Qualstar Corp. won a recent proxy battle by a dissident shareholder who pushed to remove the Simi Valley company’s board of directors. But Boca Raton-based BKF Capital Group Inc., led by chief executive Steven Bronson, said despite a failed attempt last month to unseat the board, it will continue to push for change at Qualstar. “We are not going away and the issue is not going away until management starts turning the company around and creates value for the shareholders,” said Greg Heller, senior vice president with BFK Capital. Heller said the shareholders are weighing their next move, which may be filing a lawsuit that calls into question how the company handled the process of voting for board members at its special meeting on June 20; and setting up a slate of directors to run for the Qualstar board at the next annual shareholders meeting next March. Qualstar, which employs about 70 workers at its single site in Simi Valley, makes tape-based data storage devices and its N2Power division makes power supply products. Bronson waged a proxy fight against Qualstar management over the company’s poor financial performance and anemic stock price. Qualstar’s stock price has hovered below $3 a share for almost four years, and since the quarter ended Dec. 31, 2009, the company consecutively reported net losses except for two quarterly periods. BKF and Bronson together hold more than 2.1 million shares, or a 17.3 percent stake. Qualstar CEO Larry Firestone was not available for comment before deadline. In a prepared statement after the June 20 meeting, Firestone said that shareholders had shown support and confidence in the management’s turnaround strategy. “We are pleased to have this disruption behind us so we can devote our full attention to the operation of our business and the execution of the turnaround plan,” Firestone said. At the special meeting, 5.7 million votes were cast in favor of removing the board and 5.3 million against. A total of 6.1 million votes were required for BKF’s proxy to pass. Prior to the vote, BKF had sought adjourning the meeting to clarify that the voting process was being done properly. The adjournment motion was denied, Heller said. Some shareholders have confusing experiences with the voting process, he said. “There was one investment group who had told us they were voting for our (BKF) proxy,” Heller said. “The system showed they had voted with management and we knew that not to be the case.” BKF is considering legal action as to whether its motion for adjournment was dismissed properly although no decision is likely soon, Heller said. The investment firm is also mulling whether to run its own slate of board candidates at the next annual meeting scheduled for spring 2013, Heller said, adding that improved financial performance could intervene. “It might not be unnecessary to do anything, if there are good numbers between now and then,” Heller said. BKF began its proxy fight in May, citing management’s failure to increase profitability and drive up the stock price. Changing market demands have resulted in decreasing sales of its tape-based data storage devices and an uptick in sales of the power supply products. Once BKF made known its intentions to oust the Qualstar board, the company took steps to calm investors and show that management was serious about turning around the company. For example, Firestone took over the CEO position two weeks earlier than anticipated, replacing William Gervais, a co-founder of Qualstar and the largest single investor. The company also announced a new corporate strategy that includes installing a global sales leadership and strengthening the sales force; targeted marketing and promotional efforts, including increased trade show presence, joint selling, and private labeling; enhancement of recurring revenue stream from the growing tape library installed base; and geographic diversification and expansion of target markets. There are no specific stock price benchmarks that BKF is looking for in the coming month, Heller said. Rather, the company is concerned with stopping the losses and achieving profitability, he said. The company’s fourth quarter and fiscal year ended on June 30 and will report on earnings in August. “Granted, Larry Firestone only took over a month ago so we will have to see what they are doing about generating new sales and customers,” Heller said.