Flash Memory, Inc.

Exhibit 1

Income Statements, 2007 - 2009 ($000s except earnings per share)

2007

2008

2009

2010

2011

2012

$77,131
$62,519
81.1%
$14,612
18.9%

$80,953
$68,382
84.5%
$12,571
15.5%

$89,250
$72,424
81.1%
$16,826
18.9%

144000
116784
81.1%
27216
18.9%
70070.4

144000
116784
81.1%
27216
18.9%
70070.4

$4,416
4.95%
$7,458
8.36%
$4,952

120000
97320
81.1%
22680
18.9%
58392
0.189
6000
5.00%
10032
8.36%
$6,648

$3,726
4.83%
Selling, general and administrative $6,594
8.55%
Operating income
$4,292

$4,133
5.11%
$7,536
9.31%
$902

7200
5.00%
12038.4
8.36%
$7,978

7200
5.00%
12038.4
8.36%
$7,978

Interest expense

$480
-$39

$652
9.85%
-$27

$735
8.28%
-$35

937.21
9.25%
-50

1347.6
9.25%
-50

1696.9
9.25%
-50

Other income (expenses)

Income before income taxes

$3,773

$223

$4,182

$5,661

$6,580

$6,231

Income taxes (a)

Net income

$1,509
$2,264

$89
$134

$1,673
$2,509

$2,264.32
$3,396

$2,632.0
$3,948

Earnings per share

$1.52

$0.09

$1.68

Net sales
Cost of goods sold
Gross margin
Purchases
Research and development

$2.28

$2.65

$2,492.27
$3,738
$2.51

(a) In years 2007 and after, Flash's effective combined federal and state income tax rate was 40%.
debt/Equity
int Coverage
Notes payable/Acc Receivables
ROE

0.39
8.94
60.25%
13.28%

0.52
1.38
68.98%
0.78%

0.51
6.74
69.06%
12.75%

0.63
7.09
73.85%
14.71%

0.68
5.92
77.50%
14.61%

0.47
4.70
61.70%
12.15%

Flash Memory, Inc.

Exhibit 2

Balance Sheets, 2007 - 2009 ($000s except number of shares outstanding)

2007
Cash
Accounts receivable
Inventories
Prepaid expenses
Total current assets

December 31,
2008

2009

2010

2011

2012

$2,536
$10,988
$9,592
$309
$23,425

$2,218
$12,864
$11,072
$324
$26,478

$2,934
$14,671
$11,509
$357
$29,471

3960
19726
13865
480
38031

4752
23671
16638
576
45637

4752
23671
16638
576
45637

Property, plant & equipment at$5,306

cost
Less: Accumulated depreciation $792
Net property, plant & equipment
$4,514

$6,116
$1,174
$4,942

$7,282
$1,633
$5,649

$8,182
2179.15
$6,003

$9,082
2792.8
$6,289

$9,982
3473.95
$6,508

$27,939

$31,420

$35,120

$44,034

$51,926

$52,145

$3,084
$6,620
$563
$151
$478
$10,896

$4,268
$8,873
$591
$9
$502
$14,243

$3,929
$10,132
$652
$167
$554
$15,434

4799
$14,568
876
226
744
$21,214

5759
$18,345
105
263
893
$25,365

5759
$14,604
105
249
893
$21,610

Common stock at par value

$15
Paid in capital in excess of par$7,980
value
Retained earnings
$9,048
Total shareholders' equity $17,043

$15
$7,980
$9,182
$17,177

$15
$7,980
$11,691
$19,686

$15
7980
$15,087
$23,082

$15
7980
$19,035
$27,030

$15
7980
$22,774
$30,769

Total liabilities & shareholders'

$27,939
equity
Difference
Number of shares outstanding
#######

$31,420

$35,120

Total assets
Accounts payable
Notes payable (a)
Accrued expenses
Income taxes payable (b)
Other current liabilities
Total current liabilities

$44,296 $52,396 $52,379

-$263
-$470
-$234
1,491,662 1,491,662 1,491,662 1,491,662 1,491,662

(a) Secured by accounts receivable.

(b) To avoid a penalty for underpayment of income taxes, Flash made equal estimated tax payments quarterly on the 15th of
April, June, September, and December of each year. The total of these four quarterly payments was required to equal at
least the lesser of (a) 90% of the taxes that would actually be incurred in the same year, or (b) 100% of the taxes due
on income of the prior year.

