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<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

(Mark one)

[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
          EXCHANGE ACT OF 1934

     For the quarterly period ended SEPTEMBER 30, 2000

[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

     For the  transition  period  from . . . . . . . . to . . . . . . . .


          Commission file number  0-24564
                                  -------

                                ---------------
                                FIBERSTARS, INC.
             (Exact name of registrant as specified in its charter)
                                ---------------


CALIFORNIA                                  94-3021850
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


       44259 NOBEL DRIVE, FREMONT, CA                        94538
     (Address of principal executive offices)              (Zip Code)

      (Registrant's telephone number, including area code): (510) 490-0719

          Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                  Yes X   No
                                     ----   ----

Number of shares of Common Stock outstanding as of September 30, 2000: 4,267,209

                         Index to Exhibits is at page 15


<PAGE>



                                FIBERSTARS, INC.

                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----

                         PART I - FINANCIAL INFORMATION

<S>           <C>                                                                             <C>
Item 1         Financial Statements:

               a.   Consolidated Balance Sheets
                    September 30, 2000 and December 31, 1999....................................3

               b.   Consolidated Statements of Operations
                    Three and nine months ended September 30, 2000 and 1999.....................4

               c.   Consolidated Statements of Comprehensive Operations
                    Three and nine months ended September 30, 2000 and 1999.....................5

               d.   Consolidated Statements of Cash Flows
                    Nine months ended September 30, 2000 and 1999...............................6

               e.   Notes to Consolidated Financial Statements................................7-9

Item 2         Management's Discussion and Analysis of Results of Operations and Financial
                     Condition  ............................................................10-13
</TABLE>



                           PART II - OTHER INFORMATION


<TABLE>
<S>  <C>                                    <C>                                               <C>
Item 6         Exhibits and Reports on Form 8-K................................................14

               Signatures......................................................................14
</TABLE>



                                    EXHIBITS

<TABLE>
<S>                                                                                           <C>
               Index to Exhibits...............................................................15
</TABLE>




                                     Page 2
<PAGE>


                                FIBERSTARS, INC.
                         PART I. FINANCIAL INFORMATION

Item 1.       FINANCIAL STATEMENTS


                                FIBERSTARS, INC.
                           CONSOLIDATED BALANCE SHEETS
                             (AMOUNTS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                          September 30,            December 31,
                                                               2000                    1999
                                                          ---------------         ---------------
                                                           (unaudited)
<S>                                                   <C>                      <C>
ASSETS
Current assets:
      Cash and cash equivalents                         $          2,517       $           1,904
      Accounts receivable trade, net                               5,565                   6,533
      Notes and other accounts receivables                           109                     250
      Inventories, net                                             5,686                   4,269
      Prepaids and other current assets                              665                     428
      Deferred income taxes                                          662                     662
                                                        -----------------      ------------------
           Total current assets                                   15,204                  14,046

Fixed assets, net                                                  2,643                   2,242
Goodwill, net                                                      5,263                   3,800
Other assets                                                         199                     218
Deferred income taxes                                                326                      86
                                                        -----------------         ---------------
           Total assets                                 $         23,635       $          20,392
                                                        =================      ==================


LIABILITIES
Current Liabilities:
      Accounts payable                                  $          2,724       $           2,572
      Accrued expenses                                             1,849                   2,518
      Current portion of long-term debt                                8                       8
                                                        -----------------      ------------------
           Total current liabilities                               4,581                   5,098
Long-term debt, less current portion                                 463                     626
                                                        -----------------      ------------------
           Total liabilities                                       5,044                   5,724
                                                        -----------------      ------------------


SHAREHOLDERS' EQUITY
Common stock                                                           1                       0
Value of warrants outstanding                                      2,722                       0
Additional paid-in capital                                        15,476                  13,973
Note receivable from shareholder                                     (75)                    (75)
Cumulative translation adjustments                                  (343)                   (153)
Retained earnings                                                    810                     923
                                                        -----------------      ------------------
           Total shareholders' equity                             18,591                  14,668
                                                        -----------------      ------------------
           Total liabilities and shareholders' equity   $         23,635       $          20,392
</TABLE>


                     The accompanying notes are an integral
                       part of these financial statements


                                     Page 3
<PAGE>

                                FIBERSTARS, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                (AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                  (unaudited)


<TABLE>
<CAPTION>
                                                          Three Months Ended September 30,           Nine Months Ended September 30,
                                                             2000                 1999               2000                 1999
                                                      ----------------    ----------------    ----------------    ----------------

<S>                                                   <C>                 <C>                 <C>                 <C>
Net sales                                             $         8,249     $         8,056     $        26,866     $        24,083
Cost of sales                                                   4,955               4,657              15,877              13,969
                                                      ----------------    ----------------    ----------------    ----------------
           Gross profit                                         3,294               3,399              10,989              10,114
                                                      ----------------    ----------------    ----------------    ----------------

Operating expenses:
      Research and development                                    413                 368               1,258               1,021
      Sales and marketing                                       2,125               1,874               6,658               5,833
      General and administrative                                  740                 666               2,250               1,818
      Write-off in-process technology acquired                      0                   0                 938                   0
                                                      ----------------    ----------------    ----------------    ----------------
           Total operating expenses                             3,278               2,908              11,104               8,672
                                                      ----------------    ----------------    ----------------    ----------------
                Income (loss) from operations                      16                 491                (115)              1,442

Other income (loss):
      Equity in joint venture's income (loss)                       4                   0                   4                 (15)
      Interest income (expense), net                              (11)                  8                 (71)                 13
                                                      ----------------    ----------------    ----------------    ----------------
           Income (loss) before income taxes                        9                 499                (182)              1,440
Benefit from (provision for) income taxes                           0                (180)                 69                (524)
                                                      ----------------    ----------------    ----------------    ----------------
           Net income (loss)                          $             9     $           319     $          (113)    $           916
                                                      ================    ================    ================    ================

Net income (loss) per share - basic                   $          0.00     $          0.08     $         (0.03)    $          0.23
                                                      ================    ================    ================    ================
Shares used in per share calculation - basic                    4,682               3,987               4,520               3,984
                                                      ================    ================    ================    ================

Net income (loss) per share - diluted                 $          0.00     $          0.08     $         (0.03)    $          0.23
                                                      ================    ================    ================    ================
Shares used in per share calculation - diluted                  5,336               4,112               4,520               4,064
                                                      ================    ================    ================    ================
</TABLE>


                     The accompanying notes are an integral
                       part of these financial statements


                                     Page 4
<PAGE>

                               FIBERSTARTS, INC.
              CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
                             (AMOUNTS IN THOUSANDS)
                                  (UNAUDITED)



<TABLE>
<CAPTION>
                                                         Three Months Ended September 30,           Nine Months Ended September 30,
                                                             2000                 1999                  2000               1999
                                                          ------------         ------------           ---------         -----------

<S>                                                     <C>                  <C>                    <C>               <C>
Net income (loss)                                       $           9        $         319          $     (113)       $        916

Other comprehensive loss, net of tax:
      Foreign currency translation adjustments                   (155)                  12                (544)                (46)
      Income tax benefit                                           61                                      201
                                                        --------------       --------------         -----------       -------------
           Comprehensive income (loss)                  $         (85)       $         331          $     (456)       $        870
                                                        ==============       ==============         ===========       =============
</TABLE>

                     The accompanying notes are an integral
                       part of these financial statements


                                     Page 5
<PAGE>


                                                      FIBERSTARS INC.
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (AMOUNTS IN THOUSANDS)
                                                        (unaudited)


<TABLE>
<CAPTION>
                                                                                       Nine Months Ended September 30,
                                                                                      2000                         1999
                                                                                 ---------------               --------------

<S>                                                                           <C>                           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income (loss)                                                        $           (113)             $           916
                                                                               -----------------             ----------------
      Adjustments to reconcile net income (loss) to net cash provided by
            operating activities:
                Depreciation and amortization                                             1,093                          622
                Write-off in-process technology acquired                                    938                            0
                Provision for doubtful accounts receivable                                   76                           56
                Deferred income taxes                                                      (244)                         344
                Equity in joint ventures' loss (income)                                      (4)                          15
                Changes in assets & liabilities:
                        Accounts receivable                                                 792                          108
                        Notes and other receivable                                           66                          (50)
                        Inventories                                                      (1,415)                         162
                        Prepaid expenses and other current assets                          (237)                         (89)
                        Other assets                                                       (172)                         393
                        Accounts payable                                                    134                         (246)
                        Accrued expenses                                                   (504)                        (113)
                                                                               -----------------             ----------------
                                Total adjustments                                           523                        1,202
                                                                               -----------------             ----------------
                Net cash provided by operating activities                                   410                        2,118
                                                                               -----------------             ----------------


