Violin Memory (VMEMQ) 8-K Other Events

Exhibit 99.1

VIOLIN MEMORY, INC.

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

	October 31, 2016			January 31, 2016
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	9,305		$	23,921
Restricted cash		—			10,000
Short-term investments		2,452			42,058
Accounts receivable, net		3,669			5,308
Inventory		9,749			12,001
Other current assets		1,642			4,170
Total current assets		26,817			97,458
Property and equipment, net		6,873			9,322
Other assets		5,151			6,067
	$	38,841		$	112,847
Liabilities and Stockholders’ Deficit
Current liabilities:
Line of credit	$	—		$	13,398
Accounts payable		3,418			3,747
Accrued liabilities		8,374			13,570
Deferred revenue		9,938			13,006
Total current liabilities		21,730			43,721
Convertible senior notes, net		118,369			117,464
Deferred revenue		4,368			6,239
Long-term liabilities		—			275
Total liabilities		144,467			167,699
Stockholders’ deficit:
Preferred stock, $0.0001 par value, 10,000 shares authorized as of October 31, 2016; no shares issued and outstanding as of October 31, 2016 and January 31, 2016		—			—
Common stock, $0.001 par value, 250,000 shares authorized as of October 31, 2016; 25,258 and 24,660 shares issued and outstanding as of October 31, 2016 and January 31, 2016, respectively		2			10
Additional paid-in capital		514,742			505,274
Accumulated other comprehensive income		563			456
Accumulated deficit		(620,933	)		(560,592	)
Total stockholders’ deficit		(105,626	)		(54,852	)
	$	38,841		$	112,847

VIOLIN MEMORY, INC.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

	Three Months Ended October 31,						Nine Months Ended October 31,
	2016			2015			2016			2015
	(Unaudited)
Revenue:
Product revenue	$	1,597		$	6,326		$	7,817		$	22,996
Service revenue		5,425	��		6,213			16,421			16,947
Total revenue		7,022			12,539			24,238			39,943
Cost of revenue:
Cost of product revenue (1)		2,957			3,383			10,843			13,485
Cost of service revenue (1)		2,344			2,785			7,591			8,337
Total cost of revenue		5,301			6,168			18,434			21,822
Gross profit		1,721			6,371			5,804			18,121
Operating expenses:
Sales and marketing (1)		6,173			14,049			22,721			41,144
Research and development (1)		7,863			10,110			26,694			32,216
General and administrative (1)		2,645			3,456			9,293			13,315
Restructuring charges		980			—			2,450			—
Total operating expenses		17,661			27,615			61,158			86,675
Loss from operations		(15,940	)		(21,244	)		(55,354	)		(68,554	)
Other income (expense), net		(56	)		126			(364	)		79
Interest and other financing expense		(1,596	)		(1,649	)		(4,569	)		(5,093	)
Loss before income taxes		(17,592	)		(22,767	)		(60,287	)		(73,568	)
Income taxes		14			(98	)		54			(15	)
Net loss	$	(17,606	)	$	(22,669	)	$	(60,341	)	$	(73,553	)
Net loss per share of common stock, basic and diluted	$	(0.70	)	$	(0.93	)	$	(2.41	)	$	(3.05	)
Shares used in computing net loss per share of common stock, basic and diluted		25,207			24,389			25,015			24,138
(1) Includes stock-based compensation expense as follows:
Cost of product revenue	$	22		$	233		$	56		$	753
Cost of service revenue		112			383			466			1,052
Sales and marketing		363			785			1,673			3,066
Research and development		904			1,582			4,245			5,537
General and administrative		808			1,052			2,938			4,846

VIOLIN MEMORY, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

	Nine Months Ended October 31,
	2016			2015
	(Unaudited)
Cash flows from operating activities:
Net loss	$	(60,341	)	$	(73,553	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		6,076			6,655
Accretion of debt issuance costs to interest expense		1,013			1,287
Loss on disposal of property and equipment		99			—
Provision for excess and obsolete inventory		2,940			—
Stock-based compensation		9,373			15,254
Changes in operating assets and liabilities, net:
Accounts receivable		1,639			5,568
Inventory		(2,670	)		(1,800	)
Other assets		2,519			911
Accounts payable		126			(5,313	)
Accrued liabilities		(5,471	)		(5,131	)
Deferred revenue		(4,939	)		(3,818	)
Net cash used in operating activities		(49,636	)		(59,940	)
Cash flows from investing activities:
Purchase of property and equipment		(1,382	)		(5,451	)
Decrease (increase) in restricted cash		10,000			(7,700	)
Purchase of investments		—			(49,913	)
Sale of investments		—			1,500
Proceeds from maturity of investments		39,615			52,607
Net cash provided by (used in) investing activities		48,233			(8,957	)
Cash flows from financing activities:
Proceeds from line of credit		12,847			31,617
Repayment of line of credit		(26,245	)		(27,723	)
Proceeds from issuance of common stock, net of issuance costs		87			962
Net cash used in financing activities		(13,311	)		4,856
Effect of exchange rates on cash and cash equivalents		98			222
Net increase in cash and cash equivalents		(14,616	)		(63,819	)
Cash and cash equivalents at beginning of year		23,921			93,432
Cash and cash equivalents at end of period	$	9,305		$	29,613
Supplemental disclosure of other cash flow information:
Taxes paid	$	36		$	271
Interest paid		5,164			5,225
Supplemental disclosure of non-cash investing and financing activities:
Transfer/exchange of inventory to/for property and equipment		1,982			136
Payables outstanding related to purchases of long-term assets		—			609