Flash Memory, Inc.

Exhibit 1 Income Statements, 2007 - 2009 ($000s except earnings per share)
Forecasted period
2007 2008 2009 2010 2011 2012

Net sales $77,131 $80,953 $89,250 $120,000 $144,000 $144,000

Cost 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 $7,200

Selling, 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 $937 $1,323 $1,565

Other income (expenses) -$39 -$27 -$35 -$50 -$50 -$50

Income before income taxes $3,773 $223 $4,182 $5,661 $6,604 $6,363

Income taxes (a) $1,509 $89 $1,673 $2,264 $2,642 $2,545

Net income $2,264 $134 $2,509 $3,396 $3,963 $3,818

Earnings per share $1.52 $0.09 $1.68 $2.28 $2.66 $2.56

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

Line Item Assumption or Ratio

Cost of goods sold 81.10% of sales 0.811

Research and development 5.0% of sales 0.05
Selling, general and administrative 8.36% of sales 0.0836
Interest expense Beginning of year debt balance 9.25% Interest rate 3.25%
Other income (expenses) $50,000 of expense -50 prime plus 6.00%
Corporate tax rate (a) In years 2007 an 0.4 prime plus if debt i 4.00%
Flash Memory, Inc.

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

December 31, Forecasted period

2007 2008 2009 2010 2011 2012

Cash $2,536 $2,218 $2,934 $3,960 $4,752 $4,752

Accounts receivable $10,988 $12,864 $14,671 $19,726 $23,671 $23,671
Inventories $9,592 $11,072 $11,509 $13,865 $16,638 $16,638
Prepaid 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 $8,182 $9,082 $9,982
Less: Accumulated depreciation $792 $1,174 $1,633 $2,179 $2,793 $3,474
Net property, plant & equipment $4,514 $4,942 $5,649 $6,003 $6,289 $6,508

Total assets $27,939 $31,420 $35,120 $44,034 $51,926 $52,145

Accounts payable $3,084 $4,268 $3,929 $4,799 $5,759 $5,759

Notes payable (a) $6,620 $8,873 $10,132 $14,306 $16,914 $12,323
Accrued expenses $563 $591 $652 $876 $1,051 $1,051
Income taxes payable (b) $151 $9 $167 $226 $264 $255
Other current liabilities $478 $502 $554 $744 $893 $893
Total current liabilities $10,896 $14,243 $15,434 $20,951 $24,881 $20,281

Common stock at par value $15 $15 $15 $15 $15 $15
Paid in capital in excess of par value $7,980 $7,980 $7,980 $7,980 $7,980 $7,980
Retained earnings $9,048 $9,182 $11,691 $15,087 $19,050 $22,868
Total shareholders' equity $17,043 $17,177 $19,686 $23,082 $27,045 $30,863

Total liabilities & shareholders' equity $27,939 $31,420 $35,120 $44,034 $51,926 $51,144

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

(a) Secured by accounts receivable. $29,728 $35,012 $39,822

(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 re 69.06% 72.52% 71.45% 52.06%
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.

Line Item Assumption or Ratio

Cash 3.3% of sales 3.3%
Accounts receivable 60 days sales outstan 16.4%
Inventories 52 days of cost of goo 14.2%
Prepaid expenses 0.4% of sales 0.4%
Property, plant & equipment at cost Beginning PP&E at cos $900
Accumulated depreciation Beginning A/D + 7.5% 7.5%

Accounts payable 30 days of purchases 8.22%

Purchases 60% of cost of goods 60.00%
Accrued expenses 0.73% of sales 0.73%
Income taxes payable 10% of income taxes 10.00%
Other current liabilities 0.62% of sales 0.62%

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% 32.7%
Equity 72% 66% 66% 76% 69% 60% 67.3%
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.
 Forecasted period
2010 2011
Net income $3,396 $3,963

Working capital $17,080 $20,756

CAPEX $900 $900

Needed external capital fundi $14,583 $17,693

period
2012
$3,818

$25,356

$900

$22,438
 2010 2011
Net sales $21,600
Cost of goods sold $17,064
Gross margin % $0
Gross margin $4,536