Cash flows from investing activities:
      Repayment of loan made to officers                                                     74                            0
      Cash received against loans made under notes receivable                                 0                          620
      Acquisition of fixed assets                                                          (458)                        (954)
                                                                               -----------------             ----------------
                Net cash used in investing activities                                      (384)                        (334)
                                                                               -----------------             ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Cash proceeds from sale of common stock                                               729                           27
      Proceeds from drawn on line of credit                                               1,500                            0
      Repayment of drawn on line of credit                                               (1,500)                           0
      Repayment of long-term debt                                                           (94)                         (57)
                                                                               -----------------             ----------------
                Net cash provided by (used in) financing activities                         635                          (30)
                                                                               -----------------             ----------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                     (48)                          52
                                                                               -----------------             ----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                   613                        1,806
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                            1,904                        1,290
                                                                               -----------------             ----------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                       $          2,517              $         3,096
                                                                               =================             ================

NON-CASH INVESTING ACTIVITIES:
      Fair value of assets acquired                                            $          3,497              $             0
      Common stock and warrants for capital stock issued                                 (3,497)                           0
                                                                               =================             ================
</TABLE>

                     The accompanying notes are an integral
                       part of these financial statements

                                     Page 6
<PAGE>

                                 FIBERSTARS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Although unaudited, the interim financial statements in this report reflect all
adjustments, consisting of normal recurring accruals, which are, in the opinion
of management, necessary for a fair statement of financial position, results of
operations and cash flows for the interim periods covered and of the financial
condition of the Company at the interim balance sheet dates. The results of
operations for the interim periods presented are not necessarily indicative of
the results expected for the entire year.

The year-end balance sheet information was derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles. These financial statements should be read in conjunction
with the Company's audited financial statements and notes thereto for the year
ended December 31, 1999, contained in the Company's 1999 Annual Report to
Shareholders.

EARNINGS PER SHARE
The Company presents its earnings per share (EPS) in accordance with SFAS 128
which requires the presentation of basic and diluted EPS. Basic EPS is computed
by dividing income available to shareholders by the weighted average number of
common shares outstanding for the period. Diluted EPS is computed by giving
effect to all dilutive potential common shares that were outstanding during the
period. Dilutive potential common shares consist of incremental shares upon
exercise of stock options and warrants.

In accordance with the disclosure requirements of SFAS 128, a reconciliation of
the numerator and denominator of basic and diluted EPS is provided as follows
(in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED SEPTEMBER 30,            NINE MONTHS ENDED SEPTEMBER 30,
                                               ----------------------------------          -------------------------------
                                                  2000               1999                       2000               1999
                                                  ----               ----                       ----               ----

<S>                                             <C>                <C>                   <C>                 <C>
Numerator - Basic and diluted EPS
     Net income (loss)                           $       9           $    319             $    (113)          $    916
Denominator - Basic EPS
     Weighted average shares outstanding             4,682              3,987                 4,520              3,984
                                                 ---------           --------             ---------           --------
Basic earnings (loss) per share                  $    0.00           $   0.08             $   (0.03)          $   0.23
                                                 =========           ========             =========           ========
Denominator - Diluted EPS
     Denominator - Basic EPS                         4,682              3,987                 4,520              3,984

     Effect of dilutive securities:
         Stock options                                 654                125                     -                 80
                                                 ---------           --------             ---------           --------

                                                     5,336              4,112                 4,520              4,064
                                                 ---------           --------             ---------           --------
Diluted earnings (loss) per share...             $    0.05           $   0.08             $   (0.03)          $   0.23
                                                 =========           ========             =========          =========
</TABLE>



At September 30, 2000, options to purchase 1,718,459 shares were outstanding,
but were not included in the year-to-date calculation of diluted EPS because
their inclusion would have been antidilutive. Options to purchase 1,053,802
shares of common stock were outstanding at September 30, 1999, but were not
included in the calculation of diluted EPS because their inclusion would have
been antidilutive.


                                     Page 7
<PAGE>
                                 FIBERSTARS, INC.

2. INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out) or market and
consist of the following (IN THOUSANDS):

<TABLE>
<CAPTION>
                                                        September 30,           December 31,
                                                        ------------            ------------
                                                            2000                    1999
                                                            ----                    ----
                                                         (unaudited)

<S>                                                      <C>                     <C>
Raw materials                                            $   3,522               $   2,736
Finished Goods                                               2,164                   1,533
                                                          --------                --------
                                                         $   5,686               $   4,269
                                                          ========                ========
</TABLE>

3. COMPREHENSIVE INCOME

The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income," effective January 1, 1998.
This statement requires the disclosure of comprehensive income and its
components in a full set of general purpose financial statements. Comprehensive
income is defined as net income plus net sales, expenses, gains and losses that,
under generally accepted accounting principles, are excluded from net income. A
separate statement of comprehensive income has been presented with this report.

4. SIGNIFICANT EQUITY TRANSACTIONS

Warrants valued at $2,550,000 and $172,000 were issued as part of the Company's
acquisition of Unison Fiber Optic Systems, LLC and Lightly Expressed Ltd.
respectively. In addition, shares valued at $775,000 were issued as part of the
Company's acquisition of Lightly Expressed Ltd.(see Note 6).


5. SEGMENTS AND GEOGRAPHIC SALES

The Company operates in a single industry segment that manufactures, markets and
sells fiber optic lighting products. The Company markets its products for
worldwide distribution primarily through independent sales representatives,
distributors and swimming pool builders in North America, Europe and the Far
East.

A summary of geographic sales is as follows (in thousands):

<TABLE>
<CAPTION>
                                                           Nine months ended September 30,
                                                           -------------------------------
                                                              2000               1999
                                                              ----               ----
                                                          (unaudited)        (unaudited)

<S>                                                        <C>                <C>
U.S. Domestic                                              $  18,435          $  16,817
U.S. Export                                                    3,365              1,726
European subsidiaries                                          5,066              5,540
                                                           ---------          ----------
                                                           $  26,866          $  24,083
                                                           =========          =========
</TABLE>


                                     Page 8
<PAGE>

                                FIBERSTARS, INC.


6.        ACQUISITIONS

          In the 1st quarter of 2000 the Company acquired the selected assets of
          Unison Fiber Optic Systems, LLC, and in the 2nd quarter of 2000 the
          Company acquired Lightly Expressed, Ltd. Both acquisitions were
          accounted for as a purchase.

          The following table presents the unaudited pro forma results for the
          nine months assuming the company had acquired Unison and Lightly
          Expressed at the beginning of 1999 and 2000 respectively. Net income
          and diluted earnings per share amounts have been adjusted to include
          goodwill amortization of $141,300 for the nine months ended September
          30, 1999 and 2000. This information may not necessarily be indicative
          of the future combined results of the Company.

<TABLE>
<CAPTION>
                                                                        Nine months Ended September 30,
                                                                       2000                      1999
                                                              ---------------------      --------------------
<S>                                                                <C>                          <C>
             Revenues                                              $  27,066                    $  25,310
             Net income                                                 (210)                      (2,456)
             Diluted earnings per share                            $   (0.05)                   $   (0.62)
             Basic earnings per share                              $   (0.05)                   $   (0.62)
</TABLE>




                                     Page 9
<PAGE>

                                FIBERSTARS, INC.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

The following discussion should be read in conjunction with the attached
financial statements and notes thereto.

RESULTS OF OPERATIONS

Net sales increased 2% to $8,249,000 for the quarter ended September 30, 2000.
The increase was a result of growth in commercial lighting sales, offset by
a decrease in in-ground pool lighting sales, along with a significant drop in
sales to one commercial lighting customer. Net sales for the nine months ended
September 30, 2000 were $26,866,000, a 12% increase over net sales of
$24,083,000 for the same period in the prior year. Sales increased largely due
to higher sales in the pool lighting market.

Gross profit was $3,294,000 in the 3rd quarter of 2000, a 3% decrease over the
same period in the prior year. The gross profit margin was 40% for the quarter,
a two percentage point decrease from the 42% gross margin achieved in the 3rd
quarter of 1999. The decrease in gross margin was primarily a result of higher
operations overhead costs as a percentage of net sales. Gross profit was
$10,989,000 year-to-date as of September 30, 2000, a 9% increase over the
$10,114,000 gross profit achieved for the same period in the prior year. The
gross profit margin was 41% year-to-date in 2000 versus 42% for the same period
in 1999. The 1% point decline in gross profit margin year-to-date was a result
of higher manufacturing overhead as a percentage of sales.

