Financial Performance & Scoring -- © 2006 Gaskins IPO Desktop/IPOdesktop

Pre-IPO analysis, grading & scoring -- updated Nov 27

. Business Model Rating Criteria

A = high growth market, potential leader; B = more competitive market; C= 'public venture capital'

. Calculations

. IPO Price to annualized Sales Ratio -- (Price / Sales)

Numerator

Denominator

IPO market capitalization…

Annualized Sales (last six or nine months)

(post-IPO # of shares times mid-point of IPO price range)

. IPO Price to annualized Earnings (loss) -- (Price / Earnings)

Numerator

Denominator

IPO market cap

Annualized Earnings (loss) from the last quarter

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Summary ratios for the week of Nov 27 (IPOs not previously analyzed, scored & graded)

(P/E ratios based on annualizing recent results, see notes)

Note: two not graded, scored or analyzed

. Grupo Aeroportdel Centro Norte (OMAB) uses Mexican GAAP (generall accepted accounting principles)

. Wireless Ronin Technologies (RNIN) is for accredited investors

Netlist (NLST)

NLST, C+, 7

memory subsystems for server OEMs

Post-IPO shrs:19.5mm

Irvine, CA

2003

2004

2005

Sept 06*

Sept 06**

IPO Mkt

Rev ($mm)

$100

$144

$80

$109

$44

Cap (mm)

Gross Margin %

14%

7%

8%

14%

16%

$156

Profit (loss) ($mm)*

($16)

($1)

($2)

$3

$2

@$8

Profit (loss) %

-16%

-1%

-3%

3%

4%

*nine months ended Sept

**quarter ended Sept 30, 2006

VALUATION RATIOS

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (mm)

Sales

Earnings

BookValue

TangibleBV

in IPO

Netlist (NLST)

$156

0.9

22

2.9

2.9

32%

SCORECARD

Mgt

Market

Market Do-

Proprie-

Total

1-5, 5 is high

Growth

mination

tary

rating

20 is perfect

2

2

2

1

7

Summary

. Strong September quarter with upward momentum

. Small customer, but is added OEM customers

. Has new products in the process of being approved by OEMs

. Small gross suggests products are not all that proprietary

Business

. High performance memory subsystems sold to original equipment manufacturers, or OEMs, in

the server, high performance computing and communications markets

. NLST memory subsystems are incorporated into multiple platforms at International Business

Machines Corporation, or IBM, Dell Inc., Gateway, Inc., Lenovo Group Limited, or Lenovo, and

Hewlett-Packard Company.

Small number of customers

. Dell, IBM & Lenovo represented 35%, 20% & 13%, respectively, of net sales in fiscal 2005, and

. 36%, 41% and 2%, respectively, of net sales in the first nine months of fiscal 2006.

. The decline in sales to Lenovo was due to NLST's sales emphasis on high-end server

applications.

. NLST expects that Dell and IBM will continue to represent a significant percentage of net sales

for at least the next 12 months.

IBM sales grow

. Sales to IBM continued to grow significantly in the first nine months of fiscal 2006, driven by

high demand for IBM's line of blade servers that incorporates NLST's proprietary very low profile

memory subsystem.

. Sales to Dell also grew significantly as DDR2 products began to ship in volume.

. In addition, NLST began shipments to other leading OEMs, including Gateway and Hewlett-

Packard.

. NLST has several new products in various stages of qualification that are anticipated to be

incorporated into additional platforms currently in development at customers.

Net sales results

Nine months ended September 30, 2006

. Net sales for the nine months ended September 30, 2006 were $109.4 million, an increase of

$52.9 million, or 94%, over the first nine months of fiscal 2005.

. $35.8 million of the increase was attributable to higher unit sales of very low profile memory

subsystems.

. In addition, DDR2 server memory subsystem sales increased by $21.1 million and DDR

subsystem sales decreased by $7.4 million due to customers transitioning to DDR2 architectures

. Sales of memory subsystems used to control redundant arrays of independent disks (RAIDs)

commenced late in the second quarter of fiscal 2006 and contributed $10.2 million to the increase

in revenues.

. Finally, sales of laptop and desktop personal computer, or PC, memory subsystems decreased

$9.8 million as NLST focused on sales of higher margin server memory subsystems.

Nine months ended September 30, 2005

. Net sales for the year ended December 31, 2005 were $79.9 million, a decrease of $63.8 million,

or 44%, from the year ended January 1, 2005.

. This decrease was due to a $72.6 million decrease in net sales to one key customer, partially

offset by the commencement of shipments of very low profile subsystem during fiscal 2005.

. The decrease in net sales to the key customer was attributable to its shift in memory technology

from DDR to DDR2.

. NLST's sales decreased significantly as the key customer delayed qualifying new suppliers

during this transition.

History

. Commenced operations in September 2000 and initially focused on memory subsystems for the

telecommunications markets.

. Beginning in the second quarter of 2001, shifted focus to the server and high performance

computing markets, due in large part to the telecommunications market downturn.

. In 2002, we became a qualified supplier for RLX Technologies, Inc., a blade server

manufacturer.

. One of the products initially developed for RLX, a proprietary 2-inch form factor, 1-gigabyte

memory subsystem, led to the development of a range of additional memory subsystems

Employees

As of September 30, 2006, had 115 full-time employees

Intellectual property

. As of September 30, 2006, had four patents issued and eleven patent applications pending

. Assuming that they are properly maintained, one of the issued patents will expire in 2022 and the

other three will expire in 2024.

Competition

. Products are primarily targeted for the server, high performance computing and communications

markets.

. Primary competitors are memory module providers such as SimpleTech, Inc., SMART Modular

Technologies, Inc., and Viking Interworks, a division of Sanmina-SCI Corporation.

. Also faces competition from DRAM manufacturers in a limited range of applications

Use of $45mm in IPO proceeds

o $6.0 million to establish a manufacturing facility in China;

o $5.0 million to reduce outstanding borrowings under revolving line of credit;

o$1.8 million to repay outstanding indebtedness as required under term loan agreement

o remainder for general corporate purposes, including funding our working capital requirements,

increasing research and development activities and sales and marketing resources to enter new

markets, and acquiring complementary businesses, products or technologies.

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