Exhibit 99.2

FORM OF LETTER TO STOCKHOLDERS WHO ARE RECORD HOLDERS

CROSSROADS SYSTEMS, INC.

Up To [________] Shares of Common Stock
Issuable Upon the Exercise of Subscription Rights Distributed to Record Stockholders of
Crossroads Systems, Inc.

[______], 2015

Dear Stockholder:

This notice is being distributed by Crossroads Systems, Inc. (“Crossroads” or the “Company) to all holders of record (the “Record Holders”) of shares of common stock, par value $0.001 per share (the “Common Stock”) and of shares of Series F Convertible Preferred Stock (the “Series F Preferred Stock”), of the Company, as of 5:00 p.m., New York City time, on [______], 2015 (the “Record Date”), in connection with the distribution in a rights offering (the “Rights Offering”), at no charge, of non-transferable subscription rights (the “Rights”) to subscribe for and purchase shares of Common Stock at a price of $[____] per share. The Rights are described in the Company’s Prospectus, dated [______], 2015 (the “Prospectus”).

In the Rights Offering, up to an aggregate of [________] shares of Common Stock are being offered pursuant to the Prospectus. The Rights will expire if they are not exercised by 5:00 p.m., New York City time, on [______], 2015 (the “Expiration Date”). Rights not exercised by the Expiration Date will expire, have no value and cease to be exercisable for Common Stock.

As described in the accompanying Prospectus, each Record Holder will receive one Right for every share of Common Stock and Series F Preferred Stock owned of record as of 5:00 p.m., New York City time, on the Record Date.

Each Right gives the holder thereof the right to purchase from the Company [_____] shares of Common Stock (the “Basic Subscription Right”) at a subscription price of $[____] per share (the “Subscription Price”), subject to the NOL Protection Mechanics (as defined in the Prospectus). Fractional shares or cash in lieu of fractional shares will not be issued in the Rights Offering. Instead, fractional shares resulting from the exercise of Basic Subscription Rights will be eliminated by rounding down to the nearest whole share. As an example, if you owned 100 shares of Common Stock and 50 shares of Series F Preferred Stock as of the Record Date, you would receive 150 Rights that would entitle you to purchase [___] shares of Common Stock for $[____] per share.

In addition, holders of Rights who purchase all of the shares of Common Stock available to them pursuant to their Basic Subscription Rights may also choose to subscribe (the “Over-Subscription Privilege”), at the same Subscription Price of $[___] per share, for a portion of any shares of Common Stock that other holders of Rights do not purchase through the exercise of their Basic Subscription Rights (the “Over-Subscription Shares”). If a sufficient number of Over-Subscription Shares are available, the Company will seek to honor all over-subscription requests in full, subject to the NOL Protection Mechanics. If, however, an insufficient number of Over-Subscription Shares are available to fully satisfy all Over-Subscription Privilege requests, the available shares will be distributed proportionately among the holders of Rights who exercise their Over-Subscription Privilege based on the number of shares each Rights holder subscribed for under the Basic Subscription Right. The Company will not issue fractional shares through the exercise of Over-Subscription Privileges. Instead, fractional shares resulting from the exercise of the Over-Subscription Privilege will be eliminated by rounding down to the nearest whole share.

Also, the Company has protection mechanics in place to preserve its ability to utilize its NOLs, including the ability to limit the amount of shares that certain stockholders may over-subscribe for. Stockholders who currently own more than, or who would increase their current holdings of the Company’s Common Stock from fewer than 967,976 shares to greater than 967,976 shares by virtue of the exercise of their Basic Subscription Right and/or Over-Subscription Privilege in this Rights Offering, may not be able to subscribe or over-subscribe to the extent otherwise allowable. If you currently own more than, or would potentially increase your current holdings of the Company’s Common Stock from fewer than 967,976 shares to greater than 967,976 shares but would like to participate in the Rights Offering, please contact the Company’s information agent, InvestorCom, Inc., to discuss your level of subscription, by email at info@investor-com.com, by telephone at (877) 972-0090 (toll free) or by mail at InvestorCom, Inc., 65 Locust Avenue, New Canaan, CT 06840.The Company will only permit such stockholders to participate in this Rights Offering up to such amounts as will not jeopardize the Company’s NOLs. The Company will reduce the amount of a subscription or an over-subscription exercise by the amount necessary to preserve the Company’s NOLs against future taxable income. See “The Rights Offering—NOL Protection Mechanics” in the Prospectus.