Research and development expenses were $413,000 in the 3rd quarter of 2000, a
12% increase over the 3rd quarter of 1999 due principally to increased costs for
personnel and material for building prototypes. As a percentage of net sales,
research and development expenses were 5% for the 3rd quarter of 2000 versus 5%
in the 3rd quarter of the prior year. Research and development expenses were
$1,258,000 in the first three quarters of 2000 as compared to $1,021,000 for the
first three quarters in the prior year, a 23% increase. The additional research
and development expenses were due to additional personnel and related expenses
for new commercial lighting and pool products for the case lighting, down
lighting and spa markets to be introduced in 2001.

Sales and marketing expenses were $2,125,000 in the 3rd quarter of 2000 as
compared to $1,874,000 for the same period in 1999, an increase of 13%. The
increase was primarily due to additional personnel and marketing expenses
associated with the Company's acquisitions of Unison Fiber Optic Lighting
Systems, LLC ("Unison") and Lightly Expressed Ltd. combined with higher expenses
in marketing for pool lighting sales. Sales and marketing expenses were 26% of
sales in the 3rd quarter of 2000 compared to 23% for the same quarter in 1999.
Sales and Marketing expenses were $6,658,000 year-to-date as of September 30,
2000 as compared to $5,833,000 for the same period in 1999, a 14% increase. The
increase was primarily the result of additional spending by the companies
acquired in 2000 along with higher spending on personnel and marketing material
in the pool and commercial lighting groups.

General and administrative costs were $740,000 in the 3rd quarter of 2000, an
increase of 11% over such costs in the 3rd quarter of 1999. This increase was
largely a result of additional personnel, legal and accounting fees along with
additional amortization from companies acquired in 2000. General and
administrative costs were 9% of net sales in the quarter ended September 30,
2000 versus 8% for the same quarter in 1999. Year-to-date, general and
administrative costs were $2,250,000 in 2000 versus $1,818,000 for the same
period in 1999, an increase of 24%. The year-to-date increase is also a result
of additional personnel costs, additional amortization expenses and higher
miscellaneous expenses.

An additional expense of $938,000 attributable to the write-off of in-process
technology acquired was incurred in the year-to-date expenses of 2000 in
connection with the Unison transaction as compared to no such expense in the
same period of 1999. This expense is for the write-off of the Unison acquisition
costs which are directly

                                    Page 10
<PAGE>


                                FIBERSTARS, INC.

associated with the valuation of products which were still under development at
the time of the acquisition and for which marketability is not yet proven.

Other income and expense includes income from joint ventures and interest income
and expense. Net interest expense was $11,000 in the 3rd quarter of 2000
compared to net interest income of $8,000 in 1999. The decrease in other income
and expense was due primarily to higher interest expense for overseas operations
in the 3rd quarter of 2000. Year-to-date, net interest expense was $71,000 for
2000 compared to net interest income of $13,000 for the same period in 1999,
with the increase due primarily to a greater utilization of the bank line of
credit in 2000 as compared to 1999.

There was no income tax expense in the 3rd quarter 2000.

The Company recorded net income of $9,000 in the 3rd quarter of 2000 as compared
to a higher net income of $319,000 in the 3rd quarter of 1999, substantially as
a result of the sales increase being less than the overall increase in operating
expenses and a decrease in profit margin. Year to date, the company experienced
a loss of $113,000 in 2000 versus net income of $916,000 for the same period in
1999, largely due to higher expenses in 2000 from sales and marketing and from
the one time write-off of in-process technology acquired, partially offset by
additional gross profit from the increase in sales year-to-date in 2000 over the
same period in 1999. Excluding the one-time write-off, the Company would have
recorded net income of $488,000 year-to-date, a 47% decrease over 1999.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2000, cash and cash equivalents when combined with short-term
investments were $2,517,000 as compared to $1,904,000 at December 31, 1999.

During the first nine months of 2000 there was a net loss of $113,000
compared to a $916,000 contribution to cash from net income for the same
period in 1999. After adjusting for depreciation, amortization and the
write-off of in-process technology acquired, there was $1,918,000 in cash
contributed from the nine month period ended September 30, 2000 as compared
to a total contribution for the same period in 1999 of $1,538,000. However,
after accounting for cash utilized to fund working capital there was a
contribution of $410,000 in cash for operating activities in 2000 compared to
a contribution of $2,118,000 in the first nine months of 1999. The additional
cash used in 2000 was for funding additions to fiber inventories which are
being utilized in the 2nd half of 2000 as well as for the purchase of
inventories as part of the Unison transaction.

There was a net contribution of $635,000 in cash in the first nine months of
2000 from financing activities, primarily from the sale of common stock
associated with the exercise of stock options. This compares to a net use of
cash of $30,000 from financing activities for the first nine months of 1999.

As a result of the cash utililized by operating activities and the cash
contributed by financing activities there was a net contribution of cash in the
first nine months of 2000 of $613,000 which resulted in an ending cash balance
of $2,517,000. This compares to a net contribution of $1,806,000 in cash for the
same period in 1999, resulting in an ending cash balance of $3,096,000 for that
period.

The Company has a $5.0 million unsecured line of credit for working capital
purposes and a term loan commitment of $500,000 for equipment purchases. These
are renewed on an annual basis, with the most recent renewal September 1, 2000.
As of September 30, 2000 the Company had no borrowings outstanding against its
line of credit.

                                    Page 11
<PAGE>

                                FIBERSTARS, INC.

The Company also had a total borrowing of $563,000 against a credit facility
held by its German subsidiary. This borrowing is primarily for the purpose of
financing the building of new offices owned by the Company in Berching, Germany.

The Company believes that existing cash balances, together with the Company's
bank lines of credit and funds that may be generated from operations, will be
sufficient to finance the Company's currently anticipated working capital
requirements and capital expenditure requirements for at least the next twelve
months.

OTHER FACTORS

This Report on Form 10-Q contains forward-looking statements. Such statements
generally concern future operating results, capital expenditures, product
development and enhancements, liquidity and strategy. Specific
forward-looking statements in this report include, without limitation,
statements regarding improvements in the Company's cash position. We may not
update these forward-looking statements, and the occurrence of the events
predicted in these statements is subject to a number of risks and
uncertainties, including those discussed in this report. These risks and
uncertainties could cause our actual results to differ materially from the
results predicted in our forward-looking statements. You are encouraged to
consider all the information in this report along with our other periodic
reports on file with the SEC, prior to investing in our stock.

BUSINESS RISKS AND UNCERTAINTIES

Our quarterly operating results can vary significantly depending upon a number
of factors. It is difficult to predict the lighting market's acceptance of our
products on a quarterly basis, and the level and timing of orders received can
fluctuate substantially. Our sales volumes also fluctuate. Historically we have
shipped a substantial portion of our quarterly sales in the last month of each
of the second and fourth quarters of the year. Significant portions of our
expenses are relatively fixed in advance based upon our forecasts of future
sales. If sales fall below our expectations in any given quarter, we will not be
able to make any significant adjustment in our operating expenses and our
operating results will be adversely affected. In addition, our product
development and marketing expenditures may vary significantly from quarter to
quarter and are made well in advance of potential resulting net sales.

Sales of our pool and spa lighting products, which currently are available only
with newly constructed pools and spas, depend substantially upon the level of
new construction. Sales of commercial lighting products also depend
significantly upon the level of new building construction and the renovation of
existing buildings. Construction levels are affected by housing market trends,
interest rates, and the weather. Because of the seasonality of construction, our
sales of swimming pool and commercial lighting products, and thus our overall
net sales and income, have tended to be significantly lower in the first quarter
of each year. Various economic and other trends may alter these seasonal trends
from year to year, and we cannot predict the extent to which these seasonal
trends will continue. We believe our business has been favorably impacted by
recent strength in the overall U.S. economy. If the U.S. economy softens, our
operating results will probably suffer.

Competition is increasing in a number of our markets. A number of companies
offer directly competitive products, including fiber optic lighting products for
downlighting, display case and water lighting, and neon and other lighted signs.
Our competitors include some very large and well established companies such as
Philips, Schott, 3M, Bridgestone, Mitsubishi, and Osram/Siemens. All of these
companies have substantially greater financial, technical and marketing
resources than we do. We anticipate that any future growth in fiber optic
lighting will be accompanied by continuing increases in competition, which could
accelerate growth in the market for fiber optic lighting, but which could also
adversely affect our operating results to the extent we do not compete
effectively.

