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| T | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|--------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

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| CALIFORNIA               | 95-3927330               |
|--------------------------|--------------------------|
| (State of Incorporation) | (I.R.S. Employer ID No.) |

| Title of Each Class: | Name of Each Exchange on Which Registered: |
|----------------------|--------------------------------------------|
| Common Stock         | The NASDAQ Stock Market LLC                |

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| PART III |                                                                                           |   |
|----------|------------------------------------------------------------------------------------------------|--------|
| Item 10. | Directors, Executive Officers and Corporate Governance                                         | 4      |
| Item 11. | Executive Compensation                                                                         | 5      |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 15     |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence                      | 17     |
| Item 14. | Principal Accountant Fees and Services                                                         | 17     |
|     | Signatures                                                                                     | 19     |
|     | Exhibit Index                                                                                  | 20     |

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| Name                  |   | Age    |   | Position                                        |
|-----------------------|--------|--------|--------|-------------------------------------------------|
|                  |   |   |   |                                            |
| Lawrence D. Firestone |   | 54     |   | Chief Executive Officer, President and Director |
| Stanley W. Corker     |   | 61     |   | Director                                        |
| Carl W. Gromada       |   | 71     |   | Director                                        |
| Robert A. Meyer       |   | 67     |   | Director                                        |
| Daniel C. Molhoek     |   | 71     |   | Director                                        |

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----

|   | · | Compensation fosters the long-term focus required for the Company’s success. In general, the compensation of Company executives includes longer-term incentives because they are in a greater position to influence longer-term results. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Compensation reflects the level of job responsibility, individual performance, and Company performance. As employees progress to higher levels in the organization, an increasing proportion of their pay should be linked to Company performance and stockholder returns because those employees are more able to affect the Company’s results. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Compensation reflects the value of the job in the marketplace. To attract and retain a highly skilled work force, we must remain competitive with the pay of other premier employers who compete with us for talent. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | While compensation programs and individual pay levels will always reflect differences in job responsibilities, geographies and marketplace considerations, the overall structure of the compensation and benefit programs should be broadly similar and equitable across the organization. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Advanced Digital Information Corp. |   | Focus Enhancements Inc.      |   | Quantum Corporation               |
|------------------------------------|--------|------------------------------|--------|-----------------------------------|
| Autobytel Inc.                     |   | Interlink Technologies, Inc. |   | QuickLogic Corporation            |
| CalAmp Corporation                 |   | Ixia                         |   | SpaceDev Corporation              |
| Comarco Inc.                       |   | Lantronix, Inc.              |   | Superconductor Technologies, Inc. |
| DDi Corporation                    |   | LaserCard Corporation        |   | Universal Electronics Inc.        |
| Dot Hill Corporation               |   | Overland Storage, Inc.       |   | Zhone Technologies, Inc.          |
| eMagin Corporation                 |   |                         |   |                              |

----

| Name and Principal Position                  |   | Fiscal 2012Base Salary |    |   | Percent Change versus Fiscal 2011Base Salary |    |   | Fiscal 2013Base Salary |   |    | Percent Change versus Fiscal 2012Base Salary |   |
|----------------------------------------------|--------|------------------------|---------|--------|----------------------------------------------|---------|--------|------------------------|--------|---------|----------------------------------------------|--------|
|                                         |   |                   |    |   |                                         |    |   |                   |   |    |                                         |   |
| Lawrence D. Firestone                        |   | $                      | 300,000 | (1)    |                                         | ─ |   |                   | $      | 300,000 |                                         |   | ─ |   |
| Chief Executive Officer and President        |   |                   |    |   |                                         |    |   |                   |   |    |                                         |   |   |   |
|                                         |   |                   |    |   |                                         |    |   |                   |   |    |                                         |   |   |   |
| William J. Gervais                           |   | $                      | 177,507 | (5)    |                                         | ─ |   |                   | $      | ─ |                                         |   | ─ |   |
| Former Chief Executive Officer and President |   |                   |    |   |                                         |    |   |                   |   |    |                                         |   |   |   |
|                                         |   |                   |    |   |                                         |    |   |                   |   |    |                                         |   |   |   |
| Nidhi H. Andalon                             |   | $                      | 160,000 | (2)    |                                         | 6%      |   |                   | $      | 160,000 |                                         |   | ─ |   |
| Chief Financial Officer and Vice President   |   |                   |    |   |                                         |    |   |                   |   |    |                                         |   |   |   |
|                                         |   |                   |    |   |                                         |    |   |                   |   |    |                                         |   |   |   |
| Randy D. Johnson                             |   | $                      | 180,000 |   |                                         | ─ |   |                   | $      | 200,000 | (3)                                          |   | 10% |   |
| Vice President and General Manager, N2Power  |   |                   |    |   |                                         |    |   |                   |   |    |                                         |   |   |   |
|                                         |   |                   |    |   |                                         |    |   |                   |   |    |                                         |   |   |   |
| Robert K. Covey                              |   | $                      | 170,600 | (4)    |                                         | 3%      |   |                   | $      | 170,600 |                                         |   | ─ |   |
| Vice President of Marketing                  |   |                   |    |   |                                         |    |   |                   |   |    |                                         |   |   |   |

