Overland Storage Financial Overview - Recent highlights

• Disk product revenue for the first quarter of fiscal 2014 was up 4% compared to the preceding quarter and up 26% compared to the first quarter of fiscal 2013.
• SnapServer DX Series product revenue in the first quarter of fiscal 2014 was $1.9 million, up 19% over the preceding quarter and up 34% compared to the first quarter of fiscal 2013.
• Released SnapScale X4, a clustered NAS product that is designed to provide a high-density solution to efficiently manage growing amounts of unstructured data.
• Amended San Diego lease reducing our square footage, resulting in an annual savings of over $1.2 million after February 2014.
• Entered into a definitive agreement to acquire Tandberg Data Holdings S.à.r.l., a privately-held global leader of storage and data protection solutions. The sole consideration payablein the acquisition consists of shares of our common stock. The acquisition is currently expected to be completed by the end of December 2013, subject to customary closing conditions, shareholder and regulatory approvals.
• Following the filing of the preliminary proxy for the Tandberg Data acquisition, the holders of convertible notes converted $10.7 million of convertible notes into shares of our common stock at $1.30 per share.
• Received gross proceeds of $3.0 million from the sale of convertible notes under our amended and restated note purchase agreement entered into in November 2013 which provides for the issuance of for up to $7.0 million of convertible notes in the aggregate.

Comments on the Tandberg Deal:

"We are excited about our agreement to acquire Tandberg Data, which would create a company which had approximately $110 million in annual revenue in our last fiscal year and would provide substantial resources and cost synergies, enabling us to compete more effectively in the marketplace and move toward a clearer path to profitability following integration of the two companies," said Eric Kelly, president and CEO, Overland Storage. "With this acquisition, we would have a larger sales engine and expanded market reach to realize the growth potential of the innovative and award-winning products we have developed over the last couple years.
"During the quarter, we continued to see solid growth in revenue from our SnapServer DX Series, both from the immediately preceding quarter and year-over-year, and we remain on track to begin rolling out our mobility business solution in the first quarter of calendar 2014, which is designed to enable us to deliver the full functionality of true native applications to any mobile device anywhere as a workforce productivity solution. Moving forward, we expect our products to benefit from a substantially expanded channel of 16,000 partners as a result of our acquisition of Tandberg Data."