[{"_1":2,"_3":-5,"_4":-5},"loaderData",{"_5":6,"_7":8},"actionData","errors","root",{"_101":102},"en-item",{"_9":10,"_10":11},"kind","item",{"_12":13,"_14":15,"_16":17,"_18":19,"_20":21,"_22":23,"_24":25,"_26":27,"_28":29,"_30":31,"_32":31,"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":-5,"_48":49,"_50":-5,"_51":-5,"_52":53,"_54":55,"_56":57,"_58":42,"_59":42,"_60":61,"_62":42,"_63":64},"id","rswwav041fwjvprx051mjz43z","revision",2,"title","Star Equity Holdings提交与Harte Hanks合并相关的Form S-4注册声明","originalTitle","Star Equity Holdings, Inc. (0001210708) (Filer)","summary","Star Equity Holdings于2026年10月19日签署Form S-4注册声明，涉及其拟收购Harte Hanks的合并交易。按材料所述，Harte Hanks股东可选择每股获得5.00美元现金或0.50股Star 10%系列A累积永续优先股，现金总额上限为1,920万美元；交易仍需满足股东批准、注册声明生效及至少1,500万美元债务融资等条件。","reason","材料披露了拟议合并的对价、融资与股东批准条件，以及双方近期财务信息，有助于了解交易条款及其完成风险。","source",{"_12":92,"_93":94,"_9":95,"_96":42,"_97":98,"_99":100},"links",{"_89":90,"_78":91},"publishedAt","2026-10-19T21:26:30.000Z","discoveredAt","2026-10-19T21:36:51.658Z","timelineAt","category","ai-products","tags",[85,86,87,88],"stockSymbols",[83,84],"score",85,"selected",true,"channel","news","story",{"_73":74,"_16":75},"x","readingMode","full","author","language","body",{"_64":77,"_78":-5,"_79":80,"_81":82},"outline",[],"relatedStories",[76],"indexable","markdownAvailable","group",{"_65":66,"_45":67,"_68":69,"_70":71,"_72":71},"hasTranslation","bodyLanguage","zh","factId","f1ucWgKfHbCM",{"_73":74,"_16":75},"reportCount",1,"additionalSourceCount",0,"developmentCount","publicId","a8cab5ed-a132-4e94-903e-ec52cbe8a2c9","Star Equity Holdings与Harte Hanks合并交易",{"_73":74,"_16":75},"

As\nfiled with the Securities and Exchange Commission on October 19, 2026

Registration\nNo. 333-

UNITED\nSTATES

SECURITIES\nAND EXCHANGE COMMISSION

Washington,\nD.C. 20549

FORM\nS-4

REGISTRATION\nSTATEMENT

UNDER

THE\nSECURITIES ACT OF 1933

Star\nEquity Holdings, Inc.

(Exact\nname of registrant as specified in its charter)

\n \n \n \n \n \n \n \n \n \n \n \n \n

Delaware\n

7363

59-3547281

(State\n or other jurisdiction of

Incorporation\n or Organization)

(Primary\n Standard Industrial
\n Classification Code Number)

(I.R.S.\n Employer

Identification\n Number)

c/o\nStar Equity Holdings, Inc.

53\nForest Avenue, Suite 101

Old\nGreenwich, CT 06870

(203)\n489-9500

(Address,\nincluding zip code, and telephone number, including area code, of registrant’s principal executive offices)

Jeffrey\nE. Eberwein

Chief\nExecutive Officer

Star\nEquity Holdings, Inc.

53\nForest Avenue, Suite 101

Old\nGreenwich, CT 06870

(203)\n489-9500

(Name,\naddress, including zip code, and telephone number, including area code, of agent for service)

Copies\nto:

\n \n \n \n \n \n \n

Adam\n Finerman

Baker\n & Hostetler LLP

45\n Rockefeller Plaza

New\n York, NY 10111

(212)\n 589-4233

Harte\n Hanks, Inc.

1\n Executive Drive, Suite 303

Chelmsford,\n MA 01824

(512)\n 434-1100

Travis\n Wofford

Carina\n L. Antweil

Baker\n Botts L.L.P.

910\n Louisiana Street
\nHouston, TX 77002
\n (713) 229-1234

Approximate\ndate of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement\nis declared effective and upon completion of the Merger described herein.

If\nthe securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance\nwith General Instruction G, check the following box. ☐

If\nthis Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following\nbox and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.\n☐

If\nthis Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the\nSecurities Act registration statement number of the earlier effective registration statement for the same offering. ☐

请通过勾选方框表明注册人是大型加速报盘人、加速报盘人、非加速报盘人、小规模报告公司，还是新兴成长公司。请参见《交易法》第12b-2条中“大型加速报盘人”、“加速报盘人”、“小规模报告公司”和“新兴成长公司”的定义。

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

大型\n 加速报盘人	☐	加速\n 报盘人	☐
非加速\n 报盘人	☒	小规模\n 报告公司	☒
		新兴成长\n 公司	☐

如果\n是新兴成长公司，请通过勾选方框表明注册人是否选择不使用根据《证券法》第7(a)(2)(B)条提供的任何新修订的财务会计标准的延长过渡期。 ☐

如果\n适用，请在方框中放入X以指定在进行此交易时所依据的适当规则条款：

交易法\n规则13e-4(i)（跨境发行人要约收购）

☐

交易法\n规则14d-1(d)（跨境第三方要约收购）

☐

注册人在此修改本登记声明，以在必要时延迟其生效日期，直到注册人提交进一步的修改声明，该声明明确表示本登记声明将在根据《1933年证券法》第8(a)条（经修订）的规定生效，或直到美国证券交易委员会根据上述第8(a)条的规定确定本登记声明在某日生效。

本代理声明/招股说明书中的信息不完整，可能会被更改。与本代理声明/招股说明书所述证券相关的登记声明已提交给美国证券交易委员会。在向美国证券交易委员会提交的登记声明生效之前，这些证券不得发行。本代理声明/招股说明书不构成在任何不允许该证券发行或销售的司法管辖区内的出售要约或购买要约的征集。

初步文件 - 待完成 - 日期为 2026年10月19日

$\"\"$

合并提案 - 您的投票非常重要

致 Harte Hanks, Inc. 的股东：

代表 Harte Hanks, Inc.（特拉华州公司，\"Harte Hanks\"）的董事会，我们很高兴随附有关 Merger Sub - R, Inc.（特拉华州公司，\"Merger Sub\"），Star Equity Holdings, Inc.（特拉华州公司，\"Star\"）的直接全资子公司，与 Harte Hanks 合并的代理声明/招股说明书，Harte Hanks 将继续存在，而 Merger Sub 将不再存在。我们请求您作为 Harte Hanks 股东采取某些行动。

在2026年8月14日，Harte Hanks、Star和合并子公司签署了《合并协议和计划》（以下简称“合并协议”），该协议可根据其条款随时进行修订、修改或补充。根据合并协议，合并子公司将与Harte Hanks合并，Harte Hanks作为Star的全资子公司继续存在（以下简称“合并”），而合并子公司将不再存在。

根据合并协议的条款并受其条件限制，在合并的生效时间（以下简称“生效时间”）时，Harte Hanks每股面值1.00美元的普通股（以下简称“Harte Hanks普通股”）在生效时间前已发行并流通的股份（不包括Harte Hanks作为库存股持有的股份，或由Star、合并子公司或Star或合并子公司的任何直接或间接全资子公司持有的股份）将转换为持有者选择权，根据下文所述的配额程序，持有者可选择（i）获得5.00美元现金（不计利息）（以下简称“现金对价”），或（ii）0.50股Star的10%系列A累积永久优先股，面值0.001美元（以下简称“Star优先股”）（以下简称“优先股对价”）。Harte Hanks股东可以选择为其所有股份获得现金对价、优先股对价，或根据下文所述的配额程序，部分股份获得现金对价，部分股份获得优先股对价。对于未正确做出选择的Harte Hanks普通股，或选择被撤销或被视为丢失的股份，将根据下文所述转换为获得现金对价、优先股对价或两者的组合。“合并对价”指现金对价、优先股对价、两者的组合以及任何代替Star优先股零碎股支付的现金的总称。

Harte Hanks股东的选择受配额条款的限制，以确保在合并中针对Harte Hanks普通股和某些Harte Hanks股权奖励支付的现金总额，加上代替Star优先股零碎股支付的任何现金，不超过1920万美元（以下简称“最大现金金额”）。如果针对所有正确做出现金选择的股份应支付的现金总额低于最大现金金额，那么所有正确做出现金选择的股份将获得现金对价，所有正确做出优先股选择的股份将获得优先股对价，而所有未正确做出选择的股份将根据Star的选择获得现金对价、优先股对价或两者的组合，前提是合并中支付的现金总额不超过最大现金金额。

如果就所有作出现金选择的股份应支付的总金额超过最大现金金额，那么所有作出优先股选择的股份以及所有未作出适当选择的股份，都将获得优先股对价。所有作出适当现金选择的股份将根据最大现金金额与如果所有现金选择股份全额获得现金对价时本应支付的总现金金额之间的比例，获得现金对价的按比例分配部分，并且对于未转换为获得现金权利的每一份股份，还将获得优先股对价。

在合并中不会发行任何零头股份的Star优先股。如果本应发行任何零头股份的Star优先股，持有人将获得现金，不计利息，金额等于适用的零头股份乘以10.00美元。合并对价还可能根据在合并协议日期之后、生效时间之前发生的与Harte Hanks普通股相关的任何股票分割、反向股票分割、股票股息、重组、资本重组、重新分类、合并、股份交换或类似变化进行适当调整。

由于合并中最终发行的现金和优先股数量将取决于股东的选择以及合并协议中规定的按比例分配条款的应用，因此目前无法确定与合并相关将发行的Star优先股的确切数量。因此，合并完成后Star优先股的所有权百分比将取决于Harte Hanks普通股持有人的最终选择结果以及根据合并协议进行的按比例分配计算。

由于Star优先股的市场价格可能会独立于任何按比例分配而波动，而且每个Harte Hanks股东将收到的Star优先股股份数量可能受到上述按比例分配计算的影响，因此在Harte Hanks股东投票表决合并时，优先股对价的市场价值尚无法确定。Star优先股目前在Nasdaq全球精选市场交易，代码为“STRRP”。根据2026年8月13日Star优先股的收盘价为每股10.14美元（合并协议公开宣布前的最后一个完整交易日），如果选择最大现金金额并为剩余的合并对价发行优先股，优先股对价的总价值约为1940万美元。

除非合并协议获得拥有Harte Hanks普通股投票权的已发行股份多数投票权持有人的赞成投票（“必要股东批准”），否则无法完成合并。无需任何其他类别或系列的资本股票的投票即可通过合并协议或批准合并。

A\nspecial meeting of holders of Harte Hanks Common Stock (the “Harte Hanks Special Meeting”) will take place on [________],\n2026 at [__]:00 p.m., Eastern Time, or at such other time as the Harte Hanks Special Meeting may be adjourned or postponed. The Harte\nHanks Special Meeting will be held at Harte Hanks’ principal executive office located at 1 Executive Drive, Suite 303, Chelmsford,\nMA 01824. Holders of Harte Hanks Common Stock as of the close of business on [_________], 2026 (the “Record Date”)\nare entitled to notice of, and to vote at, the Harte Hanks Special Meeting to approve and adopt the Merger Agreement as described in\nthis proxy statement/prospectus.

Your\nvote is very important, regardless of the number of shares of Harte Hanks Common Stock you own. To ensure your representation at\nthe Harte Hanks Special Meeting, please take time to vote by following the instructions contained in this proxy statement/prospectus\nand on your proxy card. Please vote promptly whether or not you expect to attend the Harte Hanks Special Meeting. Submitting a proxy\nnow will not prevent you from being able to vote at the Harte Hanks Special Meeting.

The\nboard of directors of Harte Hanks has unanimously determined that the Merger Agreement and the transactions contemplated by the Merger\nAgreement, including the Merger, are advisable and in the best interests of Harte Hanks and its stockholders, has unanimously approved\nand adopted the execution, delivery and performance by Harte Hanks of the Merger Agreement and the consummation of the transactions contemplated\nthereby, including the Merger, and unanimously recommends that Harte Hanks stockholders vote “FOR” the Harte Hanks Merger\nProposal and “FOR” the Non-Binding Advisory Compensation Proposal.

This\nproxy statement/prospectus provides you with detailed information about the Merger Agreement and the Merger. It also contains or references\ninformation about Star and Harte Hanks and certain related matters. You are encouraged to read this proxy statement/prospectus carefully.\nIn particular, you should read the “Risk Factors” section beginning on page 42 for a discussion of the risks you should\nconsider in evaluating the proposed Merger and how it will affect you. You can also obtain information about Star and Harte Hanks from\ndocuments that have been filed with the U.S. Securities and Exchange Commission.

On\nbehalf of the board of directors of Harte Hanks, thank you for your prompt attention to this important matter.

Sincerely,\n

\n \n \n \n \n \n \n \n \n \n \n \n \n

/s/ John\n H. Griffin, Jr.		/s/ David\n Fisher
John\n H. Griffin, Jr.		David\n Fisher
Chairman\n of the Board		President

Neither\nthe U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued\nin connection with the Merger or determined if this document is accurate or complete. Any representation to the contrary is a criminal\noffense.

随附的委托书/招股说明书日期为 [ ], 2026，并将于 [ ], 2026 左右首次邮寄给 Harte Hanks 普通股持有者。

附加信息

随附的委托书/招股说明书包含了来自其他文件的重要业务和财务信息，这些文件并未包含在本文件中或随本文件一起提供。您可以通过书面或口头请求免费获得这些信息。您可以通过美国证券交易委员会网站 http://www.sec.gov 获取这些文件。您也可以在 Star 的网站 https://www.starequity.com/sec-filings 上免费获取这些文件。您还可以通过以下地址书面或电话请求这些文件：

53\nForest Avenue, Suite 101

Old\nGreenwich, Connecticut 06870

(203)\n489-9500
\n注意：公司秘书

您请求的任何这些文件都不会被收取费用。为确保及时收到这些文件，您必须在 Harte Hanks 特别会议日期前至少五个（5）个工作日提出请求。这意味着，请求文件的 Harte Hanks 普通股持有者必须在 [_____], 2026 前提出请求，以便在 Harte Hanks 特别会议前收到这些文件。

没有人被授权向您提供与本文件中或引用的文件中不同的信息。本文件的日期为 [ ], 2026，您应假设本文件中的信息仅在该日期时是准确的。您应假设本文件中的信息在文件日期时是准确的。本文件邮寄给 Harte Hanks 普通股持有者，或 Star 根据合并协议发行 Star 优先股的行为，均不会产生相反的含义。

Star 网站上的信息不属于本文件。本文件中对 Star 网站的引用仅作为文本引用。

本文件不构成在任何司法管辖区向或从任何人士发出的出售任何证券的要约，或购买任何证券的要约的邀请，或在任何司法管辖区向或从任何人士发出的代理权的邀请。除非上下文另有说明，本文件中包含或引用的有关 Star 的信息由 Star 提供，本文件中有关 Harte Hanks 的信息由 Harte Hanks 提供。

有关更多信息，请参阅随附的委托书/招股说明书第 135 页开始的“您可以在哪里找到更多信息”。

$\"\"$

Harte\nHanks, Inc.

1\nExecutive Drive, Suite 303

Chelmsford,\nMA 01824

HARTE HANKS, INC. 股东特别会议通知

致 Harte Hanks, Inc. 股东：

2026年8月14日，Star Equity Holdings, Inc.（“Star”）、Merger Sub - R, Inc.（Star的直接全资子公司，“Merger Sub”）和Harte Hanks, Inc.（“Harte Hanks”）签署了一份协议和合并计划（根据其条款随时可能修订、修改或补充，称为“合并协议”）。合并协议的副本作为随附的委托书/招股说明书的附录A附上。

特此通知，Harte Hanks普通股持有人（“Harte Hanks特别会议”）的特别会议将于[________]，2026年[__]点00分（东部时间）举行，或在Harte Hanks特别会议可能被推迟或延期的其他时间举行。Harte Hanks特别会议将在Harte Hanks总部办公室举行，地址为1 Executive Drive，Suite 303，Chelmsford，MA 01824。在Harte Hanks特别会议上，Harte Hanks普通股持有人将被要求就以下事项进行投票：

一项提案，批准于2026年8月14日由Star、Merger Sub和Harte Hanks之间签署的协议和合并计划，以及该协议所设想的交易，根据该协议，Merger Sub将与Harte Hanks合并，如随附的委托书/招股说明书中更详细地描述（称为“Harte Hanks合并提案”）；

一项提案，以咨询（非约束性）方式批准与合并相关的Harte Hanks指定高管可能或将会获得的薪酬，如根据Regulation S-K第402(t)项披露的黄金降落伞薪酬表及相关叙述性披露内容（称为“非约束性咨询薪酬提案”）；以及

处理可能在特别会议或其任何延期或推迟中适当提出的其他事务。

Harte Hanks的董事会已确定2026年[_______]日营业结束时为Harte Hanks特别会议的记录日期。只有在Harte Hanks特别会议记录日期营业结束时为Harte Hanks普通股记录持有人的股东才有权收到Harte Hanks特别会议或其任何延期或推迟的通知。只有在Harte Hanks特别会议记录日期营业结束时为Harte Hanks普通股记录持有人的股东才有权在Harte Hanks特别会议或其任何延期或推迟中投票。

Harte Hanks的董事会一致建议Harte Hanks普通股持有人对Harte Hanks合并提案和非约束性咨询薪酬提案投“赞成”票。

您的投票很重要。除非Harte Hanks普通股的持有者批准Harte Hanks合并提案，否则我们无法完成合并协议中设想的交易。需要获得已发行的Harte Hanks普通股中具有投票权的多数投票权的持有者的肯定投票，才能批准Harte Hanks合并提案。如果会议有法定人数出席，非约束性咨询薪酬提案的批准需要获得在特别会议上投票的多数投票的肯定投票。非约束性咨询薪酬提案的批准不是完成合并的条件。

无论您是否计划参加Harte Hanks特别会议，我们敦促您尽快填写、签署、注明日期并寄回随附的代理投票卡，放入随附的已付邮资的信封中，或按照随附的代理投票卡中包含的说明通过互联网授权附带的代理投票卡上所列的个人投票。如果您持有的股份是以银行、经纪人或其他托管人的名义登记的，请按照此类银行、经纪人或其他托管人提供的投票指示卡上的说明进行操作。

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

根据董事会的命令，

/s/ John\n H. Griffin, Jr.

John\n H. Griffin, Jr.

董事会主席

[ ], 2026

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

常见问题	1
摘要	17
关于前瞻性声明的警示性声明	40
风险因素	42
Harte Hanks特别会议	50
提案1：Harte Hanks合并提案	54
提案2：非约束性咨询薪酬提案	55
关于公司的信息	56
合并	67
合并协议	98
合并的美国联邦所得税后果	114
未经审计的合并简明财务报表	117
STAR 10%系列A累积永久优先股的描述	128
STAR优先股股东和Harte Hanks股东权利的比较	131
法律事项	134
专家	134
您可以在何处找到更多信息	135
附录A	136
附录B	225
附录C	228
附录D	346
不需要在招股说明书中的信息	II-1
签名	II-5

常见问题

以下是一些您可能对合并和Harte Hanks特别会议提出的问题，以及这些问题的简要答案。我们敦促您仔细阅读本代理声明/招股说明书的其余部分，因为本节的信息并未提供与合并和Harte Hanks特别会议有关的所有可能对您重要的信息。请参阅第 135 页开始的“您可以在何处找到更多信息”部分。

在本代理声明/招股说明书中，除非上下文另有要求：

●“公司重大不利影响” 是指任何事实、变化、事件、违规、不准确、影响、发生或情况（每个，称为“影响”），无论单独还是与其他所有影响一起，已对Harte Hanks及其子公司的业务、财务状况或经营成果整体产生或合理预期会产生重大不利影响，或合理预期会单独或总体上使Harte Hanks无法满足本协议项下并购的先决条件或在终止日期前完成并购及其他相关交易；但以下任何一项（单独或汇总）均不视为或构成公司重大不利影响，且在确定公司重大不利影响是否已发生或可能、将会或能够发生时（受下文所述限制的约束）均不予考虑）：

美国或其他任何国家或地区的一般经济状况的变化，或全球经济发展状况的变化；

美国或其他任何国家或地区金融市场或资本市场状况的变化，包括汇率变化或证券交易普遍暂停；

Harte Hanks从事经营活动的行业状况的变化；

监管、立法或政治状况的变化；

地缘政治状况、网络攻击、敌对行动、战争、破坏、恐怖主义或军事行动；

自然灾害、天气状况、传染病、大流行病、疾病爆发、其他不可抗力事件或上帝行为；

由于谈判、签署、交付、公布、持续、履行、遵守或完成并购协议或交易所产生的影响，包括相关关系影响；

根据并购协议明确要求采取的行动，或Star同意的行动；

Star在签署后书面明确批准、同意或请求的行动；

10.