----

|   | (1) | Mr. Firestone was appointed our Chief Executive Officer and President on May 7, 2012, effective as of his commencement date of June 1, 2012.  Mr. Firestone’s base salary is specified in an employment agreement between the Company and Mr. Firestone as described below under the caption entitled “Other Compensation.” |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Upon recommendation of the Board of Directors, Ms. Andalon’s annual base salary increased to $160,000 effective November 2, 2011. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Upon recommendation of the Board of Directors, Mr. Johnson’s annual base salary increased to $200,000 effective August 7, 2012, retroactive to July 1, 2012. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | As a cost-savings measure, Mr. Covey’s base salary was reduced by 10%, from $184,000 to $165,600, in July 2009.  Mr. Covey’s base salary was partially reinstated, by $5,000, in July 2011. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Mr. Gervais ended his employment as Chief Executive and President on June 15, 2012. |
|--------|-----|-------------------------------------------------------------------------------------|

----

----

| Submitted by the members of the Compensation Committee |
|--------------------------------------------------------|
| Stanley W. Corker (Chairman)                           |
| Carl W. Gromada                                        |
| Robert A. Meyer                                        |

----

| Name and Principal Position           |   | Year   |   | Salary (1)($) |    |   | Bonus (1)($) |   |    | Grant Date Fair Value of Option Awards (2)($) |   |   | All Other Compensation (3)($) |   |   | Total($) |    |
|---------------------------------------|--------|--------|--------|---------------|---------|--------|--------------|--------|---------|-----------------------------------------------|--------|--------|-------------------------------|--------|--------|----------|---------|
|                                  |   |   |   |          |    |   |         |   |    |                                          |   |   |                          |   |   |     |    |
| Lawrence D. Firestone (7)             |   | 2012   |   | $             | 18,463  |   |         | $      | 75,000  |                                          |   | $      | 70,120                        |   |   | $        | — |   |   | $ | 163,583 |   |
| Chief Executive Officer and President |   |   |   |          |    |   |         |   |    |                                          |   |   |                          |   |   |     |    |   |   |   |   |   |
|                                  |   |   |   |          |    |   |         |   |    |                                          |   |   |                          |   |   |     |    |   |   |   |   |   |
| William J. Gervais (6)                |   | 2012   |   |          | 186,593 |   |         |   | — |                                          |   |   | —                       |   |   |     | 2,810   |   |   |   | 189,403 |   |
| Former Chief Executive Officer and    |   | 2011   |   |          | 161,346 |   |         |   | — |                                          |   |   | —                       |   |   |     | 2,851   |   |   |   | 164,197 |   |
| President                             |   | 2010   |   |          | 158,170 |   |         |   | — |                                          |   |   | —                       |   |   |     | 3,102   |   |   |   | 161,272 |   |
|                                  |   |   |   |          |    |   |         |   |    |                                          |   |   |                          |   |   |     |    |   |   |   |   |   |
| Nidhi H. Andalon (4)                  |   | 2012   |   |          | 158,013 |   |         |   | — |                                          |   |   | 11,600                        |   |   |     | 532     |   |   |   | 170,145 |   |
| Vice President and                    |   | 2011   |   |          | 150,010 |   |         |   | — |                                          |   |   | —                       |   |   |     | 573     |   |   |   | 150,583 |   |
| Chief Financial Officer               |   | 2010   |   |          | 150,010 |   |         |   | — |                                          |   |   | —                       |   |   |     | 919     |   |   |   | 150,929 |   |
|                                  |   |   |   |          |    |   |         |   |    |                                          |   |   |                          |   |   |     |    |   |   |   |   |   |
| Randy Johnson (5)                     |   | 2012   |   |          | 179,450 |   |         |   | 10,800  |                                          |   |   | 11,600                        |   |   |     | 2,286   |   |   |   | 204,136 |   |
| Vice President and                    |   | 2011   |   |          | 186,788 |   |         |   | 14,400  |                                          |   |   | —                       |   |   |     | 2,129   |   |   |   | 203,317 |   |
| General Manager, N2Power              |   | 2010   |   |          | 180,003 |   |         |   | 3,600   |                                          |   |   | —                       |   |   |     | 573     |   |   |   | 184,176 |   |
|                                  |   |   |   |          |    |   |         |   |    |                                          |   |   |                          |   |   |     |    |   |   |   |   |   |
| Robert K. Covey                       |   | 2012   |   |          | 179,480 |   |         |   | — |                                          |   |   | 11,600                        |   |   |     | 2,213   |   |   |   | 193,293 |   |
