Qualstar Corp (QBAK)

[Enterprising Investor]

Qualstar Reports Fiscal 2013 Fourth Quarter and Full Year Results (9/30/13)

SIMI VALLEY, CA--(Marketwired - Sep 30, 2013) - Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, today reported financial results for the fourth quarter and the fiscal year ended June 30, 2013.

Fiscal 2013 Fourth Quarter Financial Results
Revenues for the fourth quarter of fiscal 2013 were $2.9 million, compared with $4.3 million for the fourth quarter of fiscal 2012, a decrease of $1.4 million or 33%. Revenue was negatively impacted by previous management's execution and strategy, as well as the market for tape storage devices. Loss from operations was $3.5 million for the fourth quarter of fiscal 2013 compared with $2.5 million for the fourth quarter of fiscal 2012, primarily due to legal fees and inventory write downs. Loss per share was $(0.28) for the fourth quarter of fiscal 2013compared with loss per share of $(0.22) per basic and diluted share for the fourth quarter of fiscal 2012.

Tape library segment revenues were $1.1 million for the fourth quarter of 2013, compared with $1.7 million for the same period last year, a decrease of $0.6 million or 35%. Power supply segment revenues were $1.7 million for the quarter, compared with $2.5 million in the fourth quarter of 2012, a decrease of $0.8 million, or 32%.

Gross margin was 12% of revenues or $370,000, for the quarter ended June 30, 2013, an improvement over the negative gross margin of (0.9)% of revenues or $(40,000) for the three months ended June 30, 2012. The increase in gross profit was primarily attributed to lower charges to the inventory reserves. Engineering expenses for the fourth quarter of the fiscal year 2013 were $1.0 million, or 36% of revenues, compared with $663,000, or 15.4% of revenues for the fourth quarter of the fiscal year 2012. Sales and marketing expenses were $854,000 or 30% of revenues for the fourth quarter of fiscal 2013, compared with $548,000, or 12.8% of revenues in the corresponding period last year. General and administrative expenses for the fourth quarter of fiscal 2013 were $1.6 million, or 57% of revenues, compared to $1.3 million, or 29% of revenues, for the same period last year.

Fiscal 2013 Full Year Financial Results
Qualstar reported revenues of $12.6 million in the fiscal year 2013, a decrease of 27% compared with $17.1 million in the fiscal year 2012. Net loss in fiscal 2013 was $10.4 million or $(0.85) per basic and diluted share. This compares with a net loss in the fiscal year 2012 of $4.1 million, or $(0.34) per basic and diluted share.

Cash, cash equivalents and marketable securities were $13.8 million at June 30, 2013, compared with $20.9 million at June 30, 2012, down $7.1 million. Inventory, net of reserves, at June 30, 2013, was $1.6 million, compared with $4.5 million at June 30, 2012. This decrease in inventory was primarily attributable to the outsourced manufacturing contract with CTS.

"Fiscal year 2013 was a year of significant changes, culminating in a new Board and CEO immediately after the year end," said CEO and President, Steven Bronson. "The results for the fiscal year 2013 reflect the prior management's plan to build cost structure ahead of the revenue to support it. The new management is committed to a more prudent and financially sound plan. Since taking office, we have significantly reduced headcount, consolidated all of our activities into one location in Simi Valley, CA, and eliminated many non value-added expenditures. We believe the resulting operating expense savings will enable us to be much more competitive. We are increasing resources in sales, especially in the international arena, from which more than half of our revenues arise. We also plan on expanding our product offerings for both business segments."

About Qualstar Corporation

Qualstar Corporation ("Qualstar" or "the Company") was incorporated in California in 1984. We are a leading provider of data storage systems marketed under the Qualstar brand, and high efficiency and high density power supplies marketed under the N2Power brand. The Company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service.

The data storage division provides high quality and highly reliable data protection and archive storage systems which are used to record, retrieve and manage electronic data, primarily in networked computing environments. Our storage products integrate with all major operating systems including Windows, Linux and UNIX, and are compatible with a wide range of storage management software solutions such as those offered by IBM, EMC, CommVault and Symantec. We offer products spanning the storage needs of the small and medium-size business market to the enterprise market. We provide comprehensive worldwide service and support programs that enable customers to keep our products running in environments where the ability to constantly access data is vital. Data storage products include highly scalable automated magnetic tape libraries providing solutions for organizations requiring backup, recovery and archival storage of critical electronic information in such vertical markets as media and entertainment, hospitals, universities, and government.

The N2Power division provides both high efficiency and high density AC/DC and DC/DC power supplies for a variety of applications including data center technologies such as switches, routers, data storage, servers and networking communications equipment. Power supply products include ultra-small high efficiency open frame switching power supplies and provide power solutions to original equipment manufacturers to incorporate into products for telecommunications and networking, industrial, gaming and test equipment and other applications such as LEDs. We also design and manufacture power solutions for the telecommunications industry employing both conventional AC/DC systems and DC/DC systems. With a wide variety of standard products and the ability to create custom and semi-custom products, we offer a very comprehensive product line to OEMs that require high-value, high-efficiency power supplies to meet individual needs. The N2 brand is one of the industry leaders in delivering high power density/high efficiency ratios.

We design our products at our location in California, where our research, development and engineering takes place, and we sell our products globally through authorized resellers and OEMs. More than half of our revenues are generated internationally. Our N2Power division utilizes contract manufacturers in Asia to produce our power supply products, while our Storage division products are manufactured by a contract manufacturer in California.

More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

http://www.marketwired.com/press-release/qualstar-reports-fiscal-2013-fourth-quarter-and-full-year-results-nasdaq-qbak-1836138.htm

[Enterprising Investor]

Qualstar Corporate Update (8/21/13)

Qualstar Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, is continuing its aggressive cost cutting strategy and extensive operational realignment to restore Qualstar to profitability. As part of the new strategy, the position of VP of Marketing has been eliminated. Robert Covey, who held that role since it was created, and was an Officer of Qualstar, has left the company to pursue other interests.

Steven Bronson, Interim CEO stated: "We wish to thank Bob for the strong distributor relationships he has created over the years and wish him every success in his future endeavors."

Qualstar's fiscal year ended on June 30, 2013. It is the intention of management to file SEC Form 10-K for the fiscal year on September 30, 2013 and provide a comprehensive earnings release concurrently.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. Qualstar's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

Cautionary Statement Concerning Forward-Looking Statements
This press release contains forward-looking statements relating to expectations, plans or prospects for Qualstar Corporation that are based upon the current expectations and beliefs of Qualstar's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Qualstar does not expect to, and disclaims any obligation to, publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Qualstar, however, reserves the right to update such statements or any portion thereof at any time for any reason. In particular, the following factors, among others, could cause actual or future results to differ materially from those suggested by the forward-looking statements: Qualstar's ability to successfully execute on its strategic plan and meet its long-term financial goals; Qualstar's ability to successfully implement and recognize cost savings; Qualstar's ability to develop and commercialize new products; industry and customer adoption and acceptance of Qualstar's new products; Qualstar's ability to increase sales of its products; the rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; adverse changes in market demand for Qualstar's products; increased global competition and pricing pressure on Qualstar's products; and the risks related to actions of activist shareholders, including the amount of related costs.
For further information on these and other and other cautionary statements, please refer to the risk factors discussed in Qualstar's filings with the U.S. Securities and Exchange Commission including, but not limited to, Qualstar's Annual Report on Form 10-K for the fiscal year ended June 30, 2012, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of such Form 10-K, and any subsequently filed reports. All documents also are available without charge through the SEC's website (www.sec.gov) or from Qualstar's website (www.qualstar.com).

Contact:

Philip Varley
CFO
805-583-7744 x 114

[illegal_alias]

okay...
still learning about this company and new CEO.
Thanks,

[Enterprising Investor]

Expect roadmap to remain constant.

We believe that shareholders clearly understood our message. We never advocated a break-up of the Company. What we and the other shareholders demand is a return to profitability by rationalizing the tape library business and focusing on the power supply business; a dividend and distribution program that returns excess cash to shareholders; and management compensation aligned with shareholder interests

June 2012

[illegal_alias]

EI, now that the proxy battle for QBAK is over, what's your outlook on the company?

[Enterprising Investor]

Qualstar Announces the Appointment of Steven N. Bronson as Interim CEO and President and the Termination of the Rights Agreement (7/15/13)

SIMI VALLEY, CA, Jul 15, 2013 (Marketwired via COMTEX) -- Qualstar Corporation, a manufacturer of data storage solutions and high-efficiency power supplies, today announced the appointment of Steven N. Bronson as interim Chief Executive Officer and President of Qualstar. Mr. Bronson replaces outgoing CEO, Lawrence Firestone.

The newly elected Board of Directors (the "Board") initiated its first step to dramatically reduce Qualstar's cost structure by terminating the employment of Lawrence D. Firestone for cause as of July 10, 2013, and several other executives as of July 31, 2013. All of these executives were based in Denver, Colorado and were hired in the last 12 months while Mr. Firestone served as CEO and President of Qualstar. The Board estimates that these measures should result in annual savings of approximately $1,000,000.

Since taking control of Qualstar, the Board learned for the first time that on May 9, 2013, Mr. Firestone entered into a two year lease (with a one year minimum) on a 3,000 square foot office in the Denver, Colorado (the "Denver Office") that was used by Mr. Firestone and his executive management team. Mr. Firestone opened the Denver Office even though Qualstar was losing money, in the midst of a proxy contest for control and its headquarters and a majority of its employees and operations are based in Simi Valley, California.

"I believe that it is vital for any successful turnaround that executive management works closely with the rest of their team and that expenses need to be controlled and reduced wherever possible," said Steven N. Bronson, interim CEO and President. Mr. Bronson continued that "we expect to close the recently opened Denver, Colorado office within the next 90 days. We believe that the results of the 2013 annual meeting constitute a shareholder mandate to reverse Qualstar's negative financial trend, and the Board is committed to delivering on this directive. The Board will continue to take the appropriate actions to right-size Qualstar, support its current and future business, build a solid foundation and preserve its liquidity base."

Separately, Qualstar announced that on July 3, 2013, the Board amended the Rights Agreement, dated February 5, 2013 between Qualstar and Corporate Stock Transfer, Inc., as rights agent (the "Rights Agreement"), by advancing the final expiration date of the Rights Agreement from the close of business on January 31, 2014 to the close of business on July 3, 2013. Effective on the close of business on July 3, 2013, the Rights Agreement is no longer effective.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. Qualstar's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements relating to expectations, plans or prospects for Qualstar Corporation that are based upon the current expectations and beliefs of Qualstar's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Qualstar does not expect to, and disclaims any obligation to, publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Qualstar, however, reserves the right to update such statements or any portion thereof at any time for any reason. In particular, the following factors, among others, could cause actual or future results to differ materially from those suggested by the forward-looking statements: Qualstar's ability to successfully execute on its strategic plan and meet its long-term financial goals; Qualstar's ability to successfully implement and recognize cost savings; Qualstar's ability to develop and commercialize new products; industry and customer adoption and acceptance of Qualstar's new products; Qualstar's ability to increase sales of its products; the rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; adverse changes in market demand for Qualstar's products; increased global competition and pricing pressure on Qualstar's products; and the risks related to actions of activist shareholders, including the amount of related costs.

For further information on these and other and other cautionary statements, please refer to the risk factors discussed in Qualstar's filings with the U.S. Securities and Exchange Commission including, but not limited to, Qualstar's Annual Report on Form 10-K for the fiscal year ended June 30, 2012, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of such Form 10-K, and any subsequently filed reports. All documents also are available without charge through the SEC's website (www.sec.gov) or from Qualstar's website (www.qualstar.com).

Contact:

Philip Varley, CFO
Email Contact
805-583-7744 x 114

Vanessa Lehr/Annie Leschin
Investor Relations
StreetSmart Investor Relations
[phone]

http://www.marketwatch.com/story/qualstar-announces-the-appointment-of-steven-n-bronson-as-interim-ceo-and-president-and-the-termination-of-the-rights-agreement-2013-07-15

[Enterprising Investor]

Qualstar Announces the Results of 2013 Annual Meeting of Shareholders (7/01/13)

SIMI VALLEY, CA--(Marketwired - Jul 1, 2013) - Qualstar Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, today announced the results for its 2013 Annual Meeting of Shareholders held Friday, June 28, 2013. Based on information provided by the independent inspector of election, IVS Associates, Inc., shareholders have voted to elect Steven N. Bronson, Alan B. Howe, Sean M. Leder, Dale E. Wallis and David J. Wolenski as members of the Qualstar Board. Bronson, Howe, Leder, Wallis and Wolenski were nominated by BKF Capital Group, Inc. which, as the holder of 18.3% of Qualstar's common stock, is the company's second largest shareholder.

"As we move past a contested election for representation on the Qualstar Board of Directors, we welcome Steven Bronson, Alan Howe, Sean Leder, Dale Wallis and David Wolenski to the Qualstar Board. I look forward to working collaboratively to ensure a smooth board transition," said Lawrence D. Firestone, Qualstar's President and Chief Executive Officer. "We can now focus our full attention to our ongoing efforts to transform Qualstar and position it for long-term growth, sustainable profitability, market leadership and enhanced value for our shareholders. I would like to thank all of our departing directors for their service, dedication and commitment to Qualstar. I am particularly grateful to Allen Alley for his exemplary leadership as our independent Chairman of the Board."

Qualstar also announced that information provided by the independent inspector of election indicates that shareholders appear to have voted to (i) not ratify the adoption by the Qualstar Board of the Rights Agreement, dated February 5, 2013, by and between Qualstar and Corporate Stock Transfer, Inc., as Rights Agent, (ii) approve the amendment and restatement of the Qualstar Corporation 2008 Stock Incentive Plan, and (iii) approve the appointment of SingerLewak LLP as the independent registered public accounting firm to audit Qualstar's financial statements for the fiscal year ending June 30, 2013.

These results are based on the receipt of the official confirmation by the independent inspector of elections which was received earlier today.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. Qualstar's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements relating to expectations, plans or prospects for Qualstar Corporation that are based upon the current expectations and beliefs of Qualstar's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Qualstar does not expect to, and disclaims any obligation to, publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Qualstar, however, reserves the right to update such statements or any portion thereof at any time for any reason. In particular, the following factors, among others, could cause actual or future results to differ materially from those suggested by the forward-looking statements: Qualstar's ability to successfully execute on its strategic plan and meet its long-term financial goals; Qualstar's ability to successfully implement and recognize cost savings; Qualstar's ability to develop and commercialize new products; industry and customer adoption and acceptance of Qualstar's new products; Qualstar's ability to increase sales of its products; the rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; adverse changes in market demand for Qualstar's products; increased global competition and pricing pressure on Qualstar's products; and the risks related to actions of activist shareholders, including the amount of related costs.

For further information on these and other and other cautionary statements, please refer to the risk factors discussed in Qualstar's filings with the U.S. Securities and Exchange Commission including, but not limited to, Qualstar's Annual Report on Form 10-K for the fiscal year ended June 30, 2012, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of such Form 10-K, and any subsequently filed reports. All documents also are available without charge through the SEC's website (www.sec.gov) or from Qualstar's website (www.qualstar.com).

Contact Information

For more information, contact:

Vanessa Lehr/Annie Leschin
Investor Relations
StreetSmart Investor Relations
[phone]

http://www.marketwire.com/press-release/qualstar-announces-the-results-of-2013-annual-meeting-of-shareholders-nasdaq-qbak-1807537.htm

[Enterprising Investor]

BKF Urges Qualstar Shareholders to Focus on the Real Facts and Issues and Vote to Elect the BKF Nominees at the 2013 Annual Meeting (6/21/13)

BOCA RATON, Fla.--(BUSINESS WIRE)--BKF Capital Group, Inc. (OTCQB: BKFG), the second largest shareholder of Qualstar Corporation (NASDAQ: QBAK), today commented on the real facts and issues in BKF’s contest to replace the Board of Directors of Qualstar and elect BKF’s highly experienced, highly qualified and highly motivated nominees at the Qualstar Annual Meeting of Shareholders on June 28, 2013.

Steven Bronson, BKF’s chief executive officer, remarked: “As the contest for the future of Qualstar approaches its final stages, shareholders should focus on the real facts and issues, and not be swayed by the Company’s assurances of recovery at some unspecified future time, or the formulaic analyses of the proxy advisory services which we believe are simply wrong.”

“The facts are that the Company is burning through its cash and does not have a large runway for recovery. Qualstar’s results for the nine months ended March 31, 2013, under the Company’s new CEO Lawrence Firestone, were the worst ever. Unlike BKF, the current Board has only a nominal investment in Qualstar. Its strategy is to throw money at a problem—the continuing drain of the tape storage business—that cannot be solved by money alone.”

“BKF’s nominees are highly skilled and experienced and are incentivized to run the Company for its owners, because BKF is a substantial owner. We want what you want—prudent cash management, a strategy for the tape storage business that is based on market realities and a return to profitability in the very near turn.”