公认会计准则（GAAP）或其他会计标准、适用法律或法规的变化或拟议的变化，或其执行或解释；

11.

哈特汉克斯普通股票价格或交易量的变化，或哈特汉克斯信用评级的变化或预期变化，受协议的因果基础条款的限制；

12.

未能达到公众预期或估计，或内部预算、计划、预测或预测，受协议的因果基础条款的限制；

13.

哈特汉克斯交易诉讼；或

14.

星公司或合并子公司未能履行其在合并协议下的义务。

条款（1）–（6）和（10）中的剥离条款不适用于相关影响对哈特汉克斯整体造成不成比例的不利影响，相对于哈特汉克斯所处行业的其他公司而言。

●哈特汉克斯”指的是哈特汉克斯公司，一家特拉华州公司；

●哈特汉克斯公司章程”指的是哈特汉克斯公司的修订和重述公司章程。

●哈特汉克斯公司章程”指的是哈特汉克斯公司的第五次修订和重述章程；

●哈特汉克斯普通股票”指的是哈特汉克斯公司每股面值1.00美元的普通股票

●哈特汉克斯股东”指的是哈特汉克斯普通股票的持有者；

●哈特汉克斯特别会议”指的是于2026年[_______]举行的哈特汉克斯股东特别会议，以考虑和投票表决哈特汉克斯合并提案；

●星”指的是星股权控股公司，一家特拉华州公司；

●星公司章程”指的是星股权控股公司的修订和重述公司章程，经修订；

●星章程”指的是星股权控股公司的修订和重述章程，经修订；

●星普通股票”指的是星公司的普通股票，面值0.001美元；

●星优先股票”指的是星公司的10% A系列累积永久优先股票，面值0.001美元；

●合并子公司”指的是合并子公司-R公司，一家特拉华州公司，是星公司的直接全资子公司；

●\n“母公司重大不利影响”是指任何影响，单独或与其他所有影响一起，已经或合理预计会对Star及其子公司的整体业务、财务状况或经营成果产生重大不利影响，或合理预计会单独或合计使Star在终止日期前履行本协议规定的交割前提条件或完成合并及本协议预期的其他交易的能力变得不可能；但以下任何一项（单独或合计）均不被视为或构成母公司重大不利影响，且在确定是否已发生或可能、将会或可能发生的母公司重大不利影响时，均不予考虑（受下文所述限制的约束）：

美国或其他任何国家或地区的一般经济状况的变化，或全球经济发展的一般变化；

金融或资本市场状况的变化，包括汇率变化或一般交易暂停；

Star开展业务的行业变化；

监管、立法或政治变化；

地缘政治状况、网络攻击、敌对行动、战争、破坏、恐怖主义或军事行动；

自然灾害、天气状况、流行病、大流行、疾病爆发、不可抗力事件或上帝行为的影响；

由于协商、签署、交付、公布、持续、履行、遵守或完成合并协议或交易而产生的影响，包括关系影响；

根据合并协议明确要求采取的行动，或Harte Hanks同意的行动；

Harte Hanks在签署后书面明确批准、同意或请求的行动；

10.

公认会计准则（GAAP）、其他会计准则、适用法律或法规的变化或拟议的变化，或其执行或解释；

11.

Star普通股价格或交易量的变化，或Star信用评级的变化或预期变化，受协议基础原因资格的限制；

12.

未达到公众预期或预期，或内部预算、计划、预测或预测，受协议基础原因资格的限制；或

13.

任何\n 对合并协议项下Harte Hanks义务的违反、违约或不履行。

条款（1）-（6）和（10）中的剥离条款不适用于相关影响对Star整体而言相对于Star所处行业中的其他公司产生不成比例的不利影响的情况。

问：\n为什么我会收到这份委托书/招股说明书？

答：\n您收到这份委托书/招股说明书是因为Star、合并子公司和Harte Hanks已签署了一份合并协议，日期为2026年8月14日（根据其条款随时可能被修改、补充或修订，称为“合并协议”），根据该协议，合并子公司将与Harte Hanks合并，Harte Hanks将作为Star的全资子公司继续存在（称为“存续公司”），而合并子公司将不再存在。合并协议副本作为本委托书/招股说明书的附录A附后，并在此引用。在本委托书/招股说明书中，我们将合并的完成称为“交割”，将交割发生的日期称为“交割日”。为了完成合并，Harte Hanks股东必须批准合并协议（称为“Harte Hanks合并提案”）。Harte Hanks正在召开Harte Hanks特别会议，以获得Harte Hanks合并提案的批准，并将非约束性咨询薪酬提案提交给Harte Hanks股东进行咨询性投票。

本\n文件同时是一份招股说明书，因为根据合并协议，Star正在向Harte Hanks股东提供Star优先股股份。本委托书/招股说明书包含有关合并、Harte Hanks合并提案以及在Harte Hanks特别会议上投票的非约束性咨询薪酬提案的重要信息。您应仔细并完整地阅读本文件。随附的材料允许您无需参加Harte Hanks特别会议即可通过代理投票方式投票。您的投票非常重要，我们鼓励您尽快提交您的代理投票。

问：\n合并将发生什么？

答：\n在合并中，合并子公司将与Harte Hanks合并，Harte Hanks将作为Star的全资子公司继续存在，而合并子公司将不再存在。

根据并购协议的条款和条件，在向特拉华州州务卿提交标准形式和内容的合并证书之时（“生效时间”），在生效时间之前已发行并流通的哈特汉克斯公司（“哈特汉克斯普通股”）的每股面值1.00美元的普通股，除哈特汉克斯作为库藏股持有的股份或由星公司、合并子公司或星公司或合并子公司的任何直接或间接全资子公司持有的股份外，将转换为根据下文所述的按比例分配程序，获得以下其中一种：(i) 5.00美元现金（不计利息）（“现金对价”），或(ii) 0.50股星公司面值0.001美元的10%系列A累积永久优先股（“星优先股”）（“优先股对价”）。哈特汉克斯股东可以选择全部股份获得现金对价、全部股份获得优先股对价，或部分股份获得现金对价、部分股份获得优先股对价的组合，每种情况均受下文所述的按比例分配程序的限制。对于未正确作出选择的哈特汉克斯普通股，或选择被撤销或被视为丢失的股份，将根据下文所述，获得现金对价、优先股对价或两者的组合。

哈特汉克斯股东的选择受按比例分配条款的约束，旨在确保在并购中针对哈特汉克斯普通股和某些哈特汉克斯股权奖励支付的现金总额，加上以现金代替星优先股的零碎股份所支付的现金，不超过1920万美元（“最大现金金额”）。如果针对所有正确作出现金选择的股份应支付的现金总额低于最大现金金额，那么所有正确作出现金选择的股份将获得现金对价，所有正确作出优先股选择的股份将获得优先股对价，所有未正确作出选择的股份将根据星公司的选择，获得现金对价、优先股对价或两者的组合，前提是并购中支付的现金总额不超过最大现金金额。

如果针对所有正确作出现金选择的股份应支付的现金总额超过最大现金金额，那么所有正确作出优先股选择的股份以及所有未正确作出选择的股份将获得优先股对价。所有正确作出现金选择的股份将根据最大现金金额与如果所有现金选择股份都获得全额现金对价时应支付的现金总额之间的比率，获得按比例分配的现金对价，并就该股份的剩余部分获得优先股对价。

在合并中不会发行星优先股的零碎股份。对于本应发行的任何星优先股的零碎股份，持有人将获得现金，不计利息，金额等于适用的零碎股份乘以10.00美元。合并对价还可能根据在合并协议日期之后、生效时间之前发生的任何股票分割、反向股票分割、股票股息、重组、资本重组、重新分类、合并、股份交换或类似变化对哈特汉克斯普通股的影响进行适当调整。

由于合并中最终发行的现金和优先股金额将取决于股东选择以及合并协议中规定的比例分配条款的应用，因此目前无法确定与合并相关的星优先股的确切发行数量。因此，合并完成后星公司的所有权比例将取决于最终的选举结果和比例分配计算。

由于星优先股的市场价格可能会独立于任何比例分配而波动，而且每位哈特汉克斯股东将收到的星优先股数量可能受上述比例分配计算的影响，因此在哈特汉克斯股东投票表决合并时，优先股对价的市场价值尚无法确定。星优先股目前在纳斯达克全球精选市场交易，股票代码为“STRRP”。根据2026年8月13日星优先股的收盘价为每股10.14美元（即合并协议公开宣布前的最后一个完整交易日），如果发行最大数量的优先股对价，优先股对价的总价值约为3890万美元。

合并完成后，星优先股股东将继续持有其现有的星优先股。有关合并的更多信息，请参阅第98页开始的“合并结构”部分以及作为附录A包含的合并协议。

问：哈特汉克斯特别会议何时何地举行？

答：哈特汉克斯特别会议将于2026年[________]在[__]:00 p.m.（东部时间）举行，或在哈特汉克斯特别会议可能休会或推迟的其他时间举行。哈特汉克斯特别会议将在哈特汉克斯总部办公室举行，地址为1 Executive Drive, Suite 303, Chelmsford, MA 01824。即使您计划参加哈特汉克斯特别会议，哈特汉克斯建议您按照以下说明提前投票，以便如果您后来决定不参加或无法参加哈特汉克斯特别会议，您的投票仍将被计算在内。

问：哈特汉克斯特别会议将讨论哪些事项？

答：在哈特汉克斯特别会议上，哈特汉克斯股东将被要求审议和投票以下提案：

●\n哈特汉克斯提案1：哈特汉克斯合并提案；以及

●\n哈特汉克斯提案2：非约束性咨询薪酬提案。

Q:\n为什么我被要求对Harte Hanks的指定高管薪酬进行投票？

A:\n根据《交易法》第14A条及该法第14a-21(c)条规则，Harte Hanks必须就与合并相关的可能支付或应支付给其指定高管的薪酬进行单独的股东咨询性投票，如根据《S-K条例》第402(t)项披露的那样。该投票是单独进行的，与Harte Hanks合并提案的投票无关，仅是咨询性质，对Harte Hanks、Harte Hanks董事会、Star或合并子公司不具有约束力，也不是完成合并的条件。

为了完成合并，Harte Hanks股东必须批准Harte Hanks合并提案。非约束性咨询薪酬提案仅是咨询性质，与Harte Hanks合并提案分开，也不是完成合并的条件。

Q:\n在合并中，Harte Hanks股东将获得什么？

A:\n根据合并协议的条款并受其条件限制，在生效时间，Harte Hanks普通股在生效时间前已发行的股份（Harte Hanks、Star、合并子公司或其全资子公司持有的某些股份除外）将转换为持有者根据其选择并受下文所述的按比例分配条款限制，获得以下其中一种权利：

\n \n \n \n \n \n \n \n \n

	●	现金对价；或
	●	优先股对价。

股东可以就其股份选择获得现金对价、优先股对价或两者的组合，包括对部分股份选择现金对价，对其他股份选择优先股对价，受合并协议中规定的按比例分配程序的限制。对于未作出有效选择的股份，或选择被撤销或被视为丢失的股份，将被视为未选择股份。如果现金选择的总金额小于合并协议下可用的最大现金金额，Star将决定未选择股份是获得现金对价、优先股对价还是两者的组合。如果现金选择的总金额超过最大现金金额（如下定义），未选择股份将获得优先股对价，而选择现金的股东将获得按比例分配的现金对价和优先股对价。

合并中支付的现金总额，加上与某些股权奖励相关的现金以及以现金代替Star优先股的零碎股份的现金，不得超过最大现金金额。如果选择现金的股东应得的现金总额小于或等于最大现金金额，所有有效选择现金的股东将获得全额现金对价，所有有效选择优先股的股东将获得优先股对价。未选择股份可能获得现金、优先股或两者的组合，由Star决定，前提是不超过最大现金金额。

如果原本应支付给选择现金的股东的总金额超过最大现金金额，那么所有选择优先股的股份和所有未选择的股份都将获得优先股对价。选择现金的股份将获得现金对价的按比例分配部分，其余对价将根据合并协议以Star优先股的形式支付。

合并中不会发行Star优先股的零碎股份。如果原本应发行零碎股份，持有人将获得相当于该零碎股份乘以10.00美元的现金，不计利息。

合并对价还可能根据在合并协议日期和生效时间之间影响Harte Hanks普通股的任何股票分割、反向股票分割、股票股息、资本重组、重新分类、合并、股份交换或类似交易的影响进行调整。

问：合并中Star股东会获得什么？

答：在合并中，Star股东不会获得任何对价，其Star普通股和/或Star优先股将继续流通，并在合并后成为Star的股份。合并后，Star优先股将继续在纳斯达克全球精选市场交易。

问：从本代理声明/招股说明书的日期到合并完成时，合并对价的价值会变化吗？

答：会的。合并对价的价值可能在本代理声明/招股说明书的日期和合并完成之间发生变化。

Harte Hanks股东可以选择根据合并协议中规定的选举和按比例分配程序，就其股份获得现金对价、优先股对价或两者的组合。根据Harte Hanks股东的总体选举、按比例分配条款的应用，以及在某些情况下Star对未选择股份的对价确定，股东可能会获得现金对价、优先股对价或两者的组合。因此，合并中支付的合并对价的总体价值不能仅根据合并完成前Star优先股的交易价格来确定。

由于Star优先股的市场价格可能会独立于任何按比例分配而波动，且每位Harte Hanks股东将获得的Star优先股数量可能受上述按比例分配计算的影响，因此在Harte Hanks股东投票表决合并时，优先股对价的市场价值尚无法确定。Star优先股目前在纳斯达克全球精选市场交易，代码为“STRRP”。根据2026年8月13日（合并协议公开宣布前的最后一个完整交易日）Star优先股的收盘价为每股10.14美元，如果发行最大数量的优先股对价，优先股对价的总价值约为3890万美元。

由于最终的现金对价和优先股对价在Harte Hanks股东之间的分配将在收到选举结果并完成按比例计算后才能确定，因此目前无法根据Star优先股的任何特定交易价格确定将支付给所有Harte Hanks股东的合并对价的总价值。

问：合并将如何影响Harte Hanks的股权奖励？

答：根据合并协议，在生效时间，任何在合并协议披露附录中列出的、在生效时间前尚未行使的Harte Hanks股票期权将被取消，并被视为“奖励公司股份”，即任何有权获得合并对价的Harte Hanks普通股股权奖励所对应的股份。该股票期权将转换为获得合并对价的权利，该权利等于（i）适用的合并对价超过该股票期权行权价的差额（如有）与（ii）该Harte Hanks股票期权所涉及的Harte Hanks普通股股份数量的乘积。此类股票期权的持有者可根据适用于Harte Hanks普通股持有者的选举、按比例分配和最大现金金额条款，就所获对价的形式作出选择。因此，根据这些选举和按比例分配程序，持有者可能会收到现金对价、优先股对价或两者的组合。任何行权价等于或高于适用的合并对价的股票期权，以及未在披露附录中列出的股票期权，将被取消，且不获得任何支付或对价。

在生效时间，任何在生效时间前尚未行使且在披露附录中列出的Harte Hanks限制性股票单位奖励（“RSU”）将被取消，并被视为奖励公司股份。每个此类RSU将根据RSU所对应的Harte Hanks普通股股份数量转换为获得合并对价的权利。RSU的持有者可根据适用于Harte Hanks普通股持有者的相同选举、按比例分配和最大现金金额条款，就所获对价的形式作出选择。因此，根据这些程序，持有者可能会收到现金对价、优先股对价或两者的组合。

在生效时间，任何在生效时间前尚未行使的Harte Hanks绩效股票单位奖励（“PSU”）将不获得任何支付或对价而被取消。

问：合并将如何影响Harte Hanks 401(k)计划？

答：如果Star在交割日至少提前十个（10）个营业日前提出要求，合并协议规定Harte Hanks将采取所有合理必要的行动，使Harte Hanks 401(k)计划在交割日前一天或之前有效终止。任何此类终止都将取决于并仅在合并完成时生效。

如果Harte Hanks 401(k)计划终止，Star将在交割日后尽快合理地采取一切必要措施，使继续任职的员工能够参与Star或其关联公司的401(k)计划（“Star 401(k)计划”）。此外，Star将促使Star 401(k)计划接受继续任职员工的合格转移分配额（根据1986年国内税收法典（“法典”）第402(c)(4)条的含义），包括其在Harte Hanks 401(k)计划下的账户余额，包括任何参与者的贷款，前提是相关员工已作出选择。

合并协议还要求Harte Hanks和Star在与Harte Hanks 401(k)计划和Star 401(k)计划相关的任何行动的时机和实施方面以善意合作。

问：Star将如何为现金对价和其他与合并相关的付款提供资金？

答：Star预计通过债务融资来筹集完成合并所需的现金。完成合并取决于债务融资的条件得到满足或放弃，或任何允许的替代债务融资，并且Star在交割日必须至少有1500万美元的融资所得可用。

如需更多信息，请参见第108页开始的“完成合并的条件”部分。

问：Harte Hanks董事会建议我在Harte Hanks特别会议上如何投票？

答：Harte Hanks董事会一致建议您对Harte Hanks合并提案和非约束性咨询薪酬提案投“赞成”票。

在考虑Harte Hanks董事会的建议时，Harte Hanks股东应意识到，Harte Hanks董事和高管可能在合并中拥有与Harte Hanks普通股东不同的或额外的利益。有关这些利益的更完整描述，请参见第93页开始的“Harte Hanks董事和高管在合并中的利益”部分。

问：谁有权在Harte Hanks特别会议上投票？

A:\nThe Record Date for the Harte Hanks Special Meeting is [______], 2026. All Harte Hanks stockholders who held shares of Harte Hanks Common\nStock at the close of business on the Record Date for the Harte Hanks Special Meeting are entitled to receive notice of, and to vote\nat, the Harte Hanks Special Meeting.

Each\nHarte Hanks stockholder who held shares of Harte Hanks Common Stock as of the Record Date is entitled to cast one (1) vote on each matter\nproperly brought before the Harte Hanks Special Meeting for each share of Harte Hanks Common Stock that such holder owned of record as\nof the Record Date. As of [____], 2026, there were [______] outstanding shares of Harte Hanks Common Stock.

Attendance\nat the Harte Hanks Special Meeting is not required to vote. See below and the section entitled “Proxies” beginning on page\n52 for instructions on how to vote your shares of Harte Hanks Common Stock without attending the Harte Hanks Special Meeting.

Q:\nWhat constitutes a quorum for the Harte Hanks Special Meeting?

