Kaufman Bros. 11 th Annual Investor Conference September 3, 2008 NASDAQ CM: FCSE

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Kaufman Bros. 11th Annual Investor Conference

September 3, 2008NASDAQ CM: FCSE

This presentation contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. We refer you to the Risk Factors section in the Company’s Form 10-K for the year ended December 31, 2007 and Form 10-Q for the quarter ended June 30, 2008. These statements are based on information as of September 3, 2008 and the company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Safe Harbor Statement

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Focus Enhancements

Systems GroupDigital Media Solutions• Hi-def. video and tapeless

acquisition driving market• FireStore technology #1• New growth markets and Media

Asset Management

Partnerships with Canon, JVC, Panasonic, and Sony

80% of corporate revenue

Semiconductor GroupConvergence Chips: TV-out• Portable media players and

navigational devices• RMI, FreeScale, Marvell Reference

Designs

UWB Wireless Technology• Superior technology• 1st chip: video distribution• 2nd chip: WUSB mass market• Expected $1B industry

Digital Wireless Audio (DWA)• $136M TAM 2011• 6 patents pending to dominate• Rapid time-to-revenue

A leading developer ofdigital audio/video technology

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Ultra Wideband (UWB)“The Plan”

• Discontinuity and an inevitable growth market for high speed (54 – 480 Mbs) WPAN multimedia connectivity.– Goal: One radio multi-protocol support

(USB, UPNP, 1394, BT next gen.)– Targeting bluetooth costs with all

CMOS design

• Growth opportunity: – $1B plus market 2012

• Wireless USB believed to drive initial market acceptance. NOTE: USB already exceeds 80% attached rates. (PDA, printers, PCs)

USB hubs

PC &PC &Media CentersMedia Centers

Digital Camera,Digital Camera,Camcorder,Camcorder,HandsetHandset

PrinterPrinterMFPMFP

Future Apps:Future Apps:HID – mouse, keyboard, gamepadHID – mouse, keyboard, gamepadDisplay – TV, monitorDisplay – TV, monitorSettop BoxSettop Box

MassMassStorageStorage

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$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2007 2008 2009 2010 2011

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

TAM (K$) ASP

$ in millions $ ASP

Significant Market Opportunity

Previously Projected UWB Revenue

Source: In-Stat, Nov. 2007

Delayed ~1 yearDelayed ~1 year

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Portfolio Strategy

Market Focus

Tech

nolo

gy I

nvestm

en

t

Existing New

Exis

tin

gN

ew

ConvergencePMP/GPS

STB

Docking

Smartphone

WirelessAudio

UWB WirelessVideo/Data

WiredVideo Out(Biz, Con.)

WirelessConnected Consumer

(AV Distribution)

UWB

Convergence

Wireless Audio

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Today’s Digital Home

Home Home EntertainmenEntertainmen

tt

DVDDVD

STBSTB

Game ConsoleGame Console

PVRPVR

PMPPMP

PCPC

SpeakersSpeakers

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Phase III:Wireless Digital Home Usage

Case

Home Home EntertainmenEntertainmen

tt

DVDDVD

STBSTB

Game ConsoleGame Console

PVRPVR

AudioMojoAudioMojo

AudioMojoAudioMojo

PMPPMP

PCPC

Wireless Wireless MediaMedia

UWBUWBUWBUWB Wireless MediaWireless Media

UWBUWB Wireless MediaWireless Media

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Digital Wireless Audio Industry Revenue

