Lerach Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit Against Dot Hill Systems Corp.

If you wish to serve as lead plaintiff, you must move the Court nolater than 60 days from today. If you wish to discuss this action orhave any questions concerning this notice or your rights or interests,please contact plaintiff's counsel, Darren Robbins of Lerach Coughlinat 800/449-4900 or 619/231-1058, or via e-mail at wsl@lerachlaw.com.If you are a member of this class, you can view a copy of thecomplaint as filed or join this class action online athttp://www.lerachlaw.com/cases/dothill/. Any member of the purportedclass may move the Court to serve as lead plaintiff through counsel oftheir choice, or may choose to do nothing and remain an absent classmember.

The complaint charges Dot Hill and certain of its officers anddirectors with violations of the Securities Exchange Act of 1934. DotHill is a provider of innovative design and delivery of storagenetwork solutions to channel and OEM partners worldwide. The Companyprovides scalable, rugged, highly available data storage products formission-critical applications.

The complaint alleges that during the Class Period, defendantsissued materially false and misleading financial statements to theinvesting public due to improper revenue recognition and inadequateinternal controls. As a result of defendants' false financialstatements, Dot Hill stock traded at artificially inflated prices.

On February 3, 2005, the Company announced its preliminary Q4 04financial results and that it would be restating its 2004 unauditedfinancial results due to a data entry error that the Companyattributed to "the material weaknesses in its internal control overits financial closing process." The Company also stated that it had"identified other errors pertaining to the quarters ended March 31,2004, June 30, 2004 and September 30, 2004 that it deems immaterial,including: the incorrect classification of certain product costs asoperating expenses, the failure to eliminate corresponding revenue andcost of goods sold entries and the presence of duplicate entries."

The complaint alleges that the true facts, which were known byeach of the defendants but concealed from the investing public duringthe Class Period, were as follows: (a) the Company's accountingdepartment suffered from material weaknesses and deficiencies andlacked the necessary staff and resources to perform its requiredfunctions; (b) the Company's inadequate internal accounting processand controls enabled Dot Hill management to manipulate the Company'sCosts of Goods Sold ("COGS") and routinely and inappropriatelymisclassify "expenses" causing Dot Hill to issue false financialstatements; (c) multiple areas of the Company's internal controlssuffered serious deficiencies; (d) the Company lacked effectiveinternal controls in its financial reporting process; and (e) theCompany falsely reported its Q1-Q3 04 financial results by improperlyrecognizing revenue and by improperly recording expenses. As a resultof defendants' allegedly false statements, Dot Hill's stock traded atinflated levels during the Class Period, increasing to as high as$17.37 on December 1, 2003. The Company's shares now trade at around$6.00 per share, 66% below the Class Period high.

Plaintiff seeks to recover damages on behalf of all purchasers ofDot Hill common stock during the Class Period (the "Class"). Theplaintiff is represented by Lerach Coughlin, which has expertise inprosecuting investor class actions and extensive experience in actionsinvolving financial fraud.

Lerach Coughlin, a 160-lawyer firm with offices in San Diego, SanFrancisco, Los Angeles, New York, Boca Raton, Washington, D.C.,Houston, Philadelphia and Seattle, is active in major litigationspending in federal and state courts throughout the United States andhas taken a leading role in many important actions on behalf ofdefrauded investors, consumers, and companies, as well as victims ofhuman rights violations. Lerach Coughlin lawyers have been responsiblefor more than $20 billion in aggregate recoveries. The Lerach CoughlinWeb site (http://www.lerachlaw.com) has more information about thefirm.