A:\nThe presence at the Harte Hanks Special Meeting, or by proxy, of holders of a majority of outstanding voting power of Harte Hanks Common\nStock entitled to vote at the Harte Hanks Special Meeting will constitute a quorum for the transaction of business at the Harte Hanks\nSpecial Meeting. Abstentions will be included in determining the number of shares present at the meeting for the purpose of determining\nthe presence of a quorum, but not a broker non-vote or other failure to vote.

Q:\nWhat vote is required for the approval of the proposals at the Harte Hanks Special Meeting?

A:\nHarte Hanks Proposal 1: The Harte Hanks Merger Proposal. Approval of the Harte Hanks Merger Proposal requires the affirmative\nvote of the holders of a majority of the voting power of the outstanding shares of Harte Hanks Common Stock entitled to vote on the Merger.\nAn abstention, broker non-vote or other failure to vote will have the same effect as a vote “AGAINST” the Harte Hanks Merger\nProposal.

Harte\nHanks Proposal 2: The Non-Binding Advisory Compensation Proposal. Approval of the Non-Binding Advisory Compensation Proposal requires\nthe affirmative vote of a majority of the votes cast at the Special Meeting, provided a quorum is present. Abstentions, broker non-votes\nand failures to vote or submit a proxy will not be counted as votes cast and will have no effect on the outcome of the proposal. The\nvote is advisory only and is not a condition to completion of the Merger.

Q:\nAre there any Harte Hanks stockholders already committed to voting in favor of the Harte Hanks Merger Proposal?

A:\nYes. John H. Griffin, Jr., Genevieve C. Combes, Bradley L. Radoff, Elizabeth Ross, David Fisher and David A. Garrison, solely in such\ndirector’s or executive officer’s capacity as a stockholder of Harte Hanks, have entered into a voting agreement with Star\nrequiring each such director or executive officer to vote all shares of Harte Hanks Common Stock owned by such director or executive\nofficer in favor of the Harte Hanks Merger Proposal. As of the Record Date, these directors and executive officers held [____] shares\nof Harte Hanks Common Stock, which represented approximately [____]% of the outstanding shares of Harte Hanks Common Stock.

Q:\nWill Star vote any shares of Harte Hanks Common Stock that it owns at the Harte Hanks Special Meeting?

A:\nYes. As of the Record Date for the Harte Hanks Special Meeting, Star beneficially owned 82,000 shares of Harte Hanks Common Stock, representing\napproximately 1.1% of the outstanding shares of Harte Hanks Common Stock entitled to vote at the Special Meeting. Star intends to vote,\nor cause to be voted, all such shares FOR the Harte Hanks Merger Proposal.

Q:\nIf I hold my Harte Hanks Common Stock in “street name” through my bank, broker or other nominee, will my broker vote my shares\nfor me?

A:\nIf you hold your shares through a bank, broker or other nominee in “street name” instead of as a stockholder of record, you\nmust follow the voting instructions provided by your intermediary in order to vote your shares.

Broker\nnon-votes are votes that are not cast (and are not permitted to be cast) on a non-routine matter because the broker has not received\nvoting instructions from the beneficial owner. On routine matters, brokers have discretionary authority to cast a vote in the absence\nof voting instructions from the beneficial owner. However, because all of the proposals in this proxy statement/prospectus are considered\nnon-routine matters, shares held in “street name” will not be counted as present for the purpose of determining the existence\nof a quorum unless the Harte Hanks stockholder provides their intermediary with voting instructions for the proposal before the Special\nMeeting. Further, intermediaries who hold Harte Hanks Common Stock in “street name” for their customers do not have discretionary\nauthority to vote such shares with respect to the Merger Proposal. Accordingly, if intermediaries do not receive specific voting instructions\nfrom the beneficial owner of such shares, they may not vote such shares with respect to the Merger Proposal. It is therefore critical\nthat you cast your vote by instructing your intermediary on how to vote.

Street-name\nholders who wish to attend and vote at the Special Meeting must follow the voting instructions provided by their intermediary in order\nto vote their shares.

Q:\nHow can I attend the Harte Hanks Special Meeting?

A:\nYou may attend the Harte Hanks Special Meeting in-person, which will take place on [________], 2026 at [__]:00 p.m., Eastern Time, or\nat such other time as the Harte Hanks Special Meeting may be adjourned or postponed. The Harte Hanks Special Meeting will be held at\nHarte Hanks’ principal executive office located at 1 Executive Drive, Suite 303, Chelmsford, MA 01824.

Registration\nand check-in for the Harte Hanks Special Meeting will begin at approximately [___]:00 p.m., Eastern Time. Harte Hanks encourages stockholders\nto arrive sufficiently in advance of the scheduled meeting time to complete the check-in process.

To\nattend the Harte Hanks Special Meeting, you should be prepared to present valid government-issued photo identification and proof that\nyou owned shares of Harte Hanks Common Stock as of the Record Date. If your shares are held in “street name,” acceptable\nproof of ownership may include a brokerage statement or letter from your bank, broker, trustee or other nominee showing that you beneficially\nowned shares as of the Record Date. To vote in person, you must also obtain and present a valid legal proxy from your bank, broker, trustee\nor other nominee.

If\nyou hold shares of Harte Hanks Common Stock in “street name” through a bank, broker, trustee or other nominee and wish to\nvote your shares in person at the Harte Hanks Special Meeting, you must obtain a valid legal proxy from your bank, broker, trustee or\nother nominee and present it at the Harte Hanks Special Meeting. You should contact your bank, broker, trustee or other nominee for instructions\nregarding how to obtain a legal proxy.

Even\nif you plan to attend the Harte Hanks Special Meeting, Harte Hanks recommends that you vote in advance by following the instructions\non your proxy card or voting instruction form so that your vote will be counted if you later decide not to attend.

Q:\nHow may I submit questions during the Harte Hanks Special Meeting?

A:\nStockholders who are entitled to attend the Harte Hanks Special Meeting in person may submit questions during the meeting. Instructions\nregarding the submission of questions and the rules of conduct for the meeting will be provided at the Special Meeting.

Questions\nshould relate directly to the business of the Harte Hanks Special Meeting. Harte Hanks intends to answer questions that comply with the\nmeeting’s rules of conduct, subject to time constraints. Questions that are substantially similar may be grouped and answered together.

If\nyou hold your shares through a bank, broker, trustee or other nominee, you should follow the instructions provided by your intermediary\nregarding obtaining a legal proxy or other documentation necessary to attend and vote at the Harte Hanks Special Meeting in person.

Q:\nWhom do I contact if I have questions about the Harte Hanks Special Meeting or the Merger?

A:\nIf you are a Harte Hanks stockholder and have questions about the Harte Hanks Special Meeting or the Merger, or desire additional copies\nof this proxy statement/prospectus or additional proxy cards, you may contact:

Harte\nHanks, Inc., at the following address, phone number or e-mail address:

Harte\nHanks, Inc. (Attention: General Counsel)

1\nExecutive Drive, Suite 303

Chelmsford,\nMA 01824

general.counsel@hartehanks.com

1-512-434-1100

Q:\nWho will solicit and pay the cost of soliciting proxies in connection with the Harte Hanks Special Meeting?

A:\nThe board of directors of Harte Hanks is soliciting the Harte Hanks stockholders’ proxies in connection with the Harte Hanks Special\nMeeting. Star is responsible for the expenses incurred in connection with the printing and mailing of this proxy statement/prospectus.\nHarte Hanks has retained [_____] as proxy solicitor to assist with the solicitation of proxies in connection with the Harte Hanks Special\nMeeting. Solicitation initially will be made by mail. Forms of proxies and proxy materials may also be distributed through banks, brokers\nand other nominees to the beneficial owners of shares of Harte Hanks Common Stock, in which case these parties will be reimbursed for\ntheir reasonable out-of-pocket expenses. Proxies may also be solicited in person or by telephone, facsimile, electronic mail or other\nelectronic medium by directors, officers and employees of Harte Hanks, without additional compensation.

Harte\nHanks may also request banks, brokers, trustees and other intermediaries holding shares of Harte Hanks Common Stock beneficially owned\nby others to send this document to, and obtain proxies from, the beneficial owners and may reimburse such record holders for their reasonable\nout-of-pocket expenses in so doing.

Q:\nHow can I vote my shares without attending the Harte Hanks Special Meeting?

A:\nWhether you hold your shares of Harte Hanks Common Stock directly as the holder of record of Harte Hanks Common Stock or beneficially\nin “street name,” you may direct your vote by proxy without attending the Harte Hanks Special Meeting.

If\nyou are a record holder of Harte Hanks Common Stock, you can vote your shares by mail by following the instructions provided in the enclosed\nproxy card (or cast your vote by internet as provided on the proxy card). If you hold shares beneficially in “street name”\nas a beneficial owner of Harte Hanks Common Stock, you should follow the voting instructions provided by your bank, broker, trustee or\nother nominee. Additional information on voting procedures can be found under the section entitled “The Harte Hanks Special Meeting - Voting\nat the Harte Hanks Special Meeting” on page 51.

Q:\nWhat happens if there is not a quorum or Harte Hanks has not received enough proxies to approve the Merger Proposal?

A:\nIf a quorum is not present at the Harte Hanks Special Meeting or Harte Hanks has not received proxies representing a sufficient number\nof shares to approve the Merger Proposal, the meeting may be adjourned. Harte Hanks is not asking stockholders to vote on a separate\nadjournment proposal because, under the Harte Hanks bylaws, the presiding officer of the Harte Hanks Special Meeting has authority to\nadjourn the meeting without obtaining additional stockholder approval.

Q:\nWhat do I need to do now?

A:\nAfter carefully reading and considering the information contained in this document, please vote as soon as possible. If you hold shares\nof Harte Hanks Common Stock, please respond by completing, signing and dating the accompanying proxy card and returning it in the enclosed\npostage-paid envelope or authorize the individuals named on the accompanying proxy card to vote your shares by using the internet as\ndescribed in the instructions included with the accompanying proxy card as soon as possible so that your shares may be represented at\nthe Harte Hanks Special Meeting. Please note that if you are a beneficial owner with shares held in “street name,” you should\nfollow the voting instructions provided by your bank, broker, trustee or other nominee.

Q:\nWhat will happen to Harte Hanks Common Stock if the Merger is completed?

A:\nIf the Merger is completed, Harte Hanks will become a wholly owned subsidiary of Star, and Harte Hanks Common Stock will cease to be\npublicly traded. Harte Hanks Common Stock will be delisted from Nasdaq and deregistered under the Exchange Act as promptly as practicable\nfollowing the completion of the Merger. Harte Hanks stockholders will cease to have any rights as Harte Hanks stockholders, other than\nthe right to receive the Merger Consideration to which they are entitled under the Merger Agreement.

Q:\nWhat is a “broker non-vote”?

A:\nA broker non-vote generally occurs when a bank, broker, trustee or other nominee holding shares in street name does not receive voting\ninstructions from the beneficial owner and does not have discretionary authority to vote on the matter being considered.

The\nHarte Hanks Merger Proposal and the Non-Binding Advisory Compensation Proposal are expected to be non-routine matters. As a result, banks,\nbrokers, trustees and other nominees will not have discretionary authority to vote shares held in street name on either proposal. Accordingly,\nif you hold your shares through a bank, broker, trustee or other nominee, you must provide voting instructions to your bank, broker,\ntrustee or other nominee in order for your shares to be voted at the Harte Hanks Special Meeting.

Because\nno routine proposals are expected to be presented at the Harte Hanks Special Meeting, broker non-votes are not expected. However, if\nyou fail to provide voting instructions to your bank, broker, trustee or other nominee, your shares will not be voted on the proposals\nto be considered at the Harte Hanks Special Meeting. Since approval of the Harte Hanks Merger Proposal requires the affirmative vote\nof a majority of the outstanding voting power of Harte Hanks Common Stock entitled to vote on the proposal, a failure to vote will have\nthe same effect as a vote “AGAINST” the Harte Hanks Merger Proposal. The vote on the Non-Binding Advisory Compensation Proposal\nis advisory only and is not a condition to completion of the Merger.

Q:\nWhat if I fail to vote or abstain?

A:\nAn abstention occurs when a Harte Hanks stockholder attends the Harte Hanks Special Meeting and does not vote or returns a proxy with\nan “abstain” instruction. An abstention will have the same effect as a vote “AGAINST” the Harte Hanks Merger\nProposal. If a Harte Hanks stockholder is not present at the Harte Hanks Special Meeting and does not respond by proxy, it will also\nhave the same effect as a vote “AGAINST” the Harte Hanks Merger Proposal.

Q:\nWhy is my vote important?

A:\nIf you do not vote, it will be more difficult for Harte Hanks to obtain the necessary quorum to hold the Harte Hanks Special Meeting\nand to obtain the stockholder approval that its board of directors is recommending and seeking. Approval of the Harte Hanks Merger Proposal\nrequires the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Harte Hanks Common Stock\nentitled to vote on the Merger. Your failure to submit a proxy or vote at the Harte Hanks Special Meeting, or failure to instruct your\nbank, broker, trustee or other nominee how to vote, will prevent your shares of Harte Hanks Common Stock from being counted toward the\nquorum for the Harte Hanks Special Meeting and will have the same effect as a vote “AGAINST” the Harte Hanks Merger Proposal.\n

The\nboard of directors of Harte Hanks unanimously recommends that you vote “FOR” the Harte Hanks Merger Proposal.

Q:\nWhat will happen if I return my proxy card without indicating how to vote?

A:\nIf you sign and return your proxy card without indicating how to vote on any particular proposal, the shares of Harte Hanks Common Stock\nrepresented by your proxy will be voted as recommended by the board of directors of Harte Hanks with respect to such proposal.

Q:\nCan I change my vote after I have delivered my proxy or voting instruction card?

A:\nIf you directly hold shares of Harte Hanks Common Stock in your name as a record holder, you can change your vote at any time before\nyour proxy is voted at the Harte Hanks Special Meeting. You can do this by:

●\nsubmitting a written statement that you would like to revoke your proxy to the corporate secretary of Harte Hanks;

●\ncasting your vote by internet as provided on the proxy card;

●\nsigning and returning a proxy card with a later date; or

●\nattending the Harte Hanks Special Meeting and voting at the Harte Hanks Special Meeting.

If\nyou are a beneficial owner and your shares are held by a bank, broker, trustee or other nominee, you may change your vote by:

●\ncontacting your bank, broker, trustee or other nominee and following its procedures for changing your voting instructions; or

●\nobtaining a legal proxy from your bank, broker, trustee or other nominee and voting in accordance with the procedures described in the\nproxy statement/prospectus for beneficial owners.

Please\ncontact your bank, broker, trustee or other nominee for additional information regarding how to change your voting instructions and,\nif applicable, how to obtain a legal proxy to vote your shares at the Harte Hanks Special Meeting.

Q:\nWill Harte Hanks be required to submit the Harte Hanks Merger Proposal to its stockholders even if the board of directors of Harte Hanks\nhas withdrawn, modified or qualified its recommendation?

A:\nYes. Unless the Merger Agreement has been validly terminated prior to the Harte Hanks Special Meeting, Harte Hanks is required to submit\nthe Merger Agreement and the Merger to its stockholders for approval, even if the board of directors of Harte Hanks has withdrawn, modified\nor qualified its recommendation in favor of the Merger or otherwise effected a change in recommendation regarding the Merger.

Q:\nAre Harte Hanks stockholders entitled to dissenters’ rights of appraisal?

A:\nNo. Holders of Harte Hanks Common Stock are not entitled to appraisal rights in connection with the Merger under the Delaware General\nCorporation Law.

Q:\nAre there any risks that I should consider in deciding whether to vote for the Harte Hanks Merger Proposal at the Harte Hanks Special\nMeeting?

A:\nYes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on\npage 42. You also should read and carefully consider the risk factors of Star contained in the documents that are incorporated by reference\ninto this proxy statement/prospectus.

Q:\nWhat are the material U.S. federal income tax consequences of the Merger to Harte Hanks stockholders?

A:\nThe Merger will be treated as a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder (as defined below)\nthat exchanges its shares of Harte Hanks Common Stock for the Merger Consideration in the Merger generally will recognize gain or loss\nequal to the difference, if any, between (i) the sum of the cash (including cash in lieu of any fractional share of Star Preferred Stock)\nand the fair market value of the Star Preferred Stock received in the Merger and (ii) the U.S. holder’s adjusted tax basis in the\nHarte Hanks Common Stock surrendered in exchange therefor.

A\nnon-U.S. holder (as defined below) will generally not be subject to U.S. federal income tax with respect to the exchange of shares of\nHarte Hanks Common Stock for the Merger Consideration in the Merger unless such non-U.S. holder has certain connections to the United\nStates as described in “Material U.S. Federal Income Tax Consequences of the Merger”.

The\ntax consequences of the Merger will depend on each Harte Hanks stockholder’s particular circumstances. In addition, Harte Hanks\nstockholders may be subject to state, local and non-U.S. tax laws that are not discussed in this proxy statement/prospectus. Accordingly,\nHarte Hanks stockholders should consult their own tax advisors regarding the tax consequences of the Merger. See the section entitled\n“Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 114 for a more complete discussion of the\nU.S. federal income tax consequences of the Merger.

Q:\nWhen is the Merger expected to be completed?

A:\nNeither Star nor Harte Hanks can predict the actual date on which the Merger will be completed, or if the Merger will be completed at\nall, because completion is subject to conditions and factors outside the control of both companies. Harte Hanks must first obtain the\napproval of Harte Hanks stockholders for the Harte Hanks Merger Proposal, and Star and Harte Hanks must satisfy certain other closing\nconditions. Star and Harte Hanks expect the Merger to be completed promptly once Harte Hanks has obtained its stockholders’ approval\nas noted above, and Star and Harte Hanks have satisfied certain other closing conditions.

Q:\nWhat are the conditions to complete the Merger?

A:\nThe obligations of Star and Harte Hanks to complete the Merger are subject to the satisfaction or waiver of certain closing conditions\ncontained in the Merger Agreement, including:

●\nreceipt of the requisite approval of the Harte Hanks stockholders;

●\nthe registration statement on Form S-4 having been declared effective by the Securities and Exchange Commission and not being subject\nto any stop order or proceeding seeking a stop order;

●\nthe absence of any law, order, injunction or other legal restraint prohibiting or making illegal the consummation of the Merger;

●\nthe accuracy of the representations and warranties of the parties, subject to the materiality standards set forth in the Merger Agreement;\n

●\ncompliance in all material respects by each party with its covenants and obligations under the Merger Agreement

●\ndelivery of customary officer’s certificates by the parties;

●\nthe absence of a Company Material Adverse Effect with respect to Harte Hanks and the absence of a Parent Material Adverse Effect with\nrespect to Star, in each case continuing through Closing;

●\ndelivery to Star of the ABL Loan Agreement Amendment (as defined in the Merger Agreement) required under the Merger Agreement;

●\nsatisfaction or waiver of all conditions to the Debt Financing (or Alternative Debt Financing) and availability of not less than $15.0\nmillion under such financing arrangements on the Closing Date; and

●\nreceipt of certain required third-party consents, waivers, approvals and notices identified in the Merger Agreement.

For\nmore information, see “Conditions to Complete the Merger” beginning on page 108.

Q:\nWhat happens if the Merger is not completed?

A:\nIf the Merger is not completed, Harte Hanks stockholders will not receive any Cash Consideration or shares of Star Preferred Stock in\nconnection with the Merger. Instead, Harte Hanks will remain an independent company and Star will not acquire Harte Hanks pursuant to\nthe Merger Agreement.

The\nMerger Agreement may be terminated by Harte Hanks or Star under certain circumstances described in the Merger Agreement, including by\nmutual written consent, if the Merger has not been completed by the outside date of 11:59 p.m. Eastern Time, on March 1, 2027, if a governmental\nauthority permanently prohibits the Merger, or, in certain circumstances, following a failure of Harte Hanks stockholders to approve\nthe Merger Agreement.

