##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
  FORM 10-K/A AMENDMENT NO. 1   x
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended June 30, 2004ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _____________________ to _____________________
 Commission File Number: 000-30083 QUALSTAR CORPORATION  California
    
    95-3927330(State of Incorporation)
    
    (I.R.S. Employer Identification No.)
 3990-B Heritage Oak Court, Simi Valley, CA 93063   Registrants telephone number, including area code: (805) 583-7744 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, without par value Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No o Indicate by a check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. x Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes o No x. As of October 14, 2004, the aggregate market value of the common equity
held by non-affiliates of the registrant was approximately $39,443,178. The total number of shares of common stock outstanding at October 14, 2004
was 12,608,199. DOCUMENTS INCORPORATED BY REFERENCE None




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TABLE OF CONTENTS  PART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESSIGNATURESEXHIBIT INDEXExhibit 31.1Exhibit 31.2    Table of Contents  
 PART III 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information regarding executive officers of the Company is included in
Part I of this report under the heading Management. Information regarding
the directors of the Company is set forth below. Name
    
    Age
    
    PositionWilliam J. Gervais
    
    
    61
    
    
    Chief Executive Officer, President and DirectorRichard A. Nelson
    
    
    61
    
    
    Vice President  Engineering, Secretary and DirectorBruce E. Gladstone
    
    
    69
    
    
    DirectorRobert E. Rich.
    
    
    54
    
    
    DirectorTrude C. Taylor.
    
    
    83
    
    
    DirectorRobert T. Webber.
    
    
    63
    
    
    Director
 William J. Gervaisis a founder of Qualstar, has been our President and a
director since our inception in 1984, and was elected Chief Executive Officer
in January 2000. From 1984 until January 2000, Mr. Gervais also served as our
Chief Financial Officer. From 1981 until 1984, Mr. Gervais was President of
Northridge Design Associates, Inc., an engineering consulting firm. Mr. Gervais
was a co-founder, and served as Engineering Manager from 1976 until 1981, of
Micropolis Corporation, a former manufacturer of hard disk drives. Mr. Gervais
earned a B.S. degree in Mechanical Engineering from California State
Polytechnic University in 1967. Richard A. Nelsonis a founder of Qualstar and has been our Vice President
of Engineering, Secretary and a director since our inception in 1984. From
1974 to 1984, Mr. Nelson was self employed as an engineering consultant
specializing in microprocessor technology. Mr. Nelson earned a B.S. in
Electronic Engineering from California State Polytechnic University in 1966. Bruce
E. Gladstonehas been a director of Qualstar since 1994. Mr.
Gladstone is currently the Chief Executive Officer and Director of Aragon Technologies, a
company that designs and manufactures extremely precise lasers. From April
2000 until March 2003, Mr. Gladstone served as Executive Vice President of
2KSounds, Inc., a company engaged in the production and distribution of music.
In 1997, Mr. Gladstone was a co-founder of ComCore Semiconductor, a fabless
semiconductor company, and served as its Vice President and as a director from
1997 until its sale in 1998. From 1996 until 1997, Mr. Gladstone was a
consultant in the area of high technology startup companies. In 1990, Mr.
Gladstone co-founded Chronology Corporation, a company that provides tools for
electronic engineers, and served as an executive officer and director from 1990
until 1995. During the period 1974 through 1990, Mr. Gladstone founded and
served as chief executive officer and president of three companies providing
electronic engineering and software development tools. Mr. Gladstone began his
career in electrical engineering and received B.S. and M.S. degrees in
Engineering from the University of California, Los Angeles in 1957 and 1962. Robert E. Richhas served as a director of Qualstar since January 2000.
Mr. Rich has been engaged in the private practice of law since 1975 and has
been a shareholder of Stradling Yocca Carlson & Rauth, legal counsel to
Qualstar, since 1984. Mr. Rich received a B.A. degree in Economics from the
University of California, Los Angeles in 1972 and his J.D. degree from the
University of California, Los Angeles in 1975. Trude C. Taylorserved as a director of Qualstar from October 1989 until
December 1995, and rejoined our board in January 2000. Since 1984, Mr. Taylor
has been a principal of TC Associates, a private investment firm. Mr. Taylor
served as Chairman of the Board, Chief Executive Officer and a director of
Zehntel Corporation, an automatic electronic test equipment manufacturer, from
1984 until 1988. Mr. Taylor was a founder and served as Chief Executive
Officer, President and a director of EM&M Corporation, a computer components
and memory products company, from 1961 until 1984, and served as its Chairman
of the Board from 1984 until 1986. Mr. Taylor 2




