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Xiotech Secures $10 Million in New Equity Financing to Advance Development of New Storage Systems and Applications

Company Also Adds Additional $10 Million Line of Credit

EDEN PRAIRIE, Minn., Sept. 17 /PRNewswire/ -- Xiotech Corporation, a leading provider of data storage systems, today announced it has completed a private placement of $10 million in financing. The proceeds are to be used to build on the company's successful Emprise product line and Intelligent Storage Element (ISE(TM)) technology by bringing complementary new products to market in early 2010. The company also secured a new $10 million line of credit.

Xiotech announced a round of financing in November 2007, shortly after the company's acquisition of Seagate Technology's Advanced Storage Architecture (ASA) Group, and used those funds to bring the Emprise product line and ISE technology to market. The value-leading, self-healing, self-managing and easy-to-expand Emprise products began shipping in mid-2008 and quickly became Xiotech's signature storage offering. The company has shipped more than 1,000 ISE units in less than 10 months, has implemented a robust indirect sales model through its Channel Partner Program and has certified a wide range of industry storage products that work with Xiotech's ISE technology through the ISE-Powered Alliance Program.

The new financing is designed to build on the company's vision for the next generation of storage architectures, in which organizations can more easily increase storage capacity or storage management functionality without being locked into the closed storage systems sold by most large IT vendors today.

"In the current business environment, only the most promising companies and ideas get new funding, so we're obviously encouraged by the investor support we've received," said Xiotech President and CEO Casey Powell. "We believe the positive reception the marketplace has given the Emprise product line indicates that customers recognize storage systems should be able to largely manage themselves, and should be expandable in increments. They should not require expensive and disruptive 'forklift upgrades.' That's why we're going to continue to advocate for our storage vision, and this additional funding will help us realize these goals."

About Xiotech

Xiotech Corporation, an innovator in data storage solutions, delivers the highest storage value available today based on its Intelligent Storage Element (ISE(TM)) technology. With ISE, Xiotech(R) products deliver 100 percent usable storage capacity with no drop in performance as drives are fully utilized, provide more performance with less hardware because of their efficiency and enable organizations to scale their storage infrastructures up and out with unmatched flexibility. Additionally, Xiotech significantly reduces storage operation and management costs with the patented self-healing technology of ISE, the industry's only five-year hardware warranty and the ICON Manager user interface, which integrates and automates storage operations across the array, server and virtual machine layers. With these technologies, Xiotech stands alone in its ability to lower an organization's total cost of ownership for storage.

Xiotech is based in Eden Prairie, Minn., and maintains major facilities in Colorado Springs, Colo., and Hyderabad, India. For more information, visit www.xiotech.com, email [email protected] or call toll free 1.866.472.6764.

SOURCE Xiotech Corporation

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