| Vice President of Marketing           |   | 2011   |   |          | 173,550 |   |         |   | — |                                          |   |   | —                       |   |   |     | 2,254   |   |   |   | 175,804 |   |
|                                  |   | 2010   |   |          | 166,297 |   |         |   | — |                                          |   |   | —                       |   |   |     | 2,501   |   |   |   | 168,798 |   |

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|   | (1) | The amounts shown in these columns reflect salary and bonuses earned by the named executive officers for each of the fiscal years indicated. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The amounts shown in this column represent the fair value of stock options at the date of grant.  Options were granted to our President and CEO, on July 29, 2011 as a Director and on June 1, 2012 as CEO.  Options were granted to our named executive officers, other than our President and CEO on June 19, 2012. For information regarding the calculation of the grant date fair value of stock options, refer to note 9 of the Qualstar financial statements included in Item 8 of this report. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The amounts shown above under “All Other Compensation” represent matching contributions under our 401(k) plan, and premiums for disability and life insurance. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Ms. Andalon was appointed our Vice President effective March 25, 2010. |
|--------|-----|------------------------------------------------------------------------|

|   | (5) | Mr. Johnson was appointed our Vice President and General Manager, N2Power effective March 25, 2010. |
|--------|-----|-----------------------------------------------------------------------------------------------------|

|   | (6) | Mr. Gervais ended his employment as Chief Executive and President on June 15, 2012. |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (7) |  Mr. Firestone commenced employment as our Chief Executive Officer and President on June 1, 2012 and received a signing bonus of $75,000.  Mr. Firestone’s incentive bonus, if any, for the initial term ending June 30, 2013 will be reduced by the amount of his signing bonus, up to $75,000. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                                                                                                                                                                                                       |   | Grant Date           |   | All Other Option Awards: Number of Securities Underlying Options (1) (#) |    |   | Exercise or Base Price of Option Awards ($ / Sh) |   |   | Grant Date FairValue of Option Awards (2)($) |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|--------|----------------------------------------------------------------------------------------------|---------|--------|-----------------------------------------------------------------|--------|--------|---------------------------------------------------|--------|
|                                                                                                                                                                                                       |   |                 |   |                                                                                         |    |   |                                                            |   |   |                                              |   |
| Lawrence D. Firestone                                                                                                                                                                                      |   | 7/29/2011            |   |                                                                                         | 24,000  |   |                                                            | $      | 1.83   |                                              |   | $ | 15,120 |   |
| Lawrence D. Firestone (3)                                                                                                                                                                                  |   |   6/1/2012 |   |                                                                                         | 100,000 |   |                                                            | $      | 1.94   |                                              |   | $ | 55,000 |   |
| Nidhi H. Andalon                                |   | 6/19/2012            |   |                                                                                         | 20,000  |   |                                                            | $      | 1.89   |                                              |   | $ | 11,600 |   |
| Randy Johnson                                   |   | 6/19/2012            |   |                                                                                         | 20,000  |   |                                                            | $      | 1.89   |                                              |   | $ | 11,600 |   |
| Robert K. Covey                                 |   | 6/19/2012            |   |                                                                                         | 20,000  |   |                                                            | $      | 1.89   |                                              |   | $ | 11,600 |   |
| William J. Gervais (4)                                                                                                                                                                                     |   | ­­—  |   | ­­—                                                                          |    |   | ­­—                                             |   |   | ­­—                               |   |