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served on the board of directors of Xylan Corporation until it was
acquired by Alcatel S.A. in 1999, and currently serves on the board of
directors of Plantronics, Inc. and Professional Business Bank. Mr. Taylor also serves as a trustee of Harvey
Mudd College, and as an arbitrator for the New York Stock Exchange and the
National Association of Securities Dealers, Inc. Mr. Taylor received a B.S.
degree in Mechanical Engineering from the University of California, Los Angeles
in 1949, and an M.B.A. degree from Harvard University in 1951. Robert T. Webberhas served as a director of Qualstar since January 2000.
Mr. Webber is currently a management and air combat effectiveness
consultant. Prior to his retirement in 1999, Mr. Webber was employed for 32 years by
Lockheed-Martin Skunk Works and its predecessors, where he served in various
positions, most recently as Chief Engineer and Division Manager for the Systems
Requirements & Analysis Division. Mr. Webber currently serves on the executive
board of the National Defense Industrial Associations Combat Survivability
Division, a professional trade association. Mr. Webber received a B.S. degree
in Engineering from the University of California, Los Angeles in 1963 and an
M.B.A. degree from Pepperdine University in 1971. Directors are elected annually and hold office until the next annual
meeting of shareholders and until their successors have been elected and
qualified. Audit Committee Qualstars Board of Directors has established a standing audit committee,
which is currently comprised of the following directors: Bruce E. Gladstone,
Trude C. Taylor and Robert T. Webber. All members of the audit committee are
non-employee directors and satisfy the current standards with respect to
independence, financial expertise and experience established by rules of The
Nasdaq Stock Market, Inc. Our Board of Directors has determined that Mr.
Taylor meets the Securities and Exchange Commissions definition of audit
committee financial expert. Code of Ethics Qualstar has adopted a written Code of Business Conduct and Ethics, which
complies with the requirements for a code of ethics pursuant to Item 406(b) of
Regulation S-K under the Securities Exchange Act of 1934, that applies to our
principal executive officer, principal financial officer, principal accounting
officer or controller, and persons performing similar functions. A copy of the
Code of Business Conduct and Ethics has been filed as an exhibit to our Annual
Report on Form 10-K for the fiscal year ended June 30, 2004. A copy of the
Code of Business Conduct and Ethics is also posted on our website at
www.qualstar.com. A copy of the Code of Business Conduct and Ethics will be
provided, without charge, to any shareholder who sends a written request to the
Chief Financial Officer of Qualstar at 3990-B Heritage Oak Court, Simi Valley,
California 93063. Compliance with Section 16(a) of the Securities Exchange Act of 1934 Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Qualstars executive officers and directors, and persons who beneficially own
more than ten percent of Qualstars common stock, to file initial reports of
ownership and reports of changes in ownership with the SEC and the National
Association of Securities Dealers, Inc. Executive officers, directors and
persons who beneficially own more than ten percent of Qualstars common stock
are required by SEC regulations to furnish Qualstar with copies of all Section
16(a) forms they file. Based solely upon our review of the copies of reporting forms furnished to
Qualstar, and written representations that no other reports were required, we
believe that all filing requirements under Section 16(a) of the Securities
Exchange Act of 1934 applicable to directors, officers and any persons holding
more than ten percent of Qualstars common stock with respect to the fiscal
year ended June 30, 2004, were satisfied on a timely basis. 3




