Flash Memory, Inc.

Exhibit TN-1 Actual and Forecasted Financial Statements Assuming No Investment in New Product Line, No Sale of New Common Stock, and All Borrowings at 9.25%

Income Statement ($000s except EPS)

Actual Forecast

2007 2008 2009 2010 2011 2012

Sales $77,131 $80,953 $89,250 $120,000 $144,000 $144,000Cost of goods sold $62,519 $68,382 $72,424 $97,320 $116,784 $116,784 Gross margin $14,612 $12,571 $16,826 $22,680 $27,216 $27,216

Research and development $3,726 $4,133 $4,416 $6,000 $7,200 $7,200Selling, general and administrative $6,594 $7,536 $7,458 $10,032 $12,038 $12,038 Operating income $4,292 $902 $4,952 $6,648 $7,978 $7,978

Interest expense $480 $652 $735 $818 $1,015 $1,189Other income (expenses) -$39 -$27 -$35 $50 $50 $50

Income before income taxes $3,773 $223 $4,182 $5,780 $6,913 $6,739

Income taxes $1,509 $89 $1,673 $2,312 $2,765 $2,695Net income $2,264 $134 $2,509 $3,468 $4,148 $4,043

Earnings per share $1.52 $0.09 $1.68

Exhibit TN-1 (continued)

Balance Sheet ($000s except shares outstanding and book value per share)

Actual Forecast

2007 2008 2009 2010 2011 2012

Cash $2,536 $2,218 $2,934 $3,960 $4,752 $4,752Accounts receivable $10,988 $12,864 $14,671 $19,726 $23,671 $23,671Inventories $9,592 $11,072 $11,509 $13,865 $16,638 $16,638Prepaid expenses $309 $324 $357 $480 $576 $576 Total current assets $23,425 $26,478 $29,471 $38,031 $45,637 $45,637

Property, plant & equipment at cost $5,306 $6,116 $7,282 $7,282 $7,283 $7,284Less: Accumulated depreciation $792 $1,174 $1,633 $1,755 $1,887 $2,028Net property, plant & equipment $4,514 $4,942 $5,649 $5,527 $5,396 $5,256

Total assets $27,939 $31,420 $35,120 $43,558 $51,033 $50,893

Accounts payable $3,084 $4,268 $3,929 $4,799 $5,759 $5,759Notes payable $6,620 $8,873 $10,132 $17,753 $21,304 $21,304Accrued expenses $563 $591 $652 $876 $1,051 $1,051Income taxes payable $151 $9 $167 $231 $277 $270Other current liabilities $478 $502 $554 $744 $893 $893 Total current liabilities $10,896 $14,243 $15,434 $24,404 $29,284 $29,277

Common stock at $0.01 per share par value $15 $15 $15Paid in capital in excess of par value $7,980 $7,980 $7,980 $14,880 $14,880 $14,880Retained earnings $9,048 $9,182 $11,691 $4,274 $6,869 $6,736 Total shareholders' equity $17,043 $17,177 $19,686 $19,154 $21,749 $21,616

Total liabilities & shareholders' equity $27,939 $31,420 $35,120 $43,558 $51,033 $50,893

Number of shares outstanding 1,491,662 1,491,662 1,491,662

Book value per share $11.43 $11.52 $13.20

Return on equity 13.3% 0.8% 12.7%Interest coverage ratio (times) 8.9 1.4 6.7Notes payable / accounts receivable 60.2% 69.0% 69.1%Notes payable / shareholders' equity 38.8% 51.7% 51.5%Total liabilities / shareholders' equity 63.9% 82.9% 78.4%

Flash Memory, Inc.

Exhibit TN-3 Net Present Value of Investment in New Product Line ($000s)

2010 2011 2012 2013 2014 2015 Total

Investment in equipment -$2,200

Net working capital required to support sales $0

Investment in net working capital (the year-on-year change) $0

Sales

Cost of goods sold (includes equipment depreciation)

Research & development

Selling, general & administrative

Launch promotion

Income before income taxes

Income taxes

Net income

Depreciation of equipment

Cash flow from operations

Total cash flow -$2,200

NPV @ 10.05% cost of capital -$2,200

IRR

Flash Memory, Inc.

Exhibit TN-4 Change in Forecasted Financial Statements due to Acceptance of Investment in New Product Line

Financial Statement Account ($000s)

Actual Forecast2007 2008 2009 2010 2011 2012

Sales $0 $0Cost of goods sold (includes equipment depreciation) $0 $0Research and development $0 $0Selling, general and administrative (includes launch) $0 $0 Increase in operating income $0 $0

Cash (3.3% of sales) $0 $0Accounts receivable (60 DSO) $0 $0Inventories (52 days of COGS) $0 $0Prepaid expenses (0.4% of sales) $0 $0Net property, plant & equipment $2,200 $2,200 $2,200

Accounts payable (60 days of purchases) $0 $0Accrued expenses (0.73% of sales) $0 $0Other current liabilities (0.62% of sales) $0 $0

For informational purposes only:

NWC % of sales

Flash Memory, Inc.