Research and development

Selling, general and administrative $1,805
Advertising and promotion $300
Operating income $2,431

Income before income taxes $2,431

Income taxes (a) $972

Net income $1,459

CAPEX -$2,200
Depreiciation $440
Net working capital $5,648
Change in working capital $5,648

Cash flow -$2,200 -$3,750

Discount rate 1.00 1.10
PV of cash flows -$2,200 -$3,407

NPV $3,163
IRR 26.11%

Micron Technology SanDisk Corporation

Book value of debt 2,719.00 949.49
Book value of equity 5,602.00 4157.129
Market value of equity 7,925.06 9135.312
Total value 10,644.06 10,084.80
Beta debt 0.2 0.2
Beta equity 1.25 1.36
Beta asset 0.98 1.25
 Forecasted period
2012 2013 2014 2015
$28,000 $28,000 $11,000 $5,000
$22,120 $22,120 $8,690 $3,950
$0 $0 $0 $0
$5,880 $5,880 $2,310 $1,050

$2,340 $2,340 $919 $418

$0 $0 $0 $0
$3,540 $3,540 $1,391 $632

$3,540 $3,540 $1,391 $632

$1,416 $1,416 $556 $253

$2,124 $2,124 $834 $379

$440 $440 $440 $440

$7,322 $7,322 $2,877 $1,308
$1,674 $0 -$4,446 -$1,569

$891 $2,564 $5,720 $2,388

1.21 1.33 1.47 1.62
$735 $1,923 $3,897 $1,479

STEC, Inc.
-
275.407345867949
699.17
699.17
0.2
1.00
1.00 1.08
 2016 Assumptions
Corporate tax rate 40.00%
net working capital 26.15%
DEVEX DEVEX of 400 have already been used so I have not included it in the c
Risk-free rate 3.70%
Market premium 6.00%
Beta on debt 0.2
Cost of debt 7.25% due to the capital structure
debt-to captial 18.00%
Peer - average asse 1.08
beta on equity 1.27
Return on equity 11.32%
WACC 10.07%

$0
-$1,308

$1,308
1.78
$735
used so I have not included it in the calculation

tal structure
 2010 2011
Net sales $21,600
Cost of goods sold $17,064
Gross margin % $0
Gross margin $4,536

Research and development

Selling, general and administrative $1,805
Advertising and promotion $300
Operating income $2,431

Income before income taxes $2,431

Income taxes (a) $972

Net income $1,459

CAPEX -$2,200
Depreiciation $440
Net working capital $5,648
Change in working capital $5,648

Cash flow -$2,200 -$3,750

Discount rate 1.00 1.10
PV of cash flows -$2,200 -$3,404

NPV $3,135
IRR 26%
 Forecasted period
2012 2013 2014 2015
$28,000 $28,000 $11,000 $5,000
$22,120 $22,120 $8,690 $3,950
$0 $0 $0 $0
$5,880 $5,880 $2,310 $1,050

$2,340 $2,340 $919 $418

$0 $0 $0 $0
$3,540 $3,540 $1,391 $632

$3,540 $3,540 $1,391 $632

$1,416 $1,416 $556 $253

$2,124 $2,124 $834 $379

$440 $440 $440 $440

$7,322 $7,322 $2,877 $1,308
$1,674 $0 -$4,446 -$1,569

$891 $2,564 $5,720 $2,388

1.21 1.34 1.47 1.62
$734 $1,918 $3,883 $1,472
 2016 Assumptions
Corporate tax rate 40.00%
net working capital 26.15%
DEVEX DEVEX of 400 have already been used so I have not included it in the calcu
Risk-free rate 3.70%
Market premium 6.00%
Peer - average asset beta 1.08
Return on equity 10.17%

$0
-$1,308

$1,308
1.79
$731
not included it in the calculation
Flash Memory, Inc.

