Qualstar Receives Nasdaq Notification

Qualstar Corporation received a letter from Nasdaq on February 19, 2010, notifying the Company that it is not in compliance with Nasdaq Marketplace Rule 5605(e), which sets forth requirements relating to the process for selecting nominees for election to the board of directors.

Under this rule, nominees for a company’s board of directors must be selected, or recommended to the board of directors for selection, either by a committee comprised solely of independent directors, or by a majority of the independent directors in a vote in which only independent directors participate. It has been Qualstar’s practice, however, to approve director nominees by a unanimous vote of the full board.

In order to maintain its listing on The Nasdaq Stock Market, Qualstar will submit a written plan to regain compliance with this rule no later than March 15, 2010. The plan will be adopted by Qualstar’s full board as soon as practicable after it has been approved by Nasdaq.