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Digitiliti Acquires Storage Elements

ST. PAUL, Minn. -- Digitiliti, Inc. (the "Company" - Pink
Sheets: DIGI), announced today that it has completed its acquisition of Storage Elements, Inc. ("Storage Elements"), its principal shareholder.

In a merger of Cyclone Acquisition Corp., a Minnesota corporation and a wholly-owned subsidiary of the Company, with and into Storage Elements, all outstanding common stock of Storage Elements will be exchanged on a one for one basis for common stock of the Company that are "restricted securities"

as defined in Rule 144 of the Securities and Exchange Commission; and all outstanding convertible securities like options, warrants or convertible notes of Storage Elements will remain outstanding, but will be assumed by the Company, and common stock of the Company will be issued on exercise or conversion of these convertible securities, all as "restricted securities."

Digitiliti Inc.