ISS Recommends That Shareholders Vote the WHITE Proxy Card in Support of All Qualstar Board Nominees

ISS Recommends That Shareholders Vote the WHITE Proxy Card in Support of All 
Qualstar Board Nominees 
Both Leading Proxy Advisory Firms Now Recommend That Shareholders
Vote FOR Qualstar's Board Nominees 
SIMI VALLEY, CA -- (Marketwired) -- 06/20/13 --   Qualstar
Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions
and high-efficiency power supplies, today announced that
Institutional Shareholder Services (ISS), a leading independent proxy
advisory service, has recommended to its clients that shareholders
vote the WHITE proxy card FOR all five of the Qualstar Board of
Directors' very experienced and highly qualified director nominees,
Allen H. Alley, Chester Baffa, Lawrence D. Firestone, Gerald J. Laber
and Daniel C. Molhoek, at Qualstar's Annual Meeting of Shareholders
to be held on June 28, 2013. ISS' clients include institutional
investors, mutual funds, pension funds and other fiduciaries. In
addition, last week, Glass Lewis & Co., another leading independent
proxy advisory service, also recommended that shareholders vote FOR
all five of Qualstar's Board nominees on the WHITE proxy card. With
ISS and Glass Lewis making the same recommendation, both of the
leading proxy advisory firms have now advised Qualstar's shareholders
to support Qualstar's Board nominees and reject the attempts by BKF
Capital Group, Inc. and its controlling shareholder, Steven N.
Bronson, to take control of the Qualstar board. 
In recommending that shareholders vote the WHITE proxy card FOR all
five of the director nominees recommended by the Qualstar Board, ISS
recognized that the replacement of the entire Qualstar Board being
sought by BKF and Bronson was unwarranted given all the changes that
have already been made to the composition of Qualstar's Board over
the past year. If shareholders elect the Qualstar Board's highly
qualified and very experienced nominees -- Allen H. Alley, Chester
Baffa, Lawrence D. Firestone, Gerald J. Laber and Daniel C. Molhoek,
the entire membership of the Qualstar Board, other than Mr.
Firestone, Qualstar's Chief Executive Officer, will have been
replaced since the 2012 Annual Meeting.  
In its report, ISS referenced the "transformative changes that have
taken place in the boardroom and throughout the company since June
2012" and highlighted the failure of BKF and Bronson to "make a
compelling case that further change in the reconstituted board and
management team is warranted." ISS also noted the risk to
shareholders if BKF and Bronson were to replace the entire membership
of the Qualstar Board, stating as follows: 
"In this case, the disruptive risk to shareholders caused by further
sweeping change at the board level may be real and could jeopardize
management's recently implemented strategic plan." 
Discussing the failure of BKF and Bronson to make a "compelling case"
and articulate a detailed plan or strategy that would be likely to
deliver greater shareholder value than the continued execution of the
strategy being followed by Qualstar's Board and management, the ISS
report stated as follows: 
"[N]or did BKF provide detailed plan or strategy that is likely to
deliver greater shareholder value than the continued execution of the
reconstituted management team's strategy 
"In this case, it is both clear that the board has been responsive to
shareholders, and unclear what else the board and new management team
can do." 
"It is perhaps especially telling that the key parts of the
dissidents plan appear to be actions the new board has already
identified and begun implementing." 
ISS also commented on the adoption by the Qualstar Board of a
shareholder rights plan following the commencement by BKF and Mr.
Bronson of its unsolicited, coercive, partial tender offer last
January and recommended that shareholders vote the WHITE proxy card
FOR the ratification of the rights plan. While BKF's and Mr.
Bronson's abrupt termination of their unsolicited, coercive, partial
tender offer eliminated the need for the Qualstar Board to make a
recommendation, it was the unanimous view of the Qualstar Board that
the partial tender offer was inadequate and was not in the best
interests of Qualstar and all of its shareholders. In recommending
that shareholders vote the WHITE proxy card FOR the ratification of
the shareholder rights plan, the ISS report stated:  
"In light of the company's implementation of its strategic turnaround
plan, BKF's solicitation efforts to replace Qualstar's board with its
proposed slate of nominees, its prior attempts to gain control of the
company and our support for management's nominees, ratification of
the proposed rights plan warrants support." 
"We are very pleased that both of the leading independent,
third-party proxy advisory firms have carefully reviewed the voting
alternatives and recommend that shareholders vote for Qualstar's
director nominees, selected by Qualstar for their extensive
governance experience and outstanding qualifications," said Lawrence
D. Firestone, Qualstar's President and Chief Executive Officer. "We
are also gratified that both of the ISS and Glass Lewis reports
support the decision of our Board, after careful consideration, to
adopt a rights plan so as to protect our shareholders against BKF's
and Mr. Bronson's unsolicited, coercive, partial tender offer. This
Board and our nominees remain committed to taking the actions
necessary to protect our shareholders against abusive or coercive
tactics used by a potential acquirer seeking to gain control of
Qualstar without paying all shareholders a fair price for their
shares." 
To protect the value of their investment, Qualstar strongly
recommends that all shareholders vote for their Board's highly
qualified nominees on the WHITE proxy card TODAY -- by telephone,
Internet, or by signing, dating and returning the WHITE proxy card.  
Shareholders that need assistance in voting their shares or have any
questions are urged to call Qualstar's proxy solicitor, Mackenzie
Partners, Inc., at (800) 322-2885 (Toll Free) or at (212) 929-5500. 
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 mailed the 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 definitive proxy materials may be requested
from the Company's proxy solicitor, MacKenzie Partners, Inc., 105
Madison Avenue, New York, NY 10016 or toll-free at (800) 322-2885. 
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. 
For more information, contact: 
Mark H. Harnett / Paul Schulman 
MacKenzie Partners, Inc. 
(212) 929-5500  
Vanessa Lehr/Annie Leschin
Investor Relations
StreetSmart Investor Relations
(415) 775-1788