SAN DIEGO–(EMWNews)–BakBone Software, Incorporated

(Pink Sheets:BKBO), a global provider of heterogeneous integrated data

protection solutions, today announced that it has filed with the

Securities and Exchange Commission its annual report on Form 10-K for

its fiscal year ended March 31, 2006.

This annual report contains consolidated financial statements as of and

for fiscal years ended March 31, 2005 and 2006; condensed financial

information for the second, third and fourth fiscal quarters of BakBone’s

fiscal year ended March 31, 2005; and each of the quarters of fiscal

year ended March 31, 2006. Additionally, this annual report includes

restatements of previously filed financial statements, data and related

disclosures including consolidated financial statements as of and for

fiscal year ended March 31, 2004; condensed financial information for

fiscal quarter ended June 30, 2004; and selected consolidated financial

data as of and for fiscal years ended March 31, 2002, 2003 and 2004.

“Filing this Form 10K for our fiscal years

2004, 2005 and 2006 is an important step toward our goal of becoming a

current filer with the SEC,” said Jim Johnson,

CEO, BakBone. “We are now focused on preparing

and filing our remaining 10K reports for fiscal years 2007 and 2008 as

well as any forms that are required to bring us into compliance as a

current filer.”

Conference Call Information

The company has scheduled a conference call for today at 2:00 p.m. PDT

to discuss the bookings and cash results for the quarter ended Jun 30,

2008. In addition, management will also review key items related to the

10K filing for fiscal years 2004, 2005 and 2006. The call will be hosted

by Jim Johnson, CEO of BakBone Software.

This call will be webcast and can be accessed at www.bakbone.com

by clicking on “Company Info”

and then “Investor Relations.”

The webcast is also being distributed through the Thomson StreetEvents

Network. Individual investors can listen to the call at www.earnings.com,

Thomson’s individual investor portal, powered

by StreetEvents. Institutional investors can access the call via Thomson

StreetEvents (www.streetevents.com),

a password-protected event management site.

About BakBone Software

BakBone is committed to making data protection a simple, straightforward

process while delivering its Integrated Data Protection (IDP) strategy

through an award-winning product suite. This suite provides

unprecedented capabilities not only to protect critical data –

but more importantly, to ensure the availability of that data as

well. BakBone’s products offer a single

point of control for managing resources across all platforms, providing

improved operational efficiency, reduced system downtime, improved

availability and enhanced security to support the business growth of

enterprise environments. Thousands of users worldwide leverage BakBone’s

IDP approach to simplify the management of multi-platform environments

with a portfolio of backup, disaster recovery, replication and storage

reporting solutions for Linux, Windows, Unix and Mac OS environments.

These scalable data protection solutions address the demands of Global

5000 organizations and are distributed through a worldwide network of

select OEM partners, strategic partners, resellers and solution

providers. BakBone is headquartered in San Diego, Calif. For more

information about BakBone, visit www.bakbone.com

or email [email protected].

Safe Harbor

This press release contains forward-looking statements that involve

risks, uncertainties, assumptions and other factors, which, if they do

not materialize or prove correct, could cause BakBone’s results to

differ materially from historical results, or those expressed or implied

by such forward-looking statements. The potential risks and

uncertainties may include, but are not limited to: BakBone’s

ongoing review of its financial statements and efforts to become current

in its reporting with the Securities and Exchange Commission and the

Canadian Securities Administrators; competition in our target markets;

potential capital needs; management of future growth and expansion; the

development, implementation and execution of the Company’s

Integrated Data Protection (IDP) strategic vision; risk of third-party

claims of infringement; protection of proprietary information; customer

acceptance of the Company’s existing and newly introduced products and

fee structures; and the success of BakBone’s brand development efforts;

risks associated with strategic alliances; reliance on distribution

channels; product concentration; need to develop new and enhanced

products; potential product defects; our ability to hire and retain

qualified employees and key management personnel; and risks associated

with changes in domestic and international market conditions and the

entry into and development of international markets for the Company’s

products. Our forward-looking statements should be considered in the

context of these and other risk factors disclosed in our most recent

report filed with the Securities and Exchange Commission, which may be

found at www.sec.gov,

as well as those risk factors disclosed in our current report filed with

the Canadian Securities Administrators, which is available on SEDAR at www.sedar.com.

