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Subject: Series E is CLOSED!!!
Date: Tue, 17 Jul 2007 16:49:57 -0800
Message-ID: <BB375AF679D4A34E9CA8DFA650E2B04E0493669F@onstor-exch02.onstor.net>
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Thread-Topic: Series E is CLOSED!!!
Thread-Index: AcfI1Y/lS6/xmgdKR0CI26ZLhyT+/g==
From: "Frank Laurencio" <frank.laurencio@onstor.com>
To: "org-All Employees" <org-all@onstor.com>

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Hello,

I am thrilled to announce that yesterday afternoon we formally closed a
$27M round of financing with participation from Sand Hill Capital as
well as all our existing investors.  We will be issuing a public press
release about this soon as well.

Of the $27 million, $18M is new cash that was received in our account
today and $9M is a conversion from debt to equity.  With the Series E,
our valuation stands at $152M ($125M "pre-money" plus the funds raised,
resulting in a valuation, or "market capitalization" of $152M).  This
funding is a strong validation of our performance so far but more
importantly of the future value that our investors believe we will reach
as we continue to grow.

I am happy to answer any questions you may have one-on-one and over the
next few weeks I will schedule some group sessions to talk more
generally about stock  and any other questions you may have.

Thanks!

-Frank

Frank Laurencio
CFO
ONStor, Inc.
254 E. Hacienda Av.
Campbell, CA 95008
Direct:  408-963-2461
Cell:      408-476-4525


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<TITLE>Series E is CLOSED!!!</TITLE>
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<P DIR=3DLTR><SPAN LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"><FONT =
SIZE=3D2 FACE=3D"Arial">Hello,</FONT></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Arial">I am =
thrilled to announce that yesterday afternoon we formally closed a $27M =
round of financing with participation from</FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"><FONT SIZE=3D2 =
FACE=3D"Arial"></FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"> <FONT SIZE=3D2 FACE=3D"Arial">Sand Hill =
Capital</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Arial"></FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"> <FONT SIZE=3D2 =
FACE=3D"Arial">as well as</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"> <FONT SIZE=3D2 FACE=3D"Arial">a</FONT><FONT SIZE=3D2 =
FACE=3D"Arial">ll our existing investors</FONT><FONT SIZE=3D2 =
FACE=3D"Arial">.</FONT>&nbsp;<FONT SIZE=3D2 FACE=3D"Arial"> =
W</FONT><FONT SIZE=3D2 FACE=3D"Arial">e will be issuing a public press =
release about this soon as well.</FONT></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Arial">Of the =
$27 million, $18M is new cash that was received in our account today and =
$9M is a conversion from debt to</FONT> <FONT SIZE=3D2 =
FACE=3D"Arial">equity.</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us">&nbsp;<FONT SIZE=3D2 FACE=3D"Arial"> W</FONT><FONT =
SIZE=3D2 FACE=3D"Arial">ith the Series E, our valuation stands at $152M =
($125M</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"> =
<FONT SIZE=3D2 FACE=3D"Arial">&#8220;</FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"><FONT SIZE=3D2 =
FACE=3D"Arial">pre-money</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Arial">&#8221;</FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"><FONT SIZE=3D2 =
FACE=3D"Arial"> plus the funds raised, resulting in a</FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"> <FONT SIZE=3D2 =
FACE=3D"Arial">valuation</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Arial">, or</FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"> <FONT SIZE=3D2 =
FACE=3D"Arial">&#8220;</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Arial">market =
capitalization</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Arial">&#8221;</FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"><FONT SIZE=3D2 =
FACE=3D"Arial"> of $152M).</FONT><FONT SIZE=3D2 =
FACE=3D"Arial">&nbsp;</FONT> <FONT SIZE=3D2 FACE=3D"Arial">T</FONT><FONT =
SIZE=3D2 FACE=3D"Arial">his funding is a strong validation of our =
performance so far but more</FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"> <FONT SIZE=3D2 =
FACE=3D"Arial">importantly</FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"><FONT SIZE=3D2 =
FACE=3D"Arial"></FONT> <FONT SIZE=3D2 FACE=3D"Arial">of the future value =
that our</FONT> <FONT SIZE=3D2 FACE=3D"Arial">investors believe we will =
reach as we continue to grow.</FONT></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Arial">I am =
happy to answer any questions you may have one-on-one and over the next =
few</FONT><FONT SIZE=3D2 FACE=3D"Arial"> weeks</FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"> <FONT SIZE=3D2 =
FACE=3D"Arial">I</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Arial"></FONT> <FONT SIZE=3D2 =
FACE=3D"Arial">will schedule some group sessions to</FONT></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"> <FONT SIZE=3D2 =
FACE=3D"Arial">talk more generally about</FONT> <FONT SIZE=3D2 =
FACE=3D"Arial">stock</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us">&nbsp;<FONT SIZE=3D2 FACE=3D"Arial"> and any other =
questions you may have.</FONT></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"><FONT SIZE=3D2 =
FACE=3D"Arial">T</FONT><FONT SIZE=3D2 FACE=3D"Arial">hanks</FONT><FONT =
SIZE=3D2 FACE=3D"Arial">!</FONT></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"><FONT SIZE=3D2 =
FACE=3D"Arial">-Frank</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"></SPAN><A NAME=3D""><SPAN =
LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Times New Roman">Frank =
Laurencio</FONT></SPAN></A></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Times New =
Roman">CFO</FONT></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Times New =
Roman">ONStor, Inc.</FONT></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Times New =
Roman">254 E. Hacienda Av.</FONT></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Times =
New Roman">Campbell, CA 95008</FONT></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Times New =
Roman">Direct:&nbsp; 408-963-2461</FONT></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"><FONT SIZE=3D2 FACE=3D"Times New =
Roman">Cell:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; =
408-476-4525</FONT></SPAN><SPAN LANG=3D"en-us"></SPAN><SPAN =
LANG=3D"en-us"></SPAN><SPAN LANG=3D"en-us"></SPAN></P>

<P DIR=3DLTR><SPAN LANG=3D"en-us"></SPAN></P>

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