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|   | (1) | With the exception of the stock option grant to Mr. Firestone on June 1, 2012, stock options granted to the named executive officers vest over four years at the rate of 25% of the number of shares as of each anniversary of the date of grant, provided that the executive is still employed by Qualstar on the vesting date. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The amounts shown in this column represent the full grant date fair value of stock options granted, computed in accordance with FASB Accounting Standards Codification Topic 718, and does not necessarily correspond to the actual value that will be realized by the named executive officers.  For information regarding the calculation of the grant date fair value of stock options, refer to note 9 of the Qualstar financial statements included in Item 8 of this report. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Under the terms of an employment agreement between the Company and Mr. Firestone as described above in “Compensation Discussion and Analysis”  under the caption entitled “Other Compensation,” 75,000 of the stock options awarded to Mr. Firestone on June 1, 2012 vest on June 30, 2013 and the remaining 25,000 on December 31, 2013. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4)  | Mr. Gervais ended his employment as Chief Executive and President on June 15, 2012. |
|--------|-----------|-------------------------------------------------------------------------------------|

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|                   |   | Option Awards                                         |    |
|------------------------|--------|-------------------------------------------------------|---------|
|                   |   | Number of SecuritiesUnderlying UnexercisedOptions (#) |    |   | OptionExercisePrice($) |   |   |   |   |
|                   |   | OptionExpirationDate                                  |    |
|                   |
| Name                   |   | Exercisable                                           |    |   | Unexercisable |   |
| Lawrence D. Firestone  |   |                                                  | — |   |   |   | 24,000 | (1) |   | $ | 1.83 |   |   | 07/28/2021 |   |
| Lawrence D. Firestone  |   |                                                  | — |   |   |   | 100,000 | (2) |   | $ | 1.94 |   |   | 05/31/2022 |   |
| William J. Gervais (3) |   |                                                  | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Nidhi H. Andalon       |   |                                                  | 16,000  |   |   |   | — |   |   | $ | 3.02 |   |   | 06/13/2016 |   |
| Nidhi H. Andalon       |   |                                                  | — |   |   |   | 20,000 | (1) |   | $ | 1.89 |   |   | 06/18/2022 |   |
| Randy Johnson          |   |                                                  | 12,000  |   |   |   | — |   |   | $ | 3.10 |   |   | 03/25/2018 |   |
| Randy Johnson          |   |                                                  | — |   |   |   | 20,000 | (1) |   | $ | 1.89 |   |   | 06/18/2022 |   |
| Robert K. Covey        |   |                                                  | — |   |   |   | 20,000 | (1) |   | $ | 1.89 |   |   | 06/18/2022 |   |

----

|   | (1) | Stock options granted to the named executive officers vest over four years at the rate of 25% of the options as of each anniversary of the date of grant, provided that the executive is still employed by Qualstar on the vesting date.  The amounts shown in this column represent the remaining unvested portion of each option grant. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Under the terms of an employment agreement between the Company and Mr. Firestone as described above in “Compensation Discussion and Analysis”  under the caption entitled “Other Compensation,” 75,000 of the stock options awarded to Mr. Firestone on June 1, 2012 vest on June 30, 2013 and the remaining 25,000 on December 31, 2013. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Mr. Gervais ended his employment as Chief Executive and President on June 15, 2012. |
|--------|-----|-------------------------------------------------------------------------------------|

