BKF Capital Group, Inc. (OTCQB: BKFG), the second largest shareholder of Qualstar Corporation (NASDAQ: QBAK), today commented on the real facts and issues in BKF’s contest to replace the Board of Directors of Qualstar and elect BKF’s highly experienced, highly qualified and highly motivated nominees at the Qualstar Annual Meeting of Shareholders on June 28, 2013. Steven Bronson, BKF’s chief executive officer, remarked: “As the contest for the future of Qualstar approaches its final stages, shareholders should focus on the real facts and issues, and not be swayed by the Company’s assurances of recovery at some unspecified future time, or the formulaic analyses of the proxy advisory services which we believe are simply wrong.” “The facts are that the Company is burning through its cash and does not have a large runway for recovery. Qualstar’s results for the nine months ended March 31, 2013, under the Company’s new CEO Lawrence Firestone, were the worst ever. Unlike BKF, the current Board has only a nominal investment in Qualstar. Its strategy is to throw money at a problem—the continuing drain of the tape storage business—that cannot be solved by money alone.” “BKF’s nominees are highly skilled and experienced and are incentivized to run the Company for its owners, because BKF is a substantial owner. We want what you want—prudent cash management, a strategy for the tape storage business that is based on market realities and a return to profitability in the very near turn.” Mr. Bronson concluded: “We ask our fellow shareholders to read this release in full, together with BKF’s other materials, and vote to elect BKF’s nominees on the GOLD proxy card.” Money: The Board is Spending the Company’s Money Like It Belongs to Somebody Else As BKF has been saying for well over a year, there are serious challenges facing Qualstar, particularly in its tape storage business. The solution of the Board and CEO Lawrence Firestone has been to throw money at the problem, substantially increasing G&A, increasing Sales and Marketing costs, and increasing Engineering costs. The consequence of this strategy has been a staggering cash burn of over $6 million in the past nine months, even with the Board’s highly touted outsourcing of manufacturing operations.