In\naddition, under certain specified circumstances, Harte Hanks may be required to pay Star a termination fee. Generally, the termination\nfee is $1,152,000. The Merger Agreement provided for a reduced $576,000 fee only if Harte Hanks terminated the Merger Agreement to enter\ninto a definitive Alternative Acquisition Agreement with an Exempted Party and that agreement was entered into on or prior to the No-Shop\nPeriod Start Date, which occurred at 11:59 p.m., Eastern Time, on September 13, 2026 which is the thirtieth day after August 14, 2026\n(the “Go-Shop Period”). Because no Alternative Acquisition Agreement was entered into on or prior to that date, the\nreduced fee is a historical possibility that is no longer available; any later termination to enter into an Alternative Acquisition Agreement\nwith an Exempted Party would require payment of the full $1,152,000 Company Termination Fee. The termination fee may become payable if,\namong other circumstances, the board of directors of Harte Hanks changes its recommendation in favor of the Merger, Harte Hanks terminates\nthe Merger Agreement to enter into a definitive agreement with respect to a Superior Proposal, or the Merger Agreement is terminated\nin certain circumstances involving any bona fide offer or proposal (other than an offer or proposal by Star or Merger Sub) to engage\nin an Acquisition Transaction (an “Acquisition Proposal”) and a subsequent alternative transaction. See “Termination\nof the Merger Agreement,” “Star Termination Fee,” and “Harte Hanks Termination Fee” beginning on page 112.

In\ncertain specified circumstances, Star may be required to pay Harte Hanks a termination fee of $1,152,000, including if the Merger Agreement\nis terminated because Star breaches the Merger Agreement in a manner that causes certain closing conditions to fail or if Star fails\nto complete the Merger when required under the Merger Agreement.

For\na more complete description of the circumstances under which the Merger Agreement may be terminated and the fees and expenses that may\nbecome payable, see the sections entitled “Termination of the Merger Agreement,” “Star Termination Fee,” and\n“Harte Hanks Termination Fee” beginning on page 112.

Q:\nWhat happens if I sell my shares after the Harte Hanks Record Date but before Harte Hanks’ Special Meeting?

A:\nThe Harte Hanks Record Date is earlier than the date of the Harte Hanks Special Meeting, and earlier than the date that the Merger is\nexpected to be completed. If you sell or otherwise transfer your shares of Harte Hanks Common Stock after the Harte Hanks Record Date\nbut before the date of the Harte Hanks Special Meeting, you will retain your right to vote at the Harte Hanks Special Meeting (provided\nthat such shares remain outstanding on the date of such Harte Hanks Special Meeting), but you will not have the right to receive the\nMerger Consideration to be received by Harte Hanks stockholders in connection with the Merger. In order to receive the Merger Consideration,\nyou must hold your shares of Harte Hanks Common Stock through the completion of the Merger.

Q:\nHow do I elect the form of Merger Consideration I wish to receive?

A:\nTo make a valid election, you must properly complete and sign the election form and deliver it, together with any other required materials,\nto the payment agent in accordance with the instructions included with the election form. The payment agent must receive your properly\ncompleted election materials no later than 5:00 p.m., Eastern Time, on the Election Date.

If\nyou hold shares of Harte Hanks Common Stock in “street name” through a bank, broker, trustee or other nominee, you should\nfollow the election instructions provided by that intermediary. Your intermediary may establish an earlier deadline for receiving your\nelection instructions so that it has sufficient time to submit an election on your behalf by the Election Date.

A\nvote in favor of the Harte Hanks Merger Proposal does not constitute an election as to the form of Merger Consideration you wish to receive.\nYou must separately submit a valid election in accordance with the election materials if you wish to elect Cash Consideration, Preferred\nStock Consideration or a combination of both.

For\nadditional information, see “Election Procedures” beginning on page 100.

Q:\nWhat will happen if I do not make a valid election by the Election Date?

A:\nIf you do not make a valid election by the Election Date, or if your election is revoked, lost or otherwise deemed invalid, your shares\nwill be treated as non-electing shares. You will not have the right to determine the form of Merger Consideration paid for non-electing\nshares.

If\nvalid cash elections would require payment of less than the Maximum Cash Amount, Star will determine whether non-electing shares receive\nCash Consideration, Preferred Stock Consideration or a combination of both, subject to the Maximum Cash Amount. If valid cash elections\nwould require payment of more than the Maximum Cash Amount, non-electing shares will receive Preferred Stock Consideration.

Accordingly,\nthe form of Merger Consideration you receive may not reflect your liquidity needs, investment objectives or tax preferences if you do\nnot make a valid election by the Election Date.

Q:\nMay I change or revoke my election regarding the form of Merger Consideration?

A:\nYes. You may change or revoke your election, in whole or in part, by delivering a properly completed written notice or revised election\nform to the payment agent before 5:00 p.m., Eastern Time, on the Election Date, in accordance with the instructions contained in the\nelection materials.

After\nthe Election Date, you may not change or revoke your election. All elections will be automatically revoked if the Merger Agreement is\nterminated. Shares subject to a revoked, lost, untimely or otherwise invalid election will be treated as non-electing shares.

Q:\nIs my election regarding the form of Merger Consideration the same as my vote on the Harte Hanks Merger Proposal?

A:\nNo. Your vote on the Harte Hanks Merger Proposal and your election regarding the form of Merger Consideration are separate.

Your\nproxy card or voting instruction form allows you to vote “FOR,” “AGAINST” or “ABSTAIN” on the Harte\nHanks Merger Proposal. Your election form allows you to indicate whether you prefer to receive Cash Consideration, Preferred Stock Consideration\nor a combination of both for your shares, subject to the Maximum Cash Amount and the proration procedures in the Merger Agreement.

Submitting\nan election form will not constitute a vote on the Harte Hanks Merger Proposal, and submitting a proxy or voting instruction form will\nnot constitute an election as to the form of Merger Consideration. You should complete and return each applicable form in accordance\nwith its separate instructions and deadline.

Q:\nWhat are the material terms of the Star Preferred Stock that I may receive in the Merger?

A:\nEach share of Star Preferred Stock has a liquidation preference of $10.00 per share and is entitled to cumulative cash dividends at an\nannual rate of 10% of the liquidation preference, equivalent to $1.00 per share annually, when and as authorized by the Star board of\ndirectors and declared by Star out of funds legally available for payment. Dividends are payable quarterly in arrears, subject to the\nterms of the Certificate of Designations.

The\nStar Preferred Stock is perpetual, has no stated maturity date, is not subject to a mandatory redemption right or sinking fund and is\nnot convertible into or exchangeable for Star Common Stock. Holders generally do not have voting rights, except for limited voting rights\nrelating to specified amendments that materially and adversely affect the Star Preferred Stock and the right, together with holders of\napplicable parity preferred stock, to elect two additional directors if dividends are in arrears for six or more consecutive quarterly\ndividend periods.

The\nStar Preferred Stock ranks senior to Star Common Stock with respect to dividend and liquidation rights, on parity with equity securities\nexpressly designated as parity securities, and junior to all of Star’s existing and future indebtedness and any equity securities\nexpressly designated as senior securities.

The\nStar Preferred Stock is currently traded on the Nasdaq Global Select Market under the symbol “STRRP.” For additional information,\nsee “Description of Star 10% Series A Cumulative Perpetual Preferred Stock” beginning on page 128.

Q:\nWill I receive fractional shares of Star Preferred Stock in the Merger?

A:\nNo. Star will not issue fractional shares of Star Preferred Stock in the Merger. Instead, a holder otherwise entitled to receive a fractional\nshare will receive cash, without interest, equal to the fractional share multiplied by $10.00.

Cash\npaid in lieu of fractional shares is included in determining whether the Maximum Cash Amount has been reached. The receipt of cash in\nlieu of a fractional share generally may have U.S. federal income tax consequences. You should consult your tax advisor regarding the\ntax consequences applicable to your particular circumstances.

Q:\nWhat should I do if I receive more than one set of voting materials for the Harte Hanks Special Meeting?

A:\nIf you are a beneficial owner and hold shares of Harte Hanks Common Stock in “street name” and also are a record holder and\nhold shares directly in your name or otherwise or if you hold shares of Harte Hanks Common Stock in more than one (1) brokerage account,\nyou may receive more than one (1) set of voting materials relating to the Harte Hanks Special Meeting.

Record\nHolders. For shares held directly, please complete, sign, date and return each proxy card, or follow the instructions on the proxy\ncard or otherwise follow the voting instructions provided in this proxy statement/prospectus in order to ensure that all of your shares\nof Harte Hanks Common Stock are voted.

Beneficial\nOwners. For shares held in “street name” through a bank, broker, trustee or other nominee, you should follow the procedures\nprovided by your bank, broker, trustee or other nominee in order to vote your shares.

Q:\nWhere can I find more information about Star and Harte Hanks?

A:\nYou can find more information about Star and Harte Hanks from the various sources described under “Where You Can Find More Information”\nbeginning on page 135.

SUMMARY

This\nsummary highlights selected information in this proxy statement/prospectus and may not contain all of the information that is important\nto you. You should carefully read this entire proxy statement/prospectus and the other documents we refer you to for a more complete\nunderstanding of the matters being considered at the Harte Hanks Special Meeting. In addition, we incorporate by reference important\nbusiness and financial information about Star into this proxy statement/prospectus. You may obtain the information incorporated by reference\ninto or otherwise included with this proxy statement/prospectus without charge by following the instructions in the section entitled\n“Where You Can Find More Information” beginning on page 135 of this proxy statement/prospectus.

Information\nabout the Companies (page 56)

Star\nEquity Holdings, Inc.

Star\nEquity Holdings, Inc. is a multi-industry diversified holding company with four segments: Building Solutions, Business Services, Energy\nServices, and Investments. Star’s Common Stock and Preferred Stock are listed on the Nasdaq Global Select Market exchange as “STRR”\nand “STRRP,” respectively.

Star’s\nBuilding Solutions segment is currently made up of the following operating businesses: KBS Builders, Inc. (“KBS”);\nEdgeBuilder, Inc. (“EdgeBuilder”), and Glenbrook Building Supply, Inc. (“Glenbrook”), with the\nlatter two managed together and referred to jointly as “EBGL,” and Timber Technologies Solutions, Inc. (“TT”).\nKBS is based in Maine and manufactures modular buildings, typically in the single and multi-family residential segments, servicing principally\nthe New England market. EBGL is based in the Minneapolis-Saint Paul area and principally serves the Upper Midwest region. EBGL manufactures\nand delivers structural wall panels for single and multi-family residential buildings, and other engineered wood-based products. EBGL\nalso distributes building materials from two lumberyard locations primarily focused on professional builder customers. TT is based outside\nthe Minneapolis-St. Paul area and manufactures glue-laminated timber products for various end markets and applications, including agriculture,\nindustrial, infrastructure, and building construction (commercial and residential).

Star’s\nBusiness Services segment, which consists of Hudson Talent Solutions, LLC (“HTS”), delivers customized recruitment\nand contracting solutions to mid-to-large multinational companies, including Recruitment Process Outsourcing (“RPO”),\nproject-based RPO, contingent workforce solutions, recruitment consulting, outsourced professional contract staffing, and managed service\nprovider (“MSP”) services across eighteen countries across three geographic regions: the Americas, Asia Pacific, and\nEurope, Middle East, and Africa. Star Equity’s RPO delivery teams utilize recruitment process methodologies and project management\nexpertise to meet clients’ ongoing business needs. Star Equity’s RPO services include complete recruitment outsourcing, project-based\noutsourcing, contingent workforce solutions, and recruitment consulting for clients’ permanent staff hires. RPO services leverage\nStar Equity’s consultants, supported by Star Equity’s specialists, in the delivery of its proprietary methods to identify,\nselect, and engage the best-fit talent for critical client roles. In addition, Star Equity provides RPO clients with a range of outsourced\nprofessional contract staffing services and managed service provider services offered sometimes on a standalone basis and sometimes as\npart of a blended total talent solution. These services draw upon a combination of specialized recruiting and project management competencies\nto deliver a wide range of solutions. HTS RPO-employed professionals - either individually or as a team - are placed with client organizations\nfor a defined period of time based on specific business needs of the client.

Star’s\nEnergy Services segment currently consists of Alliance Drilling Tools, Inc. (“ADT”), a Wyoming and Texas based provider\nof drilling tools and services to the Energy industry, a key sector of the economy. ADT is a full-service downhole drilling tool company\nwhich provides sale and rental tools in the Oil & Gas, Geothermal, Mining, and Waterwells sectors. ADT is strategically located near\npremier oilfields in the Rockies, a geothermal and mining hub, and in Midland, TX within the Permian Basin. ADT’s business model\nallows for the majority of costs, such as freight, repairs, and damages, to be passed directly to customers.

Star’s\nInvestments segment holds and manages certain of its own corporate-owned real estate, including a manufacturing facility in Maine that\nis leased to KBS and a manufacturing facility in Wisconsin that is leased to TT. In addition, the Investments segment manages internally\nfunded, concentrated minority investments in a small number of public companies. It also holds and manages a promissory note and a private\nequity stake in Catalyst MedTech LLC, a provider of medical imaging equipment and services (“Catalyst”). These interests\nwere acquired in May 2023 as a result of the sale of Digirad Health.

As\nof June 30, 2026, Star had total consolidated assets of approximately $108.2 million, total liabilities of approximately $48.4 million\nand total consolidated stockholders’ equity of approximately $59.8 million.

Star’s\nprincipal executive offices are located at 53 Forest Avenue, Suite 101, Old Greenwich, CT 06870, its phone number is (203) 489-9500 and\nits website is https://www.starequity.com/. Additional information about Star and its subsidiaries is included in the documents contained\nor incorporated by reference in this proxy statement/prospectus.

Merger\nSub

Merger\nSub, a direct, wholly owned subsidiary of Star, is a Delaware corporation that was incorporated for the sole purpose of effecting the\nMerger. In the Merger, Merger Sub will merge with and into Harte Hanks, with Harte Hanks surviving as a direct, wholly owned subsidiary\nof Star and the separate corporate existence of Merger Sub will cease.

Merger\nSub’s principal administrative office is located at 53 Forest Avenue, Suite 101, Old Greenwich, CT 06870 and its phone number is\n(203) 489-9500.

Harte\nHanks, Inc.

Harte\nHanks, Inc., together with its subsidiaries (“Harte Hanks”) is a global Business Experience Outsourcing company. Harte\nHanks operates at the intersection of data, marketing, sales, customer care, fulfillment, and logistics integrating front office revenue\ngrowth and customer experience operations with back office execution to deliver measurable business outcomes. With offices in North America,\nAsia-Pacific and Europe, Harte Hanks serves leading global brands enabling them to design, activate and optimize the full customer and\nproduct lifecycle.

Harte\nHanks is a leading customer and brand experience company operating in six service categories - data, marketing, sales, customer care,\nfulfillment and logistics. In and across these service categories, Harte Hanks addresses today’s biggest growth and customer experience\nchallenges for B2B and B2C businesses across the world in the new era of intelligence and artificial intelligence (“AI”),\nby being a modern journey enabler. These challenges Harte Hanks solves include:

●\nGrappling with data, AI and technology in a cookie-restricted digital environment;

●\nGrowing awareness, demand and sales for products;

●\nStoring, fulfilling and delivering samples, kits, materials and products direct to the door of consumers, influencers or\nbusinesses;

●\nDelivering better customer experience and support across multiple channels; and

●\nDelivering effectively with tighter budgets and talent shortages.

Harte\nHanks’ clients need help enabling their journey to growth, to transformation, to customer centricity, to product success and to\nAI powered approaches and solutions to marketing, sales, fulfillment and customer care. At the core of how Harte Hanks addresses this\nis a concentration on its clients’ key audiences - prospects, customers, patients, members, partners, employees and influencers\n- and how Harte Hanks helps align its clients’ brands and products to these different audiences along journeys. This includes the\nproduct journey, e.g., product innovation, build, strategy, launch, sell, deliver, support and recall and the customer journey, e.g.,\nhow customers become aware of their needs, how they buy, making the purchase, using the product or service, advocacy and renewal. Harte\nHanks is focused on helping its clients better understand, engage, acquire, deliver to, service, support and retain these audiences.\nHarte Hanks starts by understanding and architecting the journey in focus, and then enables, delivers and manages some or all aspects\nalong this journey. Harte Hanks’ alignment of customers and products on behalf of brands along the entire lifecycle distinguishes\nit from most other agencies and competitors in its service categories.

Harte\nHanks offers a uniquely diverse range of services and solutions in and across its service categories to businesses in the following industries:

●\nB2B Technology & Services including cloud, SaaS, hardware, software, semiconductors, health technology, fintech, electronics,\ndistributors and telecommunications

●\nHealthcare, Pharmaceuticals & Health Insurance

●\nConsumer Products including health, well-being and beauty; consumer tech/electronics; domestic appliances

●\nTravel, Hospitality, Streaming & Entertainment

●\nQSRs (Quick Service Restaurants)

●\nFinancial Services and Fintech

●\nAutomotive

●\nRetail

Harte\nHanks works in partnership with its clients to provide them with: data-driven analytics and actionable insights from research; robust\ncustomer-experience (“CX”), marketing or sales strategies; and the data, content & technology to enable delivery.\nHarte Hanks then combines these insights with seamless program execution, fulfillment, service and delivery on a project or ongoing service\nbasis to meet its clients’ goals. In essence Harte Hanks offers services along the customer & product lifecycle - from Data\nto Demand, to Deal, to Delivery, and everything in between.

Operationally,\nstarting in 2024, Harte Hanks’ services are organized into three business units that span the end to end customer and product lifecycles:

●\nData, marketing, demand generation and managed marketing services (“Revenue Solutions”)

●\nCustomer Care

●\nFulfillment & Logistics

Data,\nMarketing, Demand Generation and Managed Marketing Services (Revenue Solutions)

Harte\nHanks helps its clients determine, detect and activate their audiences through traditional, digital, and emerging channels. Harte Hanks\nprovides full service multi-channel marketing from strategy to campaign execution. This includes the support of its customers’\nsales teams in their continued pursuit of excellence, delivering specialized outsourcing, optimization, lead nurturing and messaging\ndevelopment services to global and national partners. Harte Hanks leverages data, insights, technology, and award-winning creative solutions\nto meet and exceed its clients’ business objectives and optimize its clients’ return on investment.

Harte\nHanks’ key offerings under this business unit include:

●\nData & Analytics – In-depth data and analytics including audience identification, profiling, segmentation and\nprioritization, predictive modeling and data strategy. Harte Hanks provides data hygiene and cleansing to ensure the best possible\nresults. Harte Hanks accesses broad first-party and third-party data sources, search and social media, and research through\nsyndicated, primary and secondary sources, and Harte Hanks leverages its proprietary DataView tool, a comprehensive, aggregate data\nmart for B2C (USA) and B2B (Global) that provides a 360-degree customer view, with over 1,500 attributes enabling accurate\npredictive marketing to its clients. Harte Hanks also offers a unique intent data solution called Audience Finder for detecting\nin-market prospects.

●\nResearch & Intelligence – Primary and secondary research to help its clients understand their customers, category,\ncompetitors and capabilities, either as a standalone deliverable or to inform the development of strategies for campaigns and\nprograms.

● Strategy\n– Provide strategic guidance to help clients efficiently and effectively plan and execute omnichannel marketing, demand\ngeneration and customer experience programs that deliver business results. Harte Hanks leverages data and insights to enhance its\nclients’ understanding of their consumers, competitors and category dynamics, then applies those insights to develop the\nstrategies to fuel activities such as customer acquisition, engagement, purchase behavior, loyalty and advocacy. Harte Hanks’\nexpertise spans the range of strategies including targeting, Go-To-Market, commercial, product launch, customer experience,\ncampaign, content, ABM (Account Based Marketing) and demand strategy.