----

|                   |   | Option Awards                                               |    |
|------------------------|--------|-------------------------------------------------------------|---------|
| Name                   |   | Number of SharesAcquired on Exercise(#) |    |   | Value Realizedon Exercise (1)($) |   |
| Lawrence D. Firestone  |   |                                                        | — |   |   |   | — |   |
| William J. Gervais (2) |   |                                                        | — |   |   |   | — |   |
| Nidhi H. Andalon       |   |                                                        | — |   |   |   | — |   |
| Randy Johnson          |   |                                                        | — |   |   |   | — |   |
| Robert K. Covey        |   |                                                        | — |   |   |   | — |   |

----

|   | (1) | The value realized on exercise of option awards represents the market price per share of common stock on the date of exercise, less the stock option exercise price per share, multiplied by the number of stock options exercised. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Mr. Gervais ended his employment as Chief Executive and President on June 15, 2012. |
|--------|-----|-------------------------------------------------------------------------------------|

| Name                      |   | Fees Earned or Paid in Cash (1) ($) |   |   | Grant Date Fair Value of OptionAwards (2)(3)($) |   |    | Total($) |   |
|---------------------------|--------|-------------------------------------------------------------------|--------|--------|------------------------------------------------------|--------|---------|----------|--------|
| Stanley W. Corker         |   | $                                                                 | 23,750 |   |                                                 |   | — |     |   | $ | 23,750 |   |
| Lawrence D. Firestone (4) |   |                                                              | 20,000 |   |                                                 |   | 3,490   |     |   |   | 23,490 |   |
| Carl W. Gromada           |   |                                                              | 23,750 |   |                                                 |   | — |     |   |   | 23,750 |   |
| Robert A. Meyer           |   |                                                              | 23,750 |   |                                                 |   | — |     |   |   | 23,750 |   |
| Richard A. Nelson (5)     |   |                                                              | 9,000  |   |                                                 |   | — |     |   |   | 9,000 |   |
| Robert E. Rich (6)        |   |                                                              | 15,500 |   |                                                 |   | — |     |   |   | 15,500 |   |

----

|   | (1) | The amounts shown in this column represent the amount of cash compensation earned in fiscal year 2012 for service on the Board of Directors and any committees of the Board on which the director was a member in fiscal 2012. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Stock options granted to our directors typically vest over four years at the rate of 25% of the shares as of each anniversary of the date of grant. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | As of June 30, 2012, each of our non-employee directors named in the above table (except Mr. Richard A. Nelson and Mr. Lawrence D. Firestone) held unexercised stock options for 24,000 shares of our common stock. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Mr. Firestone was appointed Chief Executive Officer and President on May 7, 2012, effective as of his commencement date of June 1, 2012.  He resigned as a member of the Audit Committee effective May 8, 2012. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Mr. Nelson served as a member of the Board until March, 21, 2012. |
|--------|-----|-------------------------------------------------------------------|

|   | (6) | Mr. Rich resigned from the Board effective September 24, 2012. |
|--------|-----|----------------------------------------------------------------|

----

----

| Name                  |   | Option Awards (1) |   |   | Severance |   |    | Target Bonus |   |   | COBRA   |   |
|-----------------------|--------|------------------------|--------|--------|-----------|--------|---------|--------------|--------|--------|---------|--------|
| Lawrence D. Firestone |   | $                      | 0      |   |      | $      | 450,000 |         |   | $      | 600,000 |   |   | $ | 31,170 |   |
| Nidhi H. Andalon      |   | $                      | 200    |   |      | $      | 0       |         |   | $      | 0       |   |   | $ | 0 |   |
| Randy Johnson         |   | $                      | 200    |   |      | $      | 0       |         |   | $      | 0       |   |   | $ | 0 |   |
| Robert K. Covey       |   | $                      | 200    |   |      | $      | 0       |         |   | $      | 0       |   |   | $ | 0 |   |