Exhibit TN-5 Actual and Forecasted Financial Statements Assuming Acceptance of Investment in New Product Line, No Sale of New Common Stock, and All Borrowings at 9.25%

Income Statement ($000s except earnings per share)

Actual Forecast2007 2008 2009 2010 2011 2012

Sales $77,131 $80,953 $89,250Cost of goods sold $62,519 $68,382 $72,424 Gross margin $14,612 $12,571 $16,826

Research and development $3,726 $4,133 $4,416Selling, general and administrative $6,594 $7,536 $7,458 Operating income $4,292 $902 $4,952

Interest expense $480 $652 $735Other income (expenses) -$39 -$27 -$35

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

Income taxes $1,509 $89 $1,673Net income $2,264 $134 $2,509

Earnings per share $1.52 $0.09 $1.68

Exhibit TN-5 (continued)

Balance Sheet ($000s except shares outstanding and book value per share)

Actual Forecast2007 2008 2009 2010 2011 2012

Cash $2,536 $2,218 $2,934Accounts receivable $10,988 $12,864 $14,671Inventories $9,592 $11,072 $11,509Prepaid expenses $309 $324 $357 Total current assets $23,425 $26,478 $29,471

Property, plant & equipment at cost $5,306 $6,116 $7,282Less: Accumulated depreciation $792 $1,174 $1,633Net property, plant & equipment $4,514 $4,942 $5,649

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

Accounts payable $3,084 $4,268 $3,929Notes payable $6,620 $8,873 $10,132Accrued expenses $563 $591 $652Income taxes payable $151 $9 $167Other current liabilities $478 $502 $554 Total current liabilities $10,896 $14,243 $15,434

Common stock at $0.01 per share par value $15 $15 $15Paid in capital in excess of par value $7,980 $7,980 $7,980Retained 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

Book value per share $11.43 $11.52 $13.20

Return on equity 13.3% 0.8% 12.7%Interest coverage ratio (times) 8.9 1.4 6.7Notes payable / accounts receivable 60.2% 69.0% 69.1%Notes payable / shareholders' equity 38.8% 51.7% 51.5%Total liabilities / shareholders' equity 63.9% 82.9% 78.4%

Flash Memory, Inc.

Exhibit TN-6 Actual and Forecasted Financial Statements Assuming Acceptance of Investment in New Product Line, Sale of 300,000 Shares of Common Stock Receiving Net Proceeds of $23 per share, and All Borrowings at 7.25%

Income Statement ($000s except earnings per share)

Actual Forecast2007 2008 2009 2010 2011 2012

Sales $77,131 $80,953 $89,250Cost of goods sold $62,519 $68,382 $72,424 Gross margin $14,612 $12,571 $16,826

Research and development $3,726 $4,133 $4,416Selling, general and administrative $6,594 $7,536 $7,458 Operating income $4,292 $902 $4,952

Interest expense $480 $652 $735Other income (expenses) -$39 -$27 -$35

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

Income taxes $1,509 $89 $1,673Net income $2,264 $134 $2,509

Earnings per share $1.52 $0.09 $1.68

Exhibit TN-6 (continued)

Balance Sheet ($000s except shares outstanding and book value per share)

Actual Forecast2007 2008 2009 2010 2011 2012

Cash $2,536 $2,218 $2,934Accounts receivable $10,988 $12,864 $14,671Inventories $9,592 $11,072 $11,509Prepaid expenses $309 $324 $357 Total current assets $23,425 $26,478 $29,471

Property, plant & equipment at cost $5,306 $6,116 $7,282Less: Accumulated depreciation $792 $1,174 $1,633Net property, plant & equipment $4,514 $4,942 $5,649

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

Accounts payable $3,084 $4,268 $3,929Notes payable $6,620 $8,873 $10,132Accrued expenses $563 $591 $652Income taxes payable $151 $9 $167Other current liabilities $478 $502 $554 Total current liabilities $10,896 $14,243 $15,434

Common stock at $0.01 per share par value $15 $15 $15Paid in capital in excess of par value $7,980 $7,980 $7,980Retained 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

Book value per share $11.43 $11.52 $13.20

Return on equity 13.3% 0.8% 12.7%Interest coverage ratio (times) 8.9 1.4 6.7Notes payable / accounts receivable 60.2% 69.0% 69.1%Notes payable / shareholders' equity 38.8% 51.7% 51.5%Total liabilities / shareholders' equity 63.9% 82.9% 78.4%

Flash Memory, Inc.

Exhibit TN-7 Summary Statistics

No Investment in New Product LineSell No New StockBorrow at 9.25%

2010 2011 2012

Earnings per shareInterest coverage ratio (times)Return on equityNotes payable / accounts receivableNotes payable / shareholders' equityTotal liabilities / shareholders' equityNotes payable (000s)

Invest in the New Product LineSell No New StockBorrow at 9.25%

2010 2011 2012

Earnings per shareInterest coverage ratio (times)Return on equityNotes payable / accounts receivableNotes payable / shareholders' equityTotal liabilities / shareholders' equityNotes payable (000s)

Invest in the New Product LineSell 300,000 Shares of Common Stock

Borrow at 7.25%2010 2011 2012

Earnings per shareInterest coverage ratio (times)Return on equityNotes payable / accounts receivableNotes payable / shareholders' equityTotal liabilities / shareholders' equityNotes payable (000s)