$4.3 Million Private Placement for Crossroads

Crossroads Systems, Inc. has entered into a definitive securities purchase agreement with certain accredited investors for a private placement of 1,886,622 units of Crossroads’ common stock and warrants to purchase 943,311 shares of its common Stock.

Common stock and warrants will be sold in units, with each unit consisting of:

• one share of common stock; and
• a warrant to purchase one-half of a share of Crossroads’ common stock at an exercise price of $2.46 per whole share.

Each unit will be sold at a price of $2.2565 per unit, resulting in proceeds to Crossroads of approximately $4.3 million, before deducting expenses.

Affiliates of Lone Star Value Management, LLC, of which the company’s chairman, Jeffrey E. Eberwein, serves as a managing member, will purchase approximately $2.9 million of Units.

Roth Capital Partners acted as financial advisor to the company in the transaction, which was negotiated and approved by a special committee of the board of directors.