|   | (1) | The amounts in this column represent the aggregate gain each named executive officer would have realized if all unvested stock options that were held by him or her on June 30, 2012 accelerated and became immediately vested in full on that date.  The amount of gain was calculated based on the difference between the exercise price of each unvested option and the closing price of our common stock on that date, which was $1.90 per share. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)  | In the case of Mr. Firestone, the amounts above reflect the benefits he would have been owed in the event that his employment was terminated without cause or he resigned for good reason, as of June 30, 2012. Under the terms of the employment agreement between the Company and Mr. Firestone, “cause” includes, among other acts, any act of fraud, embezzlement or dishonesty which materially adversely affects the business of the Company or any successor entity, any unauthorized use or disclosure of confidential information or trade secrets of the Company, any material act or omission involving malfeasance or gross negligence in the performance of the executive’s duties and any material deviation from any of the Company’s or a successor entity’s policies. “Good reason” includes, among other acts, a demotion or material reduction in responsibility level, a decrease in level of his compensation by more than ten percent (10%), and a relocation of more than 30 miles from the executive’s current work place. |
|--------|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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. |
|--------|--------|---------------------------------------------------------|

----

|                                               |   | Common       |      |   | OptionsExercisable |   |    | Beneficial Ownership |   |
|----------------------------------------------------|--------|--------------|-----------|--------|--------------------|--------|---------|----------------------|--------|
| Name                                               |   | Shares Owned |      |   | Within 60 Days (1) |   |    | Number               |   |   | Percent |   |
| BKF Capital Group, Inc.                            |   |         | 2,234,520 |   |               |   | — |                 |   |   | 2,234,520 |   |   |   | 18.2 | % |
| Steven N. Bronson (2)                              |   |         |      |   |               |   |    |                 |   |   |   |   |   |   |   |   |
| 225 N.E. Mizner Blvd., Suite 400                   |   |         |      |   |               |   |    |                 |   |   |   |   |   |   |   |   |
| Boca Raton, FL 33432                               |   |         |      |   |               |   |    |                 |   |   |   |   |   |   |   |   |
| Dimensional Fund Advisors, LP (3)                  |   |         | 933,389   |   |               |   | — |                 |   |   | 933,389 |   |   |   | 7.6 | % |
| 6300 Bee Cave Road, Austin, TX 78746               |   |         |      |   |               |   |    |                 |   |   |   |   |   |   |   |   |
| Porter Orlin LLC (4)                               |   |         | 912,901   |   |               |   | — |                 |   |   | 912,901 |   |   |   | 7.5 | % |
| 665 Fifth Avenue, Floor 34, New York, NY 10103     |   |         |      |   |               |   |    |                 |   |   |   |   |   |   |   |   |
| Lloyd Miller, III (5)                              |   |         | 668,903   |   |               |   | — |                 |   |   | 668,903 |   |   |   | 5.5 | % |
| 222 Lakeview Avenue, Suite 160-365                 |   |         |      |   |               |   |    |                 |   |   |   |   |   |   |   |   |
| West Palm Beach, FL 33401                          |   |         |      |   |               |   |    |                 |   |   |   |   |   |   |   |   |
|                                               |   |         |      |   |               |   |    |                 |   |   |   |   |   |   |   |   |
| William J. Gervais                                 |   |         | 3,283,364 |   |               |   | — |                 |   |   | 3,283,364 |   |   |   | 26.8 | % |
|                                               |   |         |      |   |               |   |    |                 |   |   |   |   |   |   |   |   |
| Carl Gromada                                       |   |         | 13,000    |   |               |   | 24,000  |                 |   |   | 37,000 |   |   |   | * |   |
| Stanley W. Corker                                  |   |         | 29,640    |   |               |   | 24,000  |                 |   |   | 53,640 |   |   |   | * |   |
| Lawrence D. Firestone                              |   |         | 2,000     |   |               |   | 6,000   |                 |   |   | 8,000 |   |   |   | * |   |
| Robert A. Meyer                                    |   |         | —   |   |               |   | 24,000  |                 |   |   | 24,000 |   |   |   | * |   |
| Robert E. Rich(6)                                  |   |         | 131,400   |   |               |   | 24,000  |                 |   |   | 155,400 |   |   |   | 1.3 | % |
| Daniel C. Molhoek(6)                               |   |         | 3,000     |   |               |   | — |                 |   |   | 3,000 |   |   |   | * |   |
| Robert K. Covey                                    |   |         | 48,280    |   |               |   | — |                 |   |   | 48,280 |   |   |   | * |   |
| Nidhi H. Andalon                                   |   |         | —   |   |               |   | 16,000  |                 |   |   | 16,000 |   |   |   | * |   |
| Randy Johnson                                      |   |         | —   |   |               |   | 12,000  |                 |   |   | 12,000 |   |   |   | * |   |
| Steven W. Wagner                                   |   |         | 250       |   |               |   | — |                 |   |   | 250 |   |   |   | * |   |
| William J. Lurie                                   |   |         | —   |   |               |   | — |                 |   |   | — |   |   |   | * |   |
| All directors and officers as a group (11 persons) |   |         | 227,570   |   |               |   | 130,000 |                 |   |   | 357,570 |   |   |   | 2.9 | % |