●\nCreative & Content - Full-service creative and content design, development and execution spanning traditional and digital\nchannels, including creative concepts, messaging and content assets for print, broadcast, direct mail, website, app, display,\nsocial, mobile, search engine marketing, and voice.

●\nMarketing Technology – Website and app development, e-commerce development and enablement, database building and\nmanagement, platform architecture creation, and marketing automation to serve as the foundation for digital and multi-channel\nmarketing execution.

●\nDigital and Multi-channel Marketing Execution & Advertising – Orchestration and execution of programs and campaigns\nacross multiple channels, territories and audiences, using data, strategies, content and Marketing technology, or\n“MarTech,” provided either by Harte Hanks or by its clients. Setup and management of digital advertising programs and\ncampaigns across the latest advertising channels (e.g., Google, Meta, LinkedIn, TikTok) and platforms (DSPs, ABM advertising,\nindustry networks).

●\nDemand Generation and ABM – Providing intelligence-based B2B solutions that understand audiences and their behaviors, and\nthen inspire and drive action to deliver results. These solutions help companies understand which accounts, sectors and persons to\ntarget, and then generate marketing qualified leads (“MQLs”) and pipelines for their marketing and sales team,\nthrough combining data, strategy, content, MarTech and digital/multi-channel execution.

●\nManaged Marketing Services – Also referred to as “Marketing as a Service”. A flexible outsourcing marketing\noperations solution, that works as a highly integrated extension of a client’s own marketing function by blending the best of\nagency and business outsourcing processes and capabilities. Marketing as a Service operationalizes, manages and delivers some or all\nof: data operations, marketing technology, analytics, demand generation, and staff augmentation.

● Inside\nSales Outsourcing – Combining best-in-class analytics, accomplished sales professionals and full-cycle experimentation\nHarte Hanks provides B2B enterprises, and Small to Midsized Businesses with a fully outsourced sales service, that can work\nalongside or in lieu of an internal sales function.

●\nLead Generation – Combining data, lead generation resources and technology, Harte Hanks provides turnkey lead generation\nand development that converts interested or good fit prospects into leads for sales to qualify, nurture and sell to.

● Sales\nPlay Development – Designing sales plays and cadences to enable sales teams to find, plan, engage, nurture and convert\nprospects into sales opportunities.

Customer\nCare

Harte\nHanks’ customer care services are customized to meet the needs of its partners’ customer, helping them attract new buyers\nand turn existing patrons into loyal brand advocates. Harte Hanks supports its clients by addressing their end customers’ urgent\nneeds, navigating an increasingly-complex technology landscape, and integrating AI technology and automation — while maintaining\na fierce devotion to reducing customer effort, for the benefit of both the business and the buyer. This approach to “effortless\ncustomer experience” not only drives better service results but is also designed to lower its clients’ operational costs.

Harte\nHanks’ global, omnichannel delivery model is focused on providing its clients three key services:

●\nCustomer Service Outsourcing – Harte Hanks’ accomplished customer care associates interact and resolve consumer\nqueries and complaints across hardware and software platforms, healthcare benefit plans, product recalls and/or a myriad of other\ncustomer service issues. Harte Hanks leverages technology to help reduce customer effort while providing a human touch to increase\ncustomer satisfaction.

●\nCustomer Care Technology and AI Transformation – Harte Hanks’ solution services teams configures various CRM\nsolutions (e.g., Salesforce, Zendesk) and channel /AI technology including Amazon Connect to create meaningful customer interactions\nby connecting content between agent, AI-driven interfaces and web-based self-help tools and community forums.

● Self-Service\nTechnology – Harte Hanks provides and maintains self-service solutions through Interactive Voice Response\n(“IVR”), Help Centers, online, and via apps and channel technology.

Harte\nHanks also analyzes a significant amount of aggregated data obtained from customer interactions on behalf of its clients. Harte Hanks\nleverages information gained from this analysis and end customer-driven feedback to drive efficiencies, provide insights on predictive\nbehaviors that lead to lower customer churn and help its clients innovate their core product offerings and develop innovative product\nfeatures.

Fulfillment\n& Logistics Services

Harte\nHanks’ fulfillment and logistics services are designed to meet the diverse and dynamic needs of businesses across industries, ensuring\nthat products, promotional materials, and essential items are delivered efficiently, accurately, and on time. Harte Hanks fulfillment\nunlocks critical sales enablement, value-added product fulfillment, and eCommerce channels for its clients. Harte Hanks logistics supports\nthe supply chain needs of its clients in everything from time-sensitive deliveries to full scale supply chain management. By leveraging\nits modern infrastructure, advanced technology, and industry expertise, Harte Hanks helps its clients streamline their operations, enhance\ncustomer experience, and optimize cost efficiencies. Harte Hanks supports enterprise-level supply chain management, executes precise\ntime-sensitive deliveries, and enables eCommerce scalability.

End\nto End Product, Print-On-Demand, and Mail Fulfillment Services

Harte\nHanks’ extensive fulfillment capabilities include:

●\nPrint-On-Demand & Literature Distribution – Harte Hanks facilitates the seamless production and distribution of\nmarketing materials, sales collateral, and product literature, ensuring businesses can effectively engage with customers, prospects,\nand partners.

●\nPromotional & Branded Product Distribution – Harte Hanks manages and distributes promotional products, trade show\nmaterials, and corporate gifts to enhance brand awareness and customer engagement.

●\nCustom Kitting & Event Fulfillment – Harte Hanks’ curated kitting solutions support corporate events, influencer\nmarketing programs, employee appreciation campaigns, and conference giveaways, ensuring that clients can create impactful brand\nexperiences.

●\nProduct Recall Management – Harte Hanks assists in efficient product recalls, ensuring regulatory compliance, customer\nsafety, and brand reputation protection.

●\nTemperature-Controlled & FDA-Registered Fulfillment Centers – Harte Hanks has strategically located fulfillment\ncenters across the United States, that provide temperature-controlled storage and are FDA-registered to handle sensitive products\nsuch as:

○\nNutritional supplements, medical foods, and baby formulas

○\nChocolates, coffee, tea, snack foods, nuts, and seeds

○\nPet food, treats, and nutritional supplements

●\nScalable Global Fulfillment – Harte Hanks’ fulfillment network spans the U.S., with capabilities in Europe and\nadditional support from regional logistics partners that ensure efficient international product distribution.

Through\nits upgraded order management platform, Harte Hanks can now streamline order processing, facilitate seamless integration with various\ndata sources and eCommerce platforms, and ensure real-time visibility into inventory and shipment status.

Third-Party\nLogistics & Freight Optimization

Harte\nHanks logistics services help businesses achieve supply chain excellence by ensuring efficient transportation, freight optimization,\nand timely product delivery. Harte Hanks’ logistics expertise enables businesses to reduce costs, improve delivery speed, and optimize\ntheir supply chain operations—whether managing individual shipments or full-scale supply chain management. Harte Hanks’ comprehensive\nlogistics solutions include:

●\nNationwide & Regional Shipping – Harte Hanks facilitates the shipping of millions of time-sensitive materials annually,\nleveraging its nationwide logistics network.

●\nCertified Fleet & Expedited Shipping – With access to a contracted fleet of over 15,000 trucks, Harte Hanks provides\nclients with scalable third-party logistics (3PL) services tailored to their needs.

●\nAllink®360: Proprietary Logistics Technology – Harte Hanks’ proprietary rate-shopping system, Allink 360,\noptimizes freight costs and delivery timelines, ensuring shipments arrive on time and within budget.

●\nFlexible & Scalable Logistics Solutions – Harte Hanks offers customized logistics solutions designed to accommodate\nbusinesses of all sizes, from startups to Fortune 500 enterprises.

Client\nRelationship

Harte\nHanks is known for helping clients build deep customer relationships, create connected customer experiences, and optimize each and every\ncustomer touch point in order to deliver desired business outcomes. Realizing Harte Hanks’ clients’ success is the only valid\nmeasure of Harte Hanks’ own success. Harte Hanks ensures all its efforts are aligned with its clients’ business objectives\nand measured against defined performance metrics. It is this commitment to its clients and their businesses that allows Harte Hanks to\nbuild meaningful relationships with them. Harte Hanks’ client engagements may consist of one or a few of Harte Hanks’ service\nofferings – with a goal toward continuously expanding its relationships. Harte Hanks provides cross-service client management along\nwith continuous business reviews to ensure its clients receive value from our partnerships.

Use\nof Subcontractors

Certain\nsegments of Harte Hanks’ business rely on subcontractors and other third parties to provide a portion of Harte Hanks’ overall\nservices in certain engagements. Over the years Harte Hanks has established strong relationships with subcontractors that translate into\nhigh level service and favorable prices for its customers.

Restructuring\nActivities

Harte\nHanks’ management team continuously reviews and adjusts its cost structure and operating footprint to optimize its operations,\nand invest in improved technology. The program named “Project Elevate” involved the optimization and rationalization of its\nbusiness resources as well as the partial reinvestment of savings into Harte Hanks’ sales and marketing team, technology, and strategy.\nReorganization cost reductions from Project Elevate during 2024 through 2025 were estimated to be $16.0 million. In connection with its\ncost-saving and restructuring initiatives, Harte Hanks incurred total restructuring charges of $1.8 million and $2.4 million in 2025\nand 2024, respectively. This program has resulted in ongoing cost optimization and rationalization initiatives across the organization.

Customers

Harte\nHanks’ clients include large multinational enterprises, small and medium-sized businesses and government organizations. Harte Hanks’\nlargest client in terms of revenue generated 10.5% of total revenues in 2025. Harte Hanks’ largest 25 clients in terms of revenue\ngenerated 68.3% of total revenue in 2025. Harte Hanks’ clients span a wide range of industries including but not limited to retail,\ntravel, streaming, healthcare, financial services, and technology, which reduced the concentration risk of Harte Hanks in any one sector.\nHarte Hanks generally enters into long-term contracts with its clients ranging in duration from one to three years. Most of its contracts\ndo not require its customers to purchase a minimum amount of services from Harte Hanks. In general, Harte Hanks’ contracts with\nour customers are terminable on short notice with little or no penalty payable on termination.

Sales\nand Marketing

Harte\nHanks operates a modern sales and marketing growth engine to generate awareness, create demand and convert this demand into new business,\nas well as support existing client growth and retention. As a B2B services company Harte Hanks practices the marketing and sales methodology\nand tactics it offers to its clients, including ABM, demand generation, content marketing, inside sales and enterprise sales. Harte Hanks\nalso leverages partnerships to extend its reach and broaden its solutions.

For\nmarketing, Harte Hanks leverages a combination of corporate marketing resources, marketing services resources and a modern MarTech stack\nincluding CRM, content management, SEO/digital advertising tools to support targeting, account-based marketing, demand creation and awareness.

For\nsales, Harte Hanks relies on its enterprise and solution sellers, combined with an internal sales team, to sell its products and services\nto new clients and task its employees supporting existing clients to expand its client relationship through additional solutions and\nproducts. Harte Hanks has expanded its sales team coverage internationally to support its global client and prospect network. Its sales\nforce sells a variety of solutions and services to address its clients’ cross-selling targeted marketing needs. Harte Hanks also\nmaintains solution-specific experts in its sales force and sales groups to sell it individual products and solutions, with expertise\nby target industries including B2B, Health and B2C.

Harte\nHanks had 12 employees in our corporate sales and marketing function as of December 31, 2025.

Competition

Harte\nHanks’ competition comes from local, national, and international marketing, advertising, customer care, print fulfillment, smaller\n3PL, logistics companies, and internal client resources, against whom it competes for individual projects, entire client relationships,\nand marketing expenditures. The principal competitive factors in Harte Hanks’ industry are the breadth, depth and quality of service\nofferings, technical and strategic expertise, the perceived value of the services provided, reputation, pricing, and brand recognition.\nHarte Hanks also competes against social, mobile, web-based, email, print, broadcast, and other forms of advertising for marketing and\nadvertising dollars in general.

Furthermore,\ncompetition may begin to emerge as a result of the availability of in-house information technology solutions that can replicate some\nof Harte Hanks’ services. Harte Hanks expects its clients to continue to improve their information technology systems and offerings\nand, in some circumstances, move the services Harte Hanks provides in-house.

Seasonality

Some\nof Harte Hanks’ revenue streams tend to be higher in the fourth quarter than in other quarters during a given year. This increased\nrevenue is a result of overall increased activity prior to the holiday season in the retail vertical, and due to the open enrollment\nperiod in the healthcare vertical.

As\nof June 30, 2026, Harte Hanks had total consolidated assets of approximately $88.1 million, total liabilities of approximately $72.7\nmillion and total consolidated stockholders’ equity of approximately $15.4 million.

Harte\nHanks’ principal executive offices are located at 1 Executive Drive, Chelmsford, MA 01824, its phone number is (512) 434-1100 and\nits website is https://www.hartehanks.com.

The\nMerger and the Merger Agreement (pages 67 and 98)

The\nterms and conditions of the Merger are contained in the Merger Agreement, a copy of which is attached as Annex A to this proxy\nstatement/prospectus. You are encouraged to read the Merger Agreement carefully and in its entirety, as it is the primary legal document\nthat governs the Merger.

Pursuant\nto the terms and subject to the conditions set forth in the Merger Agreement, at the Effective Time of the Merger, Merger Sub will merge\nwith and into Harte Hanks, with Harte Hanks surviving such Merger as a wholly owned subsidiary of Star, and Merger Sub will cease to\nexist.

This\nsummary and the copy of the Merger Agreement attached to this document as Annex A are included solely to provide investors with\ninformation regarding the terms of the Merger Agreement. They are not intended to provide factual information about the parties or any\nof their respective subsidiaries or affiliates.

Merger\nConsideration (page 99)

Upon\nthe terms and subject to the conditions of the Merger Agreement, at the Effective Time, each share of Harte Hanks Common Stock issued\nand outstanding immediately prior to the Effective Time, other than shares owned by Harte Hanks, Star, Merger Sub or any of their respective\nwholly owned subsidiaries, will be converted into the right to receive, at the election of the holder thereof and subject to the election\nand proration procedures described below, either (i) the Cash Consideration, or (ii) the Preferred Stock Consideration.

Harte\nHanks stockholders may elect to receive Cash Consideration, Preferred Stock Consideration or a combination of both for their shares of\nHarte Hanks Common Stock, including by electing Cash Consideration for some shares and Preferred Stock Consideration for others. However,\nthe aggregate amount of cash payable in the Merger is subject to an overall cap. Specifically, the aggregate amount of cash payable in\nthe Merger, together with cash paid with respect to certain Harte Hanks equity awards and cash paid in lieu of fractional shares of Star\nPreferred Stock, may not exceed the Maximum Cash Amount. Accordingly, the form of consideration ultimately received by a stockholder\nmay differ from that stockholder’s election as a result of the proration provisions contained in the Merger Agreement.

If\nthe aggregate amount of cash that would otherwise be payable to all stockholders making valid cash elections is less than or equal to\nthe Maximum Cash Amount, each stockholder making a valid cash election will receive the full Cash Consideration for all shares subject\nto that election, and each stockholder making a valid preferred stock election will receive the Preferred Stock Consideration for all\nshares subject to that election. Shares for which no valid election is made will receive the Cash Consideration, the Preferred Stock\nConsideration or a combination of both, as determined by Star, provided that the Maximum Cash Amount is not exceeded.

If\nthe aggregate amount of cash that would otherwise be payable to all stockholders making valid cash elections exceeds the Maximum Cash\nAmount, all shares subject to preferred stock elections and all non-electing shares will receive the Preferred Stock Consideration. Shares\nsubject to cash elections will receive cash and preferred stock on a prorated basis, such that the aggregate cash paid in the Merger\ndoes not exceed the Maximum Cash Amount. In that circumstance, each cash-electing stockholder will receive a proportionate share of the\navailable cash, with the balance of the Merger Consideration payable in shares of Star Preferred Stock pursuant to the allocation procedures\nset forth in the Merger Agreement.

Because\nthe Merger Consideration consists of a fixed cash amount and a fixed number of shares of Star Preferred Stock, the Merger Agreement does\nnot provide for a floating exchange ratio based on the trading price of Star common stock. The amount of consideration payable for each\nshare of Harte Hanks Common Stock is fixed at $5.00 in cash or 0.50 shares of Star Preferred Stock, as applicable, subject only to the\nelection and proration procedures described above.

The\nmarket value of any portion of the Merger Consideration payable in Star Preferred Stock will fluctuate based on the market price of Star\nPreferred Stock, which is currently traded on the Nasdaq Global Select Market under the symbol “STRRP.” As a result, the\nvalue of the stock portion of the Merger Consideration, if any, that a Harte Hanks stockholder ultimately receives will depend on the\nmarket price of Star Preferred Stock at the time the Merger is completed and the form of consideration ultimately received by such stockholder\npursuant to the election and proration procedures described in the Merger Agreement.

No\nfractional shares of Star Preferred Stock will be issued in the Merger. Instead, any holder who would otherwise be entitled to receive\na fractional share of Star Preferred Stock will receive cash, without interest, equal to the applicable fractional share multiplied by\n$10.00.

The\nMerger Consideration is also subject to appropriate adjustment to reflect the effect of any stock split, reverse stock split, stock dividend,\nrecapitalization, reclassification, combination, exchange of shares or similar transaction affecting Harte Hanks Common Stock occurring\nbetween the date of the Merger Agreement and the Effective Time.

For\nmore information, see the section entitled “Terms of the Merger” beginning on page 67 and “Merger Consideration”\nbeginning on page 99.

Treatment\nof Harte Hanks Equity Awards (page 101)

The\nMerger Agreement provides for the treatment of Harte Hanks equity awards outstanding immediately prior to the Effective Time, including\nstock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”). At the Effective\nTime, such awards will be cancelled and converted into the rights described below.

●\nStock Options. At the Effective Time, each Harte Hanks stock option identified on the disclosure schedules to the Merger\nAgreement that is outstanding and unexercised immediately prior to the Effective Time will automatically be cancelled and converted\ninto the right to receive Merger Consideration based on the in-the-money value of such option. Specifically, each eligible option\nholder will be entitled to receive consideration equal to the product of (i) the excess, if any, of the applicable Merger\nConsideration over the exercise price per share of such option and (ii) the number of shares subject to such option immediately\nprior to the Effective Time. Holders of eligible options will be permitted to elect to receive Cash Consideration, Preferred Stock\nConsideration or a combination of both, subject to the same election procedures, proration provisions and Maximum Cash Amount\nlimitations applicable to holders of Harte Hanks Common Stock. Any option with an exercise price equal to or greater than the\napplicable Merger Consideration, and any option not specifically identified on the disclosure schedules to the Merger Agreement,\nwill be cancelled at the Effective Time without payment of any consideration. All payments will be subject to applicable withholding\ntaxes.

●\nRestricted Stock Units. At the Effective Time, each RSU identified on the disclosure schedules to the Merger Agreement that remains\noutstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive Merger Consideration with\nrespect to each share of Harte Hanks Common Stock underlying such RSU. RSU holders will be entitled to elect to receive Cash Consideration,\nPreferred Stock Consideration or a combination of both, subject to the same election, proration and Maximum Cash Amount provisions applicable\nto Harte Hanks stockholders. Any resulting payments will be subject to applicable tax withholding.

●\nPerformance Stock Units. At the Effective Time, each outstanding PSU will be cancelled and terminated without payment of any consideration.\nPSU holders will not receive cash, preferred stock or any other compensation in respect of such awards as a result of the Merger.

The\ntreatment of equity awards is tied to the overall Merger Consideration structure. Accordingly, holders of eligible company Options\nand RSUs who elect Cash Consideration may have a portion of such consideration converted into shares of Star’s Preferred Stock\nif cash elections exceed the Maximum Cash Amount and the proration provisions of the Merger Agreement are triggered. Likewise, if cash\nelections do not exceed the Maximum Cash Amount, cash elections generally will be honored in full, subject to the terms and conditions\nof the Merger Agreement.

