The second-largest investor in Simi Valley company Qualstar Corp. isn’t finished with a takeover of the financially struggling firm. While Steven Bronson dropped a bid on Feb. 11 to buy 3 million shares in Qualstar to gain a majority equity stake, he intends to challenge the existing board members for their seats at the next annual meeting sometime this spring. Bronson is chief executive of BKF Capital Group Inc., a Boca Raton, Fla. investment firm that owns 2.3 million, or 18.7 percent, of the shares in Qualstar, a manufacturer of data tape storage and power supply products. Bronson terminated his planned acquisition of additional shares because the board adopted poison pill, or shareholder right’s plan, on Feb. 6 that would make it impossible for Bronson to consummate the offer. The plan would take effect if an individual or group bought 10 percent or more of the Qualstar’s common stock in addition to their current holdings. In that event, the plan would both create a second, preferred class of stock and flood the market with additional common shares, diluting individual stakes. BKF’s next step is putting up its own board slate at the next Qualstar annual meeting, Bronson said. “We believe that the board has adopted the rights plan to entrench itself and management, and that shareholders should take account of this when it comes time to vote at the annual meeting,” he said in a prepared statement. Last June a special board election took place in which Bronson put up a slate of candidates but fell short of the required votes to win. Bronson has been critical of management’s failure to increase profitability and drive up the stock price. He has urged management to sell off the unprofitable tape storage business to focus on the power supply product line. The tape storage business is a point of contention with Bronson but is one that is growing, said Qualstar Chief Executive Larry Firestone. Revenue from the storage business increased in the second quarter to $2.1 million or 35.4 percent compared to $1.6 million in the same quarter last year. “We have a changing company but it is changing for the good,” Firestone said. To one outside observer, Qualstar may not be in all that bad of shape. Gil Luria, an analyst with the Los Angeles office of Wedbush Securities, said that Qualstar is at the start of a turnaround. While the tape storage market is declining it is also consolidating as other suppliers go out of business, “That opens up an opportunity to gain market share,” he said. Firestone, who became chief executive in June, has taken the right steps to improve Qualstar’s operations by investing in a sales force and making the manufacturing more efficient by outsourcing it, Luria said. In December, Qualstar signed a deal to have CTS Electronics Manufacturing Solutions in Moorpark provide manufacturing services. CTS hired on most of Qualstar’s manufacturing employees, Firestone said. With those employees gone, Qualstar will move out of its 58,000-square-foot building in Simi Valley but will stay in the area, Firestone said.