                                                                      EXHIBIT 99

Except for the historical information contained herein, the matters set forth in
this transcript, including those about our future financial results, including
revenues, sources of revenues and expenses, our gross margin, our goals and
business outlook for 2005 and thereafter, market trends, growth and market
opportunities, product introductions, product development, our customers and our
competitive position, our intention to significantly reduce operating costs
through consolidation of our U.S. operations, including planned closure of the
Fremont, California office, moving some manufacturing to Ohio and India, the
expected restructuring charge and expected annual cost savings, statements
regarding our pool and spa marketing group, expected benefits and timing of
restructuring, our evaluation of potential programs for cost reductions of EFO
and expected benefits of cost reductions including competitive advantages, the
outlook and growth prospects for EFO and our intention that EFO become the focus
of Fiberstars' future, the expectations that our pool and spa business will miss
its forecast, resulting in lower revenues and a loss for the quarter, volatility
of results from our core businesses, expected testing of the EFO freezer case
lighting system, expected sales and the expected contributions and impact of Mr.
Davenport as CEO, constitute forward-looking statements for the purposes of the
safe harbor provisions under the Private Securities Litigation Reform Act. These
forward-looking statements and all other statements that may be made on this
call that are not historical facts are subject to a number of risks and
uncertainties that may cause actual results to differ materially, including, but
not limited to, our ability to retain and obtain customer and distributor
relationships, our ability to maintain relationships with strategic partners and
ADLT, our ability to increase cash balances in future quarters, risks associated
with the evolution and growth of the fiber optic lighting market, the impact of
technological advances and competitive products, the slowing U.S. and world
economy and its effects on Fiberstars' markets, failure to develop marketable
products from new technologies, failure of EFO or other new products to meet
performance expectations, unanticipated costs of or difficulties in implementing
restructuring, the ability to evaluate and implement programs for reducing the
cost of EFO, our ability to integrate new management, delays in manufacturing of
products, increased competition, other adverse sales and distribution factors,
greater than anticipated costs and/or warranty expenses, and other risks
detailed from time to time in our SEC reports, including our Annual Report on
Form 10-K for the year ended December 31, 2004, and our Quarterly Report on Form
10-Q for the quarter ended March 31, 2005, in particular to the section entitled
"Factors That May Affect Results." These forward-looking statements speak only
as of the date hereof, and we disclaim any intention or obligation to update
these forward-looking statements.

                                      * * *

                   THE FOLLOWING IS A TRANSCRIPT PREPARED WITH

                 RESPECT TO THE FIBERSTARS, INC. CONFERENCE CALL

                              HELD ON JUNE 30, 2005

Operator:       Good afternoon. And welcome to the Fiberstars Restructuring
                conference call.

                All lines have been placed on mute to prevent any background
                noise. After the speaker's remarks there will be a question and
                answer period. If you would like to ask a question during this
                time, simply press star then the number 1 on your telephone
                keypad. If you would like to withdraw your question, press the
                pound key.

                Thank you.

<PAGE>

                I would now like to turn the conference over to Mr. David
                Ruckert, President and CEO.

                Please go ahead sir.

David Ruckert:  Thank you Micky and thank you for joining our call this
                afternoon. Before we begin, I'd like to read you the longest run
                on sentence since Faulkner's opening to Absalum Absalum in 1936.

                I would like to remind you that various remarks that we make on
                this call including those about our future financial results
                including revenues, sources of revenues and expenses, our goals
                and business outlook for 2005 and thereafter, market trends and
                market opportunities, product introductions, product
                development, our customers and our competitive position, our
                plan for hiring a new COO VP of Operations, our intention to
                significantly reduce operating costs through consolidation of
                our U.S. operations, including planned closure of the Fremont,
                California office, the expected restructuring charge, and
                expected annual cost savings, the expected benefits and timing
                of restructuring, our evaluation of potential programs for cost
                reduction of EFO, and expected benefits of cost reduction
                including competitive advantages, the outlook and growth
                prospects for EFO, and our intention that EFO become the focus
                of Fiberstars' future, the expectation that our pool and spa
                business will miss its forecast resulting in lower revenues and
                a loss for the quarter, volatility of results from our core
                businesses, expected testing of the EFO freezer case lighting
                system, and the expected contributions and impact of Mr.
                Davenport as CEO constitute forward-looking statements for which
                the purposes of the safe harbor provisions under the Private
                Securities Reform Act.

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                These forward-looking statements and all other statements that
                may be made on this call that are not historical facts are
                subject to a number of risks and uncertainties that may cause
                actual results to differ materially. We refer you to our annual
                report on form 10-K for the year ended December 31, 2004 and our
                quarterly report on form 10-Q for the quarter ending March 31,
                2005 previously filed with the SEC. In particular to the section
                entitled factors that may affect results and to other reports
                that we file from time to time with the SEC for additional
                information on factors that could cause actual results to differ
                materially from our current expectations.

                These forward-looking statements speak only as to the date
                hereof and we disclaim any obligation to update these
                forward-looking statements.

                And with that, I will say that I am joined today by John
                Davenport, our new CEO and by our CFO, Bob Connors. The
                structure this morning will be I'll make an opening series of
                remarks having to do with the restructuring news release that
                went out. John will then make his statement. He'll say a little
                bit about his background. He'll talk in more depth about EFO and
                about the press release that went out about a half an hour ago
                announcing that we got a new $1.5 million R&D award from the
                Department of Energy.

                We have Bob Connors here. We do not have any financial results
                of course, at this point to discuss but Bob will be here to
                answer any questions that you may have.

                First I want to talk about my retirement. I got a lot of
                questions about why now. This has been planned for some time.
                When I was approaching my sixty-fifth year, we discussed it with
                the board and it was clearly an inappropriate time at that
                point. At that point, EFO was not fully developed as a product.
                The marketing and sales team was not in place. In fact, there
                wasn't a coherent marketing plan at that point.

                Today, it's very different. We have an excellent product in EFO.
                As you know, the latest iteration of it with the new daylight
                lamp was introduced this April at a couple of trade shows and
                very enthusiastically received by customers. We have the
                marketing and sales team in place. We have an A team with Ted
                des `Enfants leading it. Paul Ravanelle and Paul Schooley
                helping Ted with our foothold account strategy where we focus on
                national accounts that can benefit most from the EFO energy
                savings story.

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                The marketing plan is in place. The Gensler organization is the
                key to that. We have two contracts now with Gensler and the
                endorsement of EFO by Gensler. Their first endorsement in
                history, I think will be meaningful in persuading the lighting
                professionals to consider adopting EFO. So things are in good
                shape on EFO. The direction is very positive and I feel very
                comfortable about that.