For\nmore information see “Treatment of Harte Hanks Equity Awards” beginning on page 101.

Material\nU.S. Federal Income Tax Consequences of the Merger (page 114)

The\nreceipt of Star Preferred Stock and/or cash in exchange for Harte Hanks Common Stock pursuant to the Merger will be a taxable transaction\nfor Harte Hanks stockholders for U.S. federal income tax purposes.

A\nU.S. holder will generally recognize taxable gain or loss with respect to the exchange of shares of Harte Hanks Common Stock for the\nMerger Consideration in the Merger equal to the difference, if any, between (i) the sum of the cash (including cash in lieu of any fractional\nshare of Star Preferred Stock) and the fair market value of the Star Preferred Stock received in the Merger and (ii) the U.S. holder’s\nadjusted tax basis in the Harte Hanks Common Stock surrendered in exchange therefor. Such gain or loss recognized will generally be taxable\nas capital gain or loss. A non-U.S. holder will generally not be subject to U.S. federal income tax with respect to the exchange of shares\nof Harte Hanks Common Stock for the Merger Consideration in the Merger unless such non-U.S. holder has certain connections to the United\nStates as described in “Material U.S. Federal Income Tax Consequences of the Merger”.

See\n“Material U.S. Federal Income Tax Consequences of the Merger” for a more complete discussion of the U.S. federal income tax\nconsequences of the Merger. Each Harte Hanks stockholder is strongly urged to consult with and rely upon its own tax advisor as to the\nspecific U.S. federal, state or local or non-U.S. tax consequences to such Harte Hanks stockholder of the Merger.

The\ndiscussion in this proxy statement/prospectus is a summary only and does not address all U.S. federal income tax consequences that may\nbe relevant to a particular holder. In addition, holders may be subject to state, local, non-U.S. and other tax laws that are not discussed\nin this proxy statement/prospectus. Accordingly, holders are urged to consult their own tax advisors regarding the particular tax consequences\nof the Merger in light of their specific circumstances.

Harte\nHanks’ Reasons for the Merger; Recommendation of Board of Directors of Harte Hanks (page 82)

The\nboard of directors of Harte Hanks has (a) determined that the Merger Agreement and Merger were advisable and in the best interests of\nHarte Hanks and its stockholders, (b) approved the execution and delivery of the Merger Agreement, the performance of Harte Hanks’\nobligations thereunder, and the consummation of the Merger, (c) directed that the Merger Agreement be submitted to Harte Hanks stockholders\nfor adoption at a special meeting, (d) recommended that Harte Hanks stockholders vote in favor of adopting the Merger Agreement, (e)\napproved the form of Voting and Support Agreement and entry into such agreements by Harte Hanks’ directors and officers, (f) approved\nthe form of the other transaction documents referenced in the Merger Agreement and the Company Disclosure Letter and the entry into such\nagreements by Harte Hanks, (g) approved the transaction bonuses to Harte Hanks’ management, including David Fisher and David A.\nGarrison, upon the consummation of the transaction, and (h) authorized Harte Hanks’ officers to execute and deliver the Merger\nAgreement, the Voting and Support Agreements, and all ancillary documents, and to take all actions necessary or advisable to consummate\nthe transactions contemplated thereby. Accordingly, the board of directors of Harte Hanks recommends that Harte Hanks stockholders vote\n“FOR” the Harte Hanks Merger Proposal.

For\na more detailed discussion of the board of directors of Harte Hanks’ recommendation, see “Harte Hanks’ Reasons for\nthe Merger; Recommendation of Board of Directors of Harte Hanks” beginning on page 82.

Non-Binding\nAdvisory Compensation Proposal (page 55)

Harte\nHanks stockholders will also be asked to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable\nto Harte Hanks’ named executive officers in connection with the Merger, as disclosed under “Interests of Harte Hanks Directors\nand Executive Officers in the Merger,” including the Golden Parachute Compensation table and related narrative disclosures required\npursuant to Item 402(t) of Regulation S-K. The vote is separate and apart from the Harte Hanks Merger Proposal, is advisory only and\nis not a condition to completion of the Merger. If the Merger is completed, the merger-related compensation may be paid in accordance\nwith the applicable compensation agreements and arrangements even if stockholders vote against the proposal.

Vote\nRequired: Approval of the Non-Binding Advisory Compensation Proposal requires the affirmative vote of a majority of the votes cast\nat the Special Meeting, provided a quorum is present.

Board\nRecommendation: The board of directors of Harte Hanks recommends that holders of Harte Hanks Common Stock vote “FOR”\nthe Non-Binding Advisory Compensation Proposal.

Opinion\nof Harte Hanks’ Financial Advisor (page 86)

Citizens\nJMP Securities, LLC (“Citizens”) was retained by Harte Hanks to act as its financial advisor in connection with the\nMerger and, upon Harte Hanks’ request, to render its fairness opinion to the board of directors of Harte Hanks in connection therewith.\nHarte Hanks selected Citizens to act as its financial advisor based on Citizens’ qualifications, expertise and reputation, its\nknowledge of Harte Hanks’ industry and its knowledge and understanding of the business and affairs of Harte Hanks.

followed,\nmatters considered, and qualifications and limitations on the review undertaken by Citizens in connection with the opinion (which are\nstated in its written opinion), the Merger Consideration to be received by the holders of Harte Hanks Common Stock (other than Owned\nCompany Shares (as defined in the Merger Agreement)) in the Merger was fair to such holders from a financial point of view.

The\nfull text of Citizens’ written opinion delivered to the board of directors of Harte Hanks , dated August 12, 2026, is attached\nas Annex B to this proxy statement/prospectus and incorporated into this proxy statement/prospectus by reference in its entirety.\nCitizens’ written opinion has been provided by Citizens at the request of the board of directors of Harte Hanks and is subject\nto, among other things, the assumptions made, procedures followed, matters considered, and qualifications and limitations on the review\nundertaken by Citizens in connection with the opinion (which are stated therein). You are encouraged to read the opinion carefully in\nits entirety.

Citizens\nprovided its opinion to the board of directors of Harte Hanks, in its capacity as such, in connection with and for purposes of its evaluation\nof the Merger only and Citizens’ opinion does not constitute a recommendation as to any action the board of directors of Harte\nHanks should take with respect to the Merger or how any holder of Harte Hanks Common Stock should vote or act with respect to the Merger\nor any other matter.

The\nfollowing is a summary of Citizens’ opinion and the methodology that Citizens used to render its opinion. This summary of Citizens’\nopinion contained in this proxy statement is qualified in its entirety by reference to the full text of Citizens’ written opinion.

In\narriving at its opinion, Citizens, among other things:

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

	(i)	reviewed\n certain publicly available financial statements and certain other business and financial\n information relating to Harte Hanks furnished to Citizens;
	(ii)	reviewed\n certain internal financial statements and other financial and operating data concerning Harte\n Hanks prepared by the management of Harte Hanks;
	(iii)	reviewed\n certain financial forecasts prepared by the management of Harte Hanks;
	(iv)	compared\n the financial performance of Harte Hanks with that of certain other publicly-traded companies\n that Citizens believed were generally comparable to Harte Hanks;
	(v)	reviewed\n the financial terms, to the extent publicly available, of certain acquisition transactions\n involving companies in lines of business that Citizens believed were generally comparable\n to Harte Hanks;
	(vi)	participated\n in discussions with members of the senior management of Harte Hanks with respect to the business\n prospects and financial outlook of Harte Hanks;
	(vii)	reviewed\n the Merger Agreement draft dated as of August 10, 2026 and certain related documents; and
	(viii)	performed\n such other analysis and considered such other factors as Citizens deemed appropriate.

In\nconducting its review and arriving at its opinion, Citizens has assumed and relied, without independent verification, upon the accuracy\nand completeness of all information and data that was publicly available or furnished to or otherwise reviewed by or discussed with Citizens.\nCitizens has further relied upon the assurance of the management of Harte Hanks that they are not aware of any facts or circumstances\nthat would make such information inaccurate or misleading. With respect to the financial forecasts of Harte Hanks, the management of\nHarte Hanks has advised Citizens, and Citizens has assumed, that they have been reasonably prepared on bases reflecting the best currently\navailable estimates and good faith judgments of the management of Harte Hanks as to the future financial performance of Harte Hanks and\nother matters covered thereby. Citizens has not been engaged to assess the reasonableness or achievability of such forecasts or the assumptions\non which they were based and express no view as to such forecasts or assumptions.

For\npurposes of rendering its opinion, Citizens has assumed that the representations and warranties of each party contained in the Merger\nAgreement are true and correct, that each party will perform all of the covenants and agreements required to be performed by it under\nthe Merger Agreement and that all conditions to the consummation of the Merger will be satisfied without waiver thereof. Citizens has\nassumed that the final form of the Merger Agreement will not vary materially from the last draft Merger Agreement reviewed by Citizens\nand that the Merger will be consummated substantially on the terms described in such draft, without any amendment or waiver of material\nterms or conditions. Citizens has also assumed that all necessary governmental, regulatory and other consents and approvals contemplated\nby the Merger Agreement will be obtained and that in the course of obtaining those consents and approvals no costs or restrictions will\nbe imposed or waivers made that would have an adverse effect on the contemplated benefits of the Merger.

Company\nFinancial Analyses

In\nconnection with rendering its opinion, Citizens performed certain financial, comparative and other analyses as summarized below. In arriving\nat its opinion, Citizens did not ascribe a specific range of values to the shares of Harte Hanks Common Stock but rather made its determination\nas to fairness, from a financial point of view, to the holders of shares of Harte Hanks Common Stock (other than Owned Company Shares)\nof the Merger Consideration to be received by such holders pursuant to the Merger Agreement on the basis of various financial and comparative\nanalyses. The preparation of a fairness opinion is a complex process and involves various determinations as to the most appropriate and\nrelevant methods of financial and comparative analyses and the application of those methods to the particular circumstances. Therefore,\na fairness opinion is not readily susceptible to summary description.

In\narriving at its opinion, Citizens did not attribute any particular weight to any single analysis or factor considered by it but rather\nmade qualitative judgments as to the significance and relevance of each analysis and factor relative to all other analyses and factors\nperformed and considered by it and in the context of the circumstances of the Merger. Accordingly, Citizens believes that its analyses\nmust be considered as a whole, as considering any portion of such analyses and factors, without considering all analyses and factors\nas a whole, could create a misleading or incomplete view of the process underlying its opinion. The following is a summary of the material\nfinancial analyses used by Citizens in preparing its opinion to the board of directors of Harte Hanks . Certain financial analyses summarized\nbelow include information presented in tabular format. In order to fully understand the financial analyses used by Citizens, the tables\nmust be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses.

In\nperforming its analyses, Citizens made numerous assumptions with respect to industry performance, general business and economic conditions\nand other matters, many of which are beyond the control of Harte Hanks, Star or any other parties to the Merger. None of Harte Hanks,\nStar, Citizens or any other person assumes responsibility if future results are materially different from those discussed. Any estimates\ncontained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly\nmore or less favorable than as set forth below. In addition, analyses relating to the value of businesses do not purport to be appraisals\nor reflect the prices at which the businesses may actually be sold.

Selected\nPublic Companies Analysis

Citizens\nreviewed and compared specific financial, operating and public trading data relating to Harte Hanks with selected publicly traded companies\nthat Citizens deemed comparable to Harte Hanks. Using publicly available financial data and closing stock prices as of August 7, 2026,\nCitizens calculated, among other things, total enterprise value (calculated as the equity value based on fully diluted shares outstanding,\nplus debt and less cash and cash equivalents) (“TEV”) as a multiple of estimated calendar year 2026 adjusted EBITDA\n(“EV/CY2026E EBITDA”) and estimated calendar year 2027 adjusted EBITDA (“EV/CY2027E EBITDA”). Estimated\nfinancial data of the selected companies were based on publicly available research analysts’ estimates. A summary of the selected\ncompanies and the relevant metrics is set forth below:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	EV/CY2026E EBITDA			EV/CY2027E EBITDA
YOC AG		5.3	x		4.0	x

Vianet Group		4.2	x		4.1	x

Microlise Group		3.4	x		2.8	x

Mean		4.3	x		3.6	x

Median		4.2	x		4.0	x

Citizens,\nbased on its professional judgment, selected the comparable companies because Citizens believed their businesses and operating profiles\nare reasonably similar to that of Harte Hanks. However, because of the inherent differences between the businesses, operations and prospects\nof Harte Hanks and those of the comparable companies, Citizens believed that it was inappropriate to, and therefore did not, rely solely\non the quantitative results of the selected comparable company analysis. Accordingly, Citizens also made qualitative judgments concerning\ndifferences between the businesses, financial and operating characteristics and prospects of Harte Hanks and the comparable companies\nthat could affect the public trading values of each in order to provide a context in which to consider the results of the quantitative\nanalysis. After reviewing the above analyses, Citizens selected a representative range of multiples and applied these ranges to Harte\nHanks’ estimated adjusted EBITDA for calendar years 2026 and 2027 based on the forecasts to calculate a range of implied total\nenterprise values, from which Citizens subtracted Harte Hanks’ estimated net debt to calculate a range of implied equity values,\nand divided the resulting amounts by the number of fully diluted shares of Harte Hanks Common Stock outstanding as provided by Harte\nHanks management, to calculate a range of implied prices per share of Harte Hanks Common Stock. The following summarizes the results\nof these calculations:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Multiples	Implied\n prices per \n share of Harte Hanks \n Common Stock
EV/CY2026E\n EBITDA:	3.8x\n - 4.7x	$1.84\n – $2.70

EV/CY2027E\n EBITDA:	3.6x\n - 4.4x	$1.77\n – $2.60

Selected\nPrecedent Transactions Analysis

Citizens\nreviewed, to the extent publicly available, and analyzed the valuation and financial metrics relating to selected transactions involving\ntarget companies in lines of business that Citizens believed were generally comparable to Harte Hanks, including companies providing\noutsourced business services, customer experience management, business process outsourcing and logistics services. For each precedent\ntransaction, Citizens reviewed the TEV of the target company in the transaction as a multiple of the target company’s trailing\ntwelve months adjusted EBITDA at the time of the announcement of the relevant transaction (“EV/TTM EBITDA”). Estimated\nfinancial data of the selected transactions were based on publicly available information at the time of announcement of the relevant\ntransaction. A summary of the selected transactions and the relevant metrics is set forth below:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Year Announced	Target	Acquiror	EV/TTM EBITDA
2025	Burroughs	Loomis		6.5	x
2023	CBW Resources	Super Group Holdings		4.2	x
2022	HyperPointe	XpresSpa Group		5.4	x
2020	Personiv	eClerx		4.7	x
Mean				5.2	x
Median				5.1	x

Citizens,\nbased on its professional judgment, selected the comparable transactions because Citizens believed their businesses and operating profiles\nare reasonably similar to that of Harte Hanks. However, because of the inherent differences between the businesses, operations and prospects\nof Harte Hanks and those of the companies involved in the selected transactions, Citizens believed that it was inappropriate to, and\ntherefore did not, rely solely on the quantitative results of the selected precedent transaction analysis. Accordingly, Citizens also\nmade qualitative judgments concerning differences between the selected precedent transactions and the Merger that would affect the acquisition\nvalues of the selected target companies and Harte Hanks. After reviewing the above analyses, Citizens selected a representative range\nof EV/EBITDA multiples and applied this range to Harte Hanks’ estimated adjusted EBITDA for calendar years 2026 and 2027 as provided\nby Harte Hanks’ management to calculate a range of implied total enterprise values, from which Citizens subtracted Harte Hanks’\nestimated net debt, and divided the resulting amounts by the number of fully diluted shares of Harte Hanks Common Stock outstanding as\nprovided by Harte Hanks management, to calculate a range of implied prices per share of Harte Hanks Common Stock. The following summarizes\nthe results of these calculations:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Multiples	Implied\n prices per \n share of Harte Hanks \n Common Stock
EV/CY2026E\n EBITDA:	4.6x\n - 5.6x	$2.61\n - $3.64

EV/CY2027E\n EBITDA:	4.6x\n – 5.6x	$2.81\n - $3.88

Discounted\nCash Flow Analysis

In\norder to estimate the present value of Harte Hanks Common Stock, Citizens performed a discounted cash flow analysis of Harte Hanks. A\ndiscounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset by calculating the “present\nvalue” of estimated future cash flows generated by the asset. “Present value” refers to the current value of\nfuture cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account\nmacroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.

To\ncalculate the estimated enterprise value of Harte Hanks using the discounted cash flow method, Citizens added (a) Harte Hanks’\nprojected after-tax unlevered free cash flows for fiscal years 2026 through 2029 based on the forecasts, to (b) a range of “terminal\nvalues” of Harte Hanks, and discounted such amounts to their present value using a range of selected discount rates of 14.5% to\n16.5%. The after-tax unlevered free cash flows were calculated by taking the tax-affected adjusted EBIT (defined as adjusted EBITDA less\ndepreciation and amortization), adding depreciation and amortization, subtracting changes in net working capital, capital expenditures\nand severance costs. The residual value of Harte Hanks at the end of the projection period, or “terminal value,” was estimated\nby applying an exit EBITDA multiple range of 3.6x to 4.4x to Harte Hanks’ terminal year 2029 adjusted EBITDA of approximately $12.2\nmillion from the forecasts. The range of exit EBITA multiples of 3.6x to 4.4x was selected based on Citizens analysis of the selected\ncompanies and its’ professional judgement. The range of after-tax discount rates of 14.5% to 16.5% was selected based on Citizens’\nanalysis of the weighted average cost of capital of Harte Hanks, derived by application of the capital asset pricing model, taking into\naccount, among other things, the risk-free rate based on the yield on ten-year U.S. Treasury securities, an equity risk premium, the\nrelevered beta for Harte Hanks derived from the comparable public companies, and a size premium reflective of Harte Hanks’ market\ncapitalization.

Citizens\nthen calculated a range of implied values per share of Harte Hanks Common Stock by subtracting Harte Hanks’ estimated net debt\nfrom the estimated enterprise value derived using the discounted cash flow method and dividing such amount by the number of fully diluted\nshares of Harte Hanks Common Stock outstanding as provided by Harte Hanks management. The following summarizes the results of these calculations:

Implied\nprices per share of Harte Hanks Common Stock:

Discounted\nCash Flow Analysis: $3.57 – $4.44

Star\nPreferred Stock Analysis

Citizens\nanalyzed the Star Preferred Stock to be issued as Merger Consideration at various reference prices, including the current trading price\nof $10.06, the liquidation preference of $10.00, the 30-day VWAP of $10.04, the 10-day VWAP of $10.11, the 52 week high of $10.92 and\nthe 52 week low of $8.75, calculating the implied value of the preferred stock consideration and the aggregate implied purchase price\nat each reference price, which ranged from $4.69 to $5.23.

General

Citizens\nis not a legal, tax or regulatory advisor and relied upon, without independent verification, the assessment of Harte Hanks and its legal,\ntax or regulatory advisors with respect to legal, tax or regulatory matters. Citizens is not in the business of appraising tangible assets\nand has not made any independent valuation or appraisal of any or all of the assets or liabilities (including any contingent, derivative\nor off-balance-sheet assets or liabilities) of Harte Hanks, nor has Citizens been furnished with any such valuations or appraisals. In\naddition, Citizens has not evaluated the solvency of any party to the Merger Agreement under any state or federal laws relating to bankruptcy,\ninsolvency or similar matters. Citizens’ opinion is necessarily based on financial, economic, market and other conditions as in\neffect on, and the information made available to Citizens as of, the date of the agreement. Events occurring after the date of the opinion\nmay affect the opinion and the assumptions used in preparing it, and Citizens does not assume any obligation to update, revise or reaffirm\nthe opinion.