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ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table The following table summarizes all compensation earned by our Chief
Executive Officer and the four other most highly compensated executive officers
whose total salary and bonus exceeded $100,000 for services rendered in all
capacities to us during the fiscal year ended June 30, 2004. These individuals
are referred to as our named executive officers in other parts of this report.
The amounts shown below under All Other Compensation represent matching
contributions under our 401(k) plan. Annual Compensation
    
    Long Term Compensation Awards
    
    All OtherName and Principal Position
    
    Year
    
    Salary ($)
    
    Bonus ($)
    
    Securities Underlying Options (#)
    
    Compensation ($)William J. Gervais
    
    
    2004
    
    
    $
    185,000
    
    
    
    
    
    
    
    
    
    
    
    Chief Executive Officer
    
    
    2003
    
    
    
    180,600
    
    
    
    
    
    
    
    
    
    
    
    and President
    
    
    2002
    
    
    
    160,300
    
    
    
    
    
    
    
    
    
    
    
    Thomas J. Studebaker(1)
    
    
    2004
    
    
    
    187,000
    
    
    
    
    
    
    
    
    
    
    $
    1,100Vice President of Advanced
    
    
    2003
    
    
    
    187,000
    
    
    
    
    
    
    
    40,000
    
    
    
    650Development
    
    
    2002
    
    
    
    43,200
    
    
    
    
    
    
    
    
    
    
    
    Robert K. Covey
    
    
    2004
    
    
    
    167,000
    
    
    
    
    
    
    
    
    
    
    
    1,700Vice President of Marketing
    
    
    2003
    
    
    
    162,600
    
    
    
    
    
    
    
    
    
    
    
    1,6002002
    
    
    
    158,300
    
    
    
    
    
    
    
    20,000
    
    
    
    1,600David L. Griffith(2)
    
    
    2004
    
    
    
    165,000
    
    
    
    
    
    
    
    
    
    
    
    Vice President of Operations
    
    
    2003
    
    
    
    160,600
    
    
    
    
    
    
    
    
    
    
    
    2002
    
    
    
    110,100
    
    
    
    
    
    
    
    80,000
    
    
    
    Frederic T. Boyer(3)
    
    
    2004
    
    
    
    175,000
    
    
    
    
    
    
    
    
    
    
    
    2,600Vice President and Chief
    
    
    2003
    
    
    
    111,700
    
    
    
    10,000
    
    
    
    100,000
    
    
    
    Financial Officer
    
    
    2002
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   (1)
    
    Thomas J. Studebaker became our Vice President of Advanced Development in
April 2002.(2)
    
    David L. Griffith became our Vice President of Operations in October 2001.(3)
    
    Frederic T. Boyer became our Vice President and
Chief Financial Officer in October 2002. 4




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Option Grants in Last Fiscal Year The following table sets forth certain information concerning grants of
options to each of the named executive officers during the year ended June 30,
2004. In addition, in accordance with the rules and regulations of the
Securities and Exchange Commission, the following table sets forth the
hypothetical gains or option spreads that would exist for the options. Such
gains are based on assumed rates of annual compound stock appreciation of 5%
and 10% from the date on which the options were granted over the full term of
the options. The rates do not represent Qualstars estimate or projection of
future common stock prices, and no assurance can be given that any appreciation
will occur or that the rates of annual compound stock appreciation assumed for
the purposes of the following table will be achieved. Potential RealizableValue At AssumedPercent of
    
    
    
    
    
    
    
    
    
    Annual RatesTotal Options
    
    
    
    
    
    
    
    
    
    of Stock PriceOptions
    
    Granted to
    
    Exercise
    
    
    
    
    
    Appreciation forGranted
    
    Employees in
    
    Price
    
    Expiration
    
    Option Term(2)Name
    
    (# of Shares)(1)
    
    Fiscal Year
    
    ($/Share)
    
    Date
    
    5%($)
    
    10%($)William J. Gervais
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Thomas J. Studebaker
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Robert K. Covey
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    David L. Griffith
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Frederic T. Boyer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   (1)
    