You will be required to submit payment in full of the Subscription Price for all of the shares of Common Stock for which you have subscribed pursuant to the exercise of the Basic Subscription Rights and the Over-Subscription Privilege to American Stock Transfer & Trust Company, LLC, the subscription agent for the Rights Offering (the “Subscription Agent”), by no later than 5:00 p.m., New York City time, on the Expiration Date. Your payment of the aggregate Subscription Price must be made in U.S. dollars for the full number of shares of Common Stock for which you have subscribed in the Rights Offering by cashier’s or certified check drawn upon a United States Bank, or a personal check, payable to the Subscription Agent at the address set forth below, or a wire transfer directly to the Subscription Agent as set forth below. In order for your Rights to be properly and timely exercised, payment in full for the aggregate Subscription Price for all of the shares for which you have subscribed in the Rights Offering, including final clearance of any uncertified personal checks, must be received by the Subscription Agent before 5:00 p.m., New York City Time, on the Expiration Date. If paying by uncertified personal check, please be aware that funds paid in this manner may take at least five (5) business days to clear. We urge you to consider using a cashier’s or certified check as we will not be responsible for any delays in processing personal checks, even if such delays result in your Rights not being exercised.

If you submit a subscription payment that is insufficient to purchase the total number of shares of Common Stock for which you subscribed, or if the number of shares you requested is not specified in the subscription documents, the payment received will be applied to exercise your Rights to the fullest extent possible based on the amount of the payment received, subject to the availability of shares under the Over-Subscription Privilege, if applicable, the elimination of fractional shares and the NOL Protection Mechanics.

If you submit a subscription payment that exceeds the amount necessary to purchase the number of shares of Common Stock for which you subscribed, then the excess amount will be returned to you by the Subscription Agent, without interest or penalty, as soon as practicable following the expiration of the Rights Offering.

The Rights are evidenced by Rights certificates (the “Subscription Rights Certificates”). Your Rights are non-transferable, meaning that you may not sell, transfer or assign your Subscription Rights Certificate to anyone else.

Enclosed are copies of the following documents:

Your prompt action is requested if you intend to participate in the Rights Offering. As described in the Prospectus, to exercise your Rights, you must properly complete and duly execute your Subscription Rights Certificate and forward it, together with payment in full of the aggregate Subscription Price for all of the shares for which you have subscribed pursuant to the Basic Subscription Rights and the Over-Subscription Privilege, to the Subscription Agent. Do not send the Subscription Rights Certificate or payment to the Company.

Your properly completed and duly executed Subscription Rights Certificate, accompanied by full payment of the aggregate Subscription Price, must be received by the Subscription Agent before 5:00 p.m., New York City time, on the Expiration Date. Once you have exercised your Rights, you may not cancel, revoke or otherwise amend the exercise of your Rights. Any Rights that are not exercised prior to 5:00 p.m., New York City time, on the Expiration Date will be void, of no value and will cease to be exercisable for shares of Common Stock, and you will have no further rights under them.

Additional copies of the enclosed materials may be obtained from American Stock Transfer & Trust Company, LLC, the subscription agent, at (877) 248-6417 (toll free), Monday through Friday (except bank holidays), between 9:00 a.m. and 4:00 p.m., Eastern Time, or the Company’s information agent, InvestorCom, Inc., by email at info@investor-com.com, by telephone at (877) 972-0090 (toll free) or by mail at InvestorCom, Inc., 65 Locust Avenue, New Canaan, CT 06840.

Very truly yours,

Richard K. Coleman, Jr.
President and Chief Executive Officer