8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported)       August 12, 2005

nSTOR TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-12895	95-2094565
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer   Identification No.)

6190 Corte Del Cedro, Carlsbad California	92009
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code (760) 683-2500

N/A

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

      [   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

      [   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

      [   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

      [   ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01.	Regulation FD Disclosure
Item 9.01.	Financial Statements and Exhibits
	(c)	Exhibits
		99.1	Press Release dated August 12, 2005.

    The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition”.

    The information in this Current Report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.  The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.  The furnishing of the information in this Current Report is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the information this Current Report contains is material investor information that is not otherwise publicly available.

    On August 12, 2005, the Registrant, nStor Technologies, Inc., issued a press release (the “Press Release”) announcing its financial results for the second quarter ended June 30, 2005.  A copy of the Press Release is attached as Exhibit 99.1.  The Press Release is incorporated herein by reference.

SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	nSTOR TECHNOLOGIES, INC.
	(Registrant)
Date:  August 12, 2005	By:	/s/ Jack Jaiven
		Jack Jaiven
		Vice President and Treasurer

EX-99

NSTOR FINANCIAL
  NEWS RELEASE

                                                                                                            nStor Technologies, Inc.
                                                                                                                                     6190 Corte del Cedro
                                                                                                                                     Carlsbad, California 92011
                                                                                                                                     Phone:  760-683-2500
                                                                                                                                     Fax:  760-683-2599

Contact:
Veena Raman
nStor Technologies, Inc.
760.683.2500
vraman@nstor.com

nStor Technologies Reports Second Quarter 2005 Results

30 Percent Sequential Revenue Growth
105 Percent Year over Year Growth

Carlsbad, CA – August 12, 2005 -- nStor Technologies, Inc. (AMEX: NSO), an innovative developer of storage networking solutions, today announced operating results for the second quarter and six months ended June 30, 2005. 

During the second quarter, the company’s revenues rose by $2,116,000 or 105% as compared to the corresponding quarter of 2004 and $944,000 or 30 percent from the first quarter of 2005.  The company’s second quarter net loss available to common stock was $2,139,000 or $.01 per common share on revenues of $4,125,000 compared to a net loss of $1,802,000 or $.01 per common share on revenues of $2,009,000 during the corresponding quarter of 2004.  Second quarter bookings and quarter end backlog approximated $5 million and $2.9 million, respectively, again, representing the highest quarterly bookings and quarter end backlog recorded in the company’s recent history.   These orders are largely scheduled to ship during the third quarter of 2005.

For the six months, revenues increased by $3,049,000 or 72% as compared to the corresponding period of 2004.  The company’s six month net loss available to common stock was $4,451,000 or $.03 per common share on revenues of $7,306,000 compared to a net loss of $3,938,000 or $.02 per common share on revenues of $4,257,000 during the corresponding six month period of 2004.

“Our second quarter results demonstrate our continued progress in executing against our strategic plan, as we continue to grow our product portfolio and build on a solid customer base.  During 2005, we have experienced a higher volume of orders from existing major customers and have begun significant volume shipments to several new customers,” noted Todd Gresham, nStor’s president and CEO.  He further commented that the pending merger agreement with Xyratex is complementary to nStor’s business initiatives and brings additional value to its customers, providing resources, volume procurement capabilities and customer acquisition possibilities.  Mr. Gresham added, “This transaction allows us to better serve our customers, giving us the means to significantly expand our market reach and our product development capabilities by providing the financial stability that will afford us the opportunities in this dynamic market segment.”  Mr. Gresham explained, “Xyratex’s tender offer commenced on August 5, 2004 and expires on September 2, 2005 and the company expects the merger to become final shortly thereafter.”  

Business Highlights

      ·    Recently introduced, OneStor^TM family of industry leading next generation Fibre/SAS/SATA
           products

           o        Earns industry attention and contribution to strong revenue growth

           o        Market leading SAS product shipments

      ·    Initiation of product cost reduction programs

      ·    Strong sales of new and traditional offerings to existing and new customers

      ·    Announcement of pending acquisition agreement by Xyratex Ltd. (NASDAQ:  XRTX) allowing for
           access to funding, technology and scale

About nStor Technologies, Inc.

Headquartered in Carlsbad, Calif., nStor Technologies, Inc. (AMEX: NSO) is a developer of data storage solutions that are ideally suited for both large enterprises as well as small to mid-sized businesses.  The Company's flagship controller technology and StorView software form the foundation forthe OneStor and NexStor family of turnkey solutions that support today’s most popular operating environments. Designed for storage-intensive environments and mission-critical applications, nStor's products are offered in various architectures including Fibre Channel, SAS, SCSI and SATA and are focused on addressing customers' business needs and applications. The Company markets its storage solutions through a global network of OEM partners and solutions integrators. For more information, visit www.nstor.com.

###

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimated," "project," "expect," "anticipate," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, insufficient funding, the Company's inability to increase sales to current customers and to expand its customer base, continued acceptance of the Company's products in the marketplace, the Company's inability to improve the gross margin on its products, competitive factors, dependence upon third-party vendors, outcome of litigation, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. nStor and StorView are registered trademarks of nStor Technologies, Inc.

nStor Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

				Three Months Ended						Six Months Ended
				June 30,						June 30,
				2005			2004			2005			2004
Sales			$	4,125		$	2,009		$	7,306		$	4,257
Cost of sales				3,040			1,443			5,302			3,184
		Gross margin		1,085			566			2,004			1,073
Operating expenses:
	Selling, general and administrative			2,002			1,467			4,009			2,744
	Research and development			976			685			2,088			1,696
	Depreciation			61			51			123			103
		Total operating expenses		3,039			2,203			6,220			4,543
Loss from operations				(1,954	)		(1,637	)		(4,216	)		(3,470	)
Interest expense, net				(113	)		(238	)		(162	)		(412	)
Loss from continuing operations				(2,067	)		(1,875	)		(4,378	)		(3,882	)
Income (loss) from discontinued operations				41			73			138			(56	)
Net loss before preferred stock dividends				(2,026	)		(1,802	)		(4,240	)		(3,938	)
Preferred stock dividends				(113	)		--			(211	)		--
Net loss available to common stock			$	(2,139	)	$	(1,802	)	$	(4,451	)	$	(3,938	)
Basic and diluted net loss per common share:
Loss from continuing operations			$	(.01	)	$	(.01	)	$	(.03	)	$	(.02	)
Income (loss) from discontinued       operations				.00			.00			.00			(.00	)
			$	(.01	)	$	(.01	)	$	(.03	)	$	(.02	)
Weighted average number of common shares     considered outstanding, basic and diluted				165,098			165,070			165,098			165,078

nStor Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)

				June 30,
				2005			December 31,
				(unaudited)			2004
ASSETS
Current assets:
	Cash and cash equivalents		$	58		$	1,272
	Accounts receivable, net			1,403			1,805
	Note receivable			--			626
	Inventories			1,548			1,882
	Prepaid expenses and other			297			295
		Total current assets		3,306			5,880
Property and equipment, net				453			512
Goodwill, net				1,989			1,989
Note receivable				--			417
			$	5,748		$	8,798
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
	Borrowings:
		Affiliate	$	3,725		$	9,100
		Other		325			--
	Accounts payable and other			3,544			2,543
		Total current liabilities		7,594			11,643
Long-term debt				--			3,650
Total liabilities				7,594			15,293
Shareholders’ deficit				(1,846	)		(6,495	)
			$	5,748		$	8,798