                                    Page 12
<PAGE>

                                FIBERSTARS, INC.

We believe the success of our business depends primarily on our continued
technical innovation, marketing abilities and responsiveness to customer
requirements, rather than on patents, trade secrets, trademarks, copyrights and
other intellectual property rights. Nevertheless we have a policy of seeking to
protect our intellectual property through, among other things the prosecution of
patents with respect to certain of our technologies. There are many issued
patents and pending patent applications in the field of fiber optic technology,
and certain of our competitors hold and have applied for patents related to
fiber optic lighting. Although to date we have not been involved in litigation
challenging our intellectual property rights or asserting intellectual property
rights of others, we have in the past received communications from third parties
asserting rights in our patents or that our technology infringes intellectual
property rights held by such third parties. Based on information currently
available to us we do not believe that any such claims involving our technology
or patents are meritorious. However, we may be required to engage in litigation
to protect our patent rights or to defend against the claims of others. In the
event of litigation to determine the validity of any third party claims or
claims by us against such third party, such litigation, whether or not
determined in our favor, could result in significant expense.

Our business is subject to additional risks that could materially and adversely
affect our future business, including:

          -         manufacturing risks, including the risks of shortages in
                    materials or components necessary to our manufacturing and
                    assembly operations, and the risks of increases in the
                    prices of raw materials and components;

          -         sales and distribution risks, such as risks of changes in
                    product mix or distribution channels that result in lower
                    margins;

          -         risks of the loss of a significant distributor or sales
                    representative;

          -         risks of the loss of a significant customer or swimming pool
                    builder;

          -         risks of the effects of volume discounts that we grant from
                    time to time to our larger customers, including reduced
                    profit margins;

          -         risks of product returns and exchanges; in the past we have
                    experienced defective lamps in certain of our products. We
                    cannot assure you we will not experience similar component
                    problems in the future that could also require increased
                    warranty and manufacturing costs;

          -         risks associated with product development and introduction
                    problems, such as increased research, development and
                    marketing expenses associated with new product
                    introductions;

          -         risks associated with delays in the introduction of new
                    products and technologies, including lost sales and loss of
                    market share; and

          -         risks associated with or arising from companies acquired by
                    the Company.





                                    Page 13
<PAGE>



                                     Page 19
                           PART II - OTHER INFORMATION


ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K


          (a)       The following exhibits have been filed with this Report:


                    Exhibit 10.30 - Extension - Term Commitment Note of the
                    Registrant dated as of September 1, 2000, to Wells Fargo
                    Bank.

                    Exhibit 10.31 - Extension - Revolving Line of Credit Note of
                    the Registrant dated as of September 1, 2000, to Wells Fargo
                    Bank.

                    Exhibit 10.32 - Extension - Loan Agreement of the
                    Registrant dated as of September 1, 2000 to Wells Fargo
                    Bank.

                    Exhibit 27 - Financial Data Schedule


          (b)       No reports on Form 8-K were filed by the Company during the
                    period covered by this report.


Items 1, 2, 3, 4 and 5 are not applicable and have been omitted.





                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                                     FIBERSTARS, INC.

Date: August 14, 2000                       By:      /s/  Robert A. Connors
                                                 -------------------------------
                                                        Robert A. Connors
                                                        Chief Financial Officer

                                    (Principal Financial and Accounting Officer)



                                    Page 14
<PAGE>


                                INDEX TO EXHIBITS



<TABLE>
<CAPTION>
Exhibit                                                                                    Page
Number                                                                                     Number
-------                                                                                    ------

<S>      <C>
10.30     Extension - Term Commitment Note of the Registrant dated as of
          September 1, 2000, to Wells Fargo Bank.

10.31     Extension - Revolving Line of Credit Note of the Registrant
          dated as of September 1, 2000, to Wells Fargo Bank.

10.32     Extension - Loan Agreement of the Registrant dated as of
          September 1, 2000, to Wells Fargo Bank.

27        Financial Data Schedule
</TABLE>




                                    Page 15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>2
<FILENAME>a2030823zex-10_30.txt
<DESCRIPTION>EX-10.30
<TEXT>

<PAGE>
                                                                 EXHIBIT 10.30

WELLS FARGO BANK                                          TERM COMMITMENT NOTE
-------------------------------------------------------------------------------

$500,000.00                                               SAN JOSE, CALIFORNIA
                                                          SEPTEMBER 1, 2000

     FOR VALUE RECEIVED, the undersigned FIBERSTARS, INC. ("Borrower") promises
to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its
office at SANTA CLARA VALLEY RCBO, 121 PARK CENTER PLAZA 3RD FLR, SAN JOSE, CA
95115, or at such other place as the holder hereof may designate, in lawful
money of the United States of America and in immediately available funds, the
principal sum of $500,000.00, or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement as set forth herein.

INTEREST/FEES:

     (a)  INTEREST. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) at a
rate per annum.50000% above the Prime Rate in effect from time to time. The
"Prime Rate" is a base rate that Bank from time to time establishes and which
serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto. Each change in the rate of interest
hereunder shall become effective on the date each Prime Rate change is announced
within Bank.

     (b)  PAYMENT OF INTEREST. Interest accrued on this Note shall be payable on
the 28TH day of each MONTH, commencing August 28,1999.

     (c)  DEFAULT INTEREST. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to 4% above the rate of
interest from time to time applicable to this Note.

     (d)  COMMITMENT FEE. Prior to the initial extension of credit under this
Note, Borrower shall pay to Bank a non-refundable commitment fee of $500.00.

     (e)  COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect all
interest and fees due hereunder by charging Borrower's demand deposit account
number 4496-813031 with Bank, or any other demand deposit account maintained by
any Borrower with Bank, for the full amount thereof. Should there be
insufficient funds in any such demand deposit account to pay all such sums when
due, the full amount of such deficiency shall be immediately due and payable by
Borrower.

BORROWING AND REPAYMENT:

     (a)  USE OF PROCEEDS; LIMITATION ON BORROWINGS. Each advance under this
Note shall be available solely to finance Borrower's purchase of NEW AND/OR USED
EQUIPMENT to be used in Borrower's business. Each advance shall be available to
a maximum of 80.0% of the cost or appraised value (as required by Bank) of the
new EQUIPMENT purchased with the proceeds thereof, and 75.0% of the cost or
appraised value (as required by Bank) of the used EQUIPMENT purchased with the
proceeds thereof, as evidenced by copies of invoices and/or appraisals
acceptable to Bank.

     (b)  BORROWING AND REPAYMENT. Borrower may from time to time during the
term of this Note borrow and partially or wholly repay its outstanding
borrowings, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with, or at any time as a supplement


                                     Page 1
<PAGE>

to, this Note; provided however, that amounts repaid may not be reborrowed; and
provided further, that the total borrowings under this Note shall not exceed the
principal amount stated above. The unpaid principal balance of this obligation
at any time shall be the total amounts advanced hereunder by the holder hereof
less the amount of any principal payments made hereon by or for any Borrower,
which balance may be endorsed hereon from time to time by the holder. The
outstanding principal balance of this Note shall be due and payable in full on
AUGUST 15, 2001, unless said balance is refinanced by Bank pursuant to the
provisions of (d) below.

     (c)  ADVANCES. Advances hereunder, to the total amount of the principal sum
available hereunder, may be made by the holder at the oral or written request of
(i) DAVID N. RUCKERT OR ROLAND DENNIS OR BOB CONNORS, any one acting alone, who
are authorized to request advances and direct the disposition of any advances
until written notice of the revocation of such authority is received by the
holder at the office designated above, or (ii) any person, with respect to
advances deposited to the credit of any account of any Borrower with the holder,
which advances, when so deposited, shall be conclusively presumed to have been
made to or for the benefit of each Borrower regardless of the fact that persons
other than those authorized to request advances may have authority to draw
against such account. The holder shall have no obligation to determine whether
any person requesting an advance is or has been authorized by any Borrower.