Mr. Bronson concluded: “We ask our fellow shareholders to read this release in full, together with BKF’s other materials, and vote to elect BKF’s nominees on the GOLD proxy card.”

Money: The Board is Spending the Company’s Money Like It Belongs to Somebody Else

As BKF has been saying for well over a year, there are serious challenges facing Qualstar, particularly in its tape storage business. The solution of the Board and CEO Lawrence Firestone has been to throw money at the problem, substantially increasing G&A, increasing Sales and Marketing costs, and increasing Engineering costs. The consequence of this strategy has been a staggering cash burn of over $6 million in the past nine months, even with the Board’s highly touted outsourcing of manufacturing operations.

The Company’s approach to this proxy contest is just one example of the disregard that the Board and Mr. Firestone have for shareholder money. After spending over $600,000 to thwart BKF’s non-coercive partial tender offer in January, the Company says it will be spending $500,000 in this proxy contest. That’s a total of over $1.1 million!

In this proxy contest, BKF sent out one mailing. The Company sent out three. BKF did a simple homegrown investor presentation. The Company posted two versions of a graphically enhanced, professionally designed presentation. And why not? It’s not their money.

Is Qualstar a Start-Up Company? The Current Chairman of the Board Seems to Think So

On the Company’s investor call this week, the current Chairman of the Board, Allen Ally said “Qualstar has the feeling of a very exciting startup company.” What does that mean? It means a company that can run through its cash, with the anticipation that somebody, somehow is going to come up with more. It means a company that’s under no pressure to earn a profit. It means a company that expects its stock price to be buoyed by promises of future success and is not grounded in current performance.

If that’s what the Company’s current Chairman believes, then shareholders can begin to understand why Qualster is headed in a direction of unconstrained spending, no profitability and promises instead of performance.

Of course, Qualstar is not a startup. It has been in business for almost 30 years. The markets and shareholders rightfully want to see profits and performance now.

Unfortunately, ISS Got It Wrong—Shareholders Should Not Make the Same Mistake

The Company is touting its ISS recommendation. Unfortunately, ISS is wrong in its analysis, and were shareholders to make the same mistake, BKF believes they will see the value of their investment in the Company continue to erode.

ISS looked at TSR (Total Shareholder Return) for the 12 month period ending June 2012, noted that the Company’s TSR rose from November 2012 to May 2013 and attributed this to the actions of the current Board. But of course on May 14, 2013—when the Company released its third quarter and nine month numbers with record losses—the Company’s stock price plummeted to its November 2012 levels.

ISS says “There is little doubt the company’s restructuring efforts combined with uncertainty surrounding a myriad of events, particularly, BKF’s tender offer and the ensuing proxy contest, were distractions that may have impacted negatively on the company’s TSR since May 2013.”

Really? This is the Company’s story. The abysmal nine month numbers are the fault of BKF. Shareholders should be the judge of whether this makes any sense. In the view of BKF—and BKF believes that other shareholders agree—it does not. The Company’s stock price simply reflects the fundamental flaws in the overdrive spending strategy of the current Board that was revealed in the Company’s third quarter results.

So What Is the Fundamental Flaw in the Strategy of the Current Board?

As BKF has repeatedly explained, no matter how much of the Company’s remaining cash—which has already been substantially depleted—the Board throws at the tape storage business, it will not cure the basic problem. The Company cannot go it alone in this business. Technology is moving away from tape storage, customers are bundling their tape storage with other hardware purchases and other players in this space—think for example IBM and Oracle—are far larger and have many times the resources of the Company. That is why the Company’s most direct competitors—Overland Storage and Quantum Corp., which are larger than Qualstar—are hurting.

To compound the issue, according to the Company’s recent investor presentation, Qualstar is now proposing to move to the higher end tape storage market where it would be competing directly with the likes of IBM and Oracle. This, we believe, is a recipe for disaster.

Why Did BKF Decline Mr. Firestone’s Offer to Join the Current Board?

The Company has faulted BKF for refusing to accept its offer of two Board seats. First, BKF needs to set the record straight.

•Before the special meeting in June of last year, BKF approached Mr. Firestone with a fair proposal for equal representation on the board, a mutual agreement on the fifth seat and a modification of Mr. Firestone’s employment agreement to reduce his egregious compensation package. Mr. Firestone never responded to the offer despite giving his word to get back to BKF within two weeks.
•Mr. Firestone then reached out to BKF at the end of 2012 to get BKF to register, and perhaps sell its shares, as part of a shelf registration paid for with the Company’s money. BKF declined.
•BKF didn’t hear from Mr. Firestone again until April 2013, when it was clear that BKF was following through on its previously disclosed intentions of running a slate for the annual meeting.
•Mr. Firestone did not, as the Company claims, offer BKF two Board seats. He offered BKF one Board seat, with a second Board seat for Alan Howe. BKF is proud to have Mr. Howe, with his reputation and experience, on its slate, but Mr. Howe is independent of BKF. As Mr. Firestone well knew, Mr. Howe was suggested to BKF by another major Qualstar shareholder and has no prior relationship with Steven Bronson, BKF’s CEO.
Second, BKF took Mr. Firestone’s offer of Board representation under careful consideration but decided to wait until the Company announced its third quarter and nine month results. When BKF saw those results, with record losses and cash burn, it determined that working to change the direction of the Company with the existing Board would be futile. Moreover, BKF was concerned with the fact that on May 8, 2013, Qualstar increased the size of its Board to 7 members and appointed Bud Lahber, a friend of Mr. Firestone, as a new member of the Board.

Why Does BKF Lack Confidence in Current Management?

Mr. Firestone, who was named CEO in June 2012 and has presided over the Company’s abysmal performance in the first nine months of fiscal 2013, has no prior experience as a CEO.

The other current members of the Board that the Company has nominated for re-election have long standing relationships with Mr. Firestone—they are handpicked, as the Company likes to say. For example, on the recent investor call, Bud Lahber explained the reason he joined the Board was his personal relationship with Mr. Firestone.

In June 2012, Mr. Firestone committed the Company to breakeven or profitable operations by June 2013. That of course has not happened, and the Company is not even close to achieving this milestone. In the recent investor presentation, Mr. Firestone made no commitment as to when the Company will be profitable and has established unquantifiable “mid-term” and “long-term” targets, so as to not be held accountable

What is the Strategy of the BKF Nominees?

If elected, the BKF nominees will run a lean organization. Our nominees realize that the Company’s resources are limited and that every dollar must be spent prudently.

Our nominees will reward management, but executive compensation will principally be performance based.

Our nominees realize that the only way for the Company to extricate itself from the problems that are plaguing the tape storage business will be to partner with another strategic player to leverage resources and increase market penetration.

Our nominees will thoroughly review all strategic options, from continuing to operate as a standalone company to a business combination or reorganization. There will be only one objective, and that is to maximize value for all shareholders in which BKF will share proportionately.

Why Should Shareholders Trust the BKF Nominees?

The current Board still has only a nominal financial investment in the Company. In contrast, BKF is the Company’s second largest shareholder, with millions of dollars invested in Qualstar. The interests of BKF are directly aligned with the interests of all other shareholders, and its fortunes will rise or fall with the fortunes of everyone else.

What Should Shareholders Do?

BKF has determined that the only way to fix Qualstar is to replace the Board with new independent directors. BKF is therefore asking for the help of all shareholders to elect the directors nominated by BKF on the GOLD proxy card.

Therefore no matter how many or how few shares a shareholder owns, it is important to return the GOLD proxy card and vote FOR the election of the five nominees of BKF, and as recommended by BKF on the other proposals at the 2013 Annual Meeting.

Do not return the WHITE proxy card or any other card furnished by or on behalf of the Company. Remember that only the last vote will count. Even if a shareholder has voted on the Company’s WHITE proxy card, that vote may be revoked by returning a later dated GOLD proxy card in favor of the BKF nominees and as recommended by BKF on the other proposals.

If shareholders have any questions, require assistance in voting their shares, or need additional copies of BKF’s Proxy Statement, please contact BKF’s proxy advisors—

AST PHOENIX ADVISORS

6201 15th AVENUE

3RD FLOOR

BROOKLYN, NY 11219

CALL TOLL FREE: [phone]

BANKS AND BROKERS CALL COLLECT: [phone]

About BKF Capital Group Inc.

BKF Capital Group Inc. is a publicly traded company that intends to create an asset management platform with investment vehicles that focus on areas of portfolio management that typically receive less attention from investors but also present unique investment opportunities. BKF is also engaged in seeking to arrange an acquisition, with an operating business with revenues, at least three years of operating history and unique value opportunities. For additional information please visit: www.bkfcapital.com.

Contacts
BKF Capital Group, Inc.
Maria Fregosi, 561-362-4199 x 209
[e-mail]

http://www.businesswire.com/news/home/20130621005707/en/BKF-Urges-Qualstar-Shareholders-Focus-Real-Facts

[Enterprising Investor]

Qualstar Sends Letter to Shareholders (6/10/13)

Urges Shareholders to Vote White Proxy Card and Reject Dissident Group's Latest Attempt to Obtain Control of Qualstar Without Paying Shareholders a Control Premium

http://www.marketwatch.com/story/qualstar-sends-letter-to-shareholders-2013-06-10

[Enterprising Investor]

Qualstar Commences Mailing of Definitive Proxy Materials (6/05/13)

Recommends Shareholders to Vote White Proxy Card to Reject Dissident Group's Latest Attempt to Obtain Control of Qualstar Without Paying Shareholders a Control Premium

SIMI VALLEY, CA--(Marketwired - Jun 5, 2013) - Qualstar Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, today announced that it has commenced the mailing of definitive proxy materials to its shareholders for Qualstar's Annual Meeting of Shareholders to be held on Friday, June 28, 2013. Qualstar's shareholders of record as of the close of business on May 20, 2013 will be entitled to attend and vote at the Annual Meeting.

Qualstar's Board of Directors recommends that shareholders vote to elect Qualstar's very experienced and highly-qualified director nominees -- Allen H. Alley, Chester Baffa, Lawrence D. Firestone, Gerald J. Laber and Daniel C. Molhoek -- by voting the WHITE proxy card by telephone, Internet or mail.

Qualstar strongly urges shareholders to vote only the WHITE proxy card and discard any proxy card they may receive from BKF Capital Group, Inc. and its controlling shareholder, Steven N. Bronson and reject their latest attempt to obtain control of Qualstar without paying shareholders a control premium. After being rebuffed in their most recent opportunistic attempt to take control of Qualstar through a coercive partial tender offer at a price that would have deprived tendering shareholders of the ability to participate in, and benefit from, the future growth and value potential of Qualstar, BKF and Mr. Bronson have now launched a proxy contest to take control of Qualstar by having five of its own hand-picked nominees elected to the Qualstar Board.

BKF's interests in taking control of Qualstar may not be aligned with those of other shareholders. BKF is an entity that has two employees, including Mr. Bronson, and an intern, no operating business and no revenues from operations. As it admits in its filings with the SEC, BKF Capital is currently facing the risk of being deemed a regulated investment company subjected to related restrictions and, accordingly, needs to consummate an acquisition or merger or other business combination with a viable business entity such as Qualstar to avoid adverse regulatory consequences. Qualstar believes that BKF has not fully disclosed its plans for Qualstar and is pursuing control of Qualstar for its own interests that are not aligned with those of other shareholders. Shareholders looking for further evidence as to whether BKF may have conflicting interests are encouraged to review the materials filed with the SEC this past January by BKF and Mr. Bronson in connection with their coercive partial tender offer, and the statement made by BKF that "n establishing the purchase price, . . ., the Purchaser [BKF] was motivated to establish the lowest price that might be acceptable to shareholders consistent with the Purchaser's [BKF's] objectives."

Lawrence D. Firestone, Qualstar President and Chief Executive Officer, said, "As we continue to execute our strategic turnaround plan for Qualstar and position the company for financial success, Mr. Bronson and BKF are pursuing their proxy contest for control of Qualstar despite our numerous attempts to reach an amicable settlement and avoid the needless, costly and wasteful distraction. The previous failed attempts by Mr. Bronson and BKF to take control of Qualstar, without offering to pay our shareholders an appropriate control premium, have forced our Board and management team to devote significant resources -- including management time and shareholder money -- to protect the interests of ALL shareholders, when these resources could have been better devoted to our ongoing efforts towards the growth of Qualstar. We remain committed to transforming and refocusing Qualstar on its growing core storage and power supply businesses and, accordingly, driving sustainable revenue, profitable growth and cash flow, and increasing returns for ALL shareholders."

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. Qualstar's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements relating to expectations, plans or prospects for Qualstar Corporation that are based upon the current expectations and beliefs of Qualstar's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Qualstar does not expect to, and disclaims any obligation to, publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Qualstar, however, reserves the right to update such statements or any portion thereof at any time for any reason. In particular, the following factors, among others, could cause actual or future results to differ materially from those suggested by the forward-looking statements: Qualstar's ability to successfully execute on its strategic plan and meet its long-term financial goals; Qualstar's ability to successfully implement and recognize cost savings; Qualstar's ability to develop and commercialize new products; industry and customer adoption and acceptance of Qualstar's new products; Qualstar's ability to increase sales of its products; the rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; adverse changes in market demand for Qualstar's products; increased global competition and pricing pressure on Qualstar's products; and the risks related to actions of activist shareholders, including the amount of related costs.

For further information on these and other and other cautionary statements, please refer to the risk factors discussed in Qualstar's filings with the U.S. Securities and Exchange Commission including, but not limited to, Qualstar's Annual Report on Form 10-K for the fiscal year ended June 30, 2012, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of such Form 10-K, and any subsequently filed reports. All documents also are available without charge through the SEC's website (www.sec.gov) or from Qualstar's website (www.qualstar.com).

Additional Information and Where To Find It

In connection with its 2013 Annual Meeting of Shareholders, Qualstar has filed a definitive proxy statement and a WHITE proxy card with the SEC on June 4, 2013, and has commenced the mailing of a definitive proxy statement and WHITE proxy card to its shareholders. WE URGE INVESTORS AND SHAREHOLDERS TO READ THE DEFINITIVE PROXY STATEMENT AND WHITE PROXY CARD FOR THE 2013 ANNUAL MEETING OF SHAREHOLDERS (INCLUDING ANY SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT QUALSTAR WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Shareholders will be able to obtain, free of charge, copies of the definitive proxy statement and any other documents filed by Qualstar with the SEC in connection with the 2013 Annual Meeting at the SEC's website (www.sec.gov), at Qualstar's website (www.qualstar.com) or by writing to Mr. Lawrence D. Firestone, President and Chief Executive Officer, Qualstar Corporation, 3990-B Heritage Oak Court, Simi Valley, CA 93063. In addition, copies of the proxy materials, when available, may be requested from the Company's proxy solicitor, MacKenzie Partners, Inc., 105 Madison Avenue, New York, NY 10016 or toll-free at [phone].

Certain Information Regarding Participants in the Solicitation

Qualstar, its directors, nominees for director and certain officers, employees and other persons are deemed to be participants in the solicitation of proxies from shareholders in connection with the 2013 Annual Meeting of Shareholders. Information regarding the interests of such participants is included in the definitive proxy statement and other relevant documents filed and to be filed by Qualstar with the SEC in connection with the proxy solicitation.

Contact Information

For more information, contact:

Mark H. Harnett / Paul Schulman
MacKenzie Partners, Inc.
[phone]

Vanessa Lehr/Annie Leschin
Investor Relations
StreetSmart Investor Relations
[phone]

http://www.marketwire.com/press-release/qualstar-commences-mailing-of-definitive-proxy-materials-nasdaq-qbak-1798733.htm

[Enterprising Investor]

BKF Capital Issues Stop, Look and Listen Letter to Qualstar Shareholders (6/05/13)

BOCA RATON, Fla.--(BUSINESS WIRE)--BKF Capital Group, Inc. (OTCQB – “BKFG”), the second largest shareholder of Qualstar Corporation, announced today that it issued an open letter urging shareholders of Qualstar Corporation (NASDAQ – “QBAK”) to STOP, LOOK and LISTEN before taking any action in response to the Company’s solicitation of proxies for the 2013 Annual Meeting of Shareholders. The complete text of the letter to shareholders follows:


BKF CAPITAL GROUP, INC.
225 N.E. Mizner Blvd., Suite 400
Boca Raton, FL 33432
Phone [phone]
Fax [phone]

June 4, 2013

AN IMPORTANT MESSAGE FROM:


BKF CAPITAL GROUP, INC.

TO: FELLOW SHAREHOLDERS OF

QUALSTAR CORPORATION

BKF Capital Urges Qualstar Shareholders to Look for the GOLD Proxy Card

For The Qualstar 2013 Annual Meeting

Dear Fellow Qualstar Shareholder:

At some point in the near future, you should receive a proxy statement from Qualstar Corporation in connection with its 2013 Annual Meeting. Qualstar will seek your vote for the election of current directors to the board. BKF Capital Group, Inc. will be running its own slate of highly qualified candidates to the board. We strongly urge you NOT to vote any proxy card sent to you by the Company, and to wait for BKF Capital’s proxy materials and GOLD proxy card.