----

|   | (1) | Represents shares that may be acquired upon exercise of stock options which are either currently vested or will vest within 60 days of October 5, 2012. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Based on information contained in reports filed with the Securities and Exchange Commission, BKF Capital Group, Inc. beneficially owns 2,234,520 shares of Qualstar common stock as of May 18, 2012.  Steven N. Bronson, as the Chairman and President of BKF Capital Group, Inc., may be deemed to beneficially own the shares of Qualstar held by BKF Capital Group, Inc.  Mr. Bronson, as the sole owner of BA Value Investors, LLC, is the beneficial owner of 57,700 shares of Qualstar. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Based on information contained in reports filed with the Securities and Exchange Commission, Dimensional Fund Advisors, LP, an investment adviser, beneficially owns 933,389 shares as of December 31, 2011. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Based on information contained in reports filed with the Securities and Exchange Commission, Porter Orlin LLC, an investment adviser, beneficially owns 912,901 shares as of December 31, 2011. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Based on information contained in reports filed with the Securities and Exchange Commission, Lloyd Miller, III, an investment adviser, beneficially owns 668,903 shares as of September 21, 2012. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Mr. Rich resigned from the Board effective September 24, 2012 and Mr. Molhoek joined the Board effective September 24, 2012. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------|

----

|               |   | Fiscal2012 |    |   | Fiscal2011 |   |
|--------------------|--------|------------|---------|--------|------------|--------|
| Audit Fees         |   | $          | 115,500 |   |       | $      | 125,000 |   |
| Audit-related fees |   |       | — |   |       |   | — |   |
| Tax fees           |   |       | 5,000   |   |       |   | 6,200 |   |
| All other fees     |   |       | — |   |       |   | — |   |
| Total fees         |   | $          | 120,500 |   |       | $      | 131,000 |   |

----

----

|                         | QUALSTAR CORPORATION |                                       |
|------------------------------|----------------------|--------------------------------------------|
|                         |                 |                                       |   |
|                         |                 |                                       |   |
|                         |                 |                                       |   |
| Date: October 29, 2012  | By:                  | /s/  LAWRENCE D. FIRESTONE  |   |
|                         |                 | Lawrence D. Firestone,                     |   |
|                         |                 | Chief Executive Officer and President      |   |