     (d)  REFINANCING. So long as Borrower is in compliance with all terms and
conditions contained herein and in any loan agreement or other loan documents in
effect between Borrower and Bank on the maturity date set forth above (or on
such earlier date as may be requested by Borrower), and Borrower executes a new
promissory note and such other documents as Bank shall require, all in form and
substance satisfactory to Bank, Bank agrees to refinance the then outstanding
principal balance of this Note on the following terms and conditions:

     (i)  The outstanding principal balance of this Note shall be amortized over
3 years and shall be repaid in 36 monthly installments over said term, as set
forth in the promissory note executed by Borrower to evidence such refinancing.

     (ii) The outstanding principal balance so refinanced shall bear interest at
a rate per annum (computed on the basis of a 360-day year, actual days elapsed)
0.500% above Bank's Prime Rate in effect from time to time.

COLLATERAL:

     As security for the payment and performance of all obligations of
Borrower under this Note, Borrower grants to Bank security interests of first
priority (except as agreed otherwise by Bank in writing) in the following
property of Borrower, now owned or at any time hereafter acquired: all
equipment financed with the proceeds of this note, together with security
interests in all other personal property of Borrower now or at any time
hereafter pledged to Bank as collateral for any other commercial credit
accommodation granted by Bank to Borrower. All of the foregoing shall be
evidenced by and subject to the terms of such security agreements, financing
statements and other documents as Bank shall reasonably require, all in form
and substance satisfactory to Bank. Borrower shall reimburse Bank immediately
upon demand for all costs and expenses incurred by Bank in connection with
any of the foregoing security, including without limitation, filing fees and
allocated costs of collateral audits.

EVENTS OF DEFAULT:

     Any default in the payment or performance of any obligation under this
Note, or any defined event of default under any loan agreement now or at any
time hereafter in effect between Borrower and Bank (whether executed prior
to, concurrently with or at any time after this Note), shall constitute an
"Event of Default" under this Note.

                                     Page 2
<PAGE>

MISCELLANEOUS:

(a)  REMEDIES. Upon the occurrence of any Event of Default, the holder of this
Note, at the holder's option, may declare all sums of principal, interest, fees
and charges outstanding hereunder to be immediately due and payable without
presentment, demand, protest or notice of dishonor, all of which are expressly
waived by each Borrower, and the obligation, if any, of the holder to extend any
further credit hereunder shall immediately cease and terminate. Each Borrower
shall pay to the holder immediately upon demand the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys' fees (to
include outside counsel fees and all allocated costs of the holder's in-house
counsel), incurred by the holder in connection with the enforcement of the
holder's rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, and including any of the foregoing incurred in connection with any
bankruptcy proceeding relating to any Borrower.

(b)  OBLIGATIONS JOINT AND SEVERAL. Should more than one person or entity sign
this Note as a Borrower, the obligations of each such Borrower shall be joint
and several.

(c)  GOVERNING LAW. This Note shall be governed by and construed in accordance
with the laws of the State of California.

     IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.

FIBERSTARS, INC.

By: /s/ David N. Ruckert
   ---------------------------
Title:   President, CEO
      ------------------------


                                     Page 3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.31
<SEQUENCE>3
<FILENAME>a2030823zex-10_31.txt
<DESCRIPTION>EX-10.31
<TEXT>


<PAGE>

                                                                 EXHIIBT 10.31


WELLS FARGO BANK                            REVOLVING LINE OF CREDIT NOTICE
-------------------------------------------------------------------------------

$5,000,000.00                                            SAN JOSE, CALIFORNIA
                                                         SEPTEMBER 1, 2000

     FOR VALUE RECEIVED, the undersigned FIBERSTARS, INC. ("Borrower") promises
to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its
office at SANTA CLARA VALLEY RCBO, 121 PARK CENTER PLAZA 3RD FLR, SAN JOSE, CA
95113, or at such other place as the holder hereof may designate, in lawful
money of the United States of America and in immediately available funds, the
principal sum of $5,000,000.00, or such much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement as set forth herein.

DEFINITIONS:

      As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning
set forth at the place defined:

     (a)  "Business Day" means any day except a Saturday, Sunday, or any other
day on which commercial banks in California are authorized or required by law to
close.

     (b)  "Fixed Rate Term" means a period commencing on a Business Day and
continuing for 1, 2 OR 3 MONTHS, as designated by Borrower, during which all or
a portion of the outstanding principal balance of this Note bears interest
determined in relation to LIBOR; provided however, that no Fixed Rate Term may
be selected for a principal amount less than $100,000.00; and provided further,
that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof.
If any Fixed Rate Term would end on a day which is not a Business Day, then such
Fixed Rated Term shall be extended to the next succeeding Business Day.

     (c)  "LIBOR" means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a percentage equal
to 100% less any LIBOR Reserve Percentage.

          (i)  "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the fist day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Marked Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.

          (ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rated Tem.

     (d)  "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base rates and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.

INTEREST:

     (a)  INTEREST. The outstanding principal balance of this Not shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) either
(I) at a fluctuating rate per annum EQUAL TO the Prime Rate in effect from time

                                                                             1
<PAGE>

to time, or (ii) at a fixed rate per annum determined by Bank to be 1.75000%
above LIBOR in effect on the first day of the applicable Fixed Rate Term. When
interest is determined in relation to the Prime Rate, each change in the rate of
interest hereunder shall become effective on the date each Prime Rate change is
announced within Bank. With respect to each LIBOR selection hereunder, Bank is
hereby authorized to note the date, principal amount, interest rate and Fixed
Rate Term applicable thereto and any payments make thereon on Bank's books and
records (either manually or by electronic entry) and/or on any schedule attached
to this Note, which notations shall be prima facie evidence of the accuracy of
the information noted.

     (b)  SELECTION OF INTEREST RATE OPTIONS. At any time any portion of this
Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of the Note bears interest determined in relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion for the outstanding principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed
Rate Term. Any such notice may be given by telephone (or such other electronic
method as Bank may permit) so long as, with respect to each LIBOR selection, (A)
if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is give, and (B) such
notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate
Term, or at a later time during any Business Day if Bank, at it's sole option
but without obligation to do so, accepts Borrower's notice and quotes a fixed
rate to Borrower. If Borrower does not immediately accept a fixed rate when
quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request
form Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance or
the principal amount to which Fixed Rate Term applied.

     (c)  TAXES AND REGULATORY COSTS. Borrower shall pay to Bank immediately
upon demand, in addition to any other amounts due or to become due hereunder,
any and all (i) withholdings, interest equalization taxes, stamp taxes or other
taxes (except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner or LIBOR, and (ii) future,
supplemental, emergency or other changes in the LIBOR Reserve Percentage,
assessment rates imposed by the Federal Deposit Insurance Corporation, or
similar requirements or costs imposed by any domestic or foreign governmental
authority or resulting form compliance by Bank with any request or directive
(whether or not having the fore of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are
not included in the calculation of LIBOR. In determining which of the foregoing
are attributable to any LIBOR option available to Borrower hereunder, any
reasonable allocation make by Bank among its operations shall be conclusive and
binding upon Borrower.

     (d)  PAYMENT OF INTEREST. Interest accrued on this Note shall be payable on
the 28TH day of each MONTH, commencing OCTOBER 28, 2000.

     (e)  DEFAULT INTEREST. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-year, actual days elapsed) equal to 4% above the rate of interest
from time to time applicable to this Note.

     (f)  COMMITMENT FEE. Prior to the initial extension of credit under this
Note, Borrower shall pay to Bank a non-refundable commitment fee of $2,500.00.

     (g)  COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect all
interest and fees due hereunder by charging Borrower's deposit account number
4496-813031 with Bank, or any other deposit account maintained by any Borrower
with Bank, for the full amount thereof. Should there be insufficient funds in
any such deposit

                                                                            2

<PAGE>

account to pay all such sums when due, the full amount of such deficiency shall
be immediately due and payable by Borrower.

