##### Table of Contents



SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C. 20549
  Form 10-K/A
  AMENDMENT NO. 1
  þ

ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934FOR THE FISCAL YEAR ENDED
    JUNE 30, 2006o

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 ID
    NO.)   3990-B HERITAGE OAK COURT, SIMI VALLEY, CA 93063
 (805) 583-7744
   Securities registered pursuant to Section 12(b) of the
    Act:
   Title of Each
    Class:

Name of Each
    Exchange on Which Registered:Common Stock

The NASDAQ Stock Market LLC    Securities registered pursuant to Section 12(g) of the
    Act:
 None
   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ
      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 SERVICESEXHIBIT 31.1EXHIBIT 31.2    Table of Contents  
  PART III
  
 ITEM 10. DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT
    NAME

AGE

POSITIONWilliam J. Gervais


63


Chief Executive Officer,
    President, Director and Acting Chief Financial Officer(1)Richard A. Nelson


63


Vice President 
    Engineering, Secretary and DirectorStanley W. Corker


55


DirectorCarl W. Gromada


65


DirectorRobert A. Meyer


61


DirectorRobert E. Rich


56


Director     (1)
    
    Our previous Chief Financial Officer resigned effective as of
    August 18th, 2006. We are actively searching for a new
    Chief Financial Officer. In the interim, Mr. Gervais is
    serving in the capacity of Chief Financial Officer.  William J. Gervais
  Richard A. Nelson
  Stanley W. Corker
  Carl W. Gromada
  Robert A. Meyer
 2




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Robert E. Rich
    AUDIT
    COMMITTEE
    CODE OF
    ETHICS
  Regulation S-K Form 10-K www.qualstar.com.
  COMPLIANCE WITH
    SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
    1934
     3




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##### Table of Contents



ITEM 11. EXECUTIVE
    COMPENSATION
  SUMMARY
    COMPENSATION TABLE
    Long Terms
    CompensationAwards

All OtherAnnual
    Compensation

Securities
    Underlying

CompensationName and
    Principal Position

Year

Salary
    ($)

Bonus
    ($)

Options
    (#)

($)William J. Gervais


2006


$
185,000











Chief Executive Officer


2005



185,000











and President


2004



185,000











Richard A. Nelson


2006



146,000











2,114Vice President of Engineering


2005



146,000











2,190and Secretary


2004



146,000











2,190Robert K. Covey


2006



173,000











1,734Vice President of Marketing


2005



173,000











1,7342004



167,000











1,700David L. Griffith


2006



165,000











2,475Vice President of Operations


2005



165,000











1,8092004



165,000











Frederic T. Boyer(1)


2006



175,000











2,625Chief Financial Officer


2005



175,000











2,6252004



175,000











2,600     (1)
    
    Mr. Boyer resigned effective as of August 18, 2006.  OPTION GRANTS IN
    LAST FISCAL YEAR
    Percent ofTotal Options








Potential
    Realizable Value At Assumed Annual RatesOptions


Granted to


Exercise





of Stock Price
    AppreciationGranted


Employees in


Price


Expiration


for Option
    Term(2)Name

(# of
    Shares)(1)


Fiscal
    Year


($/Share)


Date


5% ($)


10% ($)William J. Gervais






















Richard A. Nelson






















Robert K. Covey






















David L. Griffith






















Frederic T. Boyer






















  4




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##### Table of Contents



(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
  in-the-money
  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, 2006


June 30,
    2006(1)Name

on
    Exercise


Realized


Exercisable


Unexercisable


Exercisable


UnexercisableWilliam J. Gervais






















Richard A. Nelson






















Robert K. Covey










20,000











David L. Griffith










80,000











FredericT. Boyer










75,000



25,000







     (1)
    
    Represents the closing sale price of our common stock on
    June 30, 2006 ($3.35), less the exercise price per share,
    multiplied by the number of shares subject to the options held
    by the named executive officer.  COMPENSATION OF
    DIRECTORS
      COMPENSATION
    COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
 COMPENSATION DECISIONS
   5




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ITEM 12. SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    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.    Shares
    Beneficially

Percent of
    SharesName of
    Beneficial Owner

Owned

OutstandingWells Capital Management Inc.(1)


1,765,454



14.4
%525 Market Street,
    10th Floor
    San Francisco, CA 94104Wellington Management(2)


