Flash Memory, Inc.

Exhibit 1 Income Statements, 2007 - 2009 ($000s except earnings per share)

2007 2008 2009 2010 2011 2012

Net sales $77,131 $80,953 $89,250 96033 103332 111185

Cost of goods sold $62,519 $68,382 $72,424 77882.763 83802 90171 81.1% of sales
Gross margin $14,612 $12,571 $16,826 18150.237 19530 21014

Research and development $3,726 $4,133 $4,416 4801.65 5166.58 5559.24 5% of sales
Selling, general and administrative $6,594 $7,536 $7,458 8028.3588 8638.51 9295 8.36% of sales
Operating income $4,292 $902 $4,952 $5,320 $5,725 $6,160

Interest expense $480 $652 $735 Notes payable*7.25%

Other income (expenses) -$39 -$27 -$35

Income before income taxes $3,773 $223 $4,182

Income taxes (a) $1,509 $89 $1,673

Net income $2,264 $134 $2,509

Earnings per share $1.52 $0.09 $1.68

(a) In years 2007 and after, Flash's effective combined federal and state income tax rate was 40%.
Flash Memory, Inc.

Exhibit 2 Balance Sheets, 2007 - 2009 ($000s except number of shares outstanding)

2007

Cash $2,536
Accounts receivable $10,988
Inventories $9,592
Prepaid expenses $309
Total current assets $23,425

Property, plant & equipment at cost $5,306

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

Total assets $27,939

Accounts payable $3,084

Notes payable (a) $6,620
Accrued expenses $563
Income taxes payable (b) $151
Other current liabilities $478
Total current liabilities $10,896

Common stock at par value $15

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

Total liabilities & shareholders' equity $27,939

Number of shares outstanding 1,491,662

(a) Secured by accounts receivable.

(b) To avoid a penalty for underpayment of income taxes, Flash made equal estimated tax payments quart
April, June, September, and December of each year. The total of these four quarterly payments was re
least the lesser of (a) 90% of the taxes that would actually be incurred in the same year, or (b) 100% of
on income of the prior year.
For informational purposes only:

Notes payable / accounts receivable 60.2%

Notes payable / shareholders' equity 38.8%
Notes payable / total capital 28.0%
 s outstanding)

December 31,
2008 2009

$2,218 $2,934
$12,864 $14,671
$11,072 $11,509
$324 $357
$26,478 $29,471

$6,116 $7,282
$1,174 $1,633
$4,942 $5,649

$31,420 $35,120

$4,268 $3,929
$8,873 $10,132
$591 $652
$9 $167
$502 $554
$14,243 $15,434

$15 $15
$7,980 $7,980
$9,182 $11,691
$17,177 $19,686

$31,420 $35,120

1,491,662 1,491,662

l estimated tax payments quarterly on the 15th of

four quarterly payments was required to equal at
n the same year, or (b) 100% of the taxes due
69.0% 69.1%
51.7% 51.5%
34.1% 34.0%
Flash Memory, Inc.

Exhibit 1 Income Statements, 2007 - 2009 ($000s except earnings per share)

2007 2008 2009

Net sales $77,131 $80,953 $89,250

Cost of goods sold $62,519 $68,382 $72,424
Gross margin $14,612 $12,571 $16,826

Research and development $3,726 $4,133 $4,416

Selling, general and administrative $6,594 $7,536 $7,458
Operating income $4,292 $902 $4,952

Interest expense $480 $652 $735

Other income (expenses) -$39 -$27 -$35

Income before income taxes $3,773 $223 $4,182

Income taxes (a) $1,509 $89 $1,673

Net income $2,264 $134 $2,509

Earnings per share $1.52 $0.09 $1.68

(a) In years 2007 and after, Flash's effective combined federal and state income tax rate was 40%.
Flash Memory, Inc.