SIGHT COMMERICAL AND STANDBY LETTER OF CREDIT SUBFEATURE:

     (a)  LETTER OF CREDIT SUBFEATURE. As a subfeature under this Note, Bank
agrees from time to time during the term hereof to issue standby letters of
credit for the account of Borrower to finance GUARANTEE LEASE PAYMENTS FOR THEIR
GERMAN FACILITY and/or sight commercial letters of credit for the account of
Borrower to finance Borrower's inventory purchases (each, a "Letter of Credit"
and collectively, "Letters of Credit"); provided however, that the form and
substance of each Letter of Credit shall be subject to approval by Bank, in it's
sole discretion; and provided further, that the aggregate undrawn amount of all
outstanding Letters of Credit shall not at any time exceed $400,000.00. Each
standby Letter of Credit shall be issued for a term not to exceed 365 days, and
each commercial Letter of Credit shall be issued for a term not to exceed 180
days, as designated by Borrower; provided however, that no standby Letter of
Credit shall have an expiration date subsequent to the maturity date of this
Note, and no commercial Letter of Credit shall have an expiration date more than
90 days beyond the maturity date of this Note. The undrawn amount of all Letters
of Credit shall be reserved under this Note and shall not be available for
borrowings hereunder. Each Letter of Credit shall be subject to the additional
terms and conditions of the Letter of Credit Agreement and related documents, if
any, required by Bank in connection with the issuance thereof. Each draft paid
by Bank under a Letter of Credit shall be deemed an advance under this Note and
shall be repaid by Borrower in accordance with the terms and conditions of this
Note; provided however, that if advances hereunder are not available, for any
reason, at the time any draft is paid by Bank, then Borrower shall immediately
pay to Bank the full amount of such draft, together with interest thereon form
the date such amount is paid by Bank to the date such amount is full repaid by
Borrower, at the rate of interest applicable to advances hereunder. In such
event Borrower agrees that Bank, in its sole discretion, may debit any deposit
account maintained by Borrower with Bank for the amount of any such draft.

   (b) LETTER OF CREDIT FEES. Borrower shall pay to Bank (i) fees upon the
issuance of each standby Letter or Credit equal to 1.000% per annum (computed on
the basis of a 360-day year, actual days elapsed) of the face amount thereof,
and (ii) fees upon the issuance of each commercial Letter of Credit, upon the
payment or negotiation by Bank of each draft under any Letter of Credit and upon
the occurrence of any other activity with respect to any Letter of Credit
(including with limitation, the transfer, amendment or cancellation of any
Letter or Credit) determined in accordance with Bank's standard fees and charges
then in effect for such activity.

CLEAN ACCEPTANCE SUBFEATURE:

   (a) ACCEPTANCE SUBFEATURE. As a subfeature under this Note, Bank agrees from
time to time during the term hereof to create banker's acceptances (each, an
"Acceptance" and collectively, "Acceptances") for the account of Borrower by
accepting drafts drawn on Bank by Borrower for the purpose of financing
Borrower's importation of goods into the United States; provided however, that
the form and substance of each Acceptance shall be subject to approval by Bank,
in its sole discretion; and provided further, that the aggregate amount of all
outstanding Acceptances shall not at any time exceed $400,000.00. Each
Acceptance shall be in the minimum amount of $5,000.00. Each Acceptance shall be
subject to the additional terms and conditions of an Acceptance Agreement in
form and substance satisfactory to Bank. Each Acceptance shall be created for a
term not to exceed the lesser of 365 days, as designated by Borrower, or such
period of time as may be necessary to comply with the terms of the Acceptance
Agreement; provided however, that no Acceptance shall mature more than 90 days
beyond the maturity date of this Note. The outstanding amount of all Acceptances
shall be reserved under this Note and shall not be available for borrowings
hereunder. The amount of each Acceptance which matures shall be deemed an
advance under this Note and shall be repaid by Borrower in accordance with the
terms and conditions of this Note; provided however, that if advances hereunder
are not available, for any reason, at the time any Acceptance matures, then
Borrower shall immediately pay to Bank the full amount of such matured
Acceptance, together with interest thereon from the date such Acceptance matures
to the date such amount is fully repaid by Borrower, at the rate of interest
applicable to advances hereunder. In such event Borrower agrees that Bank, in
its sole discretion, may debit any deposit account maintained by Borrower with
Bank for the amount of any Acceptance. All Acceptances created hereunder shall
be discounted with Bank.

                                                                             3

<PAGE>

   (b) ACCEPTANCE FEES. For each Acceptance created hereunder, Borrower shall
pay to Bank on the date such Acceptance is created an acceptance fee determined
in accordance with Bank's standard fees and charges then in effect for the
creation of Acceptances.

BORROWING AND REPAYMENT:

   (a) USE OF PROCEEDS. Advances under this Note shall be available solely to
finance WORKING CAPITAL REQUIREMENTS.

   (b) BORROWING AND REPAYMENT. Borrower may form time to time during the term
of this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with, or at any time as a supplement
to, this Note; provided however, that the total outstanding borrowings under
this Note shall not at any time exceed the principal amount stated above; and
provided further, that Borrower shall maintain a zero balance on advances under
this Note for a period of at least 30 consecutive days during each fiscal year.
All payments credited to principal shall be applied first, to the outstanding
principal balance of this Note which bears interest determined in relation to
the Prime Rate, if any, and second, to the outstanding principal balance of this
Note which bears interest determined in relation to LIBOR, with such payments
applied to the oldest Fixed Rate Term first. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of any principal payments made hereon by or for
any Borrower, which balance may be endorsed hereon from time to time by the
holder. The outstanding principal balance of this Note shall be due and payable
in full on AUGUST 15, 2001; except with respect to any draft paid by Bank under
a commercial Letter of Credit and any Acceptance which matures subsequent to
said date, the full amount of which shall be due and payable by Borrower
immediately upon payment by Bank or at such maturity as applicable.

   (c) ADVANCES. Advances hereunder, to the total amount of the principal sum
available hereunder, may be made by the holder at the oral or written request of
(i) DAVID N. RUCKERT OR ROLAND DENNIS OR BOB CONNORS, any on acting alone, who
are authorized to request advances and direct the disposition of any advances
until written notice of the revocation of such authority is received by the
holder at the office designated above, or (ii) any person, with respect to
advances deposited to the credit of any deposit account of any Borrower, which
advances, when so deposited, shall be conclusively presumed to have been made to
or for the benefit of each Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw against
such account. The holder shall have no obligation to determine whether any
person requesting an advance is or has been authorized by any Borrower.

PREPAYMENT:

   (a) PRIME RATE. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to the Prime Rate at any time, in
any amount and without penalty.

   (b) LIBOR. Borrower may prepay principal on any portion of this Note which
bears interest determined in relation to LIBOR at any time and in the minimum
amount of $100,000.00; provided however, that if the outstanding principal
balance of such portion of this Note is less than said amount, the minimum
prepayment amount shall be the entire outstanding principal balance thereof. In
consideration of Bank providing this prepayment option to Borrower, or if any
such portion of this Note shall become due and payable at any time prior to the
last day of the Fixed Rate Term applicable thereto by acceleration or otherwise,
Borrower shall pay to Bank immediately upon demand a fee which is the sum of the
discounted monthly differences for each month from the month of prepayment
through the month in which Fixed Rate Term matures, calculated as follows for
each such month:

          (i)  DETERMINE the amount of interest which would have accrued each
month on the amount prepaid at the interest rate applicable to such amount had
it remained outstanding until the last day of the Fixed Rate Term applicable
thereto.

                                                                             4
<PAGE>

          (ii) SUBTRACT from the amount determined in (i) above the amount of
interest which would have accrued from the same month on the amount repaid for
the remaining term of such Fixed Rate Term at LIBOR in effect on the date of
prepayment for new loans made for such term and in a principal amount equal to
the amount prepaid.

          (iii) If the result obtained in (ii) for any month is greater than
zero, discount that difference by LIBOR used in (ii) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment cots, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a prate per annum 2.000% above Prime Rate
in effect from time to time (computed on the basis of a 360-day year, actual
days elapsed). Each change in the rate of interest on any such past due
prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.

EVENTS OF DEFAULT:

     Any default in the payment or performance of any obligation under this
Note, or any defined event of default under any loan agreement now or at any
time hereafter in effect between Borrower and Bank (whether executed prior to,
concurrently with or at any time after this Note), shall constitute an "Event of
Default" under this Note.

MISCELLANEOUS:

     (a)  REMEDIES. Upon the occurrence of any Even of Default, the holder of
this Note, at the holder's option, may declare all sums of principal, interest,
fees and charges outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.

     (b)  OBLIGATIONS JOINT AND SEVERAL. Should more than one person or entity
sign this Note as Borrower, the obligations of each such Borrower shall be joint
and serveral.

     (c)  GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws of the State of California.

          IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

FIBERSTARS, INC.