Source: RHA Associates

$ in millions

SpeakerFinderTM: Setup

LF C RF

RS

RBLB

LS

Sub

LF C RF

RS

RBLB

LS

Sub

RB

LF

RF

RS

Focus Competition

SpeakerFinderTM: Optimization

Focus Competition

MyZoneTM: Sweet Spot

Focus Competition

MyZoneTM: Sweet Spot

Focus Competition

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Wireless A/V ApplicationsD

TV

In

teg

rati

on

DS

P

Host

AVR & Home TheaterDVD/ Blu-Ray / HDDVD

Game ConsoleAV Docks and PVRs

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The AudioMojo™ Gap Closure

DTV• AudioMojo™ enables

the first scalable, 16-channel, highest-quality, wireless audio systems

• Transmit (master) modules integrate into DTV or AVR

• Receive (slave) modules integrate into powered, “active” speakers

• Dolby 5.1 surround sound sale would be 7 chips per complete system

• ASP per chip ~$5

Master

SlaveAudioMojo

Execution Plan

• Short Term Execution Objectives:– DWA chip:

• Tape-out: September ‘08• Receive back 100 chips: November ‘08• Bring up and demonstrate technology: November ‘08• Sample with customers: Nov./Dec. ‘08• Customer design commitment @ CES: January ‘09

– UWB Wireless Video:• Demonstrated @ Computex: June ’08• Product reference Design Demo: January ‘09

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Focus’ Competitive Summary

5.1 7.1 or higherStereo

Co

st /

ch

ann

el

Channel Depth

ONLY solution to provide:• 2ms latency

• Lip Sync requirement < 10ms• Scalable

• Up to 16 channels • Quality

• 24 bit @ 48Ksps 96Ksps• < 1usec intra-channel jitter

• Simplicity• SpeakerFinder™• myZone™ (Ear Finder)

• 7 levels of redundancy and robustness• Active Speaker Technology

• Digital Crossover Circuitry• Linear Phase Delay• Notch Filters

No competitor can do < 10ms latency (required for lip sync) with up to 16 channels at 24 bit @ 48KHz

Silicon/IP provider

$

$$$

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Leveraging Technology & Expertise with Partners and Customers

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Semiconductor Summary

• Drive UWB towards CE and Mobile applications which takes advantage of our customer base, current expertise in mobile appliances, and capabilities of our current TT1013 UWB chip

• Strengthen wireless technology portfolio with audio technology

• Targeting to generate revenue from all activities in Q3’09:– TV out chips– UWB video streaming– Digital wireless audio chip

• Long-term, merge the video and audio technologies onto a single UWB platform

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• Tapeless acquisition with file formatting

• Saves 320 hours/year capture time per camera

• Partnered with JVC, Panasonic, Canon

Video Distribution

• HD networked media appliances and processors

• Narrowcast, Digital Signage

• Best Buy, Wal*Mart, Bank of America, Fleet Bank

Acquisition / Video Production

• Integrated Media Asset Management and Archive System

• Provides a scalable and convenient workflow alternative

• Technology Alliance with Sony

Media Asset Management

Systems Group: HD Digital Media Solutions

ENTERPRISE MEDIA

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FS-4 HD$799

FS-100$1,995

DR-HD100$1,995

FS-C$1,995

Portable Direct To Edit™ Recorders

Proprietary technology adopted by major camera companies

FS-5$2,195

FS 4 Based Models Moving to FS 5

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• FireStore has been the growth driver for Systems:– Competitive conditions between the professional

camcorder manufacturers shortened the product life cycle on existing FS4 product line, but FS5 with enhanced metadata functionality began shipping in June.

• Actions: – Reduced expenses– Leverage our 4 partners: Canon, JVC, Panasonic, and

Sony• Convert FireStore users to Enterprise Media to

benefit from converging A/V & IT technologies• Enterprise Media products have the potential to

be larger than FireStore with our partners… if only 5% of FireStore installed base converted to ProxSys = $60M

Systems Growth Drivers

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• Focus is well positioned to take advantage of media going wireless and mobile

• Wireless audio, video, and data technologies• Strong customer base

• Expect to be generating semiconductor revenue in Q3’09 from three product families:

• TV-out chips• UWB video• Digital wireless audio

• Expect Systems group’s revenue to grow with partners coming on line with FS5 and ProxSys technology alliances

Investment Highlights

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THANK YOUNASDAQ CM: FCSE