Due to our continued frustration with the performance of Qualstar, BKF Capital is nominating five directors to be elected to Qualstar’s board. BKF Capital is seeking your support to elect our slate of directors, who have significant financial, managerial, operational, and electronics industry experience, and who will owe their allegiance to the shareholders of Qualstar.

The board of Directors of Qualstar may have turned over since then, but nothing has changed in Qualstar’s continuing to suffer net losses, declining revenues and a declining share price. In the first nine months of fiscal 2013, revenues are down almost 24% year over year and the Company has recorded a net loss of $6.9 million. And Mr. Firestone continues to serve as CEO.

BKF Capital is the second largest shareholder of Qualstar’s stock. Our interest is in building shareholder value, in which we will share proportionately with all other shareholders; as such our interests are directly aligned with yours. BKF Capital has invested approximately $3.8 million in Qualstar. In contrast, Qualstar’s current CEO, Lawrence Firestone, has only invested $3,400, and Qualstar’s nominees are reported by the Company to own in total 5,000 shares of stock.

We urge you to read BKF Capital’s proxy materials before you vote.

Notice: BKF Capital’s PROXY CARD for the 2013 Annual Meeting will be GOLD.

Who is BKF Capital?

BKF Capital, together with its principal shareholder Steven N. Bronson, is the owner of 2,297,119 shares or approximately 18.7% of Qualstar’s common stock. BKF Capital is a publicly traded company that intends to create an asset management platform with investment vehicles that focus on areas of portfolio management that typically receive less attention from investors but also present unique investment opportunities. BKF Capital is also seeking to arrange an acquisition with an operating business.

Why is BKF Capital seeking my vote?

In June 2012, BKF Capital conducted a contest to remove and replace the Qualstar board of directors because of the Company’s net losses, declining revenues and declining share price over the prior 9-10 years. BKF Capital also expressed concern over the manner in which the current chief executive officer, Mr. Lawrence Firestone, was at the time selected to his position. Shareholders owning a majority of shares cast in the special meeting last year voted in favor of BKF Capital’s slate and against the Qualstar board of directors, including Mr. Firestone, although this was less than the absolute majority which is required for removal of the incumbent directors under California corporate law.

The Board of Directors of Qualstar may have turned over since then, but nothing has changed. In the first nine months of fiscal 2013, revenues are down almost 24% year over year and the Company has recorded a net loss of $6.9 million. And Mr. Firestone continues to serve as CEO.

When is the Annual Meeting?

As strange as it sounds, we don’t know. Although it has filed preliminary proxy materials with the SEC, Qualstar has not yet announced the date of the 2013 Annual Meeting. Never before has Qualstar failed to hold its annual meeting later than March. However, this year the still unscheduled 2013 Annual Meeting will be held more than 15 months from the last Annual Meeting. We believe that the Company’s tactics regarding the scheduling of the 2013 Annual Meeting are a means of entrenchment.

What Should I Do Now?

Do not return any White Proxy Card you receive from Qualstar or any materials giving your broker, banker or trustee authority to execute any proxy in favor of the Qualstar nominees.

Wait until you receive BKF Capital’s proxy materials and GOLD proxy card before you cast your vote in connection with the 2013 Annual Meeting.

I M P O R T A N T

If your shares are held in Street Name only your bank or broker can vote your shares, and only upon receipt of your specific instructions. Please contact the person responsible for your account and instruct them NOT to vote at this time.

If you have any questions or need further assistance, please call Maria Fregosi at [phone] Ext. 209 or our proxy solicitor: AST Phoenix Advisors, 6201 15th Avenue, 3rd Floor, Brooklyn, NY 11219, [phone].

Thank you for your support.

Maria N. Fregosi
Chief Operating Officer
BKF Capital Group, Inc.

Participants in the Solicitation

The participants in the proxy solicitation by BKF Capital in connection with the 2013 annual meeting of Qualstar shareholders will include BKF Capital Group, Inc., a Delaware corporation, and, each of the individuals nominated by BKF Capital for election as directors at the 2013 annual meeting: Steven N. Bronson, Alan B. Howe, Sean M. Leder, Dale E. Wallis and David J. Wolenski.

BKF Capital is the record or beneficial owner of 2,239,419 shares of Qualstar common stock. Mr. Bronson is the beneficial owner of 57,700 shares, and may also be deemed to own beneficially the shares owned by BKF Capital. Except for BKF Capital and Mr. Bronson, none of the BKF participants owns any Qualstar securities.

Additional Information

BKF Capital intends to make a filing with the Securities and Exchange Commission of a definitive proxy statement and an accompanying proxy card to be used to solicit proxies in connection with the 2013 annual meeting of Qualstar shareholders. Shareholders are advised to read the definitive proxy statement and other documents related to the solicitation of shareholders for use at the 2013 annual meeting when they become available, because they will contain important information, including additional information relating to the participants in the proxy solicitation. When completed and available, BKF Capital’s definitive proxy statement and a form of proxy will be mailed to Qualstar shareholders. These materials and other materials filed by BKF Capital in connection with its proxy solicitation will be available at no charge on the SEC’s website at www.sec.gov. The definitive proxy statement and other relevant documents filed by BKF Capital with the SEC will also be available, without charge, from BKF Capital’s proxy solicitor, AST Phoenix Advisors. Call the toll-free number [phone].

Contacts

BKF Capital Group, Inc.
Maria N. Fregosi, 561-362-4199 Ext. 209
Chief Operating Officer

http://www.businesswire.com/news/home/20130605005490/en/BKF-Capital-Issues-Stop-Listen-Letter-Qualstar

[Enterprising Investor]

BKF Capital Announces Demand for Qualstar Records (5/29/13)

Intends to Nominate Seven Directors at the 2013 Annual Meeting of Shareholders

BKF CAPITAL ANNOUNCES DEMAND FOR QUALSTAR RECORDS

BKF Capital Group, Inc. (OTCQB: BKFG), announced today that it has served a demand on Qualstar Corporation (NASDAQ: QBAK) to examine its books and records supporting statements made about BKF in Qualstar’s earnings release and Form 10-Q for the quarter ended March 31, 2013. In the press release, Qualstar stated that results for the quarter were impacted “by the initiation and subsequent termination of a tender offer for shares of the company’s stock by BKF Capital Group, Inc., which adversely affected bookings and revenues for new equipment in the storage business.” The Qualstar Form 10-Q similarly stated, “Our storage bookings for the fiscal third quarter were negatively impacted by the Partial Tender Offer by the BKF Group in late January...which we observed to cause uncertainty and deferral of business opportunities among our resellers and end users.” The Form 10-Q also reported that Qualstar incurred fees of $641,000 during the quarter related to BKF’s tender offer and what it referred to as BKF’s “Potential Proxy Contest.”

BKF has given Qualstar notice that it intends to nominate a full slate of directors for election at Qualstar’s 2013 annual shareholders meeting. It is demanding the records relating to the earnings release and Form 10-Q so that it may communicate with Qualstar shareholders during its upcoming solicitation of proxies for the election of its slate regarding the statements made by Qualstar about BKF and its partial tender offer for Qualstar shares. BKF was forced to withdraw the tender offer after Qualstar adopted a so-called poison pill that effectively prevented BKF from acquiring shares in the offer. BKF is also seeking books and records to understand why, after almost fifteen months since the Company’s last annual meeting on March 21, 2012, a date for the 2013 annual meeting has not been announced.

Speaking about the Qualstar statements in the press release and the Form 10-Q, Steven N. Bronson, BKF’s chairman and chief executive officer said: “We find the Company’s statement that the third quarter results for its storage business were impacted by the BKF tender offer incredible, and we are asking the Company to provide us documentation in support of this curious assertion. We also find it hard to understand how the Company could have spent $641,000 on the BKF tender offer that was open for less than two weeks, and a proxy contest that had not even begun in the third quarter. BKF is concerned about what appears to us as a waste of corporate assets to entrench management, while the Company forecloses the right of shareholders to participate in a non-coercive tender and receive value for their shares.”

Mr. Bronson continued: “We are also concerned with the delay in holding the Company’s annual meeting. In prior years the Company has consistently held its annual meeting in March, or earlier. This year, the first since Mr. Firestone assumed office, it is already the end of May and a meeting date has yet to be announced. This appears to us as a ploy for entrenchment.”

Mr. Bronson concluded: “We hope the documents that we are requesting will shed light on the Company’s implausible assertions regarding BKF, and its troublesome decision to delay the annual meeting. We expect to be communicating about these matters with shareholders in the upcoming proxy contest.”

Participants in the Solicitation

The potential participants in a proxy solicitation by BKF in connection with the 2013 annual meeting of Qualstar shareholders are anticipated to include BKF Capital Group, Inc., a Delaware corporation, and, each of the individuals nominated by BKF for election as directors at the 2013 annual meeting: Steven N. Bronson, Alan B. Howe, Sean M. Leder, Dale E. Wallis and David J. Wolenski.

BKF is the record or beneficial owner of 2,239,419 shares of Qualstar common stock. Mr. Bronson is the beneficial owner of 57,700 shares, and may also be deemed to own beneficially the shares owned by BKF. Except for BKF and Mr. Bronson, none of the BKF participants owns any Qualstar securities.

Additional Information

BKF intends to make a filing with the Securities and Exchange Commission of a proxy statement and an accompanying proxy card to be used to solicit proxies in connection with the 2013 annual meeting of Qualstar shareholders. Shareholders are advised to read the definitive proxy statement and other documents related to the solicitation of shareholders for use at the 2013 annual meeting when they become available, because they will contain important information, including additional information relating to the participants in the proxy solicitation. When completed and available, BKF’s definitive proxy statement and a form of proxy will be mailed to Qualstar shareholders. These materials and other materials filed by BKF in connection with its proxy solicitation will be available at no charge on the SEC’s website at www.sec.gov. The definitive proxy statement and other relevant documents filed by BKF with the SEC will also be available, without charge, from BKF’s proxy solicitor, AST Phoenix Advisors. Call toll-free number [phone].

About BKF Capital Group Inc.

BKF Capital Group Inc. is a publicly traded company that intends to create an asset management platform with investment vehicles that focus on areas of portfolio management that typically receive less attention from investors but also present unique investment opportunities. BKF is also engaged in seeking to arrange an acquisition, with an operating business with revenues, at least three years of operating history and unique value opportunities. For additional information please visit: www.bkfcapital.com.

Contacts

BKF Capital Group, Inc.
Maria Fregosi, 561-362-4199 x 209
[e-mail]

http://www.businesswire.com/news/home/20130528006520/en/CORRECTING-REPLACING-BKF-Capital-Announces-Demand-Qualstar

[Enterprising Investor]

QBAK Comments on BKF Capital's Abrupt Termination of Its Unsolicited Partial Tender Offer (2/13/13)

Ended Bid Marks the Latest Failed Attempt by BKF Capital and Steven Bronson to Take Control of Qualstar Without Paying Shareholders an Appropriate Control Premium

SIMI VALLEY, CA--(Marketwire - Feb 13, 2013) - Qualstar Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, today commented on the announcement by BKF Capital Group, Inc., an entity controlled by Steven N. Bronson, that it was abruptly terminating its unsolicited partial tender offer to purchase up to 3,000,000 shares of Qualstar's common stock, or approximately 24.5% of Qualstar's outstanding shares, for $1.65 per share in cash. Had the tender offer been completed and fully subscribed, BKF Capital and Mr. Bronson would have collectively owned approximately 43.2% of Qualstar's outstanding shares.

As BKF Capital indicated in its Schedule TO, one of the purposes of its unsolicited partial tender offer was to obtain a "controlling influence" over Qualstar. This is not the first time that BKF Capital and its controlling shareholder, Mr. Bronson, have failed in their attempt to gain control of Qualstar without paying shareholders an appropriate control premium. Last June, BKF Capital and Mr. Bronson failed in their efforts to replace the entire membership of the Qualstar Board with their "hand-picked" nominees. In addition, BKF Capital and Mr. Bronson have notified Qualstar that they will pursue another proxy contest to replace the entire Qualstar Board with their hand-picked nominees at this year's annual shareholder meeting. As such, shareholders can expect to be faced with yet another attempt by BKF Capital and Mr. Bronson to take control of Qualstar without paying shareholders any premium for such control. In the weeks ahead, Qualstar intends to communicate further with its shareholders with respect to the choices that will be before them at this year's annual shareholders meeting.

Lawrence D. Firestone, Qualstar President and Chief Executive Officer, said, "As we continue to execute our strategic turnaround plan for Qualstar, with positive results already reported, Mr. Bronson and BKF Capital have once again caused us a needless and wasteful distraction. In first commencing their ill-advised partial tender offer and then abruptly terminating it, they have forced our Board and management team to devote significant resources -- including management time and shareholder money -- to protect the interests of ALL shareholders, when these resources could have been better devoted to our ongoing efforts to transform Qualstar. We remain committed to transforming and refocusing Qualstar on its growing core storage and power supply businesses and, accordingly, driving sustainable revenue, profitable growth and increasing returns for ALL shareholders."

On the evening of February 11, 2013, BKF Capital filed with the U.S. Securities and Exchange Commission an amendment to its Tender Offer Statement on Schedule TO terminating its partial tender offer. The termination of the tender offer occurred just hours before Qualstar was planning to file its Solicitation / Recommendation Statement on Schedule 14D-9 which would have contained its Board's recommendation to shareholders as to whether to tender their shares into BKF Capital's offer and the reasons for such recommendation. While the tender offer's termination eliminated the need for the Qualstar Board to make a recommendation or file a Schedule 14D-9 with the SEC, shareholders should be aware that it is the unanimous view of the Qualstar Board, after careful review and consideration, and in consultation with its financial and legal advisors, that BKF Capital's unsolicited partial tender offer was inadequate and was not in the best interests of Qualstar and all of its shareholders.

In reaching its view that BKF Capital's unsolicited partial tender offer was not in the best interests of all Qualstar shareholders, the Qualstar Board considered numerous factors, including, but not limited to, the following:
•The Qualstar Board's belief that the continued implementation of Qualstar's strategic plan, under the leadership of its new President and CEO, Lawrence D. Firestone, will generate greater value for shareholders than would have been realized by BKF Capital's partial tender offer. The Qualstar Board took into account the swift and decisive actions that have been taken under Qualstar's new leadership to (i) transform Qualstar's value proposition from being a manufacturing-based company to a more nimble, lower overhead company focused on engineering and sales, (ii) enhance its prospects for growth and value creation, and (iii) create a platform for long-term growth, sustainable profitability, market leadership and increasing returns for investors. The Qualstar Board also took into consideration that, as a result of the efforts spearheaded by its new leadership, less than two fiscal quarters into the implementation of Qualstar's refocused strategy, Qualstar has made significant and substantial progress and is starting to realize the benefits of many of the actions that its new leadership has implemented to transform and refocus Qualstar;

•The Qualstar Board's belief that BKF Capital's partial tender offer was inadequate, and, in not paying shareholders an appropriate control premium for their shares, did not provide full and fair value for ALL outstanding Qualstar shares. As BKF Capital noted in its Schedule TO, the offer price represented the price at which it was willing to purchase shares and not an assessment of the shares' value. BKF Capital also indicated that it arrived at the offer price with the intention of making a profit from the ownership of the shares and that its objective was to establish the lowest price that might be acceptable to shareholders;

•The Qualstar Board's belief that BKF Capital's partial tender offer was opportunistically timed to (i) take advantage of Qualstar's depressed stock price which is at historically low levels, and (ii) allow BKF Capital to acquire shares of Qualstar at an inadequate price before the market recognizes Qualstar's potential for growth and value creation as Qualstar, under its new leadership, continues to implement a strategic plan for transforming Qualstar;

•That the Qualstar Board had received the opinion of Needham & Company, LLC, Qualstar's financial advisor, that as of February 11, 2013 and subject to and based on the assumptions, qualifications and other considerations set forth in its opinion, BKF Capital's offer price was inadequate, from a financial point of view, to Qualstar's shareholders (other than BKF Capital and its affiliates);

•The Qualstar Board's belief that BKF Capital's partial tender offer as a partial bid was structurally and inherently coercive; and

•BKF Capital's partial tender offer was subject to numerous conditions, which created significant uncertainty about whether the offer would be consummated and a number of the conditions gave BKF Capital wide latitude not to consummate its tender offer.