Exhibit 1 Income Statements, 2007 - 2009 ($000s except earnings per share)
Forecasted period
2007 2008 2009 2010 2011 2012

Net sales $77,131 $80,953 $89,250 $120,000 $165,600 $172,000

Cost of goods sold $62,519 $68,382 $72,424 $97,320 $133,848 $138,904
Gross margin $14,612 $12,571 $16,826 $22,680 $31,752 $33,096

Research and development $3,726 $4,133 $4,416 $6,000 $7,200 $7,200

Selling, general and administrative $6,594 $7,536 $7,458 $10,032 $13,843 $14,378
Advertising and promotion $0 $300 $0
Operating income $4,292 $902 $4,952 $6,648 $10,409 $11,518

Interest expense $480 $652 $735 $937 $1,527 $1,752

Other income (expenses) -$39 -$27 -$35 -$50 -$50 -$50

Income before income taxes $3,773 $223 $4,182 $5,661 $8,832 $9,716

Income taxes (a) $1,509 $89 $1,673 $2,264 $3,533 $3,887

Net income $2,264 $134 $2,509 $3,396 $5,299 $5,830

Earnings per share $1.52 $0.09 $1.68 $2.28 $3.55 $3.91

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

Line Item Assumption or Ratio

Cost of goods sold 81.10% of sales 0.811

Research and development 5.0% of sales 0.05
Selling, general and administrative 8.36% of sales 0.0836
Interest expense Beginning of year debt balance 9.25% Interest rate 3.25%
Other income (expenses) $50,000 of expense -50 prime plus 6.00%
Corporate tax rate (a) In years 2007 an 0.4
Flash Memory, Inc.

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

December 31, Forecasted period

2007 2008 2009 2010 2011 2012

Cash $2,536 $2,218 $2,934 $3,960 $5,465 $5,676

Accounts receivable $10,988 $12,864 $14,671 $19,726 $27,222 $28,274
Inventories $9,592 $11,072 $11,509 $13,865 $19,069 $19,789
Prepaid expenses $309 $324 $357 $480 $662 $688
Total current assets $23,425 $26,478 $29,471 $38,031 $52,418 $54,427

Property, plant & equipment at cost $5,306 $6,116 $7,282 $8,182 $9,082 $9,982
CAPEX - new project $0 $0 $0 $2,200 $0 $0
Less: Accumulated depreciation $792 $1,174 $1,633 $2,179 $4,993 $7,874
Net property, plant & equipment $4,514 $4,942 $5,649 $8,203 $4,089 $2,108

Total assets $27,939 $31,420 $35,120 $46,234 $56,507 $56,535

Accounts payable $3,084 $4,268 $3,929 $4,799 $6,601 $6,850

Notes payable (a) $6,620 $8,873 $10,132 $16,506 $18,936 $12,763
Accrued expenses $563 $591 $652 $876 $1,209 $1,256
Income taxes payable (b) $151 $9 $167 $226 $353 $389
Other current liabilities $478 $502 $554 $744 $1,027 $1,066
Total current liabilities $10,896 $14,243 $15,434 $23,151 $28,126 $22,324

Common stock at par value $15 $15 $15 $15 $15 $15
Paid in capital in excess of par value $7,980 $7,980 $7,980 $7,980 $7,980 $7,980
Retained earnings $9,048 $9,182 $11,691 $15,087 $20,387 $26,216
Total shareholders' equity $17,043 $17,177 $19,686 $23,082 $28,382 $34,211

Total liabilities & shareholders' equity $27,939 $31,420 $35,120 $46,234 $56,507 $56,535

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

(a) Secured by accounts receivable. $29,728 $37,571 $43,772

(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.