    The per share exercise price of all options granted is the fair market
value of Qualstars common stock on the date of grant. Options have a
term of 10 years and become exercisable in four equal annual installments
commencing one year after the grant date.(2)
    
    The potential realizable value is calculated from the exercise price per
share, assuming the market price of Qualstars common stock appreciates in
value at the stated percentage rate from the date of grant to the
expiration date. Actual gains, if any, are dependent on the future market
price of the common stock. Options Exercised and Fiscal Year-End Values The following table sets forth information regarding options exercised by
our named executive officers during the fiscal year ended June 30, 2004, the
number of shares covered by both exercisable and unexecisable options as of
June 30, 2004, and the value of unexercised in-the-money options held by our
named executive officers as of June 30, 2004. Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values Number of
    
    
    
    
    
    Number of Securities
    
    Value of UnexercisedShares
    
    
    
    
    
    Underlying Unexercised
    
    In-the-Money Options atAcquired
    
    Value
    
    Options at June 30, 2004
    
    June 30, 2004(1)Name
    
    on Exercise
    
    Realized
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableWilliam J. Gervais
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Thomas J. Studebaker
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    20,000
    
    
    
    7,600
    
    
    
    7,600Robert K. Covey
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    10,000
    
    
    
    1,800
    
    
    
    1,800David L. Griffith
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    40,000
    
    
    
    70,000
    
    
    
    70,000Frederic T. Boyer
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    75,000
    
    
    
    47,250
    
    
    
    141,750
   (1)
    
    Represents the closing sale price of our common stock on June 30, 2004
($6.12), less the exercise price per share, multiplied by the number of
shares subject to the options held by the named executive officer. 5




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Compensation of Directors Each of our non-employee directors receive $2,000 per quarter plus $1,000
for each Board meeting attended as compensation for their service on the Board,
and are reimbursed for expenses incurred in connection with attendance at
meetings of the Board and any committees on which they serve. Directors who
serve on the Audit Committee of our Board receive an additional fee of $1,000
per quarter plus an attendance fee of $500 per meeting if the Audit Committee
meeting is held in conjunction with a meeting of the full Board, and $1,000 per
meeting if held on a day when the full Board does not meet. Directors who
serve on the Compensation Committee of our Board receive an additional fee of
$500 for attending meetings of that committee that are held on a day when the
full Board does not meet. An attendance fee of $250 per meeting is paid for
telephonic meetings of the full Board or of a committee on which a director is
a member. No fees are paid for service on the Board to directors who are
employees of Qualstar. Directors are eligible to receive options and rights to purchase
restricted stock under our 1998 Stock Incentive Plan. In January 2000, we
granted to each of our four non-employee directors the right to purchase 54,000
shares of restricted stock at a price of $2.78 per share, which each director
purchased with a full-recourse promissory note. All of these promissory notes
have been repaid in full, except for $3,860.25 of interest owed by one
director. Compensation Committee Interlocks and Insider Participation in Compensation
Decisions During the fiscal year ended June 30, 2004, the members of the
Compensation Committee of our Board of Directors were Bruce E. Gladstone, Trude
C. Taylor and Robert T. Webber. No executive officer serves as a member of the
board of directors or compensation committee of any entity that has one or more
executive officers serving on our Board of Directors. No member of the
Compensation Committee is, or ever has been, an employee or officer of
Qualstar. 6




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ITEM 12.
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS The following table sets forth information with respect to the beneficial
ownership of our common stock as of October 14, 2004 for:  
    
    each person (or group of affiliated persons) who we know
beneficially owns more than 5% of our common stock;
    
    each of our directors;
    
    each of the named executive officers; and
    
    all of our directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power
with respect to shares. Except as indicated by footnote, the persons named in
the table have sole voting and sole investment control with respect to all
shares beneficially owned, subject to community property laws where applicable.
Shares of common stock subject to options currently exercisable or exercisable
within 60 days of October 14, 2004, are deemed outstanding for computing the
percentage of the person holding such options, but are not deemed outstanding
for computing the percentage of any other person. The address for those
individuals for which an address is not otherwise indicated is: c/o Qualstar
Corporation, 3990-B Heritage Oak Court, Simi Valley, CA 93063. Shares Beneficially
    