Flash Memory, Inc.

Exhibit 3

Key Forecasting Assumptions and Relationships for 2010 Through 2012

Line Item

Assumption or Ratio

Cost of goods sold

Research and development
Selling, general and administrative
Interest expense
Other income (expenses)

81.10% of sales
5.0% of sales
8.36% of sales
Beginning of year debt balance interest rate
$50,000 of expense each year

Cash
Accounts receivable
Inventories
Prepaid expenses
Property, plant & equipment at cost
Accumulated depreciation

3.3% of sales
60 days sales outstanding
52 days of cost of good sold
0.4% of sales
Beginning PP&E at cost + capital expenditures
Beginning A/D + 7.5% of beginning PP&E at cost

Accounts payable
Purchases
Accrued expenses
Income taxes payable
Other current liabilities

30 days of purchases
60% of cost of goods sold
0.73% of sales
10% of income taxes expense
0.62% of sales

Flash Memory, Inc.

Exhibit 4

Selected Financial Information for Flash Memory, Inc., and Selected Competitors, 2007 through 2009

2007
Sales ($ millions)
EPS ($)
Dividend per share ($)
Closing stock price ($)
Shares outstanding (millions)
Book Value per share ($)
ROE
Capitalization (book value)
Debt
Equity
Beta coefficient

Flash Memory, Inc.

2008
2009 30-Apr-10 (a) 2007

77
1.52
-n/a
1.492
11.43
13.28%

81
0.09
-n/a
1.492
11.52
0.78%

89
1.68
-n/a
1.492
13.20
12.75%

5,688
-0.42
-7.25
769.1
10.08
-4.13%

5,841
-2.10
-2.64
772.5
8.00
-26.21%

4,803
-2.29
-10.56
800.7
5.81
-39.43%

28%
72%

34%
66%

34%
66%
n/a

24%
76%

31%
69%

40%
60%

SanDisk Corporation
Sales ($ millions)
EPS ($)
Dividend per share ($)
Closing stock price ($)
Shares outstanding (millions)
Book Value per share ($)
ROE
Capitalization (book value)
Debt
Equity
Beta coefficient

Micron Technology
2008
2009

3,986
0.84
-33.17
227.7
22.64
3.70%

3,351
-8.82
-9.60
225.3
15.27
-57.74%

3,567
1.83
-28.99
227.4
17.18
10.63%

15%
85%

22%
78%

21%
79%

30-Apr-10 (a)

1.46
9.35
847.6
6.61
21.00%
33%
67%
1.25

STEC, Inc.

3.71
39.84
229.3
18.13
17.87%
19%
81%
1.36

189
0.20
-8.74
49.8
3.72
5.40%

227
0.09
-4.26
50.0
3.63
2.36%

354
1.47
-16.34
49.4
5.65
26.06%

0%
100%

0%
100%

0%
100%

1.29
13.90
50.3
5.48
18.90%
0%
100%
1.00

(a) Security analyst estimates for year-end EPS $ and Return on Equity; actual data on April 30, 2010, for all other items.
San disk
STEC
Micro
Unlevered Beta
1.28
1
1.04
1.11

Years
CAPEX
Sales
COGS
depreciation
COGS-depri
SGA
promotion
EBIT
WC
Change in WC

0
2010
-2200

5648
-5648

EBIT
EBIT(1-T)
Free Cashflows
WACC (%)
PV Cash Flow
NPV

-7848
10.21%
-7848
2936

unlevered beta
Levered beta
Ke
Kd

1.11
1.26
11.24
9.25

1
2011
0
21600
17064
79.0%
440
16624
1806
300
2430
7322
-1674

2
2012
0
28000
22120
79.0%
440
21680
2341

3
2013
0
28000
22120
79.0%
440
21680
2341

4
2014
0
11000
8690
79.0%
440
8250
920

5
2015
0
5000
3950
79.0%
440
3510
418

3539
7322
0

3539
2877
4446

1390
1308
1569

632
0
1308

2430
1458

3539
2124

3539
2124

1390
834

632
379

225

2564

7009

2843

2127

204

2110

5235

1927

1308

D/C
E/C
D/E

0.18
0.82
0.22

2200 95.65217