Exhibit 2 Balance Sheets, 2007 - 2009 ($000s except number of shares outstanding)

December 31,
2007 2008 2009

Cash $2,536 $2,218 $2,934

Accounts receivable $10,988 $12,864 $14,671
Inventories $9,592 $11,072 $11,509
Prepaid expenses $309 $324 $357
Total current assets $23,425 $26,478 $29,471

Property, plant & equipment at cost $5,306 $6,116 $7,282

Less: Accumulated depreciation $792 $1,174 $1,633
Net property, plant & equipment $4,514 $4,942 $5,649

Total assets $27,939 $31,420 $35,120

Accounts payable $3,084 $4,268 $3,929

Notes payable (a) $6,620 $8,873 $10,132
Accrued expenses $563 $591 $652
Income taxes payable (b) $151 $9 $167
Other current liabilities $478 $502 $554
Total current liabilities $10,896 $14,243 $15,434

Common stock at par value $15 $15 $15

Paid in capital in excess of par value $7,980 $7,980 $7,980
Retained earnings $9,048 $9,182 $11,691
Total shareholders' equity $17,043 $17,177 $19,686

Total liabilities & shareholders' equity $27,939 $31,420 $35,120

Number of shares outstanding 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.

For informational purposes only:

Notes payable / accounts receivable 60.2% 69.0% 69.1%

Notes payable / shareholders' equity 38.8% 51.7% 51.5%
Notes payable / total capital 28.0% 34.1% 34.0%
Flash Memory, Inc.

Exhibit 3 Key Forecasting Assumptions and Relationships for 2010 Through 2012

Line Item Assumption or Ratio

Cost of goods sold 81.10% of sales

Research and development 5.0% of sales
Selling, general and administrative 8.36% of sales
Interest expense Beginning of year debt balance × interest rate
Other income (expenses) $50,000 of expense each year

Cash 3.3% of sales

Accounts receivable 60 days sales outstanding
Inventories 52 days of cost of good sold
Prepaid expenses 0.4% of sales
Property, plant & equipment at cost Beginning PP&E at cost + capital expenditures
Accumulated depreciation Beginning A/D + 7.5% of beginning PP&E at cost

Accounts payable 30 days of purchases

Purchases 60% of cost of goods sold
Accrued expenses 0.73% of sales
Income taxes payable 10% of income taxes expense
Other current liabilities 0.62% of sales
Flash Memory, Inc.

Exhibit 4 Selected Financial Information for Flash Memory, Inc., and Selected Competitors, 2007 through 2009

Flash Memory, Inc. Micron Technology

2007 2008 2009 30-Apr-10 (a) 2007 2008 2009 30-Apr-10 (a)

Sales ($ millions) 77 81 89 5,688 5,841 4,803

EPS ($) 1.52 0.09 1.68 -0.42 -2.10 -2.29 1.46
Dividend per share ($) -- -- -- -- -- --
Closing stock price ($) n/a n/a n/a 7.25 2.64 10.56 9.35
Shares outstanding (millions) 1.492 1.492 1.492 769.1 772.5 800.7 847.6
Book Value per share ($) 11.43 11.52 13.20 10.08 8.00 5.81 6.61
ROE 13.28% 0.78% 12.75% -4.13% -26.21% -39.43% 21.00%
Capitalization (book value)
Debt 28% 34% 34% 24% 31% 40% 33%
Equity 72% 66% 66% 76% 69% 60% 67%
Beta coefficient n/a 1.25

SanDisk Corporation STEC, Inc.

Sales ($ millions) 3,986 3,351 3,567 189 227 354

EPS ($) 0.84 -8.82 1.83 3.71 0.20 0.09 1.47 1.29
Dividend per share ($) -- -- -- -- -- --
Closing stock price ($) 33.17 9.60 28.99 39.84 8.74 4.26 16.34 13.90
Shares outstanding (millions) 227.7 225.3 227.4 229.3 49.8 50.0 49.4 50.3
Book Value per share ($) 22.64 15.27 17.18 18.13 3.72 3.63 5.65 5.48
ROE 3.70% -57.74% 10.63% 17.87% 5.40% 2.36% 26.06% 18.90%
Capitalization (book value)
Debt 15% 22% 21% 19% 0% 0% 0% 0%
Equity 85% 78% 79% 81% 100% 100% 100% 100%
Beta coefficient 1.36 1.00

(a) Security analyst estimates for year-end EPS $ and Return on Equity; actual data on April 30, 2010, for all other items.
Flash Memory, Inc.

