Overland Storage Announces $15.4 million Private Placement

Overland Storage, Inc. has signed definitive agreements for a private placement of 8,722,904 shares of Common Stock of the Company and Warrants to purchase up to 3,838,069 shares of Common Stock for a gross purchase price of approximately $15.4 million on March 16, 2011.

The purchase price for one share of Common Stock and a Warrant to purchase 0.44 shares of Common Stock is $1.765. The Warrants will have an exercise price of $1.71 per share, will expire March 21, 2016 and are exercisable in whole or in part, at any time prior to expiration. The transaction is anticipated to close on March 21, 2011 subject to customary closing conditions. The Company intends to use the proceeds from the offering for general corporate purposes and working capital, including the funding of product development and sales and marketing expansion, as well as the repayment of certain indebtedness. Clinton Group, Inc. has agreed to lead the private placement.

"We are pleased to formally begin our partnership with Eric Kelly and the Overland Storage management team," said Joseph A. De Perio, a portfolio manager of Clinton Group, Inc. "We believe this capital raise provides Overland Storage with a substantial runway to achieve its operational and financial goals and positions the company well for long-term growth and profitability," said De Perio. As part of the transaction, Mr. De Perio has agreed to join the board of directors.

"This additional capital will allow us to accelerate our product development efforts and continue our investment in the sales and marketing resources required to fuel growth of our products in our worldwide channel," said Eric Kelly, President and CEO of Overland Storage. "In addition, the board and I are pleased to welcome Joseph De Perio to the board of directors. Joe’s experience, along with Clinton Group’s financial commitment, will be invaluable as we continue to drive the business forward and seek to execute on our strategic plan."