Business Plan Presentation

1. Mobius Microsystems Inc. 3430 E. Jefferson Ave. #140 Detroit, MI 48207 614.571.5299 www.mobius-microsystems.com management@mobius-microsystems.com Business Plan Presentation MBA Jungle Business Plan Competition New York, New York April 25th, 2003

2. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Overview • Pain and Solution • Technology and Product • Management Team • Industry and Market • Competition • Marketing and Sales Strategy • Financials

3. Digital Microprocessor Mixed-SignalCircuits Crystal Oscillator Memory Mechanical Sensor AnalogCircuits Printed Circuit Board PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS The Problem: Disparate Systems Electronic products currently require assembly of many discrete components

4. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS The Pain These systems are: • Expensive: package costs • Large: package sizes • Power-hungry: signal across board requires 10x power • Limited in functionality: size and power constraints

5. PCB PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS The Solution: Mobius 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. Digital Microprocessor Mixed-SignalCircuits Crystal Oscillator Memory Mechanical Sensor AnalogCircuits Printed Circuit Board

6. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS The Solution: Mobius Microsystems The vision for our products: Enable electronic system developers to produce less expensive, smaller, more functional, and more reliable products that consume less power. The vision for our customers: Reap orders of magnitude improvements in the products they build and lead their industries in end-product performance, functionality, and value.

7. Pocket PC PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS The Clock is as Fundamental as Power fclk Clock frequency signal drives processor inside Everysingle synchronous semiconductor produced requires a clock to operate

8. CrystalElectronics 4 Mobius DMCs PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS State of the Art versus Mobius“Digital Monolithic Clock” State of the Art vs. Mobius “DMC” • Existing Clock Solutions • Crystal-based • Large off-chip component • Fixed frequency • Power-hungry • Expensive • Mobius DMC • MEMS-based • Small on-chip • Tunable frequency • Low-power • Inexpensive vs.

9. COMPAQ Pocket PC PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS The Mobius DMC in Action… • What Mobius can do for Compaq • Reduce total cost • Increase functionality • Increase battery life • Decrease time to market • Reduce component inventory

10. Semiconductor Design Blueprint Mobius’ DMC IP PackagedSemiconductor PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Semiconductor Intellectual Property • Manufacturing handled by customer • Low COGS • Like a software company • Successful business model: ARM, MIPS, Parthus

11. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Why IP is Used Samsung is building a cell phone • Market opportunity and window identified • System specification defined by engineering management • Chip specification defined and handed off Chip designers need to meet deadline and budgets • Develop many parts of chip in-house (if capable) • Buy 3rd party IP (Mobius) for some functions • Integrate IP with their design and send to fabrication facility for manufacturing What Mobius IP offers chip designers • Functions outside their core competency • Accelerated time to market • More profit per chip

12. Management Team Michael S. McCorquodale, CEO and CTO • Invented technology while electrical engineering Doctoral Fellow, U of Michigan • Commercial semiconductor experience with Hughes Space and Communications • Vision of how microsystems technology and Mobius will change the world Jeffrey G. Wilkins, COO • MBA 2003, U of Michigan • Business development and start-up experience, Huntington Bank and Velocys Inc • The commitment and experience to turn Mobius’ vision into reality James E. Vincke, CFO • M.S.E., MBA, U of Michigan • 23 years in start-up, executive management, Mechanical Dynamics Inc • Fund raising, acquisitions, international expansion, rapid growth • The financial acumen and perspective to manage growth from start-up to IPO PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS

13. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Industry and Market Overview • Semiconductor industry: $141B (2002) • CAGR: 8% • Cyclical, mature • System-on-chip market: $32B (2002)

14. SoC with microprocessor, memory, and communications Clock SoC Sensor Other Subsystems Analog Front End PCB PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS System-on-Chip Explained SoC’s combine a processing core, memory, and logic on a single chip Communications Analog Front Clock End Microprocessor Core Sensor Other Subsystems Memory Printed Circuit Board (PCB)

15. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Why SoC? SoC’s Market Dynamics and Needs • Broad range of end products and markets • Medium to high volume • Fast design cycles to meet product windows • Every SoC uses some IP • Comfort with IP and IP companies • Fabrication facilities (TSMC, IBM)

16. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Industry and Market Overview • Semiconductor industry: $141B (2002) • CAGR: 8% • Cyclical, mature • SoC Market: $32B (2002) • Growing 25% to 30% • Players: Texas Instruments, Motorola, Intel, Sony

17. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS First Addressable Market • Clock generation for SoC • SoC: $32 Billion or (@ $20/unit) 1.6 Billion units/yr • Each unit now requires at least $1 for clock generation • Mobius’ DMC average selling price of $0.45/unit • 1.6 Billion units x $0.45 per DMC = First addressable market size: $720 Million In Revenue

18. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS SoC End Markets Source: Gartner Dataquest Source: Gartner Dataquest

19. Competition Competitive landscape: 3 kinds of competitors • Discrete Crystal Clock Generation • Epson • Integrated Clock Manufacturers • Motorola • Hybrid Clock Manufacturers • Epson + Texas Instruments Currently there is no solution on the market for clock generation that is able to meet all of the needs of the market. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS

20. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Mobius’ Competitive Advantage • Patent-protected intellectual property portfolio • Design cycle lead • Microsystems development trade secrets • Industrial membership and “first-look” rights from “WIMS”: Microsystems Research Center • “Product Hopping” strategy

21. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Marketing and Sales Strategy Goal: De-facto standard in clock generation for SoC Step 1: Create awareness and “buzz” • Existing relationships • Conferences, tradeshows, competitions Step 2: Direct sales effort • Founders and technical sales representative • Specific existing relationships: Motorola, National Semiconductor, TSMC, Cadence, IBM

22. Direct Sales Effort For Design Win IP Partnership Effort EndCustomer Packaged SoC Compaq Intel Pocket PC To Compaq: Mobius = Less expensive, smaller, and more functional products To Intel: Mobius = More revenue per chip Influence PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Marketing and Sales Tactics Packaged SoC With Mobius DMC

23. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Electronic System Design Cycle Concept Evaluation Production • No re-design cost Design Prototype Influence • No customer risk: • System functional independent of Mobius IP at prototype phase

24. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Initial Target Customer Profile • SoC cost ≤ $10-20 • Volume per design: ~ 1M units/year • Total electronic system COGS ≤ $50 • 2 or more crystals per system • Cell phones, DVDs, PDAs, microcontrollers, disk drives, WLAN

25. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Existing Target Customer Relationships • Cell phones • Motorola, Samsung • PDAs • ARM, Intel • Microcontrollers • National Semiconductor, IBM • WLAN • Infineon (WLAN security chipsets)

26. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Business System Revenue Model • Design License • Tiered $100,000 to $300,000 (low to high volume) • Royalty • Tiered $0.50 to $0.15 per unit (low to high volume) • Annual Support & Maintenance Contract • 15% of initial license annually • Services • Design services for customers

27. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Financials Revenue, Net Income, and Cash Flow from Operations

28. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Investment Opportunities Self-Fund Operations Until First Sale Is Made $110K Founders Investment (Q3 2003) After First Sale (Q3 2003): Seeking $500K 1st Round Investment Uses: Hire Marketing and Sales Director Hire Additional Engineering Expertise Enable Additional Manufacturing Processes Establish IP Partnerships Milestone: 5 Reference Customer Relationships

29. PAIN&SOLUTION TECHNOLOGY MANAGEMENT MARKET COMPETITION STRATEGY FINANCIALS Investment Opportunities $500K 2nd Round Investment (Q1 2004) Uses: Hire Sales Person in Munich, Germany Continue to Develop Engineering Team Milestone: 3 International Reference Customers

30. Why Invest? • $720 million first addressable market • Truly compelling, protected IP • Committed and experienced management team • Small investment required for high return potential