Line Item Assumption or Ratio

Cash 3.3% of sales 3.3%
Accounts receivable 60 days sales outstan 16.4%
Inventories 52 days of cost of go 14.2%
Prepaid expenses 0.4% of sales 0.4%
Property, plant & equipment at cost Beginning PP&E at cos $900
Accumulated depreciation Beginning A/D + 7.5% 7.5%

Accounts payable 30 days of purchases 8.22%

Purchases 60% of cost of goods 60.00%
Accrued expenses 0.73% of sales 0.73%
Income taxes payable 10% of income taxes 10.00%
Other current liabilities 0.62% of sales 0.62%

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

December 31, Forecasted period

2007 2008 2009 2010 2011 2012

Cash $2,536 $2,218 $2,934 $2,156 $5,465 $5,676

Accounts receivable $10,988 $12,864 $14,671 $19,726 $27,222 $28,274
Inventories $9,592 $11,072 $11,509 $13,865 $19,069 $19,789
Prepaid expenses $309 $324 $357 $480 $662 $688
Total current assets $23,425 $26,478 $29,471 $36,227 $52,418 $54,427

Property, plant & equipment at cost $5,306 $6,116 $7,282 $8,182 $9,082 $9,982
CAPEX - new project $0 $0 $0 $2,200 $0 $0
Less: Accumulated depreciation $792 $1,174 $1,633 $2,179 $4,993 $7,874
Net property, plant & equipment $4,514 $4,942 $5,649 $8,203 $4,089 $2,108

Total assets $27,939 $31,420 $35,120 $44,430 $56,507 $56,535

Accounts payable $3,084 $4,268 $3,929 $4,799 $6,601 $6,850

Notes payable (a) $6,620 $8,873 $10,132 $14,702 $20,629 $16,475
Accrued expenses $563 $591 $652 $876 $1,209 $1,256
Income taxes payable (b) $151 $9 $167 $226 $353 $389
Other current liabilities $478 $502 $554 $744 $1,027 $1,066
Total current liabilities $10,896 $14,243 $15,434 $21,347 $29,819 $26,036

Common stock at par value $15 $15 $15 $15 $15 $15
Paid in capital in excess of par value $7,980 $7,980 $7,980 $7,980 $7,980 $7,980
Retained earnings $9,048 $9,182 $11,691 $15,087 $18,620 $22,507
Total shareholders' equity $17,043 $17,177 $19,686 $23,082 $26,615 $30,502

Total liabilities & shareholders' equity $27,939 $31,420 $35,120 $44,430 $56,434 $56,537

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

(a) Secured by accounts receivable. $29,728 $35,878 $40,060

(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.

Line Item Assumption or Ratio

Cash 3.3% of sales 3.3%
Accounts receivable 60 days sales outstan 16.4%
Inventories 52 days of cost of go 14.2%
Prepaid expenses 0.4% of sales 0.4%
Property, plant & equipment at cost Beginning PP&E at cos $900
Accumulated depreciation Beginning A/D + 7.5% 7.5%

Accounts payable 30 days of purchases 8.22%

Purchases 60% of cost of goods 60.00%
Accrued expenses 0.73% of sales 0.73%
Income taxes payable 10% of income taxes 10.00%
Other current liabilities 0.62% of sales 0.62%

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%
 Forecasted period
2010 2011
Net income $3,396 $5,299

Working capital $14,880 $22,599

CAPEX $3,100 $900

Needed external capital fundi $14,583 $18,200

period
2012
$5,830

$28,391

$900

$23,462
Flash Memory, Inc.

Exhibit 1 Income Statements, 2007 - 2009 ($000s except earnings per share)
Forecasted period
2007 2008 2009 2010 2011 2012

Net sales $77,131 $80,953 $89,250 $120,000 $165,600 $172,000

Cost of goods sold $62,519 $68,382 $72,424 $97,320 $133,848 $138,904
Gross margin $14,612 $12,571 $16,826 $22,680 $31,752 $33,096

Research and development $3,726 $4,133 $4,416 $6,000 $7,200 $7,200

Selling, general and administrative $6,594 $7,536 $7,458 $10,032 $13,843 $14,378
Advertising and promotion $0 $300 $0
Operating income $4,292 $902 $4,952 $6,648 $10,409 $11,518

Interest expense $480 $652 $735 $735 $696 $947

Other income (expenses) -$39 -$27 -$35 -$50 -$50 -$50

Income before income taxes $3,773 $223 $4,182 $5,863 $9,663 $10,521

Income taxes (a) $1,509 $89 $1,673 $2,345 $3,865 $4,209

Net income $2,264 $134 $2,509 $3,518 $5,798 $6,313

Earnings per share $1.52 $0.09 $1.68 $2.36 $3.89 $4.23

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

Line Item Assumption or Ratio

Cost of goods sold 81.10% of sales 0.811

Research and development 5.0% of sales 0.05
Selling, general and administrative 8.36% of sales 0.0836
Interest expense Beginning of year debt balance 9.25% Interest rate 3.25%
Other income (expenses) $50,000 of expense -50 prime plus 6.00%
Corporate tax rate (a) In years 2007 an 0.4 prime plus 4% if debt is below 70%
Flash Memory, Inc.