                Regarding the restructuring, the discussion on this began in May
                of 2004 in an out of the office meeting in New York by the board
                of directors. And a number of iterations of this plan have been
                reviewed and John and I have been spending some time
                individually with each of the board members going over the
                options and the financial structure that we envision for this
                new restructuring.

                And so when we announced that we will close the Fremont facility
                at the end of this year with a carefully considered decision, it
                will obviously reduce - significantly reduce our facilities
                costs, which are 25% of the current costs out in Ohio. And they
                will reduce our personnel costs as well.

                We will also be moving some portion of the manufacturing that
                was being done here in Fremont to Solon and to India. Both of
                those moves are going to take place in the next six months.

                The pool and spa marketing group will remain intact and will
                remain in northern California in a smaller facility to be
                identified.

                I believe that this is the right thing to happen. It will save
                us, of course, considerable amount of overhead and money. We're
                estimating about two million a year versus current costs. It
                will create an increased focus on EFO. The Solon, Ohio facility
                has been the EFO center.

                And we didn't say a lot in the news release about the
                initiatives that we're undertaking to reduce the cost of goods
                of EFO but please be assured that we have aggressive programs
                underway. We will probably have some other announcements to make
                on that as the year progresses this year. But we're very
                encouraged by the prospects of lower costs on EFO and we think
                that when we get lower costs on EFO the market potential of that
                product will increase.

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                Now unfortunately, what was not planned during all this is the
                pool and spa shortfall in the second quarter. Once the middle of
                June came around and we realized that that was going to happen,
                we had to bundle that into the release. It was not originally
                intended. Obviously it was a surprise to us as it was to you.

                The biggest single factor in this shortfall is the group of
                products that we sell on an OEM basis to spa - stand along spa
                manufacturers. This is a business that we elected to not do any
                engineering for about three years ago. So we're basically
                letting it drift down. It was going down about five or six
                hundred thousand dollars a year and this year, the bottom has
                dropped out on us. It's going to decline between a million and a
                half and two million dollars this year. That will be pretty much
                it. We'll be left with just a few hundred thousand dollars of
                business.

                So that's the main problem in the pool and spa area. The spa
                standalone business was a low margin OEM business that wasn't
                worth taking engineering time away from EFO. And that was a
                decision made, as I said, about three years ago, and we're
                paying for it, unfortunately this year.

                I'd like to - before I turn it over to John, I'd like to say
                that I think we're fortunate to have a man of his stature to
                lead the Company to the next level. John was introduced by one
                person at the recent Light Fair trade show as the Michael Jordan
                of lighting. That's an extraordinary introduction. He is, in
                fact, known and respected around the world in the lighting
                field. And I think Fiberstars is extremely lucky to have him.

                He's a man of great breadth of knowledge and ability. He's been
                - of course, we named him COO a few years ago to groom him for
                this position. He was President of the Unison Company when we
                bought the Unison Company, so he's much more than a chief
                engineer, believe me. And I have every confidence that John will
                make an excellent CEO and will create an environment of success
                here at Fiberstars for EFO and the rest of our product lines in
                the years to come.

                So let me turn the meeting over now to the new CEO of
                Fiberstars, John Davenport.

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John Davenport: Thank you very, very much Dave and everyone at Fiberstars.
                Appreciate the tremendous efforts, the job that Dave has done
                over the past 18 years in taking Fiberstars from a dream into
                the world's leading fiber optic lighting company.

                I am thrilled to become CEO of Fiberstars. This reminds me of
                the night I had dinner with Jack Welch. It was the night he
                became CEO of General Electric Company. I was at a meeting in
                Boca Raton with 1,000 other executives. I was the most junior,
                so therefore, they figured I was expendable. And I had dinner
                with Jack.

                He asked me if I liked my job. And I told him that there are
                only two jobs in the company that I thought were worth having:
                the one that I had and the one that he had. And I'm beginning to
                understand what I meant by that statement. I am really thrilled
                for this opportunity.

                Maybe a little bit about my background that doesn't come through
                in the write ups you may have seen. Of course, I have an R&D
                background. Incidentally, that night they stripped Jack Welch of
                his PhD, under the theory that no scientist or engineer could
                run the General Electric Company. And he became instead of Dr.
                Welch, he became the honorable Mr. Welch.

                Well, in that same spirit, I'm laying down this mantle of
                technology for a moment and give you a glimpse of my background.
                At GE I was very, very fortunate, of course, to go on calls with
                Jack and got to see him in action. He, in my view, he was GE's
                best salesman. And I got to call on CEOs of General Motors and
                Ford. And learn how to live in that kind of an environment.

                The other folks that I had a chance to interact with, Jim
                McNerny also in the news today and Dave Calhoun. Top, top talent
                at GE and I feel privileged to have learned quite a bit from
                them.

                                        6
<PAGE>

                The - I had a chance of taking - I've been very fortunate three
                or four times in taking ideas to multi-million dollar
                businesses. And most recent of which is this Xenon headlight,
                which is an idea that I had at GE and stayed with it. That's one
                thing you learned from these guys. You have to stay with it. And
                not only in the lab and not only in the factory but you have to
                go to the customers. I took that all the way to two lighting
                platforms for GE lighting on that.

                So - and had a chance to talk to retail customers for other
                products - the halogen IR that I worked. So that kind of
                training in that kind of environment where the customer is
                number one and where you're looking towards filling the needs of
                the customer is something that I grew up in. And it's been very
                valuable to me in this current project.

                So I feel people have heard me before know that I'm excited
                about EFO technology. Well, I am excited about this phase. The
                name of the game, I think, from now on is execution. Yes,
                there's going to be a lot more in the technology that's going to
                be a continuous stream of products but we've got a product
                technology that's been launched and that is drawing attention.
                And so I'm thrilled at this stage to be taking over Fiberstars.

                And I am also thrilled to tell you that we are on plan for the
                second quarter for EFO. And the plan is that, you know, I don't
                know how to do this any other way. The plan is to do this
                quarter by quarter. Account by account, customer by customer.
                And our second quarter shows growth over our first quarter. And
                we'll be seeing growth in the second half as well. Second half
                looks better than the first half.

                To give you kind of a hint at the third quarter, of course,
                you've heard about today's news, the million and a half contract
                from the Department of Energy. Department of Energy is very
                important because energy is their business. They're the people
                behind this new set of regulations. They're the people - they
                want it to succeed. That's part of the reason they're supporting
                us. They want to support technologies that can make those
                regulations be meaningful.