    Percent of SharesName of Beneficial Owner
    
    Owned
    
    OutstandingWells Capital Management Inc.(1)
    
    
    1,364,150
    
    
    
    10.8
    %525 Market Street, 10th Floor
San Francisco, CA 94104Wellington Management(2)
    
    
    1,247,300
    
    
    
    9.9
    %75 State Street
Boston, MA 02109Fidelity Management & Research Co.(3)
    
    
    1,225,703
    
    
    
    9.7
    %82 Devonshire Street
Boston, MA 02109William J. Gervais
    
    
    2,881,350
    
    
    
    22.9
    %Richard A. Nelson
    
    
    1,992,250
    
    
    
    15.8
    %Bruce E. Gladstone
    
    
    54,000
    
    
    
    0.4
    %Robert E. Rich
    
    
    131,400
    
    
    
    1.0
    %Trude C. Taylor
    
    
    201,920
    
    
    
    1.6
    %Robert T. Webber
    
    
    88,000
    
    
    
    0.7
    %Frederic T. Boyer(4)
    
    
    50,000
    
    
    
    0.4
    %Robert K. Covey(5)
    
    
    162,400
    
    
    
    1.3
    %David L. Griffith(6)
    
    
    60,000
    
    
    
    0.5
    %Thomas J. Studebaker(7)
    
    
    20,000
    
    
    
    0.2
    %All directors and officers as a group (11 persons)(8)
    
    
    5,661,320
    
    
    
    44.3
    %
   (1)
    
    Based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on February 13, 2004,
Wells Fargo & Company, as the parent holding company of Wells Capital Management Incorporated, an investment adviser, beneficially
owns 1,364,150 shares. It has sole voting power as to 1,360,200 shares and sole dispositive power as to 1,364,150 shares.(2)
    
    Based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on February 12, 2004, Wellington
Management Company, LLP, in its capacity as an investment adviser, beneficially owns 1,247,300 shares. It has shared voting power
as to 699,300 shares and shared dispositive power as to 1,247,300 shares.(3)
    
    Based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on February 17, 2004, FMR Corporation,
as the parent holding company of Fidelity Management & Research Company, an investment adviser, beneficially owns 1,225,703 shares and
has sole dispositive power over these shares but no voting power. Fidelity Management & Research Company has shared voting power as to
1,225,703 shares.(4)
    
    Includes 50,000 shares subject to stock options that are currently exercisable or exercisable within 60 days of October 14, 2004.(5)
    
    Includes 10,000 shares subject to stock options that are currently exercisable or exercisable within 60 days of October 14, 2004.(6)
    
    Includes 60,000 shares subject to stock options that are currently exercisable or exercisable within 60 days of October 14, 2004.(7)
    
    Includes 20,000 shares subject to stock options that are currently exercisable or exercisable within 60 days of October 14, 2004.(8)
    
    Includes 20,000 shares subject to stock options that are currently exercisable or exercisable within 60 days of October 14, 2004. 7




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Additional Equity Compensation Plan Information The following table provides additional information regarding Qualstars equity
compensation plans as of June 30, 2004: Number of securitiesremaining available forNumber of securities to
    
    Weighted-average
    
    future issuance underbe issued upon exercise
    
    exercise price of
    
    equity compensation plansof outstanding options,
    
    outstanding options,
    
    (excluding securitiesPlan category
    
    warrants and rights
    
    warrants and rights
    
    reflected in column (a))(a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders(1)
    
    
    511,000
    
    
    $
    5.24
    
    
    
    307,175Equity compensation
plans not approved by
security holders
    
    
    
    
    
    
    
    
    
    
    Totals
    
    
    511,000
    
    
    $
    5.24
    
    
    
    307,175
   (1)
    
