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To: Sam who wrote (28184)	5/10/2005 6:42:32 PM
From: slacker711	Read Replies (2) \| Respond to of 60323

Poor Lexar, the trial keeps getting delayed <g>....this could be a really bad quarter for them. yahoo.brand.edgar-online.com We are also seeking an injunction to prevent the importation of chips or cards manufactured by Toshiba or its Flash Vision affiliate that incorporate our technology. Our claim for unfair competition, based on California Business and Professions Code Section 17200, was not given to the jury and will be decided by the Court. We expect that the Court will rule on that claim and our motion for an injunction, as well as on anticipated post-trial motions, shortly after a hearing we expect to be held no earlier than late June 2005. This hearing was previously scheduled for May 16, 2005 but was recently delayed by the court.

To: Sam who wrote (28184)	5/10/2005 6:42:54 PM
From: Pam	Respond to of 60323

Hi Sam, The courts are the only thing keeping LEXR afloat right now. I am not a lawyer so treat my opinion with a grain of salt, but I had a chance to read a bit about the Lexar complaint and the Summary Ruling by the Judge and Toshiba's response at Lexar's website and needless to say Toshiba was poorly represented and their defense was weak. If Toshiba is going to keep on repeating that the time to sue them has expired so its too late to come after them, it doesn't seem like a good defense strategy to me. I think, the Judge already ruled that even though the time has passed, this complaint has merits to be heard. With Lexar shares jumping last week, it does appear that there are people who believe that Lexar has decent chance of collecting money from Toshiba in this matter. I also get the feeling that Toshiba may end-up settling this matter unless they can come up with a better defense. Well, we will all know next Monday. Both companies and lawyers have a very long w/e ahead of them. As far as the injunction is concerned, from what I have read it seems unlikely as they take that route generally when there is no hope of collecting the award. -Pam PS: As per Slackers post, it seems the ruling date is delayed again.

To: Sam who wrote (28184)	5/10/2005 6:55:24 PM
From: Pam	Read Replies (1) \| Respond to of 60323

Hi Sam, Our resellers may not accept our price increases from the first quarter of 2005 or in the future, if any, and, if we do not lower our selling prices to be consistent with our competitors' selling prices, our resellers may decide to reduce their orders, purchase from other vendors or return unsold product to us. In the past several months, we have lost product placements to our competitors at Wal-Mart and Sam's Club, Comp USA and other resellers in part because of our selling price strategy. In particular, CompUSA has terminated their relationship with us. In addition, at Wal-Mart and Sam's Club, which accounted for approximately 17% of our gross revenue in the first quarter of 2005, we may experience a significant decline in sales due to their addition of other vendors products into their stores. This is just my educated guess- I think Lexar is unlikely to meet the $200MM rev guidance for this Q. Also, I wouldn't be surprised if they markdown their inventory in one of these quarters. Lexar spoiled their relationship with Samsung a few Q's ago and will pay a price for a while with irregular shipments from their main supplier. -Pam