Overland On Track for Completion of Transformation

Overland Storage, Inc. reported progress on the third phase of the company's transformation and its achievements for operational efficiencies intended to deliver a profitable run-rate exiting calendar year 2014, excluding stock-based compensation and one-time charges related to the Sphere3D merger and the Tandberg acquisition.

"We are pleased to report that the expected operational changes will exceed our previously-announced annual cost savings target of $20 million by 10% to 15%. As a result, we are on track to execute on our overall transformation strategy to build a strong foundation for our core business, increase global scale, and enter new and innovative markets," said Eric Kelly, president and CEO, Overland.

Sphere3D Merger Update:

• Sphere3D has filed with the SEC Amendment No. 2 to its Registration Statement on Form F-4/A covering the shares of Sphere 3D's common stock to be issued in connection with the proposed merger with Sphere 3D.
• The proposed merger with Sphere3D continues to be on track to close this fiscal quarter, subject to the effectiveness of the registration statement described above.
• Overland have entered into a memorandum of understanding with the plaintiffs in the consolidated class action cases referred to as In re Overland Storage Inc., Shareholders Litigation that would, subject to court approval and other standard conditions, provide for the settlement of all outstanding claims in regard to our proposed merger transaction with Sphere3D.

Financing Update:
Overland has secured $5.0 million of working capital in the form of debt financing from Cyrus Capital to support restructuring and transition plans.

Restructuring Update:

• Between the closing of our acquisition of Tandberg Data and the end of this quarter, the company reduced headcount by over 100 people, constituting approximately 30% of our workforce excluding personnel in our Chinese manufacturing facility.
• It in the process of completing the transition of manufacturing from our San Diego facility to China facility and contract manufacturers.
• Relationship with BDT Media Automation GmbH has progressed with the expansion of the company's tape automation product offerings and previously announced patent cross license agreement.

Overland broadens its product portfolio with following products:

• V3 hyper-converged appliances designed to address the growing virtualization and cloud markets.
• SnapServer XSD 40, powered by the new GuardianOS 7.6 software, is a simple NAS and iSCSI SAN storage available for business needs - from virtualized server and Exchange environments, to backup and storage consolidation.
• SnapScale clustered storage with the new version of our RAINcloud OS optimized for virtual infrastructures without adding management complexity.
• RDX integration with SnapServer provides small-medium business customers with an affordable integrated solution for backup and data exchange.
• NEO tape automation product line addresses a larger segment of the market, and provide our customers with a broader set of archive options.

IBM TS1150 Model E08 Tape Drives With Record 10TB Native Capacity and 360MB/s …

IBM TS1150 Model E08 (3592-E08) is the fifth generation of the IBM 3592 enterprise tape drive and is designed to provide higher levels of performance, reliability, and cartridge capacity than the TS1140 Model E07 tape drive.

The TS1150 has a 32-channel GMR head design to deliver a native data rate performance of up to 360MB/s versus the 250MB/s data rate of the TS1140. TS1150 tape drives have dual-port 8Gb FC interfaces for FC attachment to host systems or a switched fabric environment.

The TS1150 Model EH8 (3592-EH8) tape drive is the HD2-compatible model of the TS1150 for installation in HD2 frames of the TS4500 tape library.

Model conversions are also supported to allow TS1150 model E08 to be moved from TS3500 tape library to the HD2 frames of a TS4500.

With the use of the Tape Cartridge 3592 Advanced Data (Type D), TS1150 can format a cartridge uncompressed up to 10TB. TS1150 is designed for automation and uses a tape cartridge with a form factor similar to other 3592 tape cartridges, allowing it to be used in the TS4500 tape library.
The TS1150 also supports drive-based data encryption to help protect data. The TS1140-based encryption and associated IBM Security Key Lifecycle Manager components are supported in a variety of OS environments, including Power, System i, System x, System p, Oracle, Linux, and Windows.

Application, system, or library managed encryption management methods are supported.
The encryption capability is supported when the TS1150 tape drive is integrated with or attached to select IBM supported tape libraries.

Key prerequisites
The TS1150 tape drive is supported in environments including select Power Systems, System i, System p, System x, and other servers running AIX, Linux, Oracle Solaris, and Windows OS environments.

Planned availability date

• October 24, 2014: Model E08 and its feature numbers; feature number 9699 and model conversion for model E07 to model E08
• November 21, 2014: Feature numbers 1628, 1629, and model EH8; model conversions for model EH7 to EH8 and model E08 to model EH8