers

Service Routers

Metro Ethernet Switch

Optical Transport

Core Routers

Security DPI

Load Balancing

Cloud Data Center / Networks

Enterprise

Switch / Routers

NIC / Smart NIC

Servers

DC Security / Edge

Palo Alto Networks, Cisco, Fortinet

F5, A10, Radware

Core

Cisco, Nokia, Juniper

Ciena, Fujitsu, Huawei, Infinera, ADVA

Aggregation

Cisco, Nokia, Juniper, Huawei

ZTE, Fujitsu, NEC, Hitachi, H3C

Access

Cisco, H3C, Huawei, Ericsson

NEC, Fujitsu, Hitachi

Data Centers

Cisco, Arista, Juniper, Huawei, H3C

White Box / ODM for Google, Microsoft, Amazon, FaceBook

Smart NIC

Xilinx, Intel

Microsoft, Amazon, Google, FaceBook

Video – BRCST, 8K

Sony, JVC, Panasonic, NEC

Evertz, NHK, Media Links

Test / Monitor

Spirent, Ixia

Napatech, Gigamon, Netscout

Gov’t / Industrial

Raytheon, Lockheed, Boeing

Government Agencies

Note: Companies listed include both actual and prospective customers for target markets; listings are not all-inclusive.

New Markets

Copyright © 2018 MoSys, Inc. All rights reserved.

Applications in Metro Ethernet & RoutersBandwidth Engine Wins on Performance, Size, Pins, Power, Cost

ASICMACFPGA

Data

Fro

m N

etw

ork

Bandwidth Engine 2

Bandwidth Engine 2

Advantages vs. Alternatives

❖ Memory access performance

❖ RLDRAM won’t fit or route


❖ Impossible with traditional memory

❖ Lower - pin count, area, power, cost

FramerFPGA

Data

Fro

m N

etw

ork

Bandwidth Engine 2

ASSPSwitch

Bandwidth Engine 2

Bandwidth Engine 2

Bandwidth Engine 2

ClassifyFPGAs


Metro Ethernet (First design win - 2012)

100G Buffer, Lookup and StatisticsCarrier traffic classification features at line rate

4-9 units per card, 4-10 cards per system

Edge Router (First design win - 2013)

400G OversubscriptionTraffic smoothing prevents dropped packets


Data Center ApplicationsCloud 100G, Security & SDN Drives New Requirements

Data Center Security (First design win - 2014)

Security AccelerationThreat Prevention – multiple lookup and buffering functions


Advantages vs. Alternatives


❖ RLDRAM won’t fit or route

CPU

Data

Fro

m N

etw

ork

SecurityFPGA

Bandwidth Engine 2

Bandwidth Engine 2

Bandwidth Engine 2

❖ Adds 50% more memory BW

❖ Accelerated table look up

❖ Small packet performance

Netw

ork

Ba

ckp

lane

Routers/Appliances (First design win - 2017)

Added Memory BW to NPS400Accelerated Search Tables

2 units per card, 4-10 cards per system


Mellanox

NPS-400

Bandwidth Engine 3 – Z30

Mellanox

NPS-400

New ApplicationsVideo Frame Buffers & Custom Search

Key Bandwidth Engine / PSE Architecture Advantages

Data Center SDN Switch (New App Example)

Custom Search & StatisticsAccelerate Routing and Switch Functions


❖ Memory Bandwidth → Features

❖ Custom Search Performance

ASSPChassis SwitchN

etw

ork

ParsingFPGA

ProgrammableSearch Engine

Ba

ckp

lane

ProgrammableSearch Engine

Video (First design win - 2017)

High Speed Frame BufferEnable High-Access Buffer and Editing


❖ Memory Bandwidth / Access Rate

❖ Board Size

❖ BE3 option: share between FPGAs

4K/8K FPGA

Bandwidth Engine 2

Bandwidth Engine 2

4K/8K FPGA


Relieving Key System Constraints Significant Advantages over Legacy Memory Solutions

Attribute

High-Access Processing / Fast Buffers

QDR SRAM/RLDRAM Bandwidth Engine

System Speed 100-400Gbps

Number of Chips 4 - 8 1-2

Pin Count 300 - 600 64-128

Power (W) 14-28 8-16

4x

4x

2x

Source: Company Management

XilinxVirtex 6, 7, UltraScale

AlteraStratix IV, V, Arria 10

BE2

BE2


Up to 4x Improvement

Performance

# Chips

Pin Count

Board Area

Power

Differentiated Product FamilyBandwidth Engine & Programmable Search Engine

15G / 576Mb

BE2-620

Burst

BE2-820

Macro

BE3-630

Burst

BE1

MSR576

25G / 1Gb

Z30for NPS-400

BE3-830

Macro

Serial Interface, Integrated Fast Memory & Flexible Intelligence

Serial

Memory

Fixed

Macro

Functions

Programmable

Serial Interface / Capacity

Fle

xib

le In

telli

ge

nce

10G / 576Mb

PSE

MSPS30


New Markets Requiring Bandwidth & Access Performance

Existing Roadmap Addresses Growing Markets

- Leading edge performance

- Future optimizations in software

Long Product Life: 5-10 Years

Growth in

Existing Markets

Expanding Market Opportunities


2012 2018

Smart Switch & NIC

SDN, Big Data

Indust / Gov’t

Acceleration

Video

Broadcast, 8K

Monitor & Test

Security Appl.