                But we're also pleased to say, going to be doing our first
                commercial building - actually maybe more than one in the third
                quarter. And a key to this has been the introduction at Light
                Fair this new lamp. Please order them. They're available now.
                We'll be glad to ship them. But that, we believe, is the key to
                the commercial and also retail market. We also expect a retail
                order sale in the third quarter, probably more than one.

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<PAGE>

                Supermarkets. We are now in four out of eight regions in Whole
                Foods. And we expect to add another region in the third quarter.
                We sold four Whole Foods supermarkets this quarter. So things
                are moving ahead there.

                We have an ongoing test at Albertson's in the wine department.
                And we're looking forward to doing some stores in Southern
                California. We have just recently been approved for use of EFO
                in the seafood department in their new prototype - in their new
                stores. Their type 45 stores. That's an important step to be on
                the spec.

                And we've added a new - a major new chain for a test.

                Docklights. We've - even though it's a new product, we've sold a
                few units in the second quarter. And in the third quarter, we
                expect one customer to adopt them for their loading docks chain
                wide. So that will be a significant step. And we'll probably see
                some more orders in docklights. We're looking forward to that.

                Freezer cases. We have now worked out the location for our joint
                Southern Cal Edison Albertson's test. There are 43 freezers
                involved. One cooling group, I'm told. So that you can take a
                look at what happens to the compressor loads as well as what
                happens on the temperatures in the freezer and the amount of
                energy they use compared to the existing fluorescents.

                California Edison will be doing the measurements so we're not
                going to be involved in this. It will be independently measured.
                That should begin in late third quarter. Lots - there's lots of
                interest in our being successful in freezer cases. It's probably
                the question that we received most often is when can we start
                putting EFO in our freezer cases? We want to do it as soon as
                possible.

                The military. There will be two DARPA installations, which - for
                the third quarter. One of them the Chief Executive of DARPA's
                conference room. We're on track. We believe that we'll receive
                orders for two to three ships. There will be a testing period
                that will be involved and in 2006 and then, you know, with the
                lightening speed of the government, 2007 we'll be positioned to
                be receiving an order.

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                This is important, this test is very important because they'll
                be deciding whether or not that Fiberstars' EFO goes on the
                spec. So that's looking - that will be something that we're
                tracking very closely.

                That's what the outlook looks like for the third quarter. We, as
                I said, we expected to be an increase again over our second
                quarter. And so the outlook in general has been very good.

                I'm going to turn it - open it for questions for anyone who has
                any questions.

Operator:       At this time, if you would like to ask a question please press
                star 1 on your telephone keypad.

                We'll pause for just a moment to compile the Q&A roster.

                Your first question comes from Chris Ryder.

Chris Ryder:    Hello?

John Davenport: Hello?

Chris Ryder:    Hi. A couple - sorry to see you go, Dave but I'm glad that
                putting it in such good hands.

                As you think about the transition from the California facilities
                to the Ohio facilities, should we think about giving up revenue
                in that transition?

David Ruckert:  That is not our plan. Our plan is to make this a seamless
                transition for the customer. And we are doing everything that we
                possibly can do to assure that. I brought in Wayne Platt who has
                extensive experience in this kind of transition. He's done it
                several times before in much larger transitions before. He has
                got extensive manufacturing experience in lighting companies and
                for the major lighting companies.

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Chris Ryder:    Should we think then that this $2 million cash cost savings
                comes right out of the SG&A line so that '05 SG&A could be down
                versus '04?

Bob Connors:    The effect won't take place fully until actually 2007 Chris
                because we will have some restructuring costs this year and some
                next year, although most of it will be taken this year. So - and
                as far as SG&A goes, that's where the majority of the savings
                will show up. There will be some in the gross profit line as
                well.

Chris Ryder:    And then, as it relates to your EFO, the million and a half
                dollars that you're receiving from the government, is that - how
                - do I book that into the revenue line and then offset it with
                engineering expenses? Or how do I look at that?

David Ruckert:  Yes. We'll typically offset engineering expenses.

Bob Connors:    Well, actually we don't. We do not book the contract value into
                revenue since it's basically for R&D work.

David Ruckert:  Right.

Bob Connors:    So we'll take it as a credit to the R&D line.

Chris Ryder:    So what does that do to margins for the Company?

Bob Connors:    It has no effect on margins. On gross profit margins. It will
                help the pre-tax margin.

Chris Ryder:    And then so does that mean that you're going to increase your
                R&D line by the amount of the million and a half contract?

Bob Connors:    No. We'll spend on the R&D line whatever we spend and then we'll
                deduct the amount of the contract. So it should have a positive
                effect on the R&D line. We probably will maybe augment R&D
                spending to fulfill the requirements of the contract but overall
                we wouldn't expect it to have a major change this year over next
                year because, as you know, the DARPA contract winds down at the
                end of this year.

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Chris Ryder:    Okay. And then as it relates to the docklights, you talked about
                a customer loading docks on a chain wide basis. Can you give us
                sort of an order of magnitude as to what that could mean?

John Davenport: Yeah. We don't really know the answer to that question right
                now. And I will be glad to answer that question the third
                quarter when we've got the order booked.

Chris Ryder:    But just in terms of sizing the market. You know, we talk about
                the retail opportunity, we talk about the feature opportunity,
                we talk about the Whole Foods opportunity and Albertson's
                opportunity. Can we just get a sense of what a docklight
                opportunity could be?

John Davenport: Sure. You know there are an awful lot of docks around the
                country. And this kind of a light is an efficient version of
                that light is in every one of them, practically. We probably
                won't replace all of the dock lights. Places where these things
                are really important are places where broken glass matters. For
                example, supermarket docks.

                And this is a significant opportunity. Probably not as large as
                freezer cases. Freezer cases are probably the single largest
                product opportunity, I think, in the near term. They'll be
                somewhat larger than the docklight opportunity. But the
                docklight is a nice product. And we'll see how it goes.

Chris Ryder:    Thank you sir. The reason why I'm asking the question that way
                is the freezer case is still a test market for you whereas the
                docklight are commercial orders.

John Davenport: Docklight are commercial orders. We have docklights in test
                right now. So we're further along with the docklight product.
                We've been in tests in several locations and we're beginning to
                actually get some orders. It's now in production so that we can
                - you can order a docklight.

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                Freezer cases are not at that stage. Freezer case lighting is in
                the early test phase and that's what we're doing with Southern
                Cal Edison. There is a lot of interest in it because of there
                are problems with the current technology. Fluorescent lighting
                (unintelligible) works well in the cold and besides they put
                heat in the case.

