MoSys Acquires Prism Circuits, Inc.

SUNNYVALE, Calif.--(BUSINESS WIRE)--MoSys, Inc. (NASDAQ: MOSY), a leading provider of high-density system-on-chip (SoC) memory intellectual property (IP), today announced the acquisition of substantially all of the assets and business of privately held Prism Circuits, Inc., a profitable supplier of high data rate parallel and serial interface (I/O) IP. The acquisition is expected to result in the following benefits:

• Expand MoSys’ product portfolio and addressable markets with the addition of highly valued and differentiated IP
• Accelerate the growth opportunity for MoSys’ 1T-SRAM IP in the networking and communications markets and provide stronger customer synergies
• Increase revenue and generate positive cash flow for the second half of 2009 and 2010
• Add a world-class team of engineers, including a highly talented, cost-efficient engineering design center in India
  

Founded in 2006 and based in Santa Clara, California, Prism Circuits specializes in silicon-proven, low-power, serial interface IP cores (SerDes) with data rates running at 10 gigabits per second and above, and IP cores for DDR 3 and DDR 2 parallel interfaces. Prism Circuits has established customer relationships with tier one companies such as Fujitsu, Microsoft and Juniper, as well as strong foundry relationships with Fujitsu and TSMC, which MoSys expects to build on and improve.

Under the terms of the agreement, MoSys paid approximately $13.5 million at the closing, and potentially will pay an additional earn-out amount of up to $6.5 million after the first anniversary of the closing date, subject to the attainment of specified milestones during the initial 12-month post-acquisition period. MoSys has not assumed any Prism stock options or employee equity incentive awards but has agreed to grant up to a maximum of 3.7 million shares of MoSys common stock under stock options or restricted stock units (RSUs) to 25 newly hired former Prism Circuits employees (with one RSU share equated to three option shares for this purpose).

EZchip Technologies 20F

Customer concentration: "Two major tier-1 CESR (carrier Ethernet switches/routers) vendors are building several of their CESR platforms based on EZchip Technologies network processors: Juniper Networks, which accounted for approximately 55% of our 2008 revenues, entered production with NP-2 based products in 2007 and continued to launch additional products that incorporate our NPUs during 2008..........A second major vendor has selected a customized version of NP-3, developed in collaboration with Marvell, for its principal CESR platforms. This CESR vendor accounted for a relatively minor portion of our revenues in 2008 and entered production during the first quarter of 2009 with platforms that incorporate our customized NP-3 processor developed in collaboration with Marvell."

Revenue ramp: "Our 2008 revenues increased 72% to $33.6 million, up from $19.5 million in 2007. This increase in revenues is primarily attributable to increased purchases by a limited number of large NP-2 customers who entered the production stage for networking products that incorporate our network processor chips. Combined sales of NP-2 and NP-3 products accounted for 85% of our 2008 revenues; NP-1 products contributed an additional 13%; and the remaining 2% resulted primarily from the sale of software tools and services."

Patent foundation: "We hold four United States patents, No. 6,532,457, No. 6,594,655, No. 6,625,612 and No. 6,778,534."

Employees: "As of March 30, 2009, we had 116 employees. (84 R&D, 15 Sales & Marketing, 9 Operations, 8 G&A)

Wafer foundry: "Our NP-1c network processors utilize IBM’s 0.11-micron Cu-11 ASIC template. IBM also manufactures our NP-3 line of products using the 90 nanometer process. Taiwan Semiconductor Manufacturing Co., or TSMC, manufactures our NP-2 line of products using the 0.13 micron process and the special version of our NP-3 NPU, which we developed with Marvell, and will manufacture our NPA line of products, using the 90 nanometer process......We recently entered into an agreement with Marvell pursuant to which Marvell will be the vendor for our NP-4 network processor. The NP-4 network processor will also be manufactured by TSMC using the 55 nanometer process."