SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

 Mail Stop 3030
January 14, 2009

VIA U.S. MAIL AND FAX (408) 731-1893

 James W. Sullivan Chief Financial Officer
Mosys, Inc.
755 N. Mathilda Avenue, Suite 100 Sunnyvale, California 94085
 Re: Mosys, Inc.
  Form 10-K for the year ended December 31, 2007
  Filed March 17, 2008   File No. 000-32929
Dear Mr. Sullivan:

We have reviewed your letter dated D ecember 18, 2008 and have the following
comments.  Where indicated, we think you should re vise your future documents in response to
these comments.  If you disagree, we will consid er your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Please be as detailed as necess ary in your explanation.
In some of our comments, we may ask you to pr ovide us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.     Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requir ements and to enhance the overall disclosure in
your filing.  We look forward to working with you in these respects.  We welcome any questions
you may have about our comments or any other aspect of our review.  Feel fr ee to call us at the
telephone numbers listed at th e end of this  letter.

James W. Sullivan
Mosys, Inc. January 14, 2009 Page 2
  Form 10-K for the Year Ended December 31, 2007

Financial Statements, page 50

Note 1: The Company and Summary of Significant Accounting Policies, page 54

Revenue Recognition, page 56
 Royalty, page 58

 1. Please refer to our prior comment 1.  We  note that in 2006 you recognized $2.6 million
from prepaid royalties consis ting of several intellectual pr operty arrangements.  With
regard to the pre-production prepaid r oyalties please addr ess the following:

• We note that you recognized revenue upon ex ecution of license agreements. Please
tell us the term of the licen se agreement as stated in the agreement and confirm to us
that you recognized revenue upon deliver y which does not occur for revenue
recognition purposes until the license term begins. Please refer to SAB Topic
13.A.3.d.

• Please tell us if you have any continuing involvement under the agreement, including,
but not limited to, research and development activities, maintenance of any
information used by the licensee during the li cense term, agreements to sell products,
etc. Please refer to SAB Topic 13.A.3.f.

• Tell us if the licensee is obligated to pa y you any additional fees during the license
term or if it is anticipated that the li censee will purchase any additional products
under the license agreement.

2. With regard to your post-production prepaid royalties, please respond to the following:

• If the prepaid royalties fees were, in f act, prepaid and relate to future royalty
obligations please clarify why you believe it is appropriate to recognize the revenue
prior to the culmination of the earnings pro cess. Cite the specific GAAP guidance that
supports your accounting.

• With regards to the $450,000 up-front payment,  please tell us if you have had or will
have any continuing involvement with th e licensee and if s o, how your revenue
recognition is consistent  with SAB Topic 13.A.3.f.

• With regards to the $500,000 up-front payment, it appears from your response that
you have an ongoing obligation to develop and obtain silicon qualification. In light of
this obligation, please specifically tell us how you determined it was appropriate to

James W. Sullivan
Mosys, Inc. January 14, 2009 Page 3
 recognize the revenue up-fr ont based on the guidance of  SAB Topic 13.A.3.f., noting
footnote 36.

• We see your statement as part of your res ponse to our prior comme nt 2 that “[You]
classify post-production royalties within  reported royalty revenues because the
revenue is directly tied to the licensee’s use of [your] technology in their currently
shipping commercial products.”  Based upon this classification, it appears that post-production royalties would be recorded over the term of the agreements as earned,
please tell us how this is consistent with your determinati on that the $450,000 and
$500,000 should be recognized up-front.
 3. Refer to our prior comment 2.  We note that  nearly 17% of the revenue was derived from
prepaid royalties in 2006 and none in 2007.  Pleas e discuss, in future filings, significant
components of revenue, any known trends or unc ertainties, and significant increase or
decrease on revenues.  Please refer to Item  303(a)(3) of Regulation S-K.  Consider
providing further clarification re garding the nature of these fees in future filings. For
example, consider explaining, as you did in your response that what  you refer to as pre-
production prepaid royalties are re ported as license revenue becau se they are paid as part
of the initial license fee a nd not with respect to products  being produced by the licensee
and that you classify post-production royaltie s within reported royalty revenues because
the revenue is directly tied to licensees’ use of our technology in their currently shipping
commercial products.

As appropriate, please respond to these comments  within 10 business days or tell us when
you will provide us with a response.  Please furnish a cover letter that keys your responses to our
comments and provides any requested information.  Detailed cover letters greatly facilitate our
review.  Please understand that we may have  additional comments after reviewing your
responses to our comments.
 You may contact Andri Boerman, Staff Acc ountant, at (202) 551- 3645 or me at (202)
551-3640 if you have any questions regarding these co mments.  In this regard, do not hesitate to
contact Angela Crane, Branch Chief, at (202) 551-3554.            S i n c e r e l y ,

        J u l i e  S h e r m a n           Reviewing Accountant