Citizens\nwas not requested to consider, and its opinion does not address, Harte Hanks’ underlying business decision to enter into the Merger\nAgreement and pursue the Merger, or the relative merits of the Merger as compared to any alternative business strategies that might exist\nfor Harte Hanks or the effect of any other transaction in which Harte Hanks might engage. Citizens is not requested to consider, and\nits opinion does not address, the non-financial terms of the Merger Agreement or the Merger, nor does it address the terms of any of\nthe related agreements to be entered into by the parties. Its opinion addresses only the Merger Consideration to be received by the holders\nof Harte Hanks Common Stock (other than Owned Company Shares) in the Merger. Citizens was not requested to consider, and its opinion\ndoes not address, the fairness of any consideration to be received in the Merger by the holders of any other class or series of capital\nstock, creditors or other constituencies of Harte Hanks, the allocation of the Merger Consideration amongst the holders of any class\nor series of capital stock, creditors or other constituencies of Harte Hanks, the conversion ratio pursuant to the Merger Agreement for\nany class or series of capital stock or any election, proration or adjustment of the Merger Consideration. Citizens has assumed that\nthe value of the Star Preferred Stock is the liquidation preference of $10.00 per share, and Citizens expressed no opinion as to the\nprice at which the Star Preferred Stock may be sold at in the future. Furthermore, Citizens expressed no opinion with respect to the\namount or nature of any compensation to be received by any officers, directors or employees of any party to the Merger, or any class\nof such persons, relative to the Merger Consideration to be paid to the holders of Harte Hanks Common Stock in the Merger or otherwise,\nor with respect to the fairness of any such compensation.

Citizens,\nas part of its investment banking business, is customarily engaged in the valuation of businesses and their securities in connection\nwith mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of securities, private placements\nand valuations for estate, corporate and other purposes.

Citizens\nhas acted as financial advisor to Harte Hanks in connection with the Merger and will receive a fee for its services, a portion of which\nis payable for providing the opinion and a significant portion of which will become payable only if the Merger is consummated. In addition,\nHarte Hanks has agreed to indemnify Citizens against certain liabilities arising out of its engagement. Citizens has not otherwise had\na material relationship with, nor otherwise received fees from, Harte Hanks or any other party to the Merger during the two years preceding\nthe date of the opinion.

In\nthe ordinary course of its trading, brokerage, investment management and financing activities, Citizens or its affiliates may at any\ntime hold long or short positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers,\nin debt or equity securities of other companies or any currency that may be involved in the Merger. In the future, Citizens may maintain\nother relationships with, and provide advisory and other services to Harte Hanks, Star and their respective affiliates, and may receive\nfees for providing such services.

The\nopinion was given at the request of, and was intended for the benefit and use of, the board of directors of Harte Hanks in connection\nwith its consideration of the Merger, and it is not intended to be and does not constitute a recommendation to any stockholder of Harte\nHanks as to how such stockholder should vote or act on any matter relating to the Merger.

For\nmore information, see “Opinion of Harte Hanks’ Financial Advisor,” beginning on page 86, and Annex B.

Interests\nof Harte Hanks Directors and Executive Officers in the Merger (page 93)

Voting\nand Support Agreement

Immediately\nfollowing the execution of the Merger Agreement, Star, Harte Hanks and each of John H. Griffin, Jr., Genevieve C. Combes, Bradley L.\nRadoff, Elizabeth Ross, David Fisher and David A. Garrison (each, a “supporting stockholder”) entered into a voting\nand support agreement (collectively, the “Voting and Support Agreements”). Each supporting stockholder entered into\nthe applicable Voting and Support Agreement solely in his or her capacity as a Harte Hanks stockholder and not in his or her capacity\nas a director, officer or employee of Harte Hanks.

Amendments\nto Employment Agreements

In\nconnection with the Merger, Harte Hanks amended the employment agreement with each of David Fisher, President of Harte Hanks, and David\nA. Garrison, Chief Financial Officer of Harte Hanks, conditional upon, and effective as of, the Closing. Each such amendment provides\nfor a closing incentive bonus ($200,000 for Mr. Fisher and $150,000 for Mr. Garrison) and waives the requirement that the executive remain\nunemployed in order to receive the severance benefits provided under the employment agreement.

Acceleration\nof Equity Awards and Conversion in Merger Consideration

At\nthe Effective Time, each RSU and stock option identified on the disclosure schedules to the Merger Agreement that remains outstanding\nimmediately prior to the Effective Time (including each such RSU and stock option that is held by a director or executive officer of\nHarte Hanks) will be cancelled and converted into the right to receive Merger Consideration (a) in the case of an RSU, with respect to\neach share of Harte Hanks Common Stock underlying such RSU, and (b) in the case of a stock option, based on the in-the-money value of\nsuch option. At or immediately prior to the Closing, an aggregate of 216,446 restricted stock units are expected to vest and be\nsettled, and a stock option covering 32,400 shares of Harte Hanks Common Stock is expected to be cancelled in exchange for a cash payment\nof approximately $14,580.

For\nmore information, see “Background of the Merger” beginning on page 68 and “Harte Hanks’ Reasons for the\nMerger; Recommendation of Board of Directors of Harte Hanks” beginning on page 82. These interests are described in more\ndetail, and certain of them are quantified, in the section entitled “Interests of Harte Hanks Directors and Executive Officers\nin the Merger” beginning on page 93.

Governance\nof the Combined Company After the Merger (page 96)

The\ndirectors of Merger Sub immediately prior to the Effective Time will become the directors of Harte Hanks as the Surviving Corporation,\nand the officers of Merger Sub immediately prior to the Effective Time will become the officers of the Surviving Corporation, in each\ncase until their respective successors are duly elected or appointed and qualified in accordance with applicable law and the Surviving\nCorporation’s organizational documents.

The\ndirectors and officers of Star immediately prior to the Merger Effective Time will continue to be the directors and officers of the surviving\nparent corporation.

Regulatory\nApprovals and Other Conditions to Closing (page 96)

The\nMerger is not subject to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR”) because the transaction\ndoes not meet the applicable size-of-transaction threshold, and no HSR filing or waiting period applies. Completion of the Merger is\nsubject to the satisfaction of certain other regulatory and third-party conditions described below.

Under\nthe Merger Agreement, Harte Hanks and Star have agreed to cooperate and use their respective commercially reasonable efforts to obtain\nall approvals, consents, waivers, authorizations and orders required from governmental authorities, if any, in connection with the Merger\nand the other transactions contemplated by the Merger Agreement.

In\nconnection with the issuance of shares of Star’s Preferred Stock in the Merger, Star is required to file with the SEC a registration\nstatement on Form S-4 registering the securities to be issued in the Merger. A condition to the parties’ obligation to complete\nthe Merger is that the Form S-4 have become effective under the Securities Act and not be subject to any stop order or proceedings seeking\na stop order. The filing and effectiveness of this Registration Statement on Form S-4 is intended to satisfy this condition to the parties’\nobligations to complete the Merger.

The\nMerger is also conditioned on the delivery of the ABL Loan Agreement Amendment with Texas Capital Bank and on the availability of not\nless than $15.0 million of proceeds under such facility (or any permitted Alternative Debt Financing) on the Closing Date. In addition,\nthe Merger Agreement requires the receipt of certain third-party consents, waivers, approvals and notices identified in the Merger Agreement\nand related disclosure schedules.

Although\nneither Star nor Harte Hanks knows of any reason why it cannot obtain the requisite approvals in a timely manner, Star and Harte Hanks\ncannot be certain when or if they will be obtained, or that the granting of these regulatory approvals will not involve the imposition\nof conditions on the completion of the Merger.

For\nmore information, see “Regulatory Approvals and Other Conditions to Closing” beginning on page 96.

Expected\nTiming of the Merger

Neither\nStar nor Harte Hanks can predict the actual date on which the Merger will be completed, or if the Merger will be completed at all, because\ncompletion is subject to conditions and factors outside the control of both companies. Harte Hanks must first obtain the approval of\nHarte Hanks stockholders for the Harte Hanks Merger Proposal. Star and Harte Hanks must also obtain necessary regulatory approvals and\nsatisfy certain other closing conditions. Star and Harte Hanks expect the Merger to be completed promptly once Star and Harte Hanks have\nobtained the Harte Hanks stockholders’ approval as noted above, have obtained necessary regulatory approvals, and have satisfied\nthe other closing conditions.

Debt\nFinancing and Alternative Debt Financing

In\nconnection with the Merger, Star expects to finance a portion of the cash consideration payable in the Merger, together with related\ntransaction expenses and fees, through debt financing.

Under\nthe Merger Agreement, as a condition to Star’s obligation to consummate the Merger, (i) debt financing proceeds in an aggregate\nprincipal amount of not less than $15.0 million must be available to Star and (ii) Harte Hanks must obtain an amendment to Harte Hanks’\nexisting asset-based lending facility on terms acceptable to Star, or (if such financing is not available) Star must take commercially\nreasonable efforts to obtain Alternative Debt Financing (as defined below) in no less than such amount.

As\nof the date of this proxy statement/prospectus, Harte Hanks and Star are pursuing financing arrangements intended to satisfy these requirements.\nAlthough Harte Hanks and Star currently expect that the required financing and related amendments will be available on terms acceptable\nto Star, there can be no assurance that such financing or amendments will be obtained on the anticipated terms or at all.

The\nDebt Financing and amendment to Harte Hanks’ existing asset-based lending facility are not subject to approval by Harte Hanks stockholders.

The\nMerger Agreement permits Star, subject to the terms and conditions of the Merger Agreement, to obtain Alternative Debt Financing in lieu\nof the Debt Financing and amendment to Harte Hanks’ existing asset-based lending facility.

If\nStar determines that Alternative Debt Financing is necessary or desirable, Star may seek financing from one or more alternative lenders\nor financing providers. Any Alternative Debt Financing must satisfy the requirements set forth in the Merger Agreement, including the\nrequirement that debt financing proceeds of at least $15.0 million be available at Closing.

Conditions\nto Complete the Merger (page 108)

As\nmore fully described in this proxy statement/prospectus and in the Merger Agreement, the completion of the Merger depends on a number\nof conditions being satisfied or, where legally permissible, waived. These conditions include:

●\nthe adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the voting power of the outstanding shares\nof Harte Hanks Common Stock entitled to vote on the Merger;

●\nthe Registration Statement on Form S-4 relating to the shares of Star’s Preferred Stock to be issued in connection with the Merger\nhaving become effective under the Securities Act of 1933, as amended, and not be subject to any stop order or proceedings seeking a stop\norder.

●\nthe absence of any law, injunction, judgment, order, decree or other legal restraint enacted, entered, promulgated, enforced or issued\nby any governmental authority that prohibits, restrains or makes illegal the consummation of the Merger or the other transactions contemplated\nby the Merger Agreement;

●\nthe representations and warranties of Harte Hanks and Star being true and correct at Closing, subject to the materiality and other qualification\nstandards set forth in the Merger Agreement;

●\neach party having performed and complied in all material respects with its respective covenants, agreements and obligations required\nto be performed prior to the Closing under the Merger Agreement;

●\ndelivery by Harte Hanks and Star of customary closing certificates certifying, among other things, that the applicable representations\nand warranties satisfy the standards required by the Merger Agreement and that the applicable covenants have been performed;

●\nwith respect to Harte Hanks, the absence of a Company Material Adverse Effect that is continuing as of the Closing Date;

●\nwith respect to Star, the absence of a Parent Material Adverse Effect that is continuing as of the Closing Date;

●\nHarte Hanks having delivered to Star the amendment to the ABL Loan Agreement required by the Merger Agreement, in form and substance\nrequired by the agreement;

●\nall conditions precedent to the Debt Financing, or Alternative Debt Financing, contemplated by Star having been satisfied or waived,\nother than those conditions that by their nature are to be satisfied at the Closing of the Merger;

●\nStar having available at the Closing not less than $15.0 million of proceeds under the Debt Financing (or any permitted Alternative Debt\nFinancing) required to fund the transactions contemplated by the Merger Agreement; and

●\nreceipt, expiration or satisfaction of specified third-party consents, approvals, waivers and notices required under certain contracts\nand arrangements identified in the Merger Agreement and disclosure schedules.

The\nforegoing summary is qualified in its entirety by reference to the section entitled “The Merger Agreement - Conditions to the Merger”\nand the full text of the Merger Agreement.

Termination\nof the Merger Agreement (page 111)

The\nMerger Agreement can be terminated at any time prior to the Effective Time, whether before or after the receipt of the requisite Harte\nHanks vote, in the following circumstances:

●

by\n mutual written agreement of Star and Harte Hanks;

●

by\n either Star or Harte Hanks if a final and nonappealable order, injunction or other legal\n or regulatory restraint or prohibition, or a statute, rule, regulation or order, prohibits,\n makes illegal or enjoins the consummation of the Merger, provided that the terminating party\n has complied with its obligations to use commercially reasonable efforts to resist, appeal,\n obtain consent for, resolve or lift the applicable restraint or prohibition;

●

by\n either Star or Harte Hanks if the Effective Time has not occurred by 11:59 p.m., Eastern\n Time, on March 1, 2027, subject to the limitations in the Merger Agreement, including limitations\n applicable if the other party has a valid termination right or if the terminating party’s\n breach was the primary cause of the failure to satisfy the applicable closing conditions\n or consummate the Merger by that date;

●

by\n either Star or Harte Hanks if Harte Hanks stockholders do not adopt the Merger Agreement\n at the Harte Hanks Special Meeting or any adjournment or postponement thereof at which a\n vote is taken;

●

by\n Star if a condition to Star’s and Merger Sub’s obligation to complete the Merger\n has failed to be satisfied or has become incapable of being satisfied by the termination\n date, subject to the applicable notice and cure provisions of the Merger Agreement;

●

by\n Star, before Harte Hanks stockholders approve the Merger Agreement, if the board of directors\n of Harte Hanks or a committee thereof has effected a Company Board Recommendation Change;

●

by\n Harte Hanks if a condition to Harte Hanks’ obligation to complete the Merger has failed\n to be satisfied or has become incapable of being satisfied by the termination date, subject\n to the applicable notice and cure provisions of the Merger Agreement;

●

by\n Harte Hanks, before Harte Hanks stockholders approve the Merger Agreement, to enter into\n a definitive agreement for a Superior Proposal, provided that Harte Hanks has complied in\n all material respects with the applicable non-solicitation provisions and pays the Company\n Termination Fee before or concurrently with termination; or

●

by\n Harte Hanks if the closing conditions in favor of Harte Hanks and the mutual closing conditions\n have been satisfied or waived (other than conditions that are to be satisfied at closing\n and are capable of being satisfied at closing), Harte Hanks is ready, willing and able to\n close, Star and Merger Sub fail to close when required, and, after Harte Hanks gives the\n required written notice of its intention to terminate, Star and Merger Sub fail to close\n within the applicable three-business-day period.

Harte Hanks Termination Fee and\nStar Termination Fee (page\n112)

Under\nthe Merger Agreement, Harte Hanks may be required to pay Star a termination fee of $1,152,000 in certain circumstances. The Merger Agreement\nprovided for a reduced $576,000 fee only if Harte Hanks terminated the Merger Agreement to enter into an alternative transaction involving\nmore than 25% of Harte Hanks’ outstanding voting power or assets, revenue or net income (an “Acquisition Transaction”)\nwith an Exempted Party and the definitive Alternative Acquisition Agreement was entered into on or prior to the No-Shop Period Start\nDate. Because no Alternative Acquisition Agreement was entered into on or prior to September 13, 2026, that reduced fee is no longer\navailable, and any later termination to enter into an alternative transaction with an Exempted Party would require the full $1,152,000\nCompany Termination Fee. The termination fee is payable only upon the occurrence of specified events and the termination of the Merger\nAgreement under the circumstances described below.

Prior\nto obtaining the Requisite Stockholder Approval, Harte Hanks may terminate the Merger Agreement in order to enter into a definitive agreement\nwith respect to a Superior Proposal, provided that Harte Hanks complies with the notice, negotiation and matching-right procedures set\nforth in the Merger Agreement. If Harte Hanks terminates the Merger Agreement under these circumstances, Harte Hanks will be required\nto pay Star a termination fee of $1,152,000. The reduced $576,000 fee was available only if the definitive Alternative Acquisition Agreement\nwas entered into with an Exempted Party on or prior to the No-Shop Period Start Date. Because no Alternative Acquisition Agreement was\nentered into by that date, any later termination to enter into an Alternative Acquisition Agreement with an Exempted Party would require\nthe full $1,152,000 Company Termination Fee.

Star\nmay terminate the Merger Agreement if the board of directors of Harte Hanks effects a Company Board Recommendation Change. If the Merger\nAgreement is terminated under those circumstances, Harte Hanks must pay Star a termination fee of $1,152,000.

If\n(i) an Acquisition Proposal has been publicly announced or publicly disclosed, (ii) the Merger Agreement is subsequently terminated under\ncertain specified circumstances, including a failure to obtain stockholder approval or the failure to complete the Merger by the outside\ndate, and (iii) within one year following such termination Harte Hanks consummates an Acquisition Transaction or enters into a definitive\nagreement providing for an Acquisition Transaction, then Harte Hanks will be required to pay Star a termination fee of $1,152,000.

If\nthe Merger Agreement is terminated under certain circumstances because Star or Merger Sub has failed to perform its obligations under\nthe Merger Agreement in a manner that causes a closing condition to Harte Hanks’ obligation to consummate the Merger to fail, or\nbecause Star and Merger Sub fail to consummate the Merger when required by the Merger Agreement, Star will be required to pay Harte Hanks\na termination fee of $1,152,000.

Accounting\nTreatment (page 96)

The\nMerger will be accounted for as an acquisition of Harte Hanks by Star under the acquisition method of accounting in accordance with GAAP.\n

Comparison\nof the Rights of Star Preferred Stockholders and Harte Hanks Common Stockholders\n(page 131)

The\nrights of Harte Hanks stockholders are governed by Delaware law and the Harte Hanks certificate of incorporation and the Harte Hanks\nbylaws. In the Merger, Harte Hanks stockholders who receive Star Preferred Stock Consideration will become Star Preferred Stockholders,\nand their rights will be governed by Delaware law, and will also be governed by the Certificate of Designations, Rights and Preferences\nof Star’s 10% Series A Cumulative Perpetual Preferred Stock and the Star Certificate of Incorporation. Harte Hanks stockholders\nwill have different rights once they become Star Preferred stockholders due to differences between the Harte Hanks governing documents,\non the one hand, and the Star governing documents, on the other hand. These differences are described in more detail under the section\nentitled “Comparison of the Rights of Star Preferred stockholders and Harte Hanks Common stockholders” beginning on page\n131.

Stock\nExchange Listing (page 97)

The\nshares of Star’s 10% Series A Cumulative Perpetual Preferred Stock to be issued in the Merger are listed for trading on the Nasdaq\nGlobal Select Market. Following the Merger, shares of Star Preferred Stock will continue to be traded on the Nasdaq Global Select Market.\n

The\nHarte Hanks Special Meeting (page 50)

The\nHarte Hanks Special Meeting will take place on [________], 2026 at [__]:00 p.m., Eastern Time, or at such other time as the Harte Hanks\nSpecial Meeting may be adjourned or postponed. The Harte Hanks Special Meeting will be held at Harte Hanks’ principal executive\noffice located at 1 Executive Drive, Suite 303, Chelmsford, MA 01824.

At\nthe Harte Hanks Special Meeting, Harte Hanks stockholders will be asked to vote on the following matters:

●\nthe Harte Hanks Merger Proposal; and

●\nthe Non-Binding Advisory Compensation Proposal.

You\nmay vote at the Harte Hanks Special Meeting if you owned shares of Harte Hanks Common Stock at the close of business on [_____], 2026.\nAs of the Record Date, there were [_______] shares of Harte Hanks Common Stock outstanding.