Needham & Company, LLC is acting as financial advisor to Qualstar and Stradling Yocca Carlson & Rauth, P.C. and Alston & Bird LLP are acting as legal advisors to Qualstar.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. Qualstar's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements relating to expectations, plans or prospects for Qualstar Corporation that are based upon the current expectations and beliefs of Qualstar's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Qualstar does not expect to, and disclaims any obligation to, publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Qualstar, however, reserves the right to update such statements or any portion thereof at any time for any reason. In particular, the following factors, among others, could cause actual or future results to differ materially from those suggested by the forward-looking statements: Qualstar's ability to successfully execute on its strategic plan and meet its long-term financial goals; Qualstar's ability to successfully implement and recognize cost savings; Qualstar's ability to develop and commercialize new products; industry and customer adoption and acceptance of Qualstar's new products; Qualstar's ability to increase sales of its products; the rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; adverse changes in market demand for Qualstar's products; increased global competition and pricing pressure on Qualstar's products; and the risks related to actions of activist shareholders, including the amount of related costs.

For further information on these and other and other cautionary statements, please refer to the risk factors discussed in Qualstar's filings with the U.S. Securities and Exchange Commission including, but not limited to, Qualstar's Annual Report on Form 10-K for the fiscal year ended June 30, 2012, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of such Form 10-K, and any subsequently filed reports. All documents also are available without charge through the SEC's website (www.sec.gov) or from Qualstar's website (www.qualstar.com).

Additional Information And Where To Find It

Qualstar, its directors and certain of its executive officers and employees may be deemed to be participants in the solicitation of proxies from shareholders in connection with Qualstar's 2013 Annual Meeting of Shareholders (the "2013 Annual Meeting"). Qualstar plans to file a proxy statement with the SEC in connection with the solicitation of proxies for the 2013 Annual Meeting (the "2013 Proxy Statement"). SHAREHOLDERS ARE URGED TO READ THE 2013 PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT QUALSTAR WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Additional information regarding the identity of these potential participants and their direct or indirect interests, by security holdings or otherwise, will be set forth in the 2013 Proxy Statement and other materials to be filed with the SEC in connection with the 2013 Annual Meeting. This information can also be found in Qualstar's Annual Report on Form 10-K for the year ended June 30, 2012, filed with the SEC on September 21, 2012 (as amended with the filing of a Form 10-K/A on October 29, 2012), and in Qualstar's definitive proxy statement for its 2012 Annual Meeting of Shareholders, filed with the SEC on February 13, 2012. To the extent holdings of Qualstar's securities have changed since the amounts shown in the Form 10-K/A filed on October 29, 2012, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC.

Shareholders will be able to obtain, free of charge, copies of the 2013 Proxy Statement and any other documents filed by Qualstar with the SEC in connection with the 2013 Annual Meeting at the SEC's website (www.sec.gov), at Qualstar's website (www.qualstar.com) or by writing to Mr. Lawrence D. Firestone, President and Chief Executive Officer, Qualstar Corporation, 3990-B Heritage Oak Court, Simi Valley, CA 93063. In addition, copies of the proxy materials, when available, may be requested from Qualstar's proxy solicitor, MacKenzie Partners, Inc., 105 Madison Avenue, New York, NY 10016 or toll-free at [phone].

Contact Information

For more information, contact:

Mark H. Harnett / Paul Schulman
MacKenzie Partners, Inc.
212) 929-5500

Vanessa Lehr/Annie Leschin
Investor Relations
StreetSmart Investor Relations
[phone]

http://www.marketwire.com/press-release/qualstar-corporation-comments-on-bkf-capitals-abrupt-termination-its-unsolicited-partial-nasdaq-qbak-1756542.htm

[Enterprising Investor]

BKFG Terminates Offer to Acquire Qualstar Shares On Account of Adoption of Rights Plan (2/11/13)

Will Focus Efforts on Replacing the Qualstar Board at the Upcoming 2013 Annual Meeting

BOCA RATON, Fla.--(BUSINESS WIRE)--BKF Capital Group, Inc. (OTCQB – “BKFG”) today announced that it is terminating its offer to acquire up to 3,000,000 shares of Qualstar Corporation (NASDAQ — “QBAK”) because of the recently announced adoption by Qualstar of a shareholder rights plan. The adoption of the rights plan effectively makes it impossible to consummate the offer, since the acquisition of shares in the offer would trigger the exercisability of the rights under the plan.

As disclosed in its offering materials, BKF is currently Qualstar’s second largest shareholder. BKF commenced the offer to obtain a controlling influence over the company and to improve the prospects for the election of its candidates to the Qualstar board of directors at the company’s 2013 annual meeting of shareholders. BKF intends to pursue the election of its nominees at the 2013 annual meeting of shareholders, so that shareholders can choose whether they wish to replace the current board that continues to accumulate losses and that is foreclosing from shareholders the opportunity to decide for themselves whether to accept the BKF offer. Qualstar has never held its annual meeting later than the last week of March, and BKF expects that the board will convene the annual meeting this year no later than that.

BKF has today filed an amendment to its Form TO with the Securities and Exchange Commission to amend its offer by adding a condition that the rights plan be either waived, withdrawn or terminated, so as to allow the BKF offer to be consummated. But because it is apparent that the Qualstar board has no intention of doing so, BKF is also terminating the offer. BKF does not, however, concede that the rights plan was validly adopted under California law.

Responding to the board’s action to thwart BKF’s tender offer and shareholder choice, Steven Bronson, CEO and President of BKF made the following comments:

“We are disappointed that Qualstar has decided to adopt a poison pill to prevent shareholders from deciding for themselves whether to accept the BKF offer. BKF contemplated suing Qualstar over the rights plan. But we concluded that a lawsuit would benefit the company’s lawyers, but would not create value for shareholders. We therefore decided to withdraw our offer and focus our efforts and money on replacing Qualstar's board at the next annual meeting.

“We candidly stated in our offer materials that we were making the offer to obtain a controlling influence over the Company and to improve the prospects for election of our candidates at the 2013 annual meeting. We believe that the board has adopted the rights plan to entrench itself and management, and that shareholders should take account of this when it comes time to vote at the annual meeting.

“We believe the board’s action in adopting the rights plan is part of a continuing pattern of Qualstar’s lack of regard for shareholder interests, about which BKF is deeply concerned. In June 2012, BKF conducted a proxy contest to remove the incumbent board, including CEO Larry Firestone. A majority of shareholders voting cast their ballots to oust the board and supported the platform of BKF to return capital to the shareholders and explore strategic options for the data storage business.

“The board did not get the message. Instead of taking a hard strategic look at the tape storage business, the board is continuing to throw money at it. (After subsequent analysis, BKF has come to the conclusion that unless Qualstar can align itself with a strategic partner that brings capital and distribution channels to the table, it should exit the commoditized business of the data storage space.) Instead of returning excess cash to shareholders, the board appears to be pursuing a veiled acquisition strategy.

“The company touts a five year strategic plan, but continues to run at a substantial loss. The company broadcasts its cost cutting measures, but does not flag for you the substantial shareholder dollars that Mr. Firestone is spending on lawyers, financial advisors, proxy solicitors, investor relation firms, and recruiters.

“Then there is Mr. Firestone’s own compensation. By adopting the rights plan, the board is depriving shareholders of the opportunity to accept $1.65 for their shares, which represents a 16% premium to the 90 calendar day average trading price prior to the announcement of the BKF offer. Yet the board had no problem in January of this year issuing Mr. Firestone 100,000 options at a strike price of $1.44 per share. The company had previously granted to Mr. Firestone 100,000 options at a price of $1.94 per share. Apparently, while the board is unwilling to allow its shareholders to take advantage of an offered 16% premium for their shares, it has no issue with rewarding its CEO for a 25% drop in the company’s market value since he took office. The board also had no problem awarding Mr. Firestone a severance package that, if valid, would require the company to pay Mr. Firestone over 5% of the company’s liquid assets!

“This board, including Mr. Firestone, has made virtually no investment in the company. In contrast, the interests of BKF are aligned directly with the interests of all shareholders. BKF and I have invested approximately $3.8 million in the company, and if it were not for the rights offering, BKF would have committed up to an additional $5 million. We therefore look forward to the support of shareholders at the 2013 annual meeting, where we will be seeking to replace the current board with BKF’s nominees and at long last provide shareholders with a board that we believe will be representative of shareholder interests.”

About BKF Capital Group Inc.

BKF Capital Group Inc. (OTCQB - "BKFG") is a publicly traded company seeking entrepreneurial acquisition opportunities. BKFG also has two subsidiaries, one registered as an investment advisor and another acting as a general partner of a limited partnership investment fund focusing on micro- and small-cap companies that are potentially undervalued. For additional information please visit: www.bkfcapital.com.

Contacts

BKF Capital Group, Inc.
Maria Fregosi 561-362-4199
[e-mail]

http://www.businesswire.com/news/home/20130211006114/en/BKF-Terminates-Offer-Acquire-Qualstar-Shares-Account

[Enterprising Investor]

QBAK Reports Fiscal 2013 Second Quarter Results and Strong Second Half Outlook (2/06/13)

SIMI VALLEY, CA--(Marketwire - Feb 6, 2013) - Qualstar Corporation (NASDAQ: QBAK)

•39% sequential bookings growth to $4.9 million

•Book to bill of 1.46:1

•Record pro forma gross margins of 43.5%

Qualstar Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, today reported financial results for its second fiscal quarter ended December 31, 2012 as its transformation continues under new leadership.

Fiscal 2013 Second Quarter Financial Results
Bookings for the second fiscal quarter were $4.9 million representing 39 percent sequential growth over the fiscal first quarter and a book to bill of 1.46:1. We closed the quarter with $2.9 million in backlog with the majority to be delivered in the third fiscal quarter. Revenues for the second quarter of fiscal 2013 were $3.4 million, compared to $3.6 million for the same quarter of fiscal 2012, a decrease of $200,000 or 5.6 percent, and sequentially flat to the fiscal first quarter. GAAP net loss including restructuring charges of $511,000 or $0.04 per share was $1.7 million or $0.14 per basic and diluted share. Excluding the adjustment in labor and overhead, pro forma non-GAAP net loss was $970,000 or $0.08 per share. This compares to GAAP net loss of $971,000, or $0.08 per basic and diluted share for the second quarter of fiscal 2012.

"Our fiscal second quarter represented a turning point for Qualstar as we implemented our most important and significant steps to transition from a manufacturing-based company to a more nimble, lower overhead company focused on engineering and sales," said Larry Firestone, President and CEO. "We booked business at a rate of just under $20 million annually in the second quarter and began the third quarter with very strong backlog. Combined with the work we have done to improve gross margins and lower inventories, we believe our strategy to focus Qualstar on our core markets of storage and power supply products will result in long-term growth, sustainable profitability and increasing returns for investors."

Strategic Plan Implementation
Since last June, under Mr. Firestone's leadership, Qualstar's management has taken swift and decisive action to transform Qualstar and create sustainable value for all shareholders, including:
•Initiated five-year strategic plan
•Restructuring the company for greater efficiency ?Outsourced library manufacturing to CTS ¦Decreasing inventory and expanding gross margins

?Exited and consolidated certain facilities ¦Exited Canoga Park
¦Shrunk Boulder
¦Exiting the Simi valley location and moving to smaller more suitable quarters

?Reduced workforce ¦Exited legacy product lines and old drive technologies

?Renegotiated service contract

•Fully integrated N2Power into Qualstar ?Reorganized into 2 engineering teams
?Re-engaging resellers
?Initiated discussions with first Tier 1 channel partner

•Strengthened management team and sales and engineering staff ?Bill Lurie - VP of Engineering
?Steve Wagner - VP of Sales for N2Power
?James Steger - Operations leadership

•Delivered bookings in the annual range of $20 million for the second quarter; above our breakeven point
•Added two experienced board members ?Allen Alley
?Daniel Molhoek

•Introduced new products and technology to expand addressable market potential ?Availability of LTO 6
?Encryption Key Management for XLS
?Expandable Rack Mount Tape Libraries

•Exited legacy products and technologies ?TLS and RLS 8000 - Selling below cost
?Touchless Mouse and Touchless Pointing


Storage revenues grew 35.4 percent to $2.1 million for the second quarter compared to $1.6 million in the second quarter of fiscal 2012, an increase of $554,000, and 11.3 percent sequentially, up from $1.9 million in the first fiscal quarter. The increase was primarily driven by higher sales of our XLS tape libraries. N2Power revenues were $1.2 million for the quarter, compared to $2.0 million in the prior year quarter, a decrease of $755,000, or 38.1 percent as the softness in the network and telephony markets continued.

Gross profit increased to $1.3 million, or 37.8 percent, from $827,000, or 23.3 percent from the year ago quarter. Our pro forma gross profit, for the second fiscal quarter excluding the $192,000 related to changes in labor and overhead rates was $1.5 million, or a record 43.5 percent gross margin. Our focus on reducing above the line costs and outsourcing manufacturing has delivered these results.

Fiscal second quarter operating expenses which included $511,000 of restructuring charges were $3.0 million up from $1.8 million for the second quarter of 2012. Engineering expenses for the second quarter of were $742,000, or 22.1 percent of revenues, compared to $650,000 or 18.3 percent of revenues, for the second quarter of fiscal 2012 driven by recruiter expenses for our engineering department. Sales and marketing expenses were $804,000, or 24.0 percent of revenues, compared to $448,000 or 12.6 percent of revenues, in the corresponding period last year. This increase was primarily attributed to the cost of recruiting and adding to our sales force as well as the cost of advertising and promotion. General and administrative expenses were $919,000 or 27.4 percent of revenues, compared to $741,000, or 20.8 percent of revenues, for the same period last year. The increase in G&A expenses is primarily attributed to increases in professional fees and general business insurance, partially offset by a decrease in bad debt expense.

Cash, cash equivalents and marketable securities were $17.8 million at December 31, 2012, a decrease of $3 million from June 30, 2012. Inventory, net of reserves, at December 31, 2012 was $3.6 million, compared to $4.5 million at June 30, 2012.

Qualstar Corporation Conference Call
Company management will hold a conference call to discuss its second quarter fiscal year 2013 results today at 2:00 p.m. Pacific (5:00 p.m. Eastern). Investors are invited to listen to the call live via the Internet using the link under the "Investors" section at www.qualstar.com. Please go to the Website at least 15 minutes early to register, download and install any necessary audio software. A replay of the Webcast will be available after the live conference call. Additionally, participants can dial into the live conference call by calling 888-549-7750 or 480-629-9722. An audio replay will be available through February 20, 2013, by calling 800-406-7325 or 303-590-3030 and entering access code 4593164.

About Qualstar Corporation
Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

http://www.marketwire.com/press-release/qualstar-reports-fiscal-2013-second-quarter-results-and-strong-second-half-outlook-nasdaq-qbak-1754010.htm

[Enterprising Investor]

QBAK Adopts Shareholder Rights Plan (2/06/13)

SIMI VALLEY, CA--(Marketwire - Feb 6, 2013) - Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, today announced that its Board of Directors has approved the adoption of a shareholder rights plan (the "Rights Plan") and declared a dividend distribution of one right ("Right") for each outstanding share of common stock.

The Rights Plan is intended to protect Qualstar and its shareholders from efforts to obtain control of Qualstar that the Board of Directors determines are not in the best interests of Qualstar and its shareholders, and to enable all shareholders to realize the long-term value of their investment in Qualstar. The Rights Plan is not intended to interfere with any merger, tender or exchange offer or other business combination approved by the Board of Directors. Nor does the Rights Plan prevent the Qualstar Board from considering any offer that it considers to be in the best interest of its shareholders. The Rights Plan adopted by Qualstar is similar to rights plans adopted by many other publicly-traded companies.

Pursuant to the Rights Plan, Qualstar is issuing one Right for each current share of common stock outstanding at the close of business on February 15, 2013. Initially, the Rights will not be exercisable and will be represented by Qualstar common stock certificates or book entry notations. If the Rights become exercisable, each Right will entitle shareholders to buy one one-hundredth of a share of a new series of participating preferred stock at an exercise price of $3 per Right. The distribution of the Rights will not be taxable to shareholders.

The Rights will be exercisable if a person or group acquires 10% or more of Qualstar's common stock in a transaction, including the open market purchase of shares, not approved by Qualstar's Board of Directors. If a person or group acquires 10%, each Right will entitle its holder (other than such person or members of such group) to purchase, at the Right's exercise price (subject to adjustment as provided in the Rights Plan), a number of shares of Qualstar's common stock having a then-current market value of twice the exercise price.

In order to ensure that the Rights Plan does not discourage prospective acquirors from making offers to acquire Qualstar that may be in the best interests of shareholders, the Rights Plan contains a provision to address the possible receipt of an offer that may be deemed to be a "Qualified Offer" (as defined in the Rights Plan).

Qualstar's Board of Directors may redeem the Rights for $0.001 per Right at any time before an event that causes the Rights to become exercisable. The Rights will expire on January 31, 2014, unless the Rights have previously been redeemed by the Board of Directors.

While the Rights Agreement is effective immediately, Qualstar intends to seek ratification of the Rights Plan from its shareholders.