Metro Ethernet

Router

New Emerging

Market

Opportunities

>$500M Market*

>$500M Market*

* Market definition and other information is based on management opinion.

Experienced Management Team

Len Perham

CEO

Jim Sullivan

CF0

John Monson

VP Sales & Marketing

Michael Miller

VP System Applications

Sinan Doluca

VP Engineering & Operations


Improving Financial ResultsPath to Non-GAAP Profitability

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

3Q17 4Q17 1Q18 2Q18

Revenue

License/Royalty IC Revenue


-$1.0

-$0.5

$0.0

$0.5

$1.0

3Q17 4Q17 1Q18 2Q18

Adjusted EBITDA*

* Adjusted EBITDA defined as GAAP net income (loss) before interest expense, income tax provision, depreciation and amortization, as well as stock-based compensation, intangible asset amortization and restructuring/ impairment charges. See reconciliation of GAAP to non-GAAP financial information on slide 22.

$ in millions, except EPS

Improving Financials

Key Initiatives:

❖ Establish Sales &

Operational Scale

❖ Achieve/maintain

Profitability

❖ Reduce Cash Burn

❖ Improve Cash

Position


Non-GAAP* Q3 17 Q4 17 2017 Q1 18 Q2 18

Total Revenues $ 2.5 $ 3.8 $ 8.8 $ 4.2 $ 4.6

Product 2.2 3.5 7.8 3.7 4.1

Royalty/other 0.3 0.3 1.0 0.5 0.5

Product GM % 44% 41% 40% 57% 55%

Total GM % 49% 45% 47% 62% 60%

R&D 1.3 0.8 7.6 1.0 0.9

SG&A 1.2 0.9 4.4 0.9 1.2

Total Op Ex 2.5 1.8 12.0 1.9 2.1

Op Income (Loss) (1.3) (0.1) (7.9) 0.7 0.7

Net Inc (Loss) $ (1.5) $ (0.1) $ (8.5) $0.5 $0.5

Adjusted EBITDA** $ (1.0) $ 0.1 $ (7.1) $0.9 $0.9

EPS $(0.18) $(0.01) $(1.16) $0.06 $0.06

* Non-GAAP: Excludes stock-based compensation, amortization of intangibles and restructuring/impairment charges. See reconciliation of GAAP to non-GAAP results on slide 21.** Adjusted EBITDA defined as GAAP net income (loss) before interest expense, income tax provision, depreciation and amortization, as well as stock-based compensation, intangible asset amortization and restructuring/impairment charges. See reconciliation of GAAP to non-GAAP financial information on slide 21.

$ in millions, except EPS

Target Operating Model

Targets Near Term Long Term

Revenue Growth (YoY)• Established design win base

• Long term - leverage BE3 and PSE

75%+ YoY 25%+ YoY

Gross Margin• Improvements from volume efficiency

• Align price/capacity/cost

50%+ 60%+

Operating Margin*• Revenue growth

• Improved gross margin

• Reduced OpEx

0-5% 20%+

Cash Flow• $3.6M cash @ 6/30/18

Declining

Cash Burn

Cash-

Generating

* Non-GAAP measure that excludes restructuring and impairment charges, stock-based compensation expenses and amortization of intangibles

18Copyright © 2018 MoSys, Inc. All rights reserved.

Balance Sheet

Q2 - June 30, 2018(in millions)

Cash & Investments $3.6

Total Assets $21.9

Convertible Notes* $9.6

Deferred Revenue $1.6

Total Liabilities $13.5

Stockholders’ Equity $8.0


* Feb 2018 - amended terms: i) extended maturity to Aug 2019, ii) reduced interest rate to 8% PA (PIK) and iii) reduced

convert price to $4.25 per share

Investment Highlights

❖ IC Products Solve Key Networking & Cloud Challenges

❖ Highly Differentiated Solutions, Very Long Product Life Cycles

❖ Market Trends & Partnerships Pave Way for Future Success

❖ Growing Business, Improving Financials - Path to Profitability

❖ Dedicated Organization, Proven Veteran Leadership

Fast, Intelligent & Secure

Data Throughput


Reconciliation of GAAP and Non-GAAP

Financial Information


Q3 17 Q4 17 2017 Q1 18 Q2 18

GAAP net income (loss)$ (1,743) $ (526) $ (10,668) $ 348 $ 315

Stock-based compensation expense 196 167 719 94 159

Restructuring & impairment charges 50 269 1,321 - -

Amortization of intangibles 28 28 112 27 28

Non-GAAP net income (loss) (1,469) (62) (8,516) 469 502

EBITDA adjustments:

Depreciation 184 174 747 169 171

Interest expense 238 242 927 221 206

Prov (benefit) for income taxes 4 (249) (233) 1 1

Adjusted EBITDA $ (1,043) $ 105 $ (7,075) $ 860 $ 880

$ in 000s

Thank You

1T-SRAM, Bandwidth Engine, the GigaChip logo, and MoSys are registered trademarks of MoSys, Inc. in the US and/or other countries. Bit Safe, GigaChip, LineSpeed, and the MoSys logo are trademarks of MoSys, Inc.

All other marks mentioned herein are the property of their respective owners. Copyright © 2018 MoSys, Inc. All rights reserved.

investor presentation - mosys

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