Chris Ryder:    Well congratulations again on the transition.

John Davenport: Thank you very much, Chris.

Operator:       Your next question comes from Len Brecken.

Len Brecken:    Hi guys. Appreciate the call. You know, in terms of - just to
                follow up on the freezer case products, what are the
                deliverables for getting that product to general availability to
                shipping and maybe, you know, issues of adoption? Is there any,
                you know, cost issues that you need to address to get it to
                general availability and to get it to some level of sales or...?

John Davenport: Yeah. We're looking on freezer cases as a 2006 product. And cost
                is going to be an issue because fluorescent lights are cheap.
                And one of the things that we're doing, we talked about in the
                release, is aggressively pursuing cost reduction so that we can
                bring these freezer case applications in the range that the
                freezer case - that the supermarkets and freezer case
                manufacturers, you know, that are realistic for them.

                So those are the - besides getting the product right for the
                applications, the cost reduction effort is equally important.

Len Brecken:    Well, it seems like you got the - if you can manufacture it, it
                seems like you got the right specs for the product. So I'm not
                as worried about that as I am with, you know, can you give us
                some order of magnitude where you've got to get the cost down to
                get, you know, seven figure type of revenues for the product?

David Ruckert:  I think, if I can interject in here, Lenny, I think that the -
                we're going to learn this in the second half, so I can't be that
                definitive about it. But I think we've got the cost reduction
                identified that we need to make this a huge product.

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Len Brecken:    Okay. And I would assume within a reasonable timeframe.

David Ruckert:  Yeah 2006.

John Davenport: That's the plan.

Len Brecken:    All right. One question. I don't think you guys really gave us
                an update on the spoilage test that was still outstanding that
                John mentioned maybe at a conference a while back.

David Ruckert:  Yeah. We don't have it. We're - it was due by today, in fact. It
                didn't come in. But we're expecting it momentarily. We did get a
                couple of charts on it mid-month. So we know it went well. But
                we don't have the data yet. As soon as we have the data, we'll
                put out a release on it.

Len Brecken:    Okay. Third question, can you just broadly, you know, in terms
                of - we already talked about the freezer case but broadly speak
                about, you know, maybe retail and grocery store EFO adoption
                issues at this point. I mean is it cost? Is it tweaking the
                product? Is it handholding? Is it convincing the customer that
                it does what it does? Can you just thrash out what the major
                adoption issues are left at this point?

John Davenport: I think that it's a little bit of all of the above. The color
                has been an issue in the past in the retail environment.
                Probably the biggest issue with the introduction of this new
                lamp at Light Fair we've addressed the color issue. And now it's
                a matter of getting it right. Retail environment is important to
                the retail customer. The lighting is part of this overall sale.

                In supermarkets, it's important but it's not viewed in the same
                way. Here the - here, getting it right from an aesthetic point
                of view is important. So that's one of the things tweaking that
                we're doing.

                Also, cost is an issue. You have to be able to show the savings
                that you can obtain and get the kind of payback that they're
                looking for.

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                In spite of all of that, we are making progress in the retail
                market. I just - I said that we had a retail customer coming on
                board. We're doing a test in the third quarter as well. A
                significant test in the third quarter. So we're making progress.
                We have two retail customers with - that are testing the product
                as we're speaking. And the indications continue to be positive.
                So we're making progress in this area.

Len Brecken:    Okay. Thanks. I'll get back in the queue.

Operator:       Your next question comes from Bill Gibson.

Bill Gibson:    Hi John.

John Davenport: Hi.

Bill Gibson:    What was the - and I just missed it. You were going over the,
                you know, talking about freezer cases and a test starting late
                in the third quarter and you said joint venture with
                Albertson's. What was the other company?

John Davenport: Southern Cal Edison.

Bill Gibson:    Oh, Southern California Edison was the other company. Okay.

John Davenport: Right.

Bill Gibson:    And in terms of the commercial product that - was that we
                expected to have a contract announced in the third quarter. Was
                that it? Commercial customer, building.

John Davenport: What we're expecting is a purchase order.

Bill Gibson:    A purchase order.

John Davenport: Right.

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Bill Gibson:    Okay. I assume that - is that for immediate construction or is
                that an '06 kind of thing or...?

John Davenport: No. No. That's an '05 kind of thing.

Bill Gibson:    '05 kind of thing.

John Davenport: It's a retro fit. This is not a hole in the ground. So we're
                trying to get it into a building that, you know, is standing
                there.

Bill Gibson:    Okay.

John Davenport: Anything else, it would be an '05 kind of thing.

Bill Gibson:    Good. And Dave, as the outgoing CEO, that was the longest
                introductory - I forget what caveat I've ever heard read.

David Ruckert:  It's the longest one I've ever seen. The lawyers sent it over
                and I just read it. So...

Bill Gibson:    You've got to have the lawyers look at things but thank you.

Operator:       Your next question comes from Robert Smith.

Robert Smith:   Yes. Good afternoon guys. Thanks Dave for brining the Company
                this far. And the threshold of greatness, hopefully, John and
                you the man.

                Let me ask you this, John. How are we going to get bottom line
                profitability and keep the momentum going in R&D?

John Davenport: Well, part of that - and that's a good question. And that's one
                that I think about all the time. Part of that is the funding
                that we are continuing to receive from the government and from
                other sources. And that - we see that going forward in 2006 so
                that will keep R&D as a - with a minimal impact on the bottom
                line.

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                I think that the thing that we need to do and that everyone
                expects us to do is to begin, you know, this building of
                traction in EFO and that's really, I think, sets the economy of
                scale that we need to get the costs down. That has an important
                impact on costs all by itself. Economy of scale is very
                important. And as we increase quarter over quarter that helps
                our profitability.

                So but we're using R&D contracts, awards, to help offset the
                necessary continuing R&D that we'll need.

Robert Smith:   For EFO ramp up are you going to be using Ohio or how are the
                facilities there for production capacity?

John Davenport: The answer is yes. In fact, our fiber capacity - our fiber
                manufacturing is in Ohio. Our extruded fiber manufacturing is in
                Ohio. And we are continuing, you know, we're ramping that up in
                anticipation of the - of getting - of needing that extra
                capacity fiber.

                We are also turning India on so that they'll be able to do
                assembly of certain of the other parts, fixtures and some
                electronics and probably the illuminator as well.

Robert Smith:   Is that a contract manufacturer?