Exhibit 1 Income Statements, 2007 - 2009 ($000s except earnings per share)

2007 2008

Net sales $77,131 $80,953

Cost of goods sold $62,519 $68,382
Gross margin $14,612 $12,571

Research and development $3,726 $4,133

Selling, general and administrative $6,594 $7,536
Operating income $4,292 $902

Other income (expenses) -$39 -$27

Interest expense $480 $652

Income before income taxes $3,773 $223

Income taxes (a) $1,509 $89

Net income $2,264 $134

$1.52 $0.09

(a) In years 2007 and after, Flash's effective combined federal and state income tax rate was 40%.
 2009 2010 2011 2012

$89,250 $120,000 $144,000 $144,000 given in the case

$72,424 $97,320 $116,784 $116,784 81.1% of sales
$16,826 $22,680 $27,216 $27,216

$4,416 $6,000 $7,200 $7,200 5% of sales

$7,458 $10,032 $12,038 $12,038 8.36% of sales
$4,952 $6,648 $7,978 $7,978

-$35 -$50 -$50 -$50 $50,000 of expense each year

$735 $937 $1,037 $1,213

$4,182 $5,661 $6,890 $6,715

$1,673 $2,264 $2,756 $2,686 40%

$2,509 $3,396 $4,134 $4,029

$1.68 $2.28 $2.77 $2.70

Flash Memory, Inc.

Exhibit 2 Balance Sheets, 2007 - 2009 ($000s except number of shares outstanding)

December 31,
2007 2008 2009

Cash $2,536 $2,218 $2,934

Accounts receivable $10,988 $12,864 $14,671
Inventories $9,592 $11,072 $11,509
Prepaid expenses $309 $324 $357
Total current assets $23,425 $26,478 $29,471

Property, plant & equipment at cost $5,306 $6,116 $7,282

Less: Accumulated depreciation $792 $1,174 $1,633
Net property, plant & equipment $4,514 $4,942 $5,649

Total assets $27,939 $31,420 $35,120

Accounts payable $3,084 $4,268 $3,929

Notes payable (a) $6,620 $8,873 $10,132
Accrued expenses $563 $591 $652
Income taxes payable (b) $151 $9 $167
Other current liabilities $478 $502 $554
Total current liabilities $10,896 $14,243 $15,434

Common stock at par value $15 $15 $15

Paid in capital in excess of par value $7,980 $7,980 $7,980
Retained earnings $9,048 $9,182 $11,691
Total shareholders' equity $17,043 $17,177 $19,686

Total liabilities & shareholders' equity $27,939 $31,420 $35,120

Number of shares outstanding 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 o
April, June, September, and December of each year. The total of these four quarterly payments was required to equal a
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.

For informational purposes only:

Notes payable / accounts receivable 60.2% 69.0% 69.1%

Notes payable / shareholders' equity 38.8% 51.7% 51.5%
Notes payable / total capital 28.0% 34.1% 34.0%
 December 31,
2010 2011 2012

$3,960 $4,752 $4,752 3.3% sales

$19,726 $23,671 $23,671 60 days
$13,865 $16,638 $16,638 52 days of COGS
$480 $576 $576 0.4% sales
$38,031 $45,637 $45,637

$8,182 $9,082 $9,982

$2,179 $2,793 $3,474
$6,003 $6,289 $6,508

$44,034 $51,926 $52,145

$4,799 $5,759 $5,759 30 days of purchase

$14,305 $16,731 $12,928 $0 $0 $0
$876 $1,051 $1,051 0.73% of sales
$226 $276 $269 10% of income taxes expense
$744 $893 $893 0.62% of sales
$20,951 $24,710 $20,900

$15 $15 $15

$7,980 $7,980 $7,980
$15,087 $19,222 $23,251
$23,082 $27,217 $31,246

$44,033 $51,927 $52,145

1,491,662 1,491,662 1,491,662

tax payments quarterly on the 15th of

rly payments was required to equal at
year, or (b) 100% of the taxes due

72.5% 70.7% 54.6%

62.0% 61.5% 41.4%
38.3% 38.1% 29.3%
ome taxes expense