1,019,173



8.3
%75 State Street
    Boston, MA 02109Fidelity Management &
    Research Co.(3)


1,260,803



10.3
%82 Devonshire Street
    Boston, MA 02109William J. Gervais


2,886,350



23.6
%Richard A. Nelson


1,906,560



15.6
%Stanley W. Corker


3,940



Carl W. Gromada


48,271



0.4
%Robert A. Meyer






Robert E. Rich


131,400



1.1
%Robert K. Covey(4)


108,280



0.9
%David L. Griffith(5)


80,000



0.6
%All directors and officers as a
    group (9 persons)(6)


5,177,301



41.9
%     (1)
    
    Based on information contained in a Schedule 13G filed with
    the Securities and Exchange Commission on or about June 30,
    2006, Wells Fargo & Company, as the parent holding
    company of Wells Capital Management Incorporated, an investment
    adviser, beneficially owns 1,765,454 shares.(2)
    
    Based on information contained in a Schedule 13G filed with
    the Securities and Exchange Commission on or about June 30,
    2006, Wellington Management Company, LLP, in its capacity as an
    investment adviser, beneficially owns 1,019,173 shares. 6




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(3)
    
    Based on information contained in a Schedule 13G filed with
    the Securities and Exchange Commission on or about June 30,
    2006, FMR Corporation, as the parent holding company of Fidelity
    Management & Research Company, an investment adviser,
    beneficially owns 1,260,803 shares and has sole dispositive
    power over these shares but no voting power.(4)
    
    Includes 20,000 shares subject to stock options that are
    currently exercisable or exercisable within 60 days of
    October 20, 2006.(5)
    
    Includes 80,000 shares subject to stock options that are
    currently exercisable or exercisable within 60 days of
    October 20, 2006.(6)
    
    Includes 112,500 shares subject to stock options that are
    currently exercisable within 60 days of October 20,
    2006.  ADDITIONAL EQUITY
    COMPENSATION PLAN INFORMATION
    Number of
    SecuritiesRemaining
    Available forFuture
    IssuanceNumber of
    Securities to


Weighted-Average


Under Equitybe Issued Upon
    Exercise


Exercise Price
    of


Compensation
    Plansof Outstanding
    Options,


Outstanding
    Options,


(Excluding
    SecuritiesWarrants and
    Rights


Warrants and
    Rights


Reflected in
    Column (a))Plan
    Category

(a)


(b)


(c)Equity compensation plans approved
    by security holders(1)


557,000


$
4.36



245,175Equity compensation plans not
    approved by security holders










Totals


557,000


$
4.36



245,175     (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, 2006.  
 ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS   7




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ITEM 14. PRINCIPAL
    ACCOUNTANT FEES AND SERVICES
    Fiscal


Fiscal2006


2005Audit Fees

$
156,653


$
146,140Audit-related fees


9,457



6,400Tax fees


78,235



130,250All other fees






Total fees

$
244,345


$
282,790         AUDIT COMMITTEE
    PRE-APPROVAL POLICIES AND PROCEDURES
  case-by-case
 8




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SIGNATURES
  Form 10-K
    Date: October 27, 2006

By:

/s/  WILLIAM
    J.
    GERVAISWilliam
    J. Gervais
    Chief Executive Officer and President   Form 10-K
  SIGNATURE

TITLE

DATE/s/  WILLIAM
    J. GERVAISWilliam
    J. Gervais

Chief Executive Officer,
    President and Director
    (Principal Executive Officer and Principal Financial Officer)

October 27, 2006/s/  RICHARD
    A. NELSONRichard
    A. Nelson

Vice President, Engineering
    Secretary and Director

October 27, 2006/s/  CARL
    W. GROMADACarl
    W. Gromada

Director

October 27, 2006/s/  STANLEY
    W. CORKERStanley
    W. Corker

Director

October 27, 2006/s/  ROBERT
    E. RICHRobert
    E. Rich

Director

October 27, 2006/s/  ROBERT
    A. MEYERRobert
    A. Meyer

Director

October 27, 2006/s/  NIDHI
    H. ANDALONNidhi
    H. Andalon

Controller

October 27, 2006  9




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EXHIBIT INDEX
  Exhibit No.

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.  10