John Davenport: That's a contract manufacturer.

Robert Smith:   You have people there?

John Davenport: We have Fiberstars employees on site.

Robert Smith:   The gross margin in the business as a target, I think I remember
                hearing 40%. Is that a good number?

John Davenport: That's the number.

Robert Smith:   So what kind of time frame do you think it would take to get
                there?

                                       16
<PAGE>

John Davenport: That's a terrific question. It's not going to be 2005 I'm
                afraid. And probably not 2006 but we should be making good
                traction as we go beyond that.

Robert Smith:   And this contract that was just announced with DOE, it kind of
                puts you in position to attack the residential market at some
                point. How much work is necessary to get to that point in time
                line?

John Davenport: The contract timeline is 18 months. That's what we had in the
                proposal. We would seek to accelerate the work beyond that. And
                in fact, you've seen products come out of our work with DARPA.
                We're doing two products this year although we're continuing
                working on the DARPA program. So my expectation is that we will
                probably take the 18 months but products will be coming out
                ahead of that. That's my expectation.

Robert Smith:   Products that would be...?

John Davenport: Well, we had planned to - our target is to have a product
                available for the California market in 2006 so we can begin
                testing that. Now will that be the ultimate product? Probably
                not. We want to - but we want to test that residential market as
                soon as we can with something that - something that's a
                reasonable entry product.

Robert Smith:   Okay. I wish you great good luck.

John Davenport: Thank you very much.

Operator:       Your next question comes from Michael Horwitz.

Michael
Horwitz:        Hi fellows.

John Davenport: Hi.

Michael
Horwitz:        I missed the first couple minutes of this so I may have missed
                this but did ya'll talk about Sarbanes-Oxley at all?

                                       17
<PAGE>

John Davenport: No. That's a great thing to talk about.

Michael
Horwitz:        So, it looks like we missed it by a hair. Is that right?

John Davenport: That is absolutely right.

Bob Connors:    Hurray for that too.

John Davenport: We had cheering from the CFO's office.

Michael
Horwitz:        All right. So Mr. CFO, help me out here. In the first quarter,
                on the G&A line, you had some increase expense because your
                auditors had some extra hoops to jump through, if I recall. And
                then those of us - some of us, or maybe just me on Wall Street
                modeled in that you would probably hit the threshold for
                Sarbanes-Oxley so I can go ahead and back that out of my G&A.
                Would that sound right?

Bob Connors:    We'll be spending some this year but obviously a lot less than
                it would have been.


Michael
Horwitz:        Okay. And so was that number in the first quarter, is that a
                steady state number for your G&A line? I would figure looking at
                quarters past in '04 that it's lower than that number that you
                had in the first quarter of this year.

Operator:       Your next question comes from Seth Gelsthorpe.

Seth
Gelsthorpe:     Hi.

John Davenport: Hi Seth.

Seth
Gelsthorpe:     Couple different questions. First of all, the commercial
                building that you mentioned, can you give us some sense of what
                this is? It's not a hole in the ground. Is this a one-story
                building, a 100 story building? What's the scope of this?

                                       18
<PAGE>

John Davenport: Well, it's not 100 story building. I'll tell you that but I
                don't want to - and it is not a hole in the ground. But it is a
                -it's a building which we are replacing MR16s. So it's an ideal
                application for us. And it's significant. Let me just stop
                there.

                For us it's significant. It's a demonstration that we can
                penetrate a commercial building and that's encouraging and it
                might not be the only one in that quarter. That's as far as I
                can go, Seth.

Seth
Gelsthorpe:     That's great. Thank you.

                Another question. On the docklight and freezer case segments, I
                wonder if you could just give a little bit more if possible, on
                the sort of the current pricing of the incumbent products today,
                sort of a price per docklight and what you guys charge today. If
                I was going to buy it today. And what it would be in the future,
                ideally coming from you. In other words, what do you believe the
                inflection point would be? How close do you have to get to the
                incumbent price?

John Davenport: Well let me try this. Okay?

                Presently docklight might be like $200 a dock for a decent
                system. It could be less. Okay? For standard product. Our
                docklights are more expensive. They are probably maybe instead
                of $200 a dock. Okay? We're talking probably $300 a dock, in
                that range. We need to be less than that to compete on a first
                cost basis. However, on a life cycle cost basis, we are
                competitive and if you throw in a rebate, we are competitive.

                What our goal is, is obviously not to have this question of
                calculating life cycles costs at all. So you can guess where our
                target is.

Seth
Gelsthorpe:     Okay.

John Davenport: Give you the number.

                                       19
<PAGE>

                The freezer cases, freezer cases are more complex. And the
                reason they're more complex is that it isn't just the initial
                hardware but there is a maintenance cost associated with a
                freezer door. And generally these things are contracted out.
                That number - so I don't know exactly what that number is, but
                that number might be on the order of a couple hundred dollars
                per door. And again, our target is not to be first cost limited.
                So I'll leave it at that.

Seth
Gelsthorpe:     Okay. And but then presumably the maintenance cost would be less
                because the - or is it the same?

John Davenport: The maintenance cost would be far less.

Seth
Gelsthorpe:     Because the bulb change out is less frequent? Is that why?

John Davenport: The bulb - well, in the case that we're looking at, we're
                talking about three or four bulbs versus one bulb. Right?

Seth
Gelsthorpe:     Right.

John Davenport: And the lifetimes are comparable. So you'd have to replace four
                instead of one. But that's really not the problem. The problem
                is that the bulbs - the seals leak. If you go down a freezer
                aisle, you'll see variable amounts of light. And I just did this
                last night. I love looking at freezer doors now.

                And about half of them were at about half the light level. Some
                of them were flickering. When the seal is broken and the cold
                gets to the lamp, you can get flicker from the lamp. Those
                things that - the lamps aren't burned out. The bulbs aren't
                burned out but it is very annoying to the manufacturer.

                So...

Seth
Gelsthorpe:     Bulbs are freezing to death.

                                       20
<PAGE>

John Davenport: Yeah. They're freezing to death. So that's why I don't know the
                exact answer. But we don't have any of that.

Seth
Gelsthorpe:     Right.

John Davenport: Light source is outside the case. It's passive inside the case.

Seth
Gelsthorpe:     And your fiber optic cable is unaffected by the cold, I presume?

John Davenport: Not affected by the cold. That's exactly right.

Seth
Gelsthorpe:     Okay. Couple more quickies. How long do you think you'll stick
                around, John? Delighted that you're taking on this new role.
                It's wonderful. Any idea?