All future written and oral forward-looking statements made by us or on

our behalf are also subject to these factors. BakBone assumes no

obligation to update any forward-looking statement to reflect events or

circumstances arising after the date on which it was made, other than as

required under applicable securities laws.

The common shares of BakBone Software are currently subject to cease

trade orders in the Canadian jurisdictions of Alberta, British Columbia

and Ontario due to delays in the filing of the Company’s financial

statements. Although these cease trade orders do not prevent investors,

who are not resident in or otherwise subject to the laws of Alberta,

British Columbia or Ontario, from trading the common shares of BakBone

on the Pink Sheets in the United States, investors are encouraged to

obtain legal advice to ensure that these trades are not violating the

cease trade orders. BakBone continues to work to resolve all outstanding

issues which have prevented filing of its financial statements, however

an exact date for filing of these financial statements cannot be

determined at this time.

BakBone®, BakBone Software®,

NetVault®, Application Plugin Module™,

BakBone logo®, Integrated Data Protection™,

Redefining Data Protection™, Constant Data™,

Constant Data logo™, Constant Replicator™,

OnDemand Replicator™, and Constant HA Cluster™,

are all trademarks or registered trademarks of BakBone Software, Inc.,

in the United States and/or in other countries. All other brands,

products or service names are or may be trademarks, registered

trademarks or service marks of, and used to identify, products or

services of their respective owners.

BAKBONE SOFTWARE INCORPORATED
CONSOLIDATED BALANCE SHEETS
March 31, 2004, 2005 and 2006
(in thousands, except share data)
						March 31,
		2004					2005					2006
	(restated)
ASSETS
Current assets:
Cash and cash equivalents	$	19,399				$	19,528				$	9,518
Accounts receivable, net of allowances for doubtful accounts and sales returns of $503, $230 and $224, respectively		7,021					7,773				8,372
Other assets		1,286					849					917
Total current assets		27,706					28,150					18,807
Property and equipment, net		1,942					1,653					3,468
Intangible assets, net		111					55					2,375
Goodwill		4,269					4,269					7,615
Other assets		762					798					1,593
Total assets	$	34,790				$	34,925				$	33,858
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	926				$	2,619				$	2,218
Accrued liabilities, including allowance for sales returns of $41, $101 and $131, respectively		3,895					4,932				6,314
Current portion of deferred revenue		15,976					25,590					30,363
Total current liabilities		20,797					33,141					38,895
Deferred revenue, excluding current portion		28,733					35,202					38,130
Other liabilities		42					3					1,036
Total liabilities		49,572					68,346					78,061
Commitments and contingencies
Shareholders’ deficit:
Series A convertible preferred stock, no par value, 22,000,000 shares authorized at March 31, 2004, 2005 and 2006, 18,000,000 issued and outstanding at March 31, 2004, 2005 and 2006, liquidation preference of $20,650, $22,194 and $23,134, respectively		11,160					11,160				11,160
Share capital, no par value, unlimited shares authorized, 64,526,608, 64,542,358 and 64,542,358 shares issued and outstanding at March 31, 2004, 2005, 2006, respectively		149,294					149,163				150,036
Employee benefit trust		(5	)				(17	)				(28	)
Deferred compensation		(800	)				(264	)				(81	)
Accumulated deficit		(172,065	)				(190,947	)				(205,782	)
Accumulated other comprehensive (loss) gain		(2,366	)				(2,516	)				492
Total shareholders’ deficit		(14,782	)				(33,421	)				(44,203	)
Total liabilities and shareholders’ deficit	$	34,790				$	34,925				$	33,858

BAKBONE SOFTWARE INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended March 31, 2004, 2005 and 2006
(in thousands, except per share and share data)
	Year ended March 31,
		2004					2005					2006
	(restated)
Revenues	$	12,251				$	22,086				$	35,052
Cost of revenues		2,994					4,102					4,700
Gross profit		9,257					17,984					30,352
Operating expenses:
Sales and marketing		15,798					19,254					22,557
Research and development		4,728					6,534					9,041
General and administrative		5,954					10,888					12,647
Total operating expenses		26,480					36,676					44,245
Operating loss		(17,223	)

BakBone Corporate Contact: Jennifer Trager 858-795-7525 [email protected] or BakBone Media Contact: Amber Winans 858-795-7584 [email protected]