By:  /s/ David N. Ruckert
   ---------------------------
Title: President, Ceo
      ------------------------

                                                                             5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.32
<SEQUENCE>4
<FILENAME>a2030823zex-10_32.txt
<DESCRIPTION>EXHIBIT 10.32
<TEXT>

<PAGE>

                                                                  EXHIBIT 10.32

WELLS FARGO BANK                                                 LOAN AGREEMENT
-------------------------------------------------------------------------------

     This Loan Agreement (this "Agreement") is entered into by and between
FIBERSTARS, INC. ("Borrower") and WELLS FARGO BANK, NATIONAL ASSOCIATION
("Bank") and sets forth the terms and conditions which govern all Borrower's
commercial credit accommodations form Bank, whether now existing or hereafter
granted (each, a "Credit" and collectively, "Credits"), which terms and
conditions are in addition to those set forth in any other contract, instrument
or document (collectively with this Agreement, the "Loan Documents") required by
this Agreement or heretofore or at any time hereafter delivered to Bank in
connection with any Credit.

     I.   REPRESENTATIONS AND WARRENTIES. Borrower makes the following
representations and warranties to Bank, which representations and warranties
shall be true as of the date hereof and on the date of each extension of credit
under each Credit with the same effect as through make on each such date:

     (a)  LEGAL STATUS. Borrower is a CORPORATION, duly organized and existing
and in good standing under the laws of the State of CALIFORNIA, and is qualified
or licensed to do business in all jurisdictions in which such qualification or
licensing is required or in which the failure to be qualified or licensed could
have a material adverse effect on Borrower.

     (b)  AUTHORIZATION AND VALIDITY. Each of the Loan Documents has been duly
authorized, and upon its execution and delivery to Bank will constitute a legal
valid and binding obligation of Borrower or the party which executes the same,
enforceable in accordance with its respective terms.

     (c) NO VIOLATION. The execution, delivery and performance by Borrower of
each of the Loan Documents do not violate any provision of law or regulation,
or contravene any provision of Borrower's Articles of Incorporation or
By-Laws, or result in any breach of or default under any agreement, indenture
or other instrument to which Borrower is a party or by which Borrower may be
bound.

     (d)  NO LITIGATION. There are no pending, or to the best of Borrower's
knowledge threatened, actions, claims, investigations, suits or proceedings by
or before any governmental authority, arbitrator, court or administrative agency
which could have a material adverse effect on the financial condition or
operation of Borrower except as disclosed by Borrower to Bank in writing prior
to the date hereof.

     (e)  FINANCIAL STATEMENTS. The most recent annual financial statement of
Borrower, and all interim financial statements delivered to Bank since the date
of said financial statement, true copies of which have been delivered by
Borrower to Bank prior to the date hereof, are complete and correct, present
fairly the financial condition of Borrower and disclose all liabilities of
Borrower, and have been prepared in accordance with generally accepted
accounting principles. Since the dates of such financial statements there has
been no material adverse change in the financial condition of Borrower, nor has
Borrower mortgaged, pledged, granted a security interest in or otherwise
encumbered any of its assets or properties except in favor of Bank or as
otherwise permitted by Bank in writing.

     (f)  TAX RETURNS. Borrower has no knowledge of any pending assessments or
adjustments of its income tax payable with respect to any year except as
disclosed by Borrower to Bank in writing prior to the date hereof.

II.  ADDITIONAL TERMS.

     (a)  CONDITIONS PRECEDENT. The obligation of Bank to grant any Credit is
subject to the condition that Bank shall have received all contracts,
instruments and documents, duly executed where applicable, deemed necessary by
Bank to evidence such Credit and all terms and conditions applicable thereto,
all of which shall be in form and substance satisfactory to Bank.

     (b)  Application of Payments. Each payment made on each Credit shall be
applied first, to any interest then due, second, to any fees and charges then
due, and third, to the outstanding principal balance thereof.

<PAGE>

III. COVENANTS. So long as any Credit remains available or any amounts under
any Credit remain outstanding, Borrower shall, unless Bank otherwise consents
in writing:

     (a)  INSURANCE. Maintain and keep in force, for each business in which
Borrower is engaged, insurance of the types and in amounts customarily carried
in similar lines of business, including but not limited to fire, extended
coverage, public liability, flood, property damage and workers' compensation,
carried with companies an in amounts satisfactory to Bank, and deliver to Bank
from time to time at Bank's request schedules setting forth all insurance then
in effect.

     (b)  COMPLIANCE; LAWS AND REGULATIONS. Preserve and maintain all licenses,
permits, governmental approvals, rights, privileges and franchises necessary for
the conduct of Borrower's business; and comply with the provisions of all
documents pursuant to which Borrower is organized and/or which govern Borrower's
continued existence and with the requirements of all laws, rules, regulations
and orders of any governmental authority applicable to Borrower and/or its
business, including without limitation, all state or federal environmental,
hazardous waste, health and safety statutes, and any rules or regulations
adopted pursuant thereto, which govern or affect any operations and/or
properties of Borrower.

     (c)  OTHER INDEBTEDNESS. Not create, incur, assume or permit to exist any
indebtedness or other liabilities, whether secured or unsecured, matured or
unmatured, liquidated or unliquidated, joint or several, direct or contingent
(including any contingent liability under any guaranty of the obligations of any
person or entity), except (i) the liabilities of Borrower to Bank, (ii) trade
debt incurred by Borrower in the normal course of its business, and (iii) any
other liabilities of Borrower existing as of, and disclosed to Bank in writing
prior to, the date hereof.

     (d)  MERGER; CONSOLIDATION; TRANSFER OF ASSETS. Not merge into or
consolidate with any other entity; nor make any substantial change in the nature
of Borrower's business as conducted as of the date hereof; nor acquire all or
substantially all of the assets of any other person or entity; nor sell, lease,
transfer or otherwise dispose of all or substantial or material portion of
Borrower's assets except in the ordinary course of its business.

     (e)  PLEDGE OF ASSETS. Not mortgage, pledge, grant or permit to exist a
security interest in, or lien upon, all or any portion of Borrower's assets now
owned or hereafter acquired, except in favor of Bank and except any of the
foregoing existing as of, and disclosed to Bank in writing prior to, the date
hereof.

     (f)  FINANCIAL STATEMENTS. Provide to Bank all of the following, in form
and detail satisfactory to Bank, together with such current financial and other
information as Bank from time to time may reasonably request:

          (i)  As soon as available, but in no event later than 120 days
after and as of the end of each FISCAL year, AN AUDITED financial statement
of Borrower, prepared by an independent certified public accountant
acceptable to Bank, to include a balance sheet, income statement and
statement of cash flow, together with all supporting schedules and footnotes.

     (g)  Financial Condition. Maintain Borrower's financial condition as
follows using generally accepted accounting principles consistently applied and
used consistently with prior practices, except to the extent modified by the
following definitions:

          (i)  Total Liabilities divided by Tangible Net Worth not at any time
grater than 0.75 to 1.0, with "Total Liabilities" defined as the aggregate of
current liabilities and non-current liabilities less subordinated debt, and with
"Tangible Net Worth" defined as the aggregate of total stockholders' equity plus
subordinated debt less any intangible assets.

          (ii) Quick Ratio not at any time less than 1.25 to 1.0, with "Quick
Ratio" defined as the aggregate of unrestricted cash, unrestricted marketable
securities and receivables convertible into cash divided by total current
liabilities.

<PAGE>

          (iii) Net income after taxes not less than $1.00 on annual basis,
determined as of each fiscal year end, and pre-tax profit not less than $1.00 on
a year-to-date basis, determined as of THE END OF EACH FISCAL QUARTER. Beginning
with second quarter.

          (iv)  EBITDA Coverage Ratio is not less than 1.50 to 1.0 as of each
FISCAL year end, with "EBITDA" defined as net profit before tax plus interest
expense (net of capitalized interest expense), depreciation expense and
amortization expense, and with "EBITDA Coverage Ratio" defined as EBITDA divided
by the aggregate of interest expense plus the prior period current maturity of
long-term debt and the prior period current maturity of subordinated debt.

   IV.   DEFAULT; REMEDIES.

     (a)  EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement:

          (i)    The failure to pay any principal, interest, fees or other
charges when due under any of the Loan Documents.

          (ii)   Any representation or warranty hereunder or under any other
Loan Document shall prove to be incorrect, false or misleading in any
material respect when made.

          (iii)  Any violation or breach of any term or condition of this
Agreement or any other of the Loan Documents.

          (iv)   Any default in the payment or performance of any obligation, or
any defined event of default, under any provisions of any contract, instrument
or document pursuant to which Borrower or any guarantor hereunder has Incurred
debt or any other liability of any kind to any person or entity, including Bank.