John Davenport: I could be leaving at any moment - no. I'm kidding. My
                reputation is that I stay until the job is done. And my view is
                the job is to execute on EFO. So I want to lift this thing from
                where it is right now into what you might think of as quote a
                real product. Here we think of it as a real product when they
                order it we love it. But to take it to the next level in sales.

                So I'll be around long enough to do that. That's my intention.

Seth
Gelsthorpe:     Great. How many people are leaving the Company in this process
                of restructuring? And how many people are moving from California
                to Ohio?

John Davenport: We haven't got an exact number for that but it's on the order of
                40 people are leaving the Company and there are several people
                who will have opportunities to move to Ohio. And we just don't
                know, at this point, this is very new for all of us, how many of
                those folks are going to take advantage of that opportunity.

                The - we're being very careful not to lose the knowledge base.
                There's a tremendous knowledge base here in California. We don't
                want to lose that. I can tell you this, our- we are
                transitioning - we're doing the fiber production in fixtures
                right now in Ohio for EFO. The first product that we'll be
                transitioning will be the manufacture of the illuminators will
                be in Solon.

                                       21
<PAGE>

                So our first priority is the EFO product. I'm confident that
                folks in Solon will be able to make them because the engineers
                that designed them are there. So the knowledge base is no issue
                at all in doing that.

                So that's where we are.

Seth
Gelsthorpe:     Great. Thank you.

Operator:       Your next question comes from Robert Ledoux.

Robert Ledoux:  John, you and I have chatted in the past about the competitive
                nature of LED, certainly high brightness LED. They maintain that
                the cost declination curve is about 25% a year. Does that pose a
                threat to you in a couple years? And could you address your own
                cost decline curve?

John Davenport: Sure. Twenty-five percent per year on LEDs is great. And
                however, LEDs - cost per lumen on LEDs is relatively high so
                it's going to take many years before the cost - first cost for a
                system where the light - where you have the light level of say,
                a 60-watt light bulb, incandescent bulb will be in the range
                that we have for EFO.

                We're seeing an aggressive cost reduction. Our goals for the
                next few years probably are steeper than 25%. So I don't see in
                the near future or on the horizon, I don't see cost competition
                from LEDs as being a major issue.

                I think our competitors will be the conventional lighting
                sources.

Robert Ledoux:  As they bring their cost down?

John Davenport: No. Their positioning their products for energy efficiency.
                Compact fluorescent lights, there are T5s now instead of T8s.
                Their ceramic metal hay lights. They're making different
                wattages, different geometries. Those - there is my old friend
                halogen infrared, which I did at GE touting a better MR16. Those
                are going to be in the horizon, the near, the real competition.

                                       22
<PAGE>

                We are very effective against that kind of product. For example,
                one of the installations that we have, we actually took out
                ceramic metal hay light and put in this product. We're looking
                at another installation where we'll do a far better job than
                compact fluorescents in terms of energy efficiency and quality
                of light. And of course, with MR16, there's no issue at all. EFO
                is by far the best.

                So as LED - however, our R&D group has got their foot in the
                water on LEDs and we have an active program. And we are - our
                goal is to have an LED based EFO system for a niche application
                in 2006. So we're not ignoring LEDs. After all, I did the
                strategic work for GE in creation of gel core so I'm very aware
                of the potential. Just a matter of time - time is an issue here.

Robert Ledoux:  But basically you can stem the threat by using LED as your
                illuminator if need be?

John Davenport: Well yeah. Right. We'll use the best light source available.
                Exactly. Right. And we are not - we're working with the leading
                LED manufacturer as part of our DARPA work.

Robert Ledoux:  On another point, where do you stand with your instant on
                feature, which would be much more attractive for the retail
                market.

John Davenport: I'm glad that you asked that question. We have just been awarded
                a second phase SBIR because of our successful demonstration of
                an instant on EFO system in our phase one SBR. One of the SBIRs
                was exactly that. We think that's - while it will be very nice
                for retail, it will be essential in a residential environment.
                So...

Robert Ledoux:  Does it add much to your cost?

John Davenport: It will add something to the electronics cost. Fortunately, I
                thought it might add a lot but fortunately the work that was
                funded under DARPA where we really got into an X generation kind
                of construction for illuminators, I think we're going to make
                that cost, you know, a reasonable add, you know, 20% or
                something like that. Not a factor of two. So I think - my belief
                at the present time is we're going to be able to have the
                instant light capability and be able to afford it - afford to
                use it.

                                       23
<PAGE>

Robert Ledoux:  And thirdly, does your DARPA contracts, at all, have a bake off
                features versus other light sources?

John Davenport: Bake off?

Robert Ledoux:  Contest to see which is better?

John Davenport: No. At the moment the answer is no except that we have the
                conventional fluorescent system that we obviously have to be
                competitive against. So we have to show that, for example, on a
                maintenance point of view and energy usage point of view,
                reliability, and overall life cycle cost, that there are real
                gains waiting. So that's not the case right now.

                It's - although we are not, you know, putting our heads in the
                sand. We're looking at other possible alternatives and how they
                might be viewed in this environment. And in fact, one of the
                applications we're using - I was talking about using LED and
                with an EFO system, the bunk light system is likely to be an LED
                system. The general lighting in the ship and so forth, that'll
                be our standard EFO system.

Robert Ledoux:  Thank you. And again, congratulations on these new opportunities
                for you.

John Davenport: Thank you.

Operator:       Your next question comes from Len Brecken.

Len Brecken:    Hey guys. Just a follow up. If you were to look at your product
                contributions, I think the current expectations for EFO from the
                analysts are out there are like three to five million. You know,
                just to get an idea what the contributions would be by, you
                know, product and product segment. I mean product end user
                segment.

                                       24
<PAGE>

John Davenport: Sure. First of all, you know, the estimates, of course, of the
                analysts are the estimates of the analysts but I can tell you
                what I believe will be a leading segment. The leading segment
                will be the supermarket segment. That's the one that we have the
                furthest development in and I believe that, you know, this year
                that will be the leading contribution.

Len Brecken:    Okay. And would you, you know, would you...

John Davenport: Yeah. We're - we said in the past that our guidance was that
                we'd be 5% to 10% of our business would be EFO this year. And
                we're sticking to that.

Len Brecken:    Yeah. I mean understood. And did Dave give an update on the Navy
                contract at all? Maybe I missed it?

David Ruckert:  If John can hang up his other phone, we'll have John answer that
                one.