Further details of the Rights Plan will be contained in a Current Report on Form 8-K and in a Registration Statement on Form 8-A that the Company will be filing with the Securities and Exchange Commission (SEC). These filings will be available on the SEC's web site at www.sec.gov.

Needham & Company, LLC acted as financial advisor to Qualstar in connection with the adoption of the Rights Plan. Stradling Yocca Carlson & Rauth, P.C. and Alston & Bird LLP are serving as legal advisors to Qualstar.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

http://www.marketwire.com/press-release/qualstar-adopts-shareholder-rights-plan-nasdaq-qbak-1753845.htm

[Enterprising Investor]

QBAK Board of Directors to Review Unsolicited Tender Offer From BKF (1/31/13)

Shareholders Advised to Not Take Action Pending Review

SIMI VALLEY, CA--(Marketwire - Jan 31, 2013) - Qualstar® Corporation (NASDAQ: QBAK) today confirmed that Steven Bronson and BKF Capital Group have commenced an unsolicited tender offer to acquire 3 million shares of Qualstar Corporation at a price of $1.65 per share.

Qualstar's Board of Directors, in consultation with its financial and legal advisors, will carefully review and consider the unsolicited tender offer to determine the course of action that it believes is in the best interests of the Company and its shareholders. The Board intends to advise shareholders of its formal recommendation within ten business days by making available to shareholders and filing with the Securities and Exchange Commission a solicitation/recommendation statement on Schedule 14D-9. Qualstar's shareholders are advised to take no action at this time pending the review of the tender offer by the Company's Board.

About Qualstar Corporation
Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

Important Additional Information
Qualstar's shareholders are strongly advised to carefully read Qualstar's solicitation/recommendation statement, when it becomes available, regarding the tender offer referred to in this press release, because it will contain important information. Free copies of the solicitation/recommendation statement, which will be filed by Qualstar with the SEC, will be available at the SEC's web site at www.sec.gov, or at Qualstar's web site at www.qualstar.com or can be obtained by calling the Company at 805-583-7744.

http://www.marketwire.com/press-release/qualstars-board-of-directors-to-review-unsolicited-tender-offer-from-bkf-nasdaq-qbak-1752067.htm

[Enterprising Investor]

QBAK Announces Workforce Reduction (8/21/12)

SIMI VALLEY, CA--(Marketwire - Aug 21, 2012) - Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, announced a 13% reduction in workforce late last week related to the end of life certain unprofitable, legacy product lines and old drive technologies. This action is expected to result in annual savings of approximately $480,000. This decision is part of the company's previously-announced strategic plan and one of many steps the company is taking to lower its breakeven and reach its target of profitability by fiscal year-end.

"Although these actions are never easy, this is one of the many steps we are taking to more effectively manage costs and streamline our operations to focus on key market opportunities," said Larry Firestone, President and CEO. "Qualstar remains committed to taking the necessary steps to drive revenue growth and improve profitability to deliver value to its shareholders."

About Qualstar Corporation
Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

For more information, contact:

Nicki Andalon
Vice-President & CFO
Qualstar Corporation
[phone]
Email Contact

Vanessa Lehr/Annie Leschin
Investor Relations
StreetSmart Investor Relations
415) 775-1788

http://www.marketwire.com/press-release/qualstar-announces-workforce-reduction-nasdaq-qbak-1692815.htm

[Enterprising Investor]

Qualstar Announces End of Life for TLS-8000 and RLS-8000 Libraries (8/07/12)


SIMI VALLEY, CA--(Marketwire - Aug 7, 2012) - Qualstar Corporation (NASDAQ: QBAK), a manufacturer of data security and archive storage solutions and high efficiency power supplies under the N2Power brand, today announced that it has ended production of the TLS-8000 and RLS-8000 tape library families. Warranties, technical support and service programs are unaffected by this announcement. Both product lines have been superseded by the recently introduced RLS-8350 and RLS-8500 Expandable Tape Libraries.

Using Qualstar's exclusive FastPass™ elevator assembly, the new RLS-8350 and RLS-8500 libraries are customer-expandable from 50 slots and three LTO 5 tape drives to over 470 slots, 1.4 Petabytes or over 53,000 hours of SD video, and 20 drives in a single 19" rack.

The RLS-8350 and RLS-8500 libraries also include built-in encryption key management to protect against data loss while tapes are in transit to external disaster protection sites or other remote locations. The user-specified keys unlock the powerful AES 256-bit encryption capability built into every LTO 5 tape drive.

RLS-8350 and RLS-8500 Expandable Tape Libraries are available exclusively through Qualstar's worldwide network of Authorized Resellers. Contact Qualstar, an Authorized Reseller or visit www.qualstar.com for more information.

About Qualstar Corporation
Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and high efficiency power supplies under the N2Power brand. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com, or by phone at 805-583-7744.

Qualstar and the Qualstar logo are registered trademarks of Qualstar Corporation.

Contact Information

Contact:
Bob Covey
Qualstar
805-583-7744

http://www.marketwire.com/press-release/qualstar-announces-end-of-life-for-tls-8000-and-rls-8000-libraries-nasdaq-qbak-1687676.htm

[Enterprising Investor]

BKFG Comments on Release of Results of Qualstar Special Meeting (6/28/12)

Overwhelming Majority of Disinterested Shareholders Support BKF

BOCA RATON, Fla.--(BUSINESS WIRE)--BKF Capital Group, Inc. (OTCQB: BKFG), commented today on the release of the definitive results of the Special Meeting of Shareholders of Qualstar Corporation (NASDAQ: QBAK) called by BKF to remove and replace the current Qualstar directors. Although BKF did not receive the majority of votes outstanding necessary to effect the removal, a clear majority (52.3%) of the votes cast at the Special Meeting were in support of the BKF platform. Moreover, fully two-thirds of the votes cast by disinterested shareholders—shareholders other than management and outgoing chairman and CEO William Gervais and BKF—were in favor of the BKF proposals to remove and replace the Board.

Speaking about the results, Steven N. Bronson, BKF’s chairman and chief executive officer said: “While we are disappointed that we were unable to remove and replace the Qualstar Board at this time, we are gratified that a majority of the shares represented at the Special Meeting—and the overwhelming majority of disinterested shareholders—voted with BKF. If this were a contest to elect directors at an annual meeting, based on these results, the BKF nominees would have prevailed.”

Mr. Bronson continued: “We believe that shareholders clearly understood our message. We never advocated a break-up of the Company. What we and the other shareholders demand is a return to profitability by rationalizing the tape library business and focusing on the power supply business; a dividend and distribution program that returns excess cash to shareholders; and management compensation aligned with shareholder interests.”

BKF continues to explore its legal options following the Company’s failure to recognize BKF’s motion to adjourn the Special Meeting. In making the motion, BKF cited problems with street name voting that came to its attention shortly before the meeting. Based on the meeting results, BKF believes a majority of the shares present at the Special Meeting would have been cast in favor of adjournment had the motion been allowed.

About BKF Capital Group Inc.

BKF Capital Group Inc. (OTCQB - "BKFG") is a publicly traded company focused on arranging a merger, acquisition, business combination or other arrangement with both public and private companies with unique value opportunities and/or acquiring a controlling position in such companies through equity purchases or debt financings. For additional information please visit: www.bkfcapital.com.

Contacts

BKF Capital Group, Inc.
Greg Heller, 561-362-4199 x 330
[e-mail]

http://www.businesswire.com/news/home/20120628005341/en/BKF-Capital-Comments-Release-Results-Qualstar-Special

[Enterprising Investor]

Submission of Matters to a Vote of Security Holders (Form 8-K/A)

http://sec.gov/Archives/edgar/data/758938/000143774912006435/qualstar_8ka-062012.htm

[Enterprising Investor]

BKFG Moves to Adjourn Qualstar Special Meeting Citing Problems with Street Name Voting (6/20/12)

Majority of Votes Cast Appear to Favor BKF Proposals

BOCA RATON, Fla.--(BUSINESS WIRE)--BKF Capital Group, Inc. (OTCQB: BKFG), announced that, at the Special Meeting of Shareholders of Qualstar Corporation (NASDAQ: QBAK) today called by BKF to remove and replace the current Qualstar directors, BKF moved to adjourn the meeting for a period of two weeks to Thursday, July 5, 2012 because of issues with street name voting. The Company refused to recognize BKF’s motion and challenged BKF to take legal action. BKF is now considering its legal alternatives.

In moving to adjourn the Special Meeting, BKF cited problems with street name voting that came to its attention shortly before the meeting. These problems appear to have resulted either in votes being misdirected or not allowing shareholders sufficient time to cast their vote. In one case, if not caught, these problems would have resulted in almost 900,000 votes not being cast in favor of the BKF proposals.

Under the Qualstar bylaws, a shareholders meeting may be adjourned from time to time by the vote of a majority of the shares whose holders are either present in person or represented by a proxy. Based on a preliminary tally, BKF understands that a majority of the shares present at the Special Meeting would have been cast in favor of adjournment had the motion been allowed.

Also based on a preliminary tally, BKF understands that a majority of the shares voted as of the time of the Special Meeting were cast in favor of the BKF proposals, although this was less than the absolute majority needed to remove the current directors. Irrespective of BKF’s motion for adjournment, BKF believes that this sends a powerful message to the Qualstar board that shareholders will no longer tolerate a status quo of annual losses, declining revenue and depressed market value. BKF also believes that the preliminary tally demonstrates solid support for BKF’s demand to return excess cash to shareholders.

In light of today’s developments, BKF encourages management to sit down with BKF to arrive at a mutually acceptable resolution that will provide for appropriate representation of BKF on the Company’s board and that will address the other issues raised by BKF during its campaign.

About BKF Capital Group Inc.

BKF Capital Group Inc. (OTCQB - "BKFG") is a publicly traded company focused on arranging a merger, acquisition, business combination or other arrangement with both public and private companies with unique value opportunities and/or acquiring a controlling position in such companies through equity purchases or debt financings. For additional information please visit: www.bkfcapital.com.

Contacts
BKF Capital Group, Inc.
Greg Heller, 561-362-4199 x 330
[e-mail]

http://www.businesswire.com/news/home/20120620006578/en/BKF-Moves-Adjourn-Qualstar-Special-Meeting-Citing

[Enterprising Investor]

QBAK Announces Preliminary Voting Results For The June 20 Special Meeting Of Shareholders (6/20/12)

BKF FALLS SHORT IN ITS ATTEMPT TO TAKE OVER BOARD AND BREAK UP COMPANY
SIMI VALLEY, Calif., June 20, 2012 /PRNewswire/ -- Qualstar Corporation (Nasdaq: QBAK) today announced that, based on preliminary voting results, BKF Capital Group did not obtain the required votes and thus failed in its attempt to take over the Qualstar board. Certified voting results are expected from the independent inspector within the next 5 days.

"We thank our shareholders for their support and confidence in our board and management team to continue to execute our turnaround strategy that is already underway at Qualstar," said Lawrence Firestone, Qualstar's chief executive officer. "We are pleased to have this disruption behind us so we can devote our full attention to the operation of our business and the execution of the turnaround plan."

Firestone continued, "Shareholders made the correct decision to reject BKF's unwarranted campaign to take over the company. Our Board remains committed to returning Qualstar to sustainable profitability and growth."

The preliminary voting results from today's Special Meeting of Shareholders are based on the advice of Qualstar's proxy solicitor.

About Qualstar Corporation:

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com.

SOURCE Qualstar Corporation

http://www.prnewswire.com/news-releases/qualstar-announces-preliminary-voting-results-for-the-june-20-special-meeting-of-shareholders-159762205.html

[Enterprising Investor]

BKF Capital Issues Open Letter to Qualstar Board — “There You Go Again” Distorting the Facts and Distracting Shareholders from the Issues (6/15/12)

BOCA RATON, Fla.--(BUSINESS WIRE)--BKF Capital Group, Inc. (OTCQB—BKFG) today released an open letter to the Board of Directors of Qualstar Corporation (NASDAQ—QBAK) in advance of a Special Meeting of Shareholders on June 20, 2012 to remove and replace the Qualstar Board. In the letter, BKF accuses the Board of once again distorting the truth about BKF and its principal, Steven Bronson, in an attempt to distract shareholders from the real issues of continually dismal performance, the problems of a business segment in decline that the Board has failed effectively to address and a purported turnaround strategy fraught with acquisition risk.

The full text of the letter follows.

June 15, 2012

To the Directors of Qualstar Corporation:

“There you go again.”

Yesterday you issued a press release with the eye-catching but utterly misleading title, “Qualstar Sets the Record Straight Regarding Steven Bronson’s Experience and BKF’s True Interests.” It is clear to us that, once again, your distortions and half-truths are simply an attempt to distract the attention of Qualstar shareholders from the real issues and problems that have plagued the Company on your watch. We address each of your errant claims below, but first focus on the real issues and problems from which the Board is apparently attempting to deflect shareholder attention.

Setting the Real Record Straight

BKF has called for the Special Meeting of Shareholders on Wednesday, June 20, 2012 to remove and replace the Qualstar Board, a program endorsed by Institutional Shareholder Services (ISS), the premier proxy advisory firm. BKF is urging Qualstar shareholders to promptly return their GOLD proxy cards to vote FOR the proposals of BKF to remove and replace the Board—

•Because, under the watch of the current Board, the Company has extended a continuous streak of unprofitability that began in 2004;

• Because, under the watch of the current Board, the Company’s net revenues have continued to decline, so that they were 42% less in 2011 than they were in 2004;

• Because, under the watch of the current Board, the Company’s stock price has continued to decline, so that is it over 60% lower than it was 10 years ago on a dividend adjusted basis;

• Because, under the watch of the current Board, the Company’s Tape Library business continues to lose money, dragging down the fortunes of the Company;

• Because the Board is touting an acquisition strategy when it has been incapable of profitably running its primary legacy business;

• Because pursuit of acquisitions as a cover for failed management of existing businesses is a tried and true prescription for financial disaster;

• Because the Board is refusing to make a distribution to its shareholders of excess cash, instead proposing to risk that cash on an unspecified and unproven program of acquisitions as part of a dangerous turnaround strategy;

• Because, with the departure of Mr. Gervais today, the current Board owns less than 1.3% of the outstanding shares;

• Because, at the recent annual meeting of shareholders, 3 of 5 directors failed to get a majority of the votes and a substantial number of shareholders withheld their votes from the other two;

• Because the current Board has just hired as the new CEO one of its own members with no experience as the CEO of a public company, and has guaranteed him payments in the first year of $455,000 not tied to performance; and

• Because for all of these reasons, we do not trust you when you say that at long last you are going to turn the fortunes of our Company around.

Even Glass Lewis, whose recommendation you continue to tout, has said—

[The Glass Lewis] view should not be construed as an endorsement of management or its recent efforts, which, as noted at length [in the Glass Lewis report] have failed to generate attractive value for the Company's shareholders.

Correcting Distortions of the Record

While we see your tactics for what they are, we are compelled nonetheless to address your most recent distortions and ill-informed and misleading accusations again BKF and Mr. Bronson.

Mikron Infrared, Inc.

Mr. Bronson was appointed to the Mikron board in September 1996 and became chairman and chief executive officer in August 1998, without taking a salary, to lead the company's effort of exploring strategic alternatives. He and the board determined that the best course for the company was to recruit an experienced management team, which he did. Notably, Mr. Bronson required that the management team invest their own money in company stock, which they did at a 150% premium to then current market. (Compare this with the compensation package that the Qualstar Board has handed to its new CEO, Mr. Firestone.) The management team recruited by Mr. Bronson successfully turned Mikron around, increasing its value by over 1000%. Isn’t that exactly what we want for Qualstar?

The lawsuit subsequently brought by an affiliate of Mr. Bronson against Mikron was for the breach of an advisory contract, which the company settled by making a cash payment to the affiliate. What, we ask, is wrong with that?

4Net Software

When Mr. Bronson purchased a 50.1% interest in this company in June 1996, it had only cash of less than $250,000 and its stock was almost worthless ($.00125 per share, to be exact). Mr. Bronson invested money in the company for a software business, which was then hit with the dot.com bubble of 2000. Mr. Bronson did the rational thing at the time of discontinuing this business. This is just the kind of sensible business judgment that appears to be lacking on the current Qualstar Board.

Ridgefield Acquisition Corp.

When Mr. Bronson bought control of Ridgefield in March 2000, the company had already disposed of its operations, and shareholders’ equity was under $450,000. Mr. Bronson grew that shareholders’ equity to over $800,000 as of March 31, 2011, after which the company made a cash distribution to shareholders. What exactly is the problem with this? Yes, Mr. Bronson increased his equity ownership to 82%, but he did so through cash investments and exercise of warrants, in each case with a value, or a strike price at the time of issuance, at or above market. More to the point, Mr. Bronson invested in both Ridgefield and 4NetSoftware as financial plays; they were not operating businesses. It is difficult to see any relevance of these companies to Qualstar.

Interlink Electronics Inc.

