889930--10/14/2008--OVERLAND_STORAGE

related topics

{customer, product, revenue}

{property, intellectual, protect}

{system, service, information}

{operation, international, foreign}

{product, market, service}

{stock, price, share}

{stock, price, operating}

{control, financial, internal}

{acquisition, growth, future}

{tax, income, asset}

{debt, indebtedness, cash}

{personnel, key, retain}

{competitive, industry, competition}

{loss, insurance, financial}

{interest, director, officer}

Our current cash and cash equivalents will fund our operations at current levels into November 2008. We need additional funding or we will be forced to liquidate assets and/or curtail or cease operations. Any additional funding may dilute your shares. If we are unable to raise additional funds for operations, we may not be able to continue as a going concern We have a history of net losses. We expect to continue to incur net losses for some time and we may not achieve or maintain profitability. Our financial condition and the going concern opinion from our independent registered public accounting firm may negatively impact our business. We recorded an impairment charge to reduce the carrying value of our auction rate securities and we may incur additional impairment charges with respect to auction rate securities in the future. As our revenue base continues to decline from our current operations, we may choose to exit or divest some or a substantial portion of our current operations to focus on fewer opportunities. Our business has been highly dependent on sales to large OEM customers, and we are currently in the middle of a transition with our largest OEM customer. We could incur charges for excess and obsolete inventory. If our suppliers fail to meet our manufacturing needs, it would delay our production and our product shipments to customers and negatively affect our operations. We rely on indirect sales channels to market and sell our branded products. Therefore, the loss of or deterioration in our relationship with one or more of our distributors or resellers could negatively affect our operating results. We plan to replace our ERP (Enterprise Resource Planning) System within the next several years, and this may be disruptive to our business. Our financial results may fluctuate substantially for many reasons, and past results should not be relied on as indications of future performance. The market price of our common stock may be volatile We face intense competition and price pressure, and many of our competitors have substantially greater resources than we do. Our business is highly dependent on the continued market acceptance and usage of tape-based systems for data backup and recovery. Our disk-based products involve many significant risks and may fail to achieve or maintain market acceptance. Our success depends on our ability to anticipate rapid technological changes and develop new and enhanced products. Our international operations are important to our business and involve unique risks. We are subject to exchange rate risk in connection with our international operations. Our ability to compete effectively depends in part on our ability to protect our intellectual property rights effectively. Our success will depend partly on our ability to operate without infringing on or misappropriating the proprietary rights of others. We have made a number of acquisitions in the past, including our June 2008 acquisition of Snap Server, and we may make acquisitions in the future. The failure to successfully integrate acquisitions and successfully complete product development and launch of the related products could harm our business, financial condition and operating results. Our warranty reserves may not adequately cover our warranty obligations. The failure to attract, retain and motivate key personnel could have a significant adverse impact on our operations. We may require a reverse stock split in order to satisfy the requirement that our common stock maintain a minimum bid price of $1.00 in order to maintain listing on the NASDAQ Global Market. If we cannot satisfy such requirement and other continued listing requirements, our common stock may be delisted from the NASDAQ Global Market, and our stock price could be adversely affected and the liquidity of our stock and our ability to obtain financing could be impaired.

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889930--10/14/2008--OVERLAND_STORAGE_INC