John\nH. Griffin, Jr., Genevieve C. Combes, Bradley L. Radoff, Elizabeth Ross, David Fisher and David A. Garrison, solely in such director’s\nor executive officer’s capacity as a stockholder of Harte Hanks, have entered into a voting agreement with Star requiring each\nsuch director or executive officer to vote all shares of Harte Hanks Common Stock owned by such director or executive officer in favor\nof the Harte Hanks Merger Proposal. As of the Record Date, these directors and executive officers held [____] shares of Harte Hanks Common\nStock, which represented approximately [____]% of the outstanding shares of Harte Hanks Common Stock entitled to vote at the Harte Hanks\nSpecial Meeting.

As\nof the Record Date for the Harte Hanks Special Meeting, Star beneficially owned 82,000 shares of Harte Hanks Common Stock, representing\napproximately 1.1% of the outstanding shares of Harte Hanks Common Stock entitled to vote at the Special Meeting. Star intends to vote,\nor cause to be voted, all such shares FOR the Harte Hanks Merger Proposal.

The\nHarte Hanks Merger Proposal will be approved if a majority of the voting power of the outstanding shares of Harte Hanks Common Stock\nentitled to vote at the Harte Hanks Special Meeting are voted in favor of such proposal. If a Harte Hanks stockholder present at the\nHarte Hanks Special Meeting abstains from voting, or responds by proxy with an “ABSTAIN,” it will have the same effect as\na vote “AGAINST” such proposal. If a Harte Hanks stockholder is not present at the Harte Hanks Special Meeting and does not\nrespond by proxy or does not provide his, her or its bank, broker, trustee or other nominee with instructions, as applicable and as may\nbe required, it will have the same effect as a vote “AGAINST” such proposal.

Approval\nof the Non-Binding Advisory Compensation Proposal is not a condition to completion of the Merger. Approval of the Non-Binding Advisory\nCompensation Proposal requires the affirmative vote of a majority of the votes cast at the Special Meeting, provided a quorum is present.

Dissenters’\nRights in the Merger (page 97)

Neither\nStar stockholders nor Harte Hanks stockholders are entitled to dissenters’ rights under the Merger Agreement or the General Corporation\nLaw of the State of Delaware (“DGCL”).

Election\nProcedures (page 100)

To\nmake an effective election, a stockholder of record must submit a properly completed election form to the designated payment agent, on\nor before the election deadline specified in the election materials (“election deadline”). The election deadline will be\n5:00 p.m., Eastern Time, on the Election Date. The “Election Date” will be the date of the Harte Hanks stockholder meeting,\nunless the Closing Date is more than four business days after that meeting; in that case, it will be two business days before the Closing\nDate. Star and Harte Hanks may agree to, and publicly announce, another Election Date.

Elections\nreceived after the election deadline, or elections that are not properly completed, will be treated as if no election had been made.\nYou may change or revoke your election at any time prior to the election deadline by written notice received by the payment agent prior\nto the election deadline accompanied by a properly completed and signed, revised election form. All elections will be revoked automatically\nif the Merger Agreement is terminated. You may not revoke or change your elections following the election deadline.

Stockholders\nwho do not make a valid election by the election deadline will be deemed to have made no election and will receive Merger Consideration\nin accordance with the allocation and proration procedures set forth in the Merger Agreement. In addition, all elections are subject\nto the overall cash and stock consideration limitations and proration provisions contained in the Merger Agreement, which may result\nin stockholders receiving a combination of cash and Star Preferred Stock that differs from the form of consideration elected.

Maximum\nCash Amount and Proration (page 99)\n

Harte\nHanks stockholders may elect to receive (i) $5.00 in cash for each share of Harte Hanks Common Stock for which they elect Cash Consideration,\n(ii) 0.50 share of Star Preferred Stock for each share of Harte Hanks Common Stock for which they elect Preferred Stock Consideration,\nor (iii) a combination of both by electing Cash Consideration for some shares and Preferred Stock Consideration for others, in each case\nsubject to the election and proration procedures contained in the Merger Agreement. Stockholders who do not make a valid election by\nthe election deadline, or whose election is revoked, lost or otherwise not properly made, will be treated as non-electing stockholders.

The\nMerger Agreement provides that the aggregate amount of cash payable in the Merger, including cash payable in lieu of fractional shares\nof Star Preferred Stock, may not exceed the Maximum Cash Amount. As a result, a stockholder may not receive the exact form of consideration\nelected.

If\nthe aggregate amount of cash that would be paid to all stockholders making cash elections is less than $19.2 million, all cash-electing\nstockholders will receive the full Cash Consideration of $5.00 per share and all Preferred Stock-electing stockholders will receive the\nfull Preferred Stock Consideration of 0.50 share of Star Preferred Stock per share. In that circumstance, Star will determine whether\nnon-electing stockholders receive Cash Consideration, Preferred Stock Consideration, or a combination of both, provided that the aggregate\ncash paid in the Merger does not exceed $19.2 million.

If\nthe aggregate amount of cash that would be paid to all shares making cash elections exceeds the $19.2 million Maximum Cash Amount, all\nPreferred Stock-electing shares and all non-electing shares will receive the Preferred Stock Consideration. In addition, each cash-electing\nshare will receive a prorated portion of the Cash Consideration and Preferred Stock Consideration.

The\namount of cash payable to each cash-electing share will be determined by multiplying the Cash Consideration otherwise payable to all\ncash-electing shares by a fraction, the numerator of which is the Maximum Cash Amount and the denominator of which is the aggregate amount\nof cash that would be paid in respect of all Cash Electing Company Shares if all such Cash Electing Company Shares received the Cash\nConsideration in full. The remaining portion of each cash election will be converted into the right to receive Preferred Stock Consideration.

Any\nshares for which a valid election is not made, or for which an election is revoked, lost or otherwise deemed ineffective, will be treated\nas non-electing shares. If cash elections exceed the Maximum Cash Amount, all non-electing shares will receive Preferred Stock Consideration.\nIf cash elections do not exceed the Maximum Cash Amount, Star may allocate Cash Consideration, Preferred Stock Consideration, or a combination\nthereof to non-electing shares, subject to the Maximum Cash Amount, in its discretion.

Risk\nFactors (page 42)

In\nevaluating the Merger Agreement and the Merger, you should carefully read this proxy statement/prospectus\nand give special consideration to the factors discussed in the section entitled “Risk Factors” beginning on page 42.

CAUTIONARY\nSTATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Some\nof the statements contained or incorporated by reference into this proxy statement/prospectus are “forward-looking statements”\nwithin the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”), Section 27A of the Securities\nAct, and Section 21E of the Exchange Act notwithstanding that such statements are not specifically identified as such. In addition, certain\nstatements may be contained in Star’s future filings with the U.S. Securities and Exchange Commission (“SEC”),\nin press releases and in oral and written statements made by Star or Harte Hanks or with their respective approval that are not statements\nof historical fact and constitute forward-looking statements within the meaning of the Act. Any statement that does not describe historical\nor current facts is a forward-looking statement, including statements with respect to Star’s and Harte Hanks’ beliefs, goals,\nintentions and expectations regarding the proposed transaction, revenues, earnings, Debt Financing, asset quality and capital levels,\namong other matters; our estimates of future costs and benefits of the actions we may take; our assessments of the Debt Financing; our\nassessments of other market risks; our ability to achieve our financial and other strategic goals; the expected timing of completion\nof the proposed transaction; the expected cost savings, synergies and other anticipated benefits from the proposed transaction; and other\nstatements that are not historical facts.

Forward-looking\nstatements are typically identified by words such as “believe,” “expect,” “anticipate,” “project,”\n“intend,” “target,” “estimate,” “continue,” “positions,” “prospects”\nor “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,”\nor “may,” or by variations of such words or by similar expressions. Forward-looking statements are based on current expectations,\nestimates and projections about Star’s and Harte Hanks’ businesses, beliefs of Star’s and Harte Hanks’ management\nand assumptions made by Star and Harte Hanks’ management. These statements are not guarantees of future performance and are subject\nto numerous risks, uncertainties and assumptions that are difficult to predict, change over time, and many of which are beyond the control\nof Star and Harte Hanks. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking\nstatements.

Some\nof these risks include, among others:

●\nthe occurrence of any event, change or other circumstances that could give rise to the right of one or all of the parties to terminate\nthe Merger Agreement;

●\nthe outcome of any legal proceedings that may be instituted against Star or Harte Hanks;

●\nthe possibility that the proposed transaction will not close when expected or at all because required regulatory, stockholder or other\napprovals are not received or other conditions to the Closing are not satisfied on a timely basis or at all, or are obtained subject\nto conditions that are not anticipated (and the risk that required regulatory approvals may result in the imposition of conditions that\ncould adversely affect the combined company or the expected benefits of the proposed transaction);

●\nthe ability of Star and Harte Hanks to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed\ntransaction;

●\nthe risk that any announcements relating to the proposed transaction could have adverse effects on the market price of Star Preferred\nStock;

●\nthe possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as\na result of the impact of, or problems arising from, the integration of the two (2) organizations or as a result of the strength of the\neconomy and competitive factors in the areas where Star and Harte Hanks do business;

●\ncertain restrictions during the pendency of the proposed transaction that may impact the parties’ ability to pursue certain business\nopportunities or strategic transactions;

●\nthe possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events;\n

●\ndiversion of management’s attention from ongoing business operations and opportunities;

●\nthe possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the Merger within the expected\ntimeframes or at all and to successfully integrate Harte Hanks’ operations and those of Star;

●\nsuch integration may be more difficult, time consuming or costly than expected;

●\nrevenues following the proposed transaction may be lower than expected;

●\nStar’s and Harte Hanks’ success in executing their respective business plans and strategies and managing the risks involved\nin the foregoing; and

●\nrisks related to the potential impact of general economic, political and market factors on the companies or the Merger and other factors\nthat may affect future results of Star and Harte Hanks.

These\nare representative of the risks that could affect the outcome of the forward-looking statements. In addition, such statements could be\naffected by general industry and market conditions and growth rates, general economic and political conditions, either nationally or\nin the states in which Star, Harte Hanks or their respective subsidiaries do business, including interest rate and currency exchange\nrate fluctuations, changes and trends in the securities markets, and other risks.

For\nany forward-looking statements made in this proxy statement/prospectus or in any documents included with or incorporated by reference\ninto this proxy statement/prospectus, Star and Harte Hanks claim the protection of the safe harbor for forward-looking statements contained\nin the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. You\nare cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this proxy statement/prospectus\nor the dates of the documents incorporated by reference in this proxy statement/prospectus and are not guarantees of future results,\nperformance or outcomes. Annualized, pro forma, projected and estimated numbers are used for illustrative purposes only, are not forecasts\nand may not reflect actual results. Except as required by applicable law, neither Star nor Harte Hanks undertakes to update these forward-looking\nstatements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made.\n

For\nadditional information about factors that could cause actual results to differ materially from those described in the forward-looking\nstatements, please see the reports that Star has filed with the SEC as described under “Where You Can Find More Information”\nbeginning on page 135.

Star\nand Harte Hanks expressly qualify in their entirety all forward-looking statements attributable to either of them or any person acting\non their behalf by the cautionary statements contained or referred to in this proxy statement/prospectus.

RISK\nFACTORS

In\naddition to the other information contained in or incorporated by reference into this proxy statement/prospectus,\nincluding the matters addressed under the caption “Cautionary Statement Regarding Forward-Looking Statements” beginning on\npage 40, Harte Hanks stockholders should carefully consider the following risk factors in deciding whether to vote for the approval\nof the Harte Hanks Merger Proposal.

Risks\nRelating to the Consummation of the Merger

Harte\nHanks stockholders may receive a form of consideration different from what they elect.

Under\nthe Merger Agreement, holders of Harte Hanks Common Stock may elect to receive Cash Consideration of $5.00 per share, Preferred Stock\nConsideration of 0.50 share of Star’s Preferred Stock per share, or a combination of both by electing Cash Consideration for some\nshares and Preferred Stock Consideration for others, subject to the election and proration procedures set forth in the Merger Agreement.\nHowever, the aggregate amount of cash payable in the Merger, including cash payable in lieu of fractional shares of Star Preferred Stock,\nmay not exceed $19.2 million. As a result, if the aggregate Cash Consideration elected by Harte Hanks stockholders exceeds $19.2 million,\nall Preferred Stock elections and all non-elections will be converted into Preferred Stock Consideration, and cash elections will be\nprorated. In that circumstance, stockholders that elect to receive cash will receive Cash Consideration only with respect to a portion\nof their shares and will receive Preferred Stock Consideration with respect to the remainder of their shares. The amount of cash ultimately\nreceived by each cash-electing stockholder will depend on the total number of shares for which cash elections are made by all Harte Hanks\nstockholders.

In\naddition, stockholders who do not make a valid election, whose election is revoked, or whose election is otherwise deemed ineffective\nwill be treated as non-electing stockholders. If cash elections do not exceed the $19.2 million cash cap, Star will determine whether\nnon-electing shares receive Cash Consideration, Preferred Stock Consideration, or a combination of both, subject to the Maximum Cash\nAmount. Accordingly, stockholders may not know the exact form of Merger Consideration they will receive until after the election process\nhas been completed and the final allocation has been determined. Regardless of whether you elect to receive Cash Consideration, Preferred\nStock Consideration or a combination of both, you may receive a different mix of Cash and Preferred Stock than you elected, and the consideration\nyou ultimately receive will depend in part on the elections made by other Harte Hanks stockholders.

Non-electing\nstockholders may receive a form of consideration determined by Star.

Stockholders\nwho do not submit a valid election, whose election is revoked, or whose election is otherwise ineffective will be treated as non-electing\nstockholders. If the aggregate amount of cash elected by Harte Hanks stockholders is less than the $19.2 million Maximum Cash Amount\npermitted under the Merger Agreement, Star has the discretion to determine whether non-electing shares receive Cash Consideration, Preferred\nStock Consideration, or a combination of both, subject to the cash cap. In addition, the Star Preferred Stock has different investment\ncharacteristics and risks than cash, including risks related to Star’s business, financial condition and the market value of the\nStar Preferred Stock.

Star\nand Harte Hanks are expected to incur substantial costs related to the Merger and integration.

Star\nand Harte Hanks have incurred and expect to incur a number of non-recurring costs associated with the Merger. These costs include legal,\nfinancial advisory, accounting, consulting and other advisory fees, severance/employee benefit-related costs, public company filing fees\nand other regulatory fees, financial printing and other printing costs and other related costs. Some of these costs are payable by either\nStar or Harte Hanks regardless of whether the Merger is completed. See “Fees and Expenses” beginning on page 112.

Following\nthe Closing, Star is expected to incur substantial costs related to the integration of Star’s and Harte Hanks’ businesses,\nincluding facilities and systems consolidation costs and employment-related costs. Star and Harte Hanks may also incur additional costs\nto maintain employee morale and to retain key employees. There are a large number of processes, policies, procedures, operations, technologies\nand systems that may need to be integrated, including accounting and finance, payroll, compliance, treasury management, operations, vendor\nmanagement, risk management, lines of business, pricing and benefits. While Star and Harte Hanks have assumed that a certain level of\ncosts will be incurred, there are many factors beyond their control that could affect the total amount or the timing of the integration\ncosts. Moreover, many of the costs that will be incurred are, by their nature, difficult to estimate accurately. These integration costs\nmay result in the combined company taking charges against earnings following the completion of the Merger, and the amount and timing\nof such charges are uncertain at present. There can be no assurances that the expected benefits and efficiencies related to the integration\nof the businesses will be realized to offset these transaction and integration costs over time.

Combining\nStar and Harte Hanks may be more difficult, costly or time-consuming than expected, and Star and Harte Hanks may fail to realize the\nanticipated benefits of the Merger.

The\nsuccess of the Merger will depend, in part, on the ability to realize the anticipated cost savings from combining the businesses of Star\nand Harte Hanks. To realize the anticipated benefits and cost savings from the Merger, Star and Harte Hanks must successfully integrate\nand combine their businesses in a manner that permits those cost savings to be realized, without adversely affecting current revenues\nand future growth. If Star and Harte Hanks are not able to successfully achieve these objectives, the anticipated benefits of the Merger\nmay not be realized fully, or at all, or may take longer to realize than expected. In addition, the actual cost savings of the Merger\ncould be less than anticipated, and integration may result in additional and unforeseen expenses.

An\ninability to realize the full extent of the anticipated benefits of the Merger and the other transactions contemplated by the Merger\nAgreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses\nand operating results of the combined company following the completion of the Merger, which may adversely affect the value of the capital\nstock of the combined company following the completion of the Merger.

Star\nand Harte Hanks have operated and, until the completion of the Merger, must continue to operate, independently. It is possible that the\nintegration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies\nin standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with clients,\ncustomers, and employees or to achieve the anticipated benefits and cost savings of the Merger. Integration efforts between the two companies\nmay also divert management attention and resources. These integration matters could have an adverse effect on each of Star and Harte\nHanks during this transition period and for an undetermined period after completion of the Merger.

The\nfuture results of the combined company following the Merger may suffer if the combined company does not effectively manage its expanded\noperations.

Following\nthe Merger, the size of the business of the combined company will increase beyond the current size of Star’s business. The combined\ncompany’s future success will depend, in part, upon its ability to manage this expanded business, which may pose challenges for\nmanagement, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.\nThere can be no assurances that the combined company will be successful or that it will realize the expected operating efficiencies,\nrevenue enhancement or other benefits currently anticipated from the Merger.

The\ncombined company may be unable to retain Star and/or Harte Hanks’ key personnel successfully after the Merger is completed.

The\nsuccess of the Merger will depend in part on the combined company’s ability to retain the talents and dedication of key employees\ncurrently employed by Star and Harte Hanks. It is possible that these employees may decide not to remain with Star or Harte Hanks, as\napplicable, while the Merger is pending or with the combined company after the Merger is consummated. If Star and Harte Hanks are unable\nto retain key employees, including management, who are critical to the successful integration and future operations of the companies,\nStar and Harte Hanks could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how\nand unanticipated additional recruitment costs. In addition, following the Merger, if key employees terminate their employment, the combined\ncompany’s business activities may be adversely affected, and management’s attention may be diverted from successfully hiring\nsuitable replacements, all of which may cause the combined company’s business to suffer. Star and Harte Hanks also may not be able\nto locate or retain suitable replacements for any key employees who leave either company. See “Governance of the Combined Company\nAfter the Merger” beginning on page 96.

The\nMerger is conditioned on the availability of Debt Financing and/or Alternative Debt Financing, which may not be obtained on the anticipated\nterms or at all.

The\ncompletion of the Merger is conditioned upon the availability of proposed financing of a portion of the Cash Consideration and any cash\nin lieu of fractional shares of Star Preferred Stock, pursuant to a draw by Harte Hanks on its $25,000,000 existing secured revolving\ncredit facility under the ABL Loan Agreement (the “Debt Financing”). Under the Merger Agreement, Star expects to fund\na portion of the Cash Consideration through borrowings under Harte Hanks’ existing revolving credit facility pursuant to the ABL\nLoan Agreement, as amended by the ABL Loan Agreement Amendment, or in the event any portion of the Debt Financing becomes unavailable,\nStar shall use commercially reasonable efforts to obtain alternative debt financing on terms substantially similar to those available\nunder the ABL Loan Agreement or otherwise acceptable to Star in its sole discretion (“Alternative Debt Financing”).\nAmong other conditions, the Merger cannot be completed unless all conditions to the funding of the Debt Financing (or any Alternative\nDebt Financing) have been satisfied or waived and at least $15.0 million is available to be borrowed at Closing.

Although\nStar and Harte Hanks have agreed to use commercially reasonable efforts to obtain the required financing, there can be no assurance that\nthe required financing will be available on acceptable terms, when needed, or at all. Financing commitments may be delayed, terminated\nor become unavailable as a result of adverse market conditions, lender requirements, the failure to satisfy closing conditions or other\nfactors