The one company that the Board has stopped talking about is Interlink, which has actual relevance to Qualstar. This is an operating company that had been losing money for ten years, that Mr. Bronson took control of in 2010 and is now poised for its first profitable year in over ten years.

The 40 Act

The Board is most shrill with its dire predictions of BKF having to dispose of its interest in Qualstar because of issues under the Investment Company Act of 1940 and its fantasy of BKF’s seeking only to extract a dividend from the Company before it is required to sell its shares.

We have said it before, and we will say it again, BKF believes it is unlikely that it will be required to dispose of its shares. What is apparent to us from the Board’s rant is that the Board knows little about BKF, little about its plans and little about the Investment Company Act.

The Conclusion

The noise that the Board is seeking to generate did not fool ISS, which recommended in favor of BKF’s program to remove and replace the Board, nor should it fool the Company’s shareholders. To restore value and for a Board whose interests are aligned with shareholders, shareholders should vote their GOLD proxy cards in favor of the BKF program.

BKF Capital Group, Inc.

Greg S. Heller

Senior Vice President

About BKF Capital Group Inc.

BKF Capital Group Inc. (OTCQB - "BKFG") is a publicly traded company focused on arranging a merger, acquisition, business combination or other arrangement with both public and private companies with unique value opportunities and/or acquiring a controlling position in such companies through equity purchases or debt financings. For additional information please visit: www.bkfcapital.com.

Qualstar shareholder with questions should contact BKF’s proxy advisors—

PHOENIX ADVISORY PARTNERS
110 Wall Street
27th Floor
New York, NY 10005
Call Toll Free: [phone]
Banks And Brokers Call Collect: [phone]

No matter how many shares you own, your vote is extremely important.

You can take control of your Company’s future, but for democracy to work you have got to vote.

We need an absolute majority to win.

Doing nothing is the same as a vote for a Board that has failed you in the past.

Please vote your GOLD proxy card and support the BKF slate.

Do not return a WHITE proxy card or any other card sent to you on behalf of the current Board.

http://www.businesswire.com/news/home/20120615005715/en/BKF-Capital-Issues-Open-Letter-Qualstar-Board


Contacts


BKF Capital Group, Inc.
Greg Heller, 561-362-4199 x 330
[e-mail]

[Enterprising Investor]

BKFG Issues Open Letter to Qualstar Shareholders (6/13/12)

Says Qualstar Stalls on Production of Accounting Records and Misleads on Experience of New CEO

BOCA RATON, Fla.--(BUSINESS WIRE)--BKF Capital Group, Inc. (BKFG) today released an open letter to shareholders of Qualstar Corporation (NASDAQ—QBAK) in advance of a Special Meeting of Shareholders on June 20, 2012 to remove and replace the Qualstar Board. In the letter, BKF accuses Qualstar of stalling on the production of accounting records, which BKF believes are relevant to shareholder assessment of the performance of the Board in advance of the Special Meeting, and questions whether the Qualstar Board is trying to hide information from shareholders. BKF also challenges the Board’s characterization of the new CEO that it selected, who has never served in a chief executive capacity, as a “turnaround specialist.”


The full text of the letter follows.

June 13, 2012

Dear Fellow Qualstar Shareholders:

The Special Meeting of Shareholders to remove and replace the Board of Qualstar Corporation will be held on June 20, 2012. If you have not already done so, please promptly return your GOLD proxy card to vote FOR the proposals of BKF Capital Group, Inc. to remove and replace the Board, so that the BKF slate of nominees may begin to return value to shareholders.

It would seem that the current Board members have already given shareholders sufficient reasons to remove them from office — the destruction of the Company’s share value, the decline in operating performance, the outsized compensation of the new CEO, the distortions and half-truths regarding the BKF slate. But this Board keeps adding more.

Stalling on BKF’s Demand to Inspect Accounting Books and Records

BKF exercised its right under California law to demand inspection of Qualstar's accounting books and records, including the following items:

• compensation and expense reimbursement to directors and officers;

• payments for aircraft owned by directors and officers;

• legal services performed by the law firm of one of the directors;

• investment advice paid for by the Company; and

• executive recruitment and compensation consultants.

Qualstar has stalled in the production of these accounting records. BKF asked for these materials because we believed they are relevant to the shareholder’ assessment of the performance of the Board in advance of the Special Meeting. Qualstar’s legal counsel (who is also a director of the Company) refused to provide the records on a timely basis and threatened that it would take longer for BKF to obtain a court ordered inspection of these documents than waiting for Qualstar to comply. Because the Board is dragging its feet in the production of these materials, we have to ask: Does the Board have something to hide? Is there financial information or payments to management that the Board does not want shareholders to know with sufficient time to affect the vote at the Special Meeting?

Mr. Firestone, the Purported Turnaround Specialist

On June 12th, the Company issued a press release announcing, “Turnaround Specialist Engaged Full Time To Grow Qualstar Investment.” And just who is this “turnaround specialist?” Board member Lawrence Firestone, whom BKF is seeking to remove. Now, when we think of someone as a turnaround specialist, we think of a CEO type or a Chief Restructuring Officer, someone who runs the show and call the shots, not a CFO who keeps the books. Mr. Firestone’s primary experience, and all his experience in the last 12 years has been as a CFO — he has not in fact been at the helm of any turnaround situation. But if you really want to appreciate how this Board is trying to mislead you, consider this statement in the release:

[Mr. Firestone g]rew Advanced Energy Industries from a market capitalization of $500 million to over $1.1 billion in two years.

These are the real facts. Mr. Firestone became CFO of Advanced Energy Industries in August 2006. He left, under circumstances which appear to us to be not of his own choosing, in August 2010. During that time the stock price climbed to a high of $25.68 in May 2007, dropped to a low of $5.49 in March 2009, recovered to the $17.00 range as Mr. Firestone was leaving. Even assuming Mr. Firestone was responsible for these gyrations, is this a turnaround specialist?

It’s All About Trust

As much as this contest is about the failures of the current Board, it is also about trust.

• Can you trust a Board that has failed you in the past to work for you in the future?

• Can you trust a Board that says it has a turnaround plan when it feeds you distortions and half-truths?

• Can you trust a Board to implement an acquisition strategy when it has been unable to profitably operate Qualstar’s legacy Tape Library business?

• Can you trust a Board that tells you that BKF poses a risk to your investment, when BKF is proposing to return cash to shareholders in order to take risk off the table?

The answer to each of these questions, we believe, is that this Board cannot be trusted and must be removed in order to create value for all shareholders.

No matter how many shares you own, your vote is extremely important.

You can take control of your Company’s future, but for democracy to work you have got to vote.

We need an absolute majority to win.

Doing nothing is the same as a vote for a Board that has failed you in the past.

Please vote your GOLD proxy card and support the BKF slate.

DO NOT return a WHITE proxy card or any other card sent to you on behalf of the current Board.

If you have any questions, please contact our proxy advisors—

PHOENIX ADVISORY PARTNERS

110 Wall Street
27th Floor
New York, NY 10005
Call Toll Free: [phone]
Banks And Brokers Call Collect: [phone]

We look forward to your support.

BKF Capital Group, Inc.
Greg S. Heller
Senior Vice President

About BKF Capital Group Inc.

BKF Capital Group Inc. (OTCQB - "BKFG") is a publicly traded company focused on arranging a merger, acquisition, business combination or other arrangement with both public and private companies with unique value opportunities and/or acquiring a controlling position in such companies through equity purchases or debt financings. For additional information please visit: www.bkfcapital.com.

Contacts

BKF Capital Group, Inc.
Greg Heller, 561-362-4199 x 330
[e-mail]

http://www.businesswire.com/news/home/20120613006015/en/BKF-Capital-Issues-Open-Letter-Qualstar-Shareholders

[Enterprising Investor]

ISS Backs BKF Capital Group in Its Proxy Contest to Remove and Replace the Board of Qualstar Corporation (6/12/12)

BOCA RATON, Fla.--(BUSINESS WIRE)--BKF Capital Group, Inc. (OTCQB: BKFG), today announced that Institutional Shareholder Services is recommending that Qualstar Corporation (NASDAQ: QBAK) shareholders vote to remove the current Qualstar directors and replace them with BKF’s slate of nominees on the GOLD proxy card. ISS, a shareholder advisory firm, released its report, on Friday June 8th, recommending that shareholders support BKF and vote FOR the BKF proposals. In making its recommendation, ISS concludes—

[BKF has] made a compelling case that change is warranted due to concerns with oversight, deteriorating financials, share price underperformance, and a lack of board accountability and responsiveness. As such, we recommend that shareholders vote for the following items on the GOLD CARD...

BKF believes the ISS recommendation validates our position that Qualstar’s board has not been proactive in stemming the losses and restructuring its Tapes Library business, resulting in a continual decline in its stock price over the past 10 years.

Additionally, ISS agrees that Qualstar’s board “has maintained a significant level of under-utilized cash and securities and has not attempted to redeploy it to generate shareholder value.” Qualstar maintains approximately 70% of its total assets in cash and marketable securities, which generates a return of about 1%. BKF believes that investors should be able to allocate that cash more efficiently and in line with their individual risk tolerances.

ISS further observed concerning the BKF nominees that “[the BKF] slate has three nominees with compelling turnaround experience: Bronson, Fred, and Wolenski;” that “Leder's financial experience may help in managing Qualstar's portfolio [and] may also help Qualstar manage its substantial current lease obligation;” and that “Yu brings accounting expertise to the board.”

BKF urges all of Qualstar’s shareholders to vote for the BKF proposals on the GOLD proxy card and ignore the WHITE proxy card sent by Qualstar’s incumbent board. If you have any questions, please contact our proxy advisors:

PHOENIX ADVISORY PARTNERS
110 Wall Street
27th Floor
New York, NY 10005
Call Toll Free: [phone]
Banks And Brokers Call Collect: [phone]

About BKF Capital Group Inc.

BKF Capital Group Inc. (OTCQB - "BKFG") is a publicly traded company focused on arranging a merger, acquisition, business combination or other arrangement with both public and private companies with unique value opportunities and/or acquiring a controlling position in such companies through equity purchases or debt financings. For additional information please visit: www.bkfcapital.com.

Contacts

BKF Capital Group, Inc.
Greg Heller, 561-362-4199 x 330
[e-mail]

http://www.businesswire.com/news/home/20120612005434/en/ISS-Backs-BKF-Capital-Group-Proxy-Contest

[Enterprising Investor]

Turnaround Specialist Engaged Full Time To Grow Qualstar Investment (6/12/12)

Qualstar Board Urges Shareholders to Allow the New Management Team to Complete the Turnaround and Not Break Up Qualstar

SIMI VALLEY, Calif., June 12, 2012 /PRNewswire/ -- Qualstar® Corporation's (Nasdaq: QBAK) Board of Directors is pleased to announce that Larry Firestone, a 30-year veteran of restructuring, turning around and growing companies post turnaround is now fully engaged as Qualstar's CEO, effective June 1, 2012. The Qualstar Board, together with Mr. Firestone, is committed to driving long term value of the Company for the benefit of all Qualstar investors. As a result, Mr. Firestone and the management team are setting a new strategy that will enable the Company to return to sustainable and growing profitability.

The Board was unanimous in its choice of Mr. Firestone given his extremely relevant industry experience, and most importantly, his impressive success rate in turning around companies in situations similar to Qualstar. Among Mr. Firestone's notable achievements in this arena are:

As the CFO of Xiotech, a private performance storage company, Larry held a lead role to turn this venture backed company profitable within one year after several years of losses.

Grew Advanced Energy Industries from a market capitalization of $500 million to over $1.1 billion in two years, reduced operating expenses by over $19 million annually, and installed a tax strategy that allowed Advanced Energy to reduce its cash taxes by over $10 million. This allowed a $50 million share buyback using earnings. Once turned around, Advanced Energy implemented a successful acquisition strategy in the solar inverter market.

As a key member of the leadership team, took Applied Films Corp. from $25 million in revenues, losing money, with an $11 million (approximately $3.00 per share) market cap to $240 million in revenues in just 7 years and subsequently sold for $460 million (just under $30.00 per share). This growth included 3 major acquisitions with successful integrations.

In under two years, successfully turned Woolson Spice & Coffee, d/b/a Lion Coffee into a profitable and growing business after years of bleeding cash and losing money. Today Lion Coffee is the #1 brand of gourmet roasted coffee in Hawaii.

THE PLAN TO STRENGTHEN QUALSTAR IS UNDERWAY

Mr. Firestone and the Qualstar management team have developed a plan to increase sales and return Qualstar to profitability. The major components of this plan include the following:

Installing global sales leadership and strengthening our sales force

Expanding channel partner and strategic relationships

Targeted marketing and promotional efforts, including increased trade show presence, joint selling, and private labeling

Enhancement of our recurring revenue stream from the growing tape library installed base

Geographic diversification and expansion of target markets

Product related initiatives Acquire complementary product lines – broaden market coverage

OEM complementary products to offer a complete storage solution
Introduced new mid-tier rack mount tape library products to compete successfully in this market

Restructure the organization for greater efficiency

Centralize corporate engineering function

Establish formal organic growth and profitability strategies

Margin improvement and business rationalization where appropriate

Evaluate strategic value added opportunities, including accretive acquisitions

Product development and product line extension

The board believes that executing these strategies will enhance long term shareholder value and prove the value of the Qualstar franchise is best realized with the company intact.

BKF Capital Group, Inc. and Steven N. Bronson, its controlling shareholder, are attempting to disrupt this plan and are requesting shareholder support in their unwarranted and untimely efforts to take over the company. BKF has requested this special meeting to remove all of the current members of Qualstar's Board, including Mr. Firestone, in favor of Bronson himself and his four hand-picked nominees – an incredibly draconian measure and one sure to cause considerable instability during this crucial turn around time. Qualstar shareholders have an opportunity to support the Company's new initiatives – and protect the value of their investment – by rejecting BKF's threat to take control of the company. The board urges all shareholders to discard any GOLD proxy card they may have received from BKF and Steven Bronson.

THE BOARD IS TAKING THE RIGHT STEPS TO BENEFIT ALL SHAREHOLDERS

Every vote is extremely important. Shareholders are urged to vote the WHITE proxy card AGAINST BKF's proposal to remove Larry Firestone and the other directors and to replace them with Bronson's nominees, and NOT to sign or return any Gold proxy card that they may receive from Bronson and BKF. Even if you have previously voted on the gold proxy card supplied by BKF, you can still change your vote to support your Board. Only the latest-dated proxy counts.

If shareholders have any questions or need assistance voting their shares, please contact Mackenzie Partners, Inc., our proxy solicitor, toll free at [phone] or [phone] (call collect) or at [e-mail].

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com.

SOURCE Qualstar Corporation

http://www.prnewswire.com/news-releases/turnaround-specialist-engaged-full-time-to-grow-qualstar-investment-158548755.html

[Enterprising Investor]

QBAK Will Be Seeking Your Support to Stop BKF Capital Group From Taking Control of the Company and Risking Shareholder Value (5/29/12)

SIMI VALLEY, CA--(Marketwire - May 29, 2012) - Qualstar® Corporation's (NASDAQ: QBAK) Board of Directors today reiterated its commitment to maximizing value for all shareholders in the face of the poorly-timed and imprudent attempt by BKF Capital Group, Inc. ("BKF") and its controlling shareholder, Steven N. Bronson, to take control of the Company. A Special Meeting of Qualstar's shareholders will be held on Wednesday, June 20, 2012 to decide important issues affecting the future of Qualstar. Our Board urges shareholders to ignore any materials, communications or gold proxy card received from BKF or Mr. Bronson that ask for a vote in support of their efforts.

Qualstar's Board is undertaking new initiatives, including the recent appointment of Lawrence Firestone as the Company's new CEO, to increase sales and return Qualstar to sustained profitability. Mr. Firestone has over 30 years of executive management experience with a track record demonstrating the vision and capabilities to improve Qualstar's performance and grow its business. The recent actions by BKF and Mr. Bronson are disrupting the implementation and progress of these initiatives, resulting in needless distraction and wasteful expenses.

"We believe BFK and Mr. Bronson are only interested in securing a quick, opportunistic gain, rather than returning Qualstar to profitability in order to enhance shareholder value for the benefit of all of our shareholders," said Lawrence Firestone, who will start June 1st as Qualstar's new Chief Executive Officer and President to succeed Mr. William J. Gervais, who will retire as of June 15, 2012. Mr. Firestone added: "We remain committed to capitalizing on Qualstar's near and long-term business opportunities and will fight on your behalf to oppose BKF's and Bronson's attempt to take over Qualstar because we believe they are seeking to further only their own short-term interests and have no regard for the harm that would be caused to our other shareholders, who own 81% of Qualstar's outstanding shares.