John Davenport: I'll be glad to give an update on the Navy contract. I did talk
                a little bit about it but let me say a little bit more about the
                Navy contract. We are, in fact, expecting to have a contract to
                do two to three ships. This is a process in which the U.S.
                government is involved so there are lots of steps and there are
                admirals who have to sign off on this. All sorts of things have
                to happen; however, this is being guarded by - guided by DARPA.
                And our indications are that the process is going along. That
                there are no negatives. So our expectations are that we're going
                to be doing Navy ships.

Len Brecken:    By when?

John Davenport: We're hoping to see some work yet this year on those.

Len Brecken:    Okay. So there's no real change in expectations.

John Davenport: There's no real change in the - you'll know. You'll see a press
                release.

                                       25
<PAGE>

Len Brecken:    All right. John, one question on gross margins. I mean assuming,
                I think your capacity - you didn't really talk about capacity at
                all. You know progress in terms of ramping the capacity. There
                were plans several quarters ago to expand that. And I think your
                current run rate potential is like 9 million in sales or
                something like that. Can you just give me - your comment on
                gross margin, is that, you know, the 40% - do you think you're
                going to be able to achieve that at, you know, what level of
                revenues? Or is it not revenue dependent? Is it cost reduction
                dependent?

John Davenport: I think it probably depends on both. The cost reductions will
                come with economy of scale. But also with the cost reduction
                programs that we have in place that are design dependent. The
                cost reductions won't come in 2005; however, we do have an
                aggressive program in place and we should see some significant
                reductions in cost in 2006.

Len Brecken:    Okay. So I mean if you look out in the second half of 2006 when
                the revenues are obviously, hopefully more substantial and your
                cost reductions are in place, do you think you will be able to
                achieve that bogey then?

Bob Connors:    This is Bob. I think it will largely depend on some of the
                things we've discussed on this call such as the pricing that we
                need to get to for EFO to compete in these markets and whether
                we're far enough along on the cost reduction to keep a 40%
                margin at those price levels.

                So I think it's a little bit early to say it's going to happen
                in 2006. I'd feel more comfortable in 2007 at this point.

Len Brecken:    Okay. Fair enough. Thanks guys.

Operator:       Your next question comes from Michael Horwitz.

Michael
Horwitz:        I guess I got cut off last time but in order not to get cut off
                this time, will you let me know is Paul Schooley going to be
                hiring people since you'll be devoting more resources to EFO?

John Davenport: Yes. The plan is to increase those folks. So I don't know if
                Paul will actually do the hiring but Paul will have help in
                doing the things that he needs to achieve.

                                       26
<PAGE>

Michael
Horwitz:        And then in terms of the cost reductions, are we talking about
                coatings cost? Are we going to do materials science here to get
                down the cost curve?

John Davenport: Yes.

Michael
Horwitz:        And so I've been told the numbers could be near about a 30%
                reduction on the low side. Maybe 50% on the high side. What's
                your feeling on that?

John Davenport: The - our cost - you're not too far off the mark. We have
                aggressive cost reductions.

Michael
Horwitz:        And then, Bob, and hopefully, I won't get cut off, can you just
                tell me where a normal, general and administrative line is
                before the restructuring and where you might think it's after?

Bob Connor:     We don't really forecast at that level of detail, Mike but as I
                said, we had high costs in the first quarter, primarily related
                to the accounting and of course, we have higher legal expenses
                because of 10-K and proxy. So it will come down but we don't
                give, you know, line item forecasts.

Michael
Horwitz:        And then in terms of the Albertson's Southern California Edison
                test, they're obviously putting some capital resources into this
                so this is almost like paid for R&D or how do I look at that?

John Davenport: Absolutely. They'll be putting some capital resources into that.
                In fact, we're hoping that we qualify for the California
                standard offer. And so the state of California should be putting
                some resources into it as well.

Michael
Horwitz:        Okay. Thank you.

Operator:       Your next question comes from Dick Smith.

Dick Smith:     Hi guys.

                                       27
<PAGE>

John Davenport: Hi.

Dick Smith:     John, I guess, you know, it makes it kind of tough to make a
                buck when your gross profit is 40%, your SG&A is running about
                in the middle 30s and that's before any R&D expenses or interest
                expense. And we've been doing that for the last few years. And
                I'm just tickled to death to see this new structuring going on.

                My question to you is this. Where do you see SG&A expenses as a
                percentage of total revenues? And in what timeframe do you
                expect to do that?

John Davenport: Of course the restructuring is directed towards reducing our
                overhead cost and towards reducing, you know improving those
                numbers. So I'm going to ask Bob to amplify that a little bit.

Bob Connors:    Yeah. Dick, expense - as you might imagine, given the
                restructuring is primarily going to take place this year that
                SG&A is going to be, you know, pretty high this year. Next year,
                we should not have as much restructuring but I would imagine
                we'd have some. So that would tend to put it pretty close to the
                line as far as reaching that 40% level.

                So I think we're looking at 2007 before we get rid of all the
                restructuring costs. Have a more normal SG&A, which includes all
                of the savings that we're going to achieve and coincidentally,
                that's when it looks as though the margin outlook is better as
                well. So that's - hopefully that answers your question.

Dick Smith:     Well, do you guys have a target as to what percentage SG&A would
                run as a percentage of total revenues? And any timeframe that
                you're trying to achieve that?

Bob Connors:    Well, I think we've shown total operating expense forecasts for
                the Company out say three to five years, which calls for a 15%
                pre-tax margin, which would equate to about a 25% SG&A line. So
                that's where we're headed. It's a question of how long will it
                take us to get there.

Dick Smith:     Do you have any kind of a timeframe in mind?

                                       28
<PAGE>

John Davenport: Well, that's the three to five years.

Dick Smith:     Okay.

John Davenport: We've been saying this.

Dick Smith:     Okay. And this restructuring, what's this going to do to your
                working capital in the near future and do you anticipate having
                to go and raise more capital somewhere?

Bob Connors:    We've made no statements about that except to say that the board
                is continually looking at that as an option, particularly given
                the potential for the need to grow the business. In the short
                term, we'll still continue to do that. As you can see from the
                release, we're going to have some additional cash costs to
                continue and complete the restructuring. So that will put a
                little pressure on cash.

                But we had about a million dollars in the bank - a little less
                than that at the end of Q1. Cash typically builds during the
                next three quarters and then the next squeeze on cash would come
                in the first quarter of next year when we'd have pool business
                with its early buy terms and that kind of thing. And we might
                have to dip into the bank line of credit at that point.

Dick Smith:     In this particular move, aside from Dave, are there any key
                people that won't be moving or that will be leaving the Company
                because you're moving from Fremont to Ohio?

