Overland Storage Signed for Private Placement

Overland Storage, Inc, has signed definitive agreements for a private placement of 794,659 shares of Convertible Preferred Stock of the Company and Warrants to purchase up to 6,373,266 shares of Common Stock for a gross purchase price of approximately $12.0 million on February 18, 2010.

The Preferred Stock is initially convertible into 4,521,648 shares of Common Stock. The Warrants will have an initial exercise price of $2.583 per share which will expire February 22, 2015 and are exercisable in whole or in part, at any time prior to expiration. The transaction is anticipated to close on February 22, 2010 subject to customary closing conditions.

The Company intends to use the proceeds from the offering to fund product development, sales and marketing expansion and general working capital requirements. "We are extremely pleased to have completed this round of funding," said Eric Kelly, President and CEO of Overland Storage. "Having additional capital puts us in the position to execute on our vision and strategy, which is important to our partners, customers and employees."