| Signature                            | Title                                                 | Date             |
|--------------------------------------|-------------------------------------------------------|------------------|
|                                 |                                                  |             |
|                                 |                                                  |             |
| /s/  LAWRENCE D. FIRESTONE | Chief Executive Officer,                              | October 29, 2012 |
| Lawrence D. Firestone                | President and Director                                |             |
|                                 | (principal executive officer)                         |             |
|                                 |                                                  |             |
|                                 |                                                  |             |
| /s/  NIDHI H. ANDALON      | Chief Financial Officer, Vice President and Secretary | October 29, 2012 |
| Nidhi H. Andalon                     | (principal financial officer)                         |             |
|                                 |                                                  |             |
|                                 |                                                  |             |
| /s/  CARL W. GROMADA       | Director                                              | October 29, 2012 |
| Carl W. Gromada                      |                                                  |             |
|                                 |                                                  |             |
|                                 |                                                  |             |
| /s/  STANLEY W. CORKER     | Director                                              | October 29, 2012 |
| Stanley W. Corker                    |                                                  |             |
|                                 |                                                  |             |
|                                 |                                                  |             |
| /s/  DANIEL C. MOLHOEK     | Director                                              | October 29, 2012 |
| Daniel C. Molhoek                    |                                                  |             |
|                                 |                                                  |             |
|                                 |                                                  |             |
| /s/  ROBERT A. MEYER       | Director                                              | October 29, 2012 |
| Robert A. Meyer                      |                                                  |             |
|                                 |                                                  |             |

----

| ExhibitNo. |   |   Description                                                                                                      |
|------------|--------|-------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                    |
| 3.1(1)     |   | Restated Articles of Incorporation.                                                                                     |
|       |   |                                                                                                                    |
| 3.2(4)     |   | Bylaws, as amended and restated as of March 24, 2011.                                                                   |
|       |   |                                                                                                                    |
| 10.1(1)*   |   | 1998 Stock Incentive Plan, as amended and restated.                                                                     |
|       |   |                                                                                                                    |
| 10.2(1)    |   | Form of Indemnification Agreement.                                                                                      |
|       |   |                                                                                                                    |
| 10.3(2)    |   | Lease agreement between Strategic Performance Fund-II, Inc. and Qualstar Corporation, dated September 20, 2000.         |
|       |   |                                                                                                                    |
| 10.4(6)    |   | Amendment to Lease agreement between Strategic Performance Fund-II, Inc. and Qualstar Corporation, dated June 30, 2009. |
|       |   |                                                                                                                    |
| 10.5(5)*   |   | 2008 Stock Incentive Plan                                                                                               |
|       |   |                                                                                                                    |
| 10.6       |   | Consulting Agreement with William J. Gervais, dated June 22, 2012.                                                      |
|       |   |                                                                                                                    |
| 10.7*      |   | Employment Agreement with Lawrence D. Firestone, dated May 8, 2012.                                                     |
|       |   |                                                                                                                    |
| 14.1(3)    |   | Code of Business Conduct and Ethics                                                                                     |
|       |   |                                                                                                                    |
| 23.1       |   | Consent of Independent Registered Public Accounting Firm (SingerLewak LLP).                                             |
|       |   |                                                                                                                    |
| 31.1       |   | 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.                 |
|       |   |                                                                                                                    |
| 32.1       |   | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                 |
|       |   |                                                                                                                    |
| 32.2       |   | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                 |

----

| (1)     | Incorporated by reference to the designated exhibits to Qualstar’s registration statement on Form S-1 (Commission File No. 333-96009), declared effective by the Commission on June 22, 2000. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | Incorporated by reference to the designated exhibit to Qualstar’s Report on Form 10-Q for the fiscal quarter ended September 30, 2000.                                                             |
| (3)     | Incorporated by reference to the designated exhibit to Qualstar’s Report on Form 10-K for the fiscal year ended June 30, 2004.                                                                     |
| (4)     | Incorporated by reference to Exhibit 3.1 to Qualstar’s Report on Form 8-K dated March 24, 2011.                                                                                                         |
| (5)     | Incorporated by reference to Exhibit 10.1 to Qualstar’s Report on Form 10-Q/A for the fiscal quarter ended March 31, 2009.                                                                                   |
| (6)     | Incorporated by reference to Exhibit 10.4 to Qualstar’s report on Form 10-K for the fiscal year ended June 30, 2009.                                                                                         |
| *  | Each of these exhibits constitutes a management contract, compensatory plan or arrangement required to be filed as an exhibit to this report pursuant to Item 15(b) of this report.                           |