Exhibit 99.1

       MATHSTAR, INC. ENTERS INTO DEFINITIVE AGREEMENTS FOR $12.6 MILLION
                 PRIVATE PLACEMENT OF COMMON STOCK AND WARRANTS

    COMPANY CONTINUES THE COMMERCIALIZATION OF ITS ARRIX(TM) FAMILY OF FIELD
                  PROGRAMMABLE OBJECT ARRAY(TM) (FPOA) PRODUCTS

HILLSBORO, Ore., Sept. 27 /PRNewswire-FirstCall/ -- MathStar, Inc.
(Nasdaq: MATH), the FPOA leader, today announced that it signed
definitive agreements for a private placement of its common stock and
common stock purchase warrants for gross proceeds of approximately $12.6
million.

In the private offering, the Company sold approximately 3.1 million
shares of common stock and common stock purchase warrants to purchase
approximately 1.3 million shares. The warrants have a five-year term and
an exercise price of $6.00 per share. The private placement is subject
to customary closing conditions and is expected to close within the next
several days. Piper Jaffray acted as the sole placement agent for the
offering.

"MathStar is currently making the transition from a research and
development company to a commercial enterprise. This financing will be
used to speed the commercialization of our Arrix family of FPOA
products," said Doug Pihl, MathStar CEO.

This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any security. The shares and warrants
issued in the private placement have not been registered under the
Securities Act of 1933, as amended, or applicable state securities laws.
The shares may not be offered or sold in the United States absent
registration under the Securities Act and applicable state securities
laws or an applicable exemption from registration requirements.
MathStar, Inc. has agreed to file a registration statement covering the
shares of common stock and the shares issuable upon exercise of the
warrants.

About MathStar, Inc.

MathStar is a fabless semiconductor company that designs, manufactures
and markets a new class of programmable logic chips called Field
Programmable Object Arrays(TM) (FPOAs). FPOAs are high-performance,
reprogrammable integrated circuits based on proprietary Silicon
Object(TM) technology. MathStar's reprogrammable FPOA can process logic
functions at a clock rate up to 1 gigahertz, much faster than current
commercially available programmable logic devices. MathStar's flagship
product line, the Arrix family, represents a powerful solution that is
ideal for digital signal processing and filtering applications in the
machine vision, video processing, medical imaging and military/aerospace
markets. FPOAs are available now and supported by a wide range of
development tools, libraries, application notes and technical
documentation. For more information, please visit www.mathstar.com.



Statements in this press release, other than historical information, may
be "forward-looking" in nature within the meaning of Section 21E the
Private Securities Litigation Reform Act of 1995 and are subject to
various risks, uncertainties and assumptions. These statements are based
on management's current expectations, estimates and projections about
MathStar and its industry and include, but are not limited to, those set
forth in the section of MathStar's Annual Report on Form 10-K filed with
the Securities and Exchange Commission on March 31, 2006 under the
heading "Risk Factors." MathStar undertakes no obligation to update any
forward-looking statements in order to reflect events or circumstances
that may arise after the date of this release.

SOURCE  MathStar, Inc.
    -0-                             09/27/2006
    /CONTACT:  Douglas Pihl or James Cruckshank both of MathStar, Inc.,
+1-503-726-5500, or info@mathstar.com; or Jeff Hardison of McClenahan Bruer
Communications, +1-503-546-1000, or jeff@mcbru.com, for MathStar, Inc./
    /Web site:  http://www.mathstar.com /
    (MATH)