                Hello?

John Davenport: Yes. I've got - I've got that.

                I'm trying to - trying to define key people. The EFO team, of
                course, will be unchanged. That's maintained. The manufacturing
                manager here in Fremont will not move to Ohio. I'm going to turn
                to my CFO and ask - he's a key person and ask him what his plans
                are.

                                       29
<PAGE>

Bob Connors:    Yes. My plans are to be part of the transition and make the move
                to Ohio. I think that probably the only other change that John
                mentioned is the operations guys.

Dick Smith:     Okay.

Bob Connors:    Others are staying on board.

Dick Smith:     John you just briefly mentioned that you are a guy with a
                reputation that gets the job done and one of the things you said
                that you're going to be taking Fiberstars to the next level of
                sales. Is there three to five year - I mean is there any level
                of sales that you have in mind when you said that level of
                sales?

John Davenport: Probably. But I probably shouldn't say what it is. I have an
                internal expectation. Let me just say this, that I am used to
                seeing businesses that I've developed from an idea exceed $100
                million. In some cases, a lot more than that.

Dick Smith:     Okay. That's fair enough. And also, you know, there have been a
                lot of questions about LED and certainly OLED, which
                encompasses, I guess phosphorous with it. Has there been any
                work with phosphorous in fiber optics?

John Davenport: Sure. Let me just say that what you can do - and in fact, we've
                investigated this. What you can do is extrude or put in
                particles of phosphor in the fiber itself and as you put in blue
                light, it will change the color of the light and you can get
                very spectacular effects. Scintillation counters use such
                fibers. This is something that we've looked at, thought about
                from an R&D perspective so there is a potential to do that.

                So far though that we've seen by far the most efficient way to
                deliver light is to do it directly. Make the fiber as
                transmission to white light as possible and then have a very
                efficient white light source. So that's a great question.

                That comes from my other life.

                                       30
<PAGE>

Dick Smith:     Also, I'm assuming that in the regions that you're dealing with
                in Whole Foods, one of the regions that you don't have is the
                southeastern part of the United States. Would that be correct?

John Davenport: We do have the southeastern part of the United States. We just
                shipped a job.

Dick Smith:     Well, then I wanted to ask you this. I recently went to a new
                store in Sarasota. And it did not look like that was the EFO
                system. It looked like...

John Davenport: You are absolutely right. We didn't get the Sarasota job. We
                didn't get into that region before - in time to do it. However,
                they're - it's another store. We'll let them build it. We'll
                send you the address and maybe you can get to that.

Dick Smith:     In the store that you missed in Sarasota, John, what did they
                put in? They put some drop lighting. It almost looked like it
                was EFO but then I noticed electrical current coming on down to
                it.

John Davenport: I'm not sure what they put in, in that store but I'll ask one of
                the guys to find out.

Dick Smith:     Okay. Thanks very much guys.

John Davenport: Great.

Operator:       Your next question comes from Tom Sharp.

Tom Sharp:      Good afternoon guys. Let me just say first, it's been
                fascinating to watch this company develop over the last couple
                of years and I look forward to that in the future.

                Let me just address what seems like could be the big elephant in
                the middle of the room that no one's asking. Why not close or
                sell the pool business? It seems like the return on equity, the
                return on invested capital is going to be substantially higher
                in EFO than it is in this sort of legacy pool business. What
                kind of metrics are you looking at or have you considered that?

                                       31
<PAGE>

John Davenport: The answer to that is that the board has considered that. If
                you've read any of Jack Welch's books or grew up under him, you
                know that you've got to consider that. Right now, our approach
                is, you know, Jack Welch's approach would be to fix, sell, or
                close. And we are in the fix mode right now. But that's
                something that, you know, the board could change their mind on.

Tom Sharp:      So fixing meaning that - trying to get gross margin...

John Davenport: Getting the margin - sizing the overhead to the business so that
                business is a cash generator. And you know, going forward, that
                will be helpful as we grow the EFO business.

Tom Sharp:      Right. And the fix mode, you think, is how far out? When you
                call it fixed?

John Davenport: That's what we're doing right now. Most of the savings will come
                from reducing overhead associated with our pool and spa
                business.

David Ruckert:  And this was a business that was already profitable. So we're
                actually going to make it more profitable.

Tom Sharp:      Great. Thanks for the time.

Operator:       Your next question comes from Robert Smith.

Robert Smith:   During the conversation in the past, we've tossed out numbers of
                market size, which are extremely large, 5, 10, 15 billion and
                multiples of that in residential. So why aren't you more
                ambitious for where you want to stay around to take the Company
                to?

John Davenport: I am very ambitious. I'm just not announcing it.

Robert Smith:   Well, okay. This question John was how long you were going to
                stay around. So I'd like you to stay around and really bring
                that to a realization. And...

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John Davenport: I'd love to. That's - I not going to go any further under the
                tent but I'd love to.

Robert Smith:   Okay. So you want to see this realized?

John Davenport: Yeah. I'd like to see this business blossom. You know, what
                that's going to be is something that we'll find out as we go
                forward.

                We're nearing an hour and 15 minutes on this call. So I think
                that we should limit it to another question. One more.

Operator:       Your next question comes from Len Brecken.

Len Brecken:    I just wanted to just double back on John's comment on the
                restructuring. Was this restructuring a proactive move to
                accelerate the adoption of EFO through cost reductions? Or was
                it just to stop the bleeding in the pool business? Or a
                combination of both and what percentage of both was it?

                I mean I'm just trying to ascertain whether this is an
                aggressive defensive move because you see EFO business
                visibility increasing. You now see the real potential of some
                serious, you know, tens of millions of revenues here.

John Davenport: Yeah. The answer is focus. Probably more important than the cost
                reductions are the ability to create focus. We're moving the -
                we've changed the focus from significant focus on EFO - I think
                we said 25% in the release to most of the folks working at
                Fiberstars are working on EFO. So the recognition that we really
                want to concentrate on EFO.

                Also, improving our cost structure will help in terms of being
                able to fund EFO and get that to happen as soon as we can be
                able to fund the development of customers, of various freezer
                case alternatives, fixtures, and so forth.

Len Brecken:    Okay. So John you're basically making the bet, as they say.

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John Davenport: Right.

Len Brecken:    All right. Thank you.

John Davenport: Thank you.

                Thank you very much. I appreciate everyone's participation in
                the call. And I officially call this session closed.

Operator:       This concludes today's Fiberstars restructuring conference call.
                You may now disconnect.

                                       END

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