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

December 31, Forecasted period

2007 2008 2009 2010 2011 2012

Cash $2,536 $2,218 $2,934 $3,960 $4,752 $4,752

Accounts receivable $10,988 $12,864 $14,671 $19,726 $27,222 $28,274
Inventories $9,592 $11,072 $11,509 $13,865 $19,069 $19,789
Prepaid expenses $309 $324 $357 $480 $662 $688
Total current assets $23,425 $26,478 $29,471 $38,031 $51,705 $53,503

Property, plant & equipment at cost $5,306 $6,116 $7,282 $8,182 $9,082 $9,982
CAPEX - new project $0 $0 $0 $2,200 $0 $0
Less: Accumulated depreciation $792 $1,174 $1,633 $2,179 $4,993 $7,874
Net property, plant & equipment $4,514 $4,942 $5,649 $8,203 $4,089 $2,108

Total assets $27,939 $31,420 $35,120 $46,234 $55,794 $55,611

Accounts payable $3,084 $4,268 $3,929 $4,799 $6,601 $6,850

Notes payable (a) $6,620 $8,873 $10,132 $9,598 $13,056 $8,617
Accrued expenses $563 $591 $652 $876 $1,209 $1,256
Income taxes payable (b) $151 $9 $167 $235 $387 $421
Other current liabilities $478 $502 $554 $744 $1,027 $1,066
Total current liabilities $10,896 $14,243 $15,434 $16,251 $22,279 $18,209

Common stock at par value $15 $15 $15 $15 $15 $15
Common of new shares $4,475 $4,475 $4,475
Paid in capital in excess of par value $7,980 $7,980 $7,980 $7,980 $7,980 $7,980
Paid in capital in excess of par value after new shares $2,425 $2,425 $2,425
Retained earnings $9,048 $9,182 $11,691 $15,087 $18,620 $22,507
Total shareholders' equity $17,043 $17,177 $19,686 $29,982 $33,515 $37,402

Total liabilities & shareholders' equity $27,939 $31,420 $35,120 $46,234 $55,794 $55,611

Hard codet - toal liabilities & shareholders' equity $27,939 $31,420 $35,120 $36,636 $42,738 $46,995

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

Number of new shares outstanding 300,000 300,000 300,000
Total shares outstanding 1,491,662 1,491,662 1,491,662 1,791,662 1,791,662 1,791,662

Paid-in capital calculation Shares Issuance Capital

Total Equity Capital rasied after cost 300,000 23 6,900,000
Par Amount
Common stock 15 4,474,986
Excess Amount
Additional Paid-In capital 8 2,425,014

(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.

Line Item Assumption or Ratio

Cash 3.3% of sales 3.3%
Accounts receivable 60 days sales outstan 16.4%
Inventories 52 days of cost of goo 14.2%
Prepaid expenses 0.4% of sales 0.4%
Property, plant & equipment at cost Beginning PP&E at cos $900
Accumulated depreciation Beginning A/D + 7.5% 7.5%

Accounts payable 30 days of purchases 8.22%

Purchases 60% of cost of goods 60.00%
Accrued expenses 0.73% of sales 0.73%
Income taxes payable 10% of income taxes 10.00%
Other current liabilities 0.62% of sales 0.62%

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%
 Forecasted period
2010 2011
Net income $3,518 $5,798

Working capital $21,780 $29,426

CAPEX $3,100 $900

Needed external capital fundi $21,361 $24,528

period
2012
$6,313

$35,294

$900

$29,881