          (v)    The filing of a petition by or against Borrower or any
guarantor hereunder any provisions of the Bankruptcy Reform Act, Title 11 of the
United States Code, as amended or recodified from time to time, or under any
similar or other law relating to bankruptcy, insolvency, reorganization or other
relief for debtors; the appointment of a receiver, trustee, custodian or
liquidator of or for any part o the assets or property of Borrower or any such
guarantor; Borrower or any such guarantor becomes insolvent, makes a general
assignment for the benefit of creditors or is generally not paying its debts as
they become due; or any attachment or like levy on any property of Borrower or
any such guarantor.

          (vi)   Any material adverse change, as determined solely by Bank, in
the financial condition of Borrower.

          (vii)  The death or incapacity of any individual guarantor hereunder;
or the dissolution or liquidation of Borrower or of any guarantor hereunder
which is a corporation, partnership or other type of entity.

          (viii) Any change in ownership during the term hereof of an aggregate
of 25% or more of the common stock of Borrower.

     (b) REMEDIES. Upon the occurrence of any Event of Default: (i) the entire
balance of principal, interest, fees and charges on each Credit shall, at Bank's
option, become immediately due and payable in full without presentment, demand,
protest or notice of dishonor, all of which are expressly waived by Borrower;
(ii) the obligation, if any, of Bank to extend any further credit to Borrower
under any of the Loan Documents shall immediately cease and terminate; and (iii)
Bank shall have all rights, powers and remedies available under each of the Loan
Documents, or accorded by law, including without limitation the right to resort
to any security for any Credit. All rights, powers and remedies of Bank shall be
cumulative.

<PAGE>

   V.   MISCELLANEOUS.

     (a)  NO WAIVER. No delay, failure or discontinuance of Bank in exercising
any right, power or remedy under any of the Loan Documents shall affect or
operate as a waiver of such right, power or remedy; nor shall any single or
partial exercise of any such right, power or remedy preclude, waive or otherwise
affect any other or further exercise thereof or the exercise of any other right,
power or remedy. Any waiver, permit, consent or approval of any kind by Bank of
any breach of or default under any of the Loan Documents, or any such waiver of
any provisions or conditions hereof, must be in writing and shall be effective
only to the extent set forth in writing.

     (b)  NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to the applicable party at its address
specified below or to such other address as any party may designate by written
notice to each other party, and shall be deemed given or made as follows: (i) if
personally delivered, upon delivery; (ii) if sent by mail, upon the earlier of
the date of receipt or 3 days after deposit in the U.S. mail, first class and
postage prepaid; and (iii) if sent by telecopy, upon receipt.

     (c) COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in connection with (I) the negotiation and preparation of
this Agreement and the other Loan Documents, and Bank's continued
administrative of each Credit, (iii) the enforcement of Bank's rights and/or
the collection of any amounts which become due to Bank under any of the Loan
Documents, and (iii) the prosecution or defense of any action in any way
related to any of the Loan Documents, including without limitation, any
action of declaratory relief, whether incurred at the trial or appellate
level, in an arbitration proceeding or otherwise, and including any of the
foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion
brought by Bank or any other person) relating to Borrower or any other person
or entity.

     (d)  SUCCESSORS; ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; provided however, that Borrower may not
assign or transfer its interests or rights hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank's rights
and benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any Credit, Borrower or its business, any guarantor or any
Credit or the business of any such guarantor, or any collateral for any Credit.

     (e)  CONTROLLING AGREEMENT; AMENDMENT. In the even of any direct conflict
between any provision of this Agreement and any provision of any other Loan
Document, the terms of this Agreement shall control. This Agreement may be
amended or modified only in writing signed by Bank and Borrower.

     (f)  NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered into
for the sole protection and benefit of the parties hereto and their respective
permitted successors and assigns, and no other person or entity shall be a third
party beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any other Loan Document to which it is not a
party.

     (g)  SERVERABILITY OF PROVISIONS. If any provision of this Agreement shall
be held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.

     (h)  GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

     (i)  Cancellation of Prior Loan Agreements. The Agreement cancels and
supersedes all prior loan agreements between Borrower and Bank relating to any
Credit.

<PAGE>

   VI.   ARBITRATION

     (a)  ARBITRATION. Upon the demand of any party, any Dispute shall be
resolved by binding arbitration in accordance with the terms of this agreement.
A "Dispute" shall mean any action, dispute, claim or controversy of any kind,
whether in contract or tort, statutory or common law, legal or equitable, now
existing or hereafter arising under or in connection with, or in any way
pertaining to, any of the Loan Documents, or any past, present future extensions
of credit and other activities, transactions or obligations of any kind related
directly or indirectly to any of the Loan Documents, including without
limitation, any of the foregoing arising in connection with the exercise of any
self-help, ancillary or other remedies pursuant to any of the Loan Documents.
Any party may be summary proceedings bring an action in court to compel
arbitration of a Dispute. Any party who fails or refuses to submit to
arbitration following a lawful demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
Dispute.

     (b)  GOVERNING RULES. Arbitration proceedings shall be administered by
the American Arbitration Association ("AAA") or such other administrator as
the parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States
Cod), notwithstanding any conflicting choice of law provision in any of the
Loan Documents. The arbitration shall be conducted at a location in
California selected by the AAA or other administrator. If there is any
inconsistency between the terms hereof and any such rules, the terms and
procedures set forth herein shall control. All statutes of limitation
applicable to any Dispute shall apply to any arbitration proceeding. All
discovery activities shall be expressly limited to matters directly relevant
to the Dispute being arbitrated. Judgement upon any award rendered in an
arbitration may be entered in any court having jurisdiction; provided
however, that nothing contained herein shall be deemed to be a waiver by any
party that is a bank of the protections afforded to it under 12 U.S.C.
Section 91 or any similar applicable state law.

     (c) NO WAIVER; PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary
remedies, including without limitation injunctive relief, sequestration,
attachment, garnishment or the appointment of a receiver, from a court or
competent jurisdiction before, after or during the pendency of any
arbitration or other proceeding. The exercise of any such remedy shall not
waive the right of any party to compel arbitration or reference hereunder.

     (d)  ARBITRATOR QUALIFICATIONS AND POWERS; AWARDS. Arbitrators must be
active members of the California State Bar or retired judged of the state of
federal judiciary of California, with expertise in the substantive law
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the State of California, (ii) may grant
any remedy or relief that a court of the State of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less shall
be decided by a single arbitrator who shall not render an award greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.

     (e)  REAL PROPERTY COLLATERAL; JUDICIAL REFERENCE. Notwithstanding
anything herein to the contrary, no Dispute shall be submitted to arbitration
if the Dispute concerns indebtedness secured directly or indirectly, in whole
or in part, b any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (iii) all parties to the arbitration waive any rights or
benefits that might accrue them by virtue of the single action rule statute
of California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interest securing such
indebtedness and obligations, shall remain fully valid and enforceable. If
any Dispute is not submitted to arbitration, the Dispute shall be referred to
a referee in accordance with California Cod of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications

<PAGE>

required herein for arbitrators shall be selected pursuant to the AAA's
selection procedures. Judgement upon the decision rendered by a referee shall be
entered in the court in which such proceeding was commenced in accordance with
California Cod of Civil Procedure Sections 644 and 645.

     (f)  MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.


     IN WITNESS WHEREOF, Borrower and Bank have executed this Agreement as of
September 1, 2000.


Fiberstars, Inc.


By:  /s/ David N. Ruckert
   -------------------------
Title: President, CEO
      ----------------------

Address:          44259 Nobel Drive
                  Fremont, CA 94538


WELLS FARGO BANK,
         NATIONAL ASSOCIATION

By:  /s/ Laura Zaragoza
   ------------------------------------------
Title: Wells Fargo Assistant Vice President
      ---------------------------------------

Address:          121 Park Center Plaza 3rd Flr
                  San Jose, CA 95113



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>5
<FILENAME>a2030823zex-27.txt
<DESCRIPTION>EX-27
<TEXT>

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<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000

<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-2000
<PERIOD-START>                             JAN-01-2000
<PERIOD-END>                               SEP-30-2000
<CASH>                                           2,517
<SECURITIES>                                         0
<RECEIVABLES>                                    5,565
<ALLOWANCES>                                       391
<INVENTORY>                                      5,686
<CURRENT-ASSETS>                                15,204
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<PREFERRED>                                          0
<COMMON>                                             0
<OTHER-SE>                                           0
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<CGS>                                           15,877
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<OTHER-EXPENSES>                                11,104
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