    Includes shares subject to stock options granted under the 1998 Stock
Incentive Plan, and shares available for additional option grants under
that plan, as of June 30, 2004. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In January 2000 each of our four non-employee directors purchased 54,000
shares of restricted stock pursuant to our 1998 Stock Incentive Plan at a price
of $2.78 per share, which was the fair market value of our stock on the date of
grant as determined by our board of directors. Each director paid for his
shares with a full-recourse promissory note in the amount of $150,000, secured
by a pledge of the purchased shares. Payments of principal on the notes were
due in four equal annual installments commencing on the second anniversary of
the date of the note. Interest on the notes accrued at the rate of 6.21% per
annum. As of June 30, 2004, all of these promissory notes had been repaid in
full, except for $3,860.25 in interest owed by one director. 8




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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The aggregate fees billed by Ernst & Young LLP, independent accountants,
for professional services rendered to Qualstar during the fiscal years ended
June 30, 2004 and fiscal 2003 were comprised of the following: Fiscal
    
    Fiscal2004
    
    2003Audit Fees
    
    $
    140,000
    
    
    $
    131,000Audit-related fees
    
    
    54,000
    
    
    
    25,000Tax fees
    
    
    162,000
    
    
    
    70,000All other fees
    
    
    
    
    
    
    Total fees
    
    $
    356,000
    
    
    $
    226,000
 Audit fees include fees for professional services rendered in connection
with the audit of our consolidated financial statements for each year and
reviews of our unaudited consolidated quarterly financial statements, as well
as fees related to consents and reports in connection with regulatory filings
for those fiscal years. Audit-related fees in fiscal 2004 and 2003 were primarily for general
assistance in connection with the implementation of procedures required to
comply with rules and regulations promulgated pursuant to the Sarbanes-Oxley
Act of 2002. Tax fees related primarily to tax compliance and advisory services, and
the preparation of federal and state tax returns for each year. Tax fees for
fiscal 2004 also include professional services rendered in connection with
determining the availability of research and development tax credits. Audit Committee Pre-Approval Policies and Procedures Our Audit Committees policy is to pre-approve all audit and permissible
non-audit services provided by our independent accountants in accordance with
applicable Securities and Exchange Commission rules. The Audit Committee
adopted a written pre-approval policy on June 25, 2003, and all services
performed by Ernst & Young in connection with engagements subsequent to June
25, 2003 were pre-approved in accordance with the Audit Committees
pre-approval policy. The Audit Committee generally pre-approves particular
services or categories of services on a case-by-case basis. The independent
accountants and management periodically report to the Audit Committee regarding
the extent of services provided by the independent accountants in accordance
with these pre-approvals, and the fees for the services performed to date. 9




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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized. Dated: October 27, 2004
    QUALSTAR CORPORATIONBy:
    /s/   William J. GervaisWilliam J. GervaisChief Executive Officer and President Pursuant to the requirements of the Securities Exchange Act of 1934, this
amendment on Form 10K/A has been signed below by the following persons in the
capacities and on the dates indicated. SIGNATURE
    
    TITLE
    
    DATE/s/ William J. Gervais

William J. Gervais
    
    Chief Executive Officer, President and Director
(principal executive officer)
    
    October 27, 2004/s/ Richard A. Nelson

Richard A. Nelson
    
    Vice President of Engineering, Secretary and Director
    
    October 27, 2004/s/ Frederic T. Boyer

Frederic T. Boyer
    
    Vice President and Chief Financial Officer
(principal financial and accounting officer)
    
    October 27, 2004/s/ Bruce E. Gladstone

Bruce E. Gladstone
    
    Director
    
    October 27, 2004/s/ Trude C. Taylor

Trude C. Taylor
    
    Director
    
    October 27, 2004/s/ Robert E. Rich

Robert E. Rich
    
    Director
    
    October 27, 2004/s/ Robert T. Webber

Robert T. Webber
    
    Director
    
    October 27, 2004
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EXHIBIT INDEX ExhibitNo.
    
    Description31.1
    
    Certification of Principal Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Principal Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
 11