We believe Qualstar has a strong and high quality franchise that we can leverage to grow the Company. After the time I've spent with our Board, our employees and some of our shareholders, I am confident and optimistic about Qualstar's future. Please join me, the management team and the Board as we embark on rebuilding Qualstar with financial discipline and financial success. We look forward to the Special Meeting, which will provide our shareholders an important opportunity to support our directors and management and to put this wasteful proxy contest behind us, so that we can focus our efforts and Qualstar's resources on running the Company and creating shareholder value."

William Gervais, the Company's founder and outgoing CEO, who owns 27% of Qualstar's outstanding shares and, as a result, has the largest personal stake of any shareholder in the outcome of this proxy contest, stated, "I have confidence in the board and the management team at Qualstar led by Larry Firestone and believe that they will succeed in growing sales and returning Qualstar to profitability. By contrast, it appears that none of BKF's nominees, including Bronson, has ever successfully managed a publicly held operating company. Therefore, I think it would be a grievous mistake for shareholders to trust their investment in Qualstar to BKF and Bronson."

Qualstar expects to mail a definitive proxy statement to its shareholders in the near future in connection with the Special Meeting, along with a WHITE proxy card. The Special Meeting of Shareholders will be held on Wednesday, June 20, 2012 at Qualstar's offices located at 3990-B Heritage Oak Court, Simi Valley, California 93063, at 10:00 a.m. PDT. The record date for the meeting is May 23, 2012, and shareholders of record as of that date will be eligible to vote at the meeting.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com.

IMPORTANT INFORMATION / SOLICITATION PARTICIPANTS LEGEND

Qualstar Corporation and its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Qualstar Corporation in connection with the Special Meeting of Shareholders to be held on June 20, 2012. Information regarding these directors and executive officers and their interests in connection with the matters to be voted on at the special meeting is included in the preliminary proxy statement filed by Qualstar Corporation with the Securities and Exchange Commission on May 21, 2012. In addition, Qualstar Corporation files annual, quarterly and special reports, proxy and information statements, and other information with the Securities and Exchange Commission. These documents and the preliminary proxy statement are, and the definitive proxy statement, when it is filed with the Securities and Exchange Commission, will be available free of charge at the Securities and Exchange Commission's web site at www.sec.gov or from Qualstar Corporation at www.qualstar.com.

SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION THAT SHAREHOLDERS SHOULD CONSIDER BEFORE MAKING ANY VOTING DECISION.

Contact Information

Investor Contact:
Nicki Andalon
Vice President & CFO
Qualstar Corporation
[phone]

Paul Schulman
Mark Harnett
MacKenzie Partners, Inc.
[phone]

http://www.marketwire.com/press-release/qualstar-will-be-seeking-your-support-stop-bkf-capital-group-from-taking-control-company-nasdaq-qbak-1662287.htm

[Enterprising Investor]

BKFG Will Be Seeking Support to Replace the Board of Directors for Qualstar Corporation at a Special Meeting of Shareholders (5/24/12)

BOCA RATON, Fla.--(BUSINESS WIRE)--BKF Capital Group, Inc. (OTCQB: BKFG), today announced that it has sent a letter to fellow shareholders of Qualstar Corporation (NASDAQ: QBAK) seeking their support to vote to remove the incumbent members of the board of directors of Qualstar, to fix the authorized number of directors and to elect new members to the board of directors.

The text of the letter is set forth below:

May 22, 2012

BKF CAPITAL GROUP WILL BE SEEKING YOUR SUPPORT

TO REPLACE THE BOARD OF QUALSTAR CORPORATION

AT A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 20, 2012

Dear Fellow Qualstar Shareholder:

BKF Capital Group, Inc., the second largest shareholder and the largest institutional investor of Qualstar Corporation, has demanded a Special Meeting of Shareholders to replace the existing Board of Directors of Qualstar. The meeting will be held on Wednesday June 20, 2012. We have filed preliminary proxy materials with the Securities and Exchange Commission for the purposes of:

Removing all of the existing directors of Qualstar (other than co-founder William Gervais, who will be resigning effective June 15, 2012);
Fixing the size of the Board at five directors; and
Electing BKF’s five nominees to the Board.
We expect to be sending out definitive proxy materials with proxy cards in the near future, but time will be short and we will need the help of all the Company’s shareholders to replace the current Board as the first step in our efforts to maximize value for all shareholders. We are writing this letter to inform you why we are seeking to replace the Board, and why you should support us when you receive our proxy materials.

Who Is BKF? BKF Capital Group, Inc., founded in 1954, is a publicly traded company focused on value investment opportunities primarily in the small-cap and middle market sectors. Together with Steven Bronson, its controlling shareholder and a BKF nominee, BKF owns approximately 18.7% of the Company’s outstanding shares, and is the Company’s largest institutional holder. BKF’s interest in value creation for shareholders is fully aligned with all other Qualstar shareholders. BKF is not seeking any rights or benefits that are different than the rights of all other shareholders of the Company on a proportionate basis.

Why Will BKF Be Asking for Your Support to Replace the Qualstar Board? BKF believes that Qualstar’s shares are undervalued. The share price for the Company’s common stock on May 16, 2012 was $1.97, approximately 13% below the book value of the shares of $2.26 at March 31, 2012, based on the Company’s Quarterly Report on Form 10-Q for the quarter then ended. The share price has experienced a ten-year decline of approximately 66% from its share price at the end of April 2002 of $5.88, adjusted for dividends. According to the Company’s own Form 10-K, its stock price has underperformed its self-determined peer group over the last five years. Also, with the exception of Mr. Gervais, who is retiring, the current Board has no meaningful equity stake in the Company.

Who Are BKF’s Nominees? BKF’s nominees include Steven Bronson, the controlling shareholder of BKF with over 27 years of business and investment experience; Edward Fred, the CEO of CPI Aerostructures, Inc., a publicly-traded aerospace company; Sean Leder, CEO of The Leder Group, which focuses on real estate, equities and fixed income securities investments, and a former investment banker; David Wolenski, vice president of Electro-Mechanical Products, Inc., which manufactures precision-machined components and thermal management systems for the semiconductor, laser, and medical device industries; and Peter Yu, founder of CPA By Choice, which provides interim controllership and CFO services, Yu & Fleischer, LLC, a full service CPA firm, and Staffing By Choice, a professional staffing and recruitment firm. Among them, the BKF nominees have the management, manufacturing, investment, finance and accounting expertise, which combined with the substantial equity interest in BKF, will give shareholders a Board that is qualified and incentivized to make value maximizing decisions on behalf of shareholders.

What is BKF’s Program to Enhance Shareholder Value? BKF expects that its nominees, if elected, will seek to maximize shareholder value by divesting the Company’s unprofitable Tape Libraries business, if it cannot be turned around; distributing excess cash to shareholders; focusing Qualstar’s resources on its generally profitable Power Supply business; and carefully analyzing strategic alternatives.

Why is BKF Disturbed by Qualstar’s Appointment of a New CEO? On May 9, 2012, Qualstar announced that it had appointed Lawrence Firestone, one of the Company’s existing directors, as the new CEO to replace Mr. Gervais. This was after BKF notified the Company that it was seeking to replace Mr. Firestone as a director of the Company. According to the Company’s annual proxy materials, Mr. Firestone has never served as the CEO of a public company. Also, according to the Company’s public disclosure, Mr. Firestone will receive a base salary of $300,000, automatically increasing to $350,000 in July 2013 unless he is given notice of non-renewal by March 2013; a signing bonus of $75,000; a commuting allowance of $60,000 and a relocation allowance of $20,000 pending his move to California; and options to purchase 300,000 shares. This compares with total compensation of $164,197 paid to the Company’s existing CEO in 2011. In addition, Mr. Firestone will receive severance that includes 18 months’ base salary and other payments and benefits under certain circumstances, including if shareholders replace the current Board and the new Board were to terminate Mr. Firestone within 12 months. The current Board entered into these arrangements knowing that we intended to run a contest to replace the existing directors. This troubles us, and we think it should be of concern to you as well.

Why Should Shareholders Reject Qualstar’s Response to BKF’s Campaign to Replace the Board? In response to BKF’s demand for the Special Meeting of Shareholders to replace the Board, on May 18th, the Company issued a press release in which Mr. Firestone is quoted as saying, “We plan to implement new initiatives to increase sales and return Qualstar to sustained profitability.” Qualstar has not been profitable since 2004. Mr. Firestone has been on the Board for a year, and all of the other directors have served since at least 2006. Should you trust this same Board to now all of a sudden turn the Company around? We do not think so.

What Should You Do Now? You should wait to receive BKF’s definitive proxy materials and proxy card. You should not return any proxy card furnished to you on behalf of the Company.

Whom Should You Contact If You Have Questions? BKF has retained PHOENIX ADVISORY PARTNERS as its proxy advisory firm. If you have questions, please contact them at 110 Wall Street, 27th Floor, New York, NY, 10005. Call Toll Free: [phone]; Banks and Brokers Call Collect: [phone].

We thank you and look forward to your support.

BKF Capital Group, Inc.

Greg S. Heller

Senior Vice President

The participants in BKF’s proxy solicitation include BKF, certain of its officers, including Steven Bronson and Greg Heller, and the nominees named above. Information about the participants has been set forth in BKF’s preliminary proxy statement filed by BKF with the SEC on May 17th and will be contained in BKF’s definitive proxy materials. As of the date hereof, BKF owns 2,234,380 shares of common stock of Qualstar, representing approximately ­­ 18.2% of the outstanding shares of common stock, and Mr. Bronson, as the sole owner of BA Value Investors, LLC, owns 57,700 shares, constituting less than 1% of the outstanding shares. None of the other participants owns any shares of Qualstar common stock, and each of the participants disclaims beneficial ownership of the shares not actually owned by that participant. BKF strongly advises all Qualstar shareholders to read the definitive BKF proxy materials when they become available because they will contain important information. These definitive proxy materials will be sent to shareholders by BKF and will also be available at no charge on the SEC’s website at http://www.sec.gov.

About BKF Capital Group Inc.

BKF Capital Group Inc. (OTCQB - "BKFG") is a publicly traded company focused on arranging a merger, acquisition, business combination or other arrangement with both public and private companies with unique value opportunities and/or acquiring a controlling position in such companies through equity purchases or debt financings. For additional information please visit: www.bkfcapital.com.


Contacts
BKF Capital Group, Inc.
Greg Heller, 561-362-4199 x 330
[e-mail]

http://www.businesswire.com/news/home/20120524006108/en/BKF-Capital-Group-Seeking-Support-Replace-Board

[levelnever]

Biggest trade since 2009 just went through, heavy volume, curious to see if BKFG is the buyer, guess we should know in the next few days.

[Enterprising Investor]

QBAK Sets June 20, 2012 Special Shareholder Meeting (5/18/12)

SIMI VALLEY, CA--(Marketwire - May 18, 2012) - Qualstar® Corporation (NASDAQ: QBAK) today announced, in response to a request received from BKF Capital Group, Inc. ("BKF"), that a Special Meeting of Shareholders will be held on Wednesday, June 20, 2012. The meeting will take place at Qualstar's offices located at 3990-B Heritage Oak Court, Simi Valley, California 93063, at 10:00 a.m. PDT. The record date for the meeting is May 23, 2012, and shareholders of record as of that date will be eligible to vote at the meeting.

"We plan to implement new initiatives to increase sales and return Qualstar to sustained profitability and we believe Qualstar's directors bring a valuable blend of industry knowledge as well as strategic and operational expertise that will be important to our success in achieving that goal," said Lawrence Firestone, recently appointed as Qualstar's new Chief Executive Officer and President to succeed Mr. William J. Gervais, who will retire as of June 15, 2012. Mr. Gervais, a co-founder of Qualstar, currently owns approximately 27% of Qualstar's total shares outstanding. Mr. Firestone further commented: "We believe that BKF is seeking to take control of Qualstar in order to secure a quick, opportunistic gain, instead of seeking to return Qualstar to profitability in order to enhance shareholder value for all of our shareholders. As a result, we oppose BKF's attempt to replace our Board with its own nominees. We look forward to the Special Meeting, which will provide our shareholders an important opportunity to support our directors and management and to putting this wasteful proxy contest behind us, so that we can focus our efforts and Qualstar's resources on running the Company and creating shareholder value."

Qualstar intends to file a proxy statement with the Securities and Exchange Commission in connection with the Special Meeting, which will be mailed to shareholders along with a white proxy card.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com.

IMPORTANT INFORMATION / SOLICITATION PARTICIPANTS LEGEND

Qualstar Corporation and its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Qualstar Corporation in connection with any meeting of shareholders that may be held. Information regarding these directors and executive officers and their interests in connection with the matters to be voted on at any meeting that may be held will be included in the proxy statement filed by Qualstar Corporation with the Securities and Exchange Commission in connection with any such meeting. In addition, Qualstar Corporation files annual, quarterly and special reports, proxy and information statements, and other information with the Securities and Exchange Commission. These documents are available, and the proxy statement, when it is filed with the Securities and Exchange Commission, will be available free of charge at the Securities and Exchange Commission's web site at www.sec.gov or from Qualstar Corporation at www.qualstar.com.

SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN IT IS AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION THAT SHAREHOLDERS SHOULD CONSIDER BEFORE MAKING ANY VOTING OR INVESTMENT DECISION.

Contact Information

Investor Contact:
Nicki Andalon
Vice President & CFO
Qualstar Corporation
[phone]

http://www.marketwire.com/press-release/qualstar-sets-june-20-2012-special-shareholder-meeting-nasdaq-qbak-1659216.htm

[Enterprising Investor]

BKFG Demands Special Shareholders Meeting for Qualstar Corporation (5/01/12)

BOCA RATON, Fla.--(BUSINESS WIRE)--BKF Capital Group Inc. (OTCQB: BKFG) today announced that it has sent a letter to Qualstar Corporation (NASDAQ: QBAK) demanding a special meeting of the shareholders of Qualstar to vote to remove the incumbent members of the board of directors, to fix the authorized number of directors and to elect new members to the board of directors. BKF owns 16.2% of Qualstar’s shares and is making the demand in accordance with Qualstar’s bylaws.

The text of the letter is set forth below:

BKF CAPITAL GROUP, INC.
225 N.E. Mizner Boulevard, Suite 400
Boca Raton, Florida 33432
Tel. No. [phone]

April 30, 2012

VIA FACSIMILE TO [phone] AND OVERNIGHT COURIER


Qualstar Corporation
3990-B Heritage Oak Court
Simi Valley, CA 93603
Attention: Nidhi H. Andalon, Secretary


Gentlemen:

I am writing on behalf of BKF Capital Group, Inc. (“BKF”) which is, as of the date of this letter, the shareholder of record of 1,986,186 shares of common stock of Qualstar Corporation (“Qualstar” or the “Company”), constituting more than ten percent (10%) of the voting power of the Company’s outstanding shares.

Pursuant to the authority set forth in Article II, Section 3 of the Company’s Bylaws (as amended and restated as of March 24, 2011) and Section 600(d) of the California General Corporation Law, BKF hereby calls a special meeting of the shareholders of the Company, with such meeting to be held at the Company’s headquarters or at a nearby location during business hours on Wednesday, June 20, 2012.

The business to be conducted at the special meeting and included in the notice of the meeting to shareholders shall consist of the following, with such matters to be considered by the shareholders at the special meeting in the order set forth below:

1. Approval by the shareholders of the removal from office of all incumbent directors of Qualstar;

2. Approval by the shareholders of a resolution to fix the authorized number of directors of Qualstar at five (5) directors; and

3. Election by the shareholders of five (5) directors to fill the vacancies created by the removal of the incumbent directors.

To assure the proper and orderly conduct of the voting process for the special meeting, we respectfully request that the Board of Directors establish a record date for the special meeting that is no later than May 15, 2012 and that notice of the special meeting be sent to shareholders of the Company by no later than May 21, 2012.

Sincerely,
Greg S. Heller
Senior Vice President,
BKF Capital Group, Inc.

cc: Board of Directors,
Qualstar Corporation
Nidhi H. Andalon,
Registered Agent

About BKF Capital Group Inc.

BKF Capital Group Inc. (OTCQB - "BKFG") is a publicly traded company focused on arranging a merger, acquisition, business combination or other arrangement with both public and private companies with unique value opportunities and/or acquiring a controlling position in such companies through equity purchases or debt financings. For additional information please visit: www.bkfcapital.com.

* * *

BKF, together with the other participants (referred to below), intends to make a filing with the Securities and Exchange Commission of a proxy statement and accompanying proxy card to be used to solicit votes in connection with the special meeting of shareholders.

BKF strongly advises all Qualstar shareholders to read the proxy statement and other proxy materials relating to the intended solicitation of proxies by BKF as and when they become available because they will contain important information, including information relating the participants in the proxy solicitation. These proxy materials will be available at no charge on the U.S. Securities and Exchange Commission’s website at http://www.sec.gov.

The participants in the proxy solicitation are anticipated to include BKF and certain of its officers, including Steven Bronson and Greg Heller. Other persons, who have yet to be finally determined and who BKF intends to nominate as directors of Qualstar for election at the special meeting, may also be deemed participants in the intended proxy solicitation. Information about the participants will be set forth in the proxy statement anticipated to be filed by BKF with the SEC. As of the date hereof, BKF owns 1,990,786 shares of common stock of Qualstar, representing approximately 16.2 % of the outstanding shares of common stock, and Mr. Bronson, as the sole owner of BA Value Investors, LLC, owns 57,700 shares constituting less than 1% of the outstanding shares. BKF and Mr. Bronson have filed a Statement on Schedule 13D with respect to the shares of common stock of Qualstar. Each of the participants disclaims beneficial ownership of the shares not directly own by that participant.

Contacts
BKF Capital Group, Inc.
Greg Heller 561-362-4199 x 330
[e-mail]

http://www.businesswire.com/news/home/20120501005409/en/BKF-Capital-Group-Demands-Special-Shareholders-Meeting

[Enterprising Investor]

QBAK Reports Fiscal 2012 Third Quarter Results (5/10/12)

SIMI VALLEY, CA--(Marketwire - May 10, 2012) - Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of automated tape storage solutions and high efficiency power supplies, today reported financial results for the third quarter of fiscal 2012 ended March 31, 2012.

Fiscal 2012 Third Quarter Financial Results
Revenues for the third quarter of fiscal 2012 were $4.6 million, compared to $4.2 million for the same quarter of fiscal 2011, an increase of $0.4 million or 8.5 percent. Loss from operations was $601,000 compared to $561,000 in the third quarter of fiscal 2011. Net loss was $553,000 or $0.05 per basic and diluted share, compared to a net loss of $514,000, or $0.04 per basic and diluted share for the third quarter of fiscal 2011.

Tape library segment revenues were $1.9 million for the third quarter, compared to $2.0 million in the third quarter of fiscal 2011, a decrease of $0.1 million, or 4.3 percent. This decrease in revenues was due to lower sales of TLS and RLS tape libraries and service, partially offset by increased sales of XLS tape libraries and media. Power supply segment revenues were $2.7 million for the quarter, compared to $2.2 million in the prior year quarter, an increase of $0.5 million, or 20.0 percent. The increase in revenues is related to an increase in overall demand.

Gross profit decreased to $1.2 million, or 25.8 percent of net revenues, for the three months ended March 31, 2012, from $1.4 million, or 32.3 percent of net revenues, for the three months ended March 31, 2011. The decrease in gross profit is attributed to a change in product mix.

Research and development ("R&D") expenses for the third quarter of fiscal 2012 were $696,000, or 15.1 percent of revenues, compared to $656,000 or 15.4 percent of revenues, for the third quarter of fiscal 2011. The increase is due primarily to higher consulting expenses. Sales and marketing expenses were $451,000, or 9.8 percent of revenues, compared to $604,000 or 14.2 percent of revenues, in the corresponding period last year. The decrease in sales and marketing expenses is attributed to lower compensation expenses and decreased advertising and promotion expenses. General and administrative expenses were $644,000 or 14.0 percent of revenues, compared to $672,000, or 15.8 percent of revenues, for the same period last year.

Commenting on the Company's business results, Bill Gervais, president and chief executive of Qualstar, said, "We are finding traction with the new RLS 10U and 6U product line. We are also seeing more activity overall in the market, compared to last quarter. In the power supply segment, we shipped approximately 43,600 units, yielding the highest quarterly revenue for power supplies to date."

Fiscal 2012 Nine-Month Financial Results
Qualstar reported revenues of $12.8 million for the first nine months of fiscal 2012, compared with $13.6 million for the first nine months of fiscal 2011. The Company's net loss for the first nine months of fiscal 2012 was $1.5 million, or $(0.12) per basic and diluted share, compared with a net loss of $0.6 million, or $(0.05) per basic and diluted share, in the first nine months of fiscal 2011.

Cash, cash equivalents and marketable securities were $21.6 million at March 31, 2012. Inventory, net of reserves, at March 31, 2012 was $6.1 million, compared to $5.7 million at June 30, 2011.

Qualstar Corporation Conference Call
The Company will hold a conference call to discuss its fiscal 2012 third quarter results on Thursday, May 10th, 2012 at 2:00 p.m. Pacific standard time (5:00 p.m. Eastern). Investors are invited to listen to the call live via the Internet using the link under the "Investors" section at www.qualstar.com. Please go to the Website at least 15 minutes early to register, download and install any necessary audio software. A replay of the Webcast will be available after the live conference call. Additionally, participants can dial into the live conference call by calling 1-877-941-0843 or 1-480-629-9770. An audio replay will be available through May 24th, 2012, by calling 1-800-406-7325 or 1-303-590-3030, and entering access code 4536084.

About Qualstar Corporation
Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

http://www.marketwire.com/press-release/qualstar-reports-fiscal-2012-third-quarter-results-nasdaq-qbak-1655824.htm

[levelnever]

Listened to conference call, nothing much of interest, besides business, same old, same old. In Q&A, only two questions, first was a little bit of a testy exchange with Greg Heller from BKFG who asked about when the 8-K would be filed with regards to Firestone. Heller sounds pretty darn aggresive with his approach and he wasn't afraid to let Gervais know it.

[Enterprising Investor]

BKFG purchases of QBAK are almost daily.

Seems to be the primary buyer of shares, too.

Listed below are trades for the last 60 days.

Trade Date/Buy or Sale/Number of Shares/Price
4/27/2012 Buy 400 $1.925
4/25/2012 Buy 2,866 $1.92
4/9/2012 Buy 1,000 $1.92
4/5/2012 Buy 22,400 $1.9298
4/2/2012 Buy 200 $1.9
3/30/2012 Buy 10,000 $1.85
3/29/2012 Buy 10,000 $1.83
3/28/2012 Buy 19,400 $1.8252
3/22/2012 Buy 1,300 $1.85
3/21/2012 Buy 1,213 $1.85
3/20/2012 Buy 18,020 $1.85
3/19/2012 Buy 1,352 $1.85
3/9/2012 Buy 2,200 $1.87
3/8/2012 Buy 8,361 $1.87
3/7/2012 Buy 1,639 $1.87
3/6/2012 Buy 15,744 $1.8877
3/5/2012 Buy 4,256 $1.8986
3/2/2012 Buy 10,244 $1.883

http://sec.gov/Archives/edgar/data/9235/000092627412000005/bkfqual-13da4.txt

[Time to update spreadsheet again]

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=75092072

[Enterprising Investor]

BKFG owns 1,986,186 beneficial shares of QBAK (5/01/12)

http://sec.gov/Archives/edgar/data/9235/000114420412025254/v311472_ex99-1.htm

http://investorshub.advfn.com/boards/board.aspx?board_id=16924

[Enterprising Investor]

Qualstar Reports Fiscal 2012 Third Quarter Results (5/10/12)

SIMI VALLEY, CA--(Marketwire - May 10, 2012) - Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of automated tape storage solutions and high efficiency power supplies, today reported financial results for the third quarter of fiscal 2012 ended March 31, 2012.

Fiscal 2012 Third Quarter Financial Results

Revenues for the third quarter of fiscal 2012 were $4.6 million, compared to $4.2 million for the same quarter of fiscal 2011, an increase of $0.4 million or 8.5 percent. Loss from operations was $601,000 compared to $561,000 in the third quarter of fiscal 2011. Net loss was $553,000 or $0.05 per basic and diluted share, compared to a net loss of $514,000, or $0.04 per basic and diluted share for the third quarter of fiscal 2011.

Tape library segment revenues were $1.9 million for the third quarter, compared to $2.0 million in the third quarter of fiscal 2011, a decrease of $0.1 million, or 4.3 percent. This decrease in revenues was due to lower sales of TLS and RLS tape libraries and service, partially offset by increased sales of XLS tape libraries and media. Power supply segment revenues were $2.7 million for the quarter, compared to $2.2 million in the prior year quarter, an increase of $0.5 million, or 20.0 percent. The increase in revenues is related to an increase in overall demand.

Gross profit decreased to $1.2 million, or 25.8 percent of net revenues, for the three months ended March 31, 2012, from $1.4 million, or 32.3 percent of net revenues, for the three months ended March 31, 2011. The decrease in gross profit is attributed to a change in product mix.

Research and development ("R&D") expenses for the third quarter of fiscal 2012 were $696,000, or 15.1 percent of revenues, compared to $656,000 or 15.4 percent of revenues, for the third quarter of fiscal 2011. The increase is due primarily to higher consulting expenses. Sales and marketing expenses were $451,000, or 9.8 percent of revenues, compared to $604,000 or 14.2 percent of revenues, in the corresponding period last year. The decrease in sales and marketing expenses is attributed to lower compensation expenses and decreased advertising and promotion expenses. General and administrative expenses were $644,000 or 14.0 percent of revenues, compared to $672,000, or 15.8 percent of revenues, for the same period last year.

Commenting on the Company's business results, Bill Gervais, president and chief executive of Qualstar, said, "We are finding traction with the new RLS 10U and 6U product line. We are also seeing more activity overall in the market, compared to last quarter. In the power supply segment, we shipped approximately 43,600 units, yielding the highest quarterly revenue for power supplies to date."

Fiscal 2012 Nine-Month Financial Results

Qualstar reported revenues of $12.8 million for the first nine months of fiscal 2012, compared with $13.6 million for the first nine months of fiscal 2011. The Company's net loss for the first nine months of fiscal 2012 was $1.5 million, or $(0.12) per basic and diluted share, compared with a net loss of $0.6 million, or $(0.05) per basic and diluted share, in the first nine months of fiscal 2011.

Cash, cash equivalents and marketable securities were $21.6 million at March 31, 2012. Inventory, net of reserves, at March 31, 2012 was $6.1 million, compared to $5.7 million at June 30, 2011.

Qualstar Corporation Conference Call

The Company will hold a conference call to discuss its fiscal 2012 third quarter results on Thursday, May 10th, 2012 at 2:00 p.m. Pacific standard time (5:00 p.m. Eastern). Investors are invited to listen to the call live via the Internet using the link under the "Investors" section at www.qualstar.com. Please go to the Website at least 15 minutes early to register, download and install any necessary audio software. A replay of the Webcast will be available after the live conference call. Additionally, participants can dial into the live conference call by calling 1-877-941-0843 or 1-480-629-9770. An audio replay will be available through May 24th, 2012, by calling 1-800-406-7325 or 1-303-590-3030, and entering access code 4536084.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

Forward-Looking Statements

Statements concerning the future business, operating results and financial condition of the Company are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations and are subject to a number of uncertainties that could cause actual performance and results to differ materially from the results discussed in the forward-looking statements. Factors that could affect the Company's actual results include the Company's ability to increase sales of its products; rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; and, adverse changes in market demand for its products. The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Further information on these and other potential factors that could affect the Company's financial results or condition are included in Qualstar's filings with the Securities and Exchange Commission. In particular, reference is made to the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2011, and to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of its Form 10-K.

http://www.marketwire.com/press-release/qualstar-reports-fiscal-2012-third-quarter-results-nasdaq-qbak-1655824.htm

[Enterprising Investor]

QBAK Appoints Lawrence D. Firestone CEO and President (5/09/12)

SIMI VALLEY, CA--(Marketwire - May 9, 2012) - Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of automated tape storage solutions and high efficiency power supplies, announced today that the Board of Directors has appointed Mr. Lawrence D. Firestone to the position of Chief Executive Officer and President of the Company, to succeed Mr. William J. Gervais, who will retire as of June 15, 2012. Mr. Firestone will commence his new position by June 4, 2012.

Mr. Gervais commented: "I am pleased that Larry has agreed to assume day-to-day leadership of the Company that I co-founded 28 years ago. Having worked with Larry as a member of our Board for the last 12 months, I'm confident that the Company will be in good hands."

"I am excited to join Qualstar as its new CEO," said Mr. Firestone. "It is a privilege to be asked to lead such a fine organization. I believe that Qualstar has great technology and I will be working to deliver strong value to shareholders through growth in sales of existing products and through targeted acquisitions."

Mr. Firestone, age 54, joined Qualstar's Board in May 2011 and will continue to serve as a director of the Company. Mr. Firestone has over 30 years of operations and financial management experience in global public and private companies, including significant turnaround and M&A expertise. Until he commences his new duties with Qualstar, he will continue in his current position as the Chief Financial Officer of Xiotech Corporation, a supplier of enterprise storage systems, a position he has held since February 2011. From 2006 to 2010, Mr. Firestone was Executive Vice President and Chief Financial Officer of Advanced Energy Industries, Inc., a provider of power conversion devices for the semi-conductor and solar inverter markets. Mr. Firestone also served as a director of Amtech Systems, Inc. and as a director of Hyperspace Communications, Inc. Mr. Firestone holds a BSBA degree in Accounting from Slippery Rock State College.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com.

Contact Information

Contact:
For more information, contact:
Nicki Andalon
Vice President & CFO
Qualstar Corporation
[phone]

http://www.marketwire.com/press-release/qualstar-appoints-lawrence-d-firestone-ceo-and-president-nasdaq-qbak-1655021.htm

[Enterprising Investor]

QBAK Reports Retirement Date of CEO (3/27/12)

SIMI VALLEY, CA--(Marketwire - Mar 27, 2012) - Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of automated tape storage solutions and high efficiency power supplies, today reported that Mr. William J. Gervais, Chief Executive Officer, President and a member of the Board of Directors of Qualstar Corporation (the "Company"), notified the Board of Directors on March 21, 2012 that he will retire from the Company and tendered his resignation as a director and officer of the Company, to be effective as of June 15, 2012.

Mr. Gervais co-founded Qualstar in 1984 and has served as a director since its inception, as President since 1984, and as Chief Executive Officer and President since 2000. Mr. Gervais will continue in his present positions until the effective date of his retirement and will assist in making a smooth transition to his successor. He will also be available in the future on a consulting basis as needed. The Board has commenced a search for a new Chief Executive Officer to replace Mr. Gervais.

The Board thanks Bill for his insightful knowledge and leadership since the Company's founding 28 years ago, and wishes him the best of luck in his retirement.

About Qualstar Corporation
Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

Contact Information

For more information, contact:

Nicki Andalon
Vice-President and CFO
Qualstar Corporation
[phone]

http://www.marketwire.com/press-release/qualstar-reports-retirement-date-of-ceo-nasdaq-qbak-1636897.htm

[Penny Roger$]

~ Monday! $QBAK ~ Earnings posted, pending or coming soon! In Charts and Links Below!

~ $QBAK ~ Earnings expected on Monday *
Want more like this? Search Keyword: MACMONEY >>> http://tinyurl.com/MACMONEY <<<
One or more of many earnings sites has alerted this security has or will be posting earnings on or around the day of this message.








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http://investorshub.advfn.com/boards/post_prvt.aspx?user=251916

*If the earnings date is in error please ignore error. I do my best.

[Soapy Bubbles]

Qualstar Reports Fiscal 2011 Fourth Quarter and Full Year Results
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Qualstar Corp. (MM) (NASDAQ:QBAK)
Intraday Stock Chart

Today : Thursday 1 September 2011
Click Here for more Qualstar Corp. (MM) Charts.

Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of automated tape storage solutions and high efficiency power supplies, today reported financial results for the fourth quarter and the fiscal year ended June 30, 2011.

Fiscal 2011 Fourth Quarter Financial Results

Revenues for the fourth quarter of fiscal 2011 were $4.7 million, compared to $4.0 million for the same quarter of fiscal 2010, an increase of $0.7 million or 17.9%. Loss from operations was $0.1 million compared to $0.6 million in the fourth quarter of fiscal 2010. Net loss was $37,000 or $0.00 per basic and diluted share, compared to a net loss of $0.6 million, or $(0.05) per basic and diluted share for the fourth quarter of fiscal 2010.

Tape library segment revenues were $2.04 million for the fourth quarter, compared to $2.26 million for the prior year quarter, a decrease of $223,000 or 9.9%. Power supply segment revenues were $2.67 million for the quarter, compared to $1.73 million in the same quarter last year, an increase of $939,000 million, or 54.4%.

Gross profit increased to $1.6 million, or 34% of net revenues, for the three months ended June 30, 2011, from $1.3 million, or 32.1% of net revenues, for the three months ended June 30, 2010. The increase in gross profit is attributed to an increase in revenues, a change in product mix, a decrease in inventory reserves, and higher absorption of labor and overhead. Research and development ("R&D") expenses for the fourth quarter of fiscal 2011 were $656,000, or 13.9% of revenues, compared to $749,000, or 18.8% of revenues, for the fourth quarter of fiscal 2010. Sales and marketing expenses were $506,000, or 10.7% of revenues, compared to $528,000 or 13.2% of revenues, in the corresponding period last year. General and administrative expenses in the fourth quarter of fiscal 2011 were $563,000, or 12% of revenues, compared to $631,000, or 15.8% of revenues, for the same period last year.

[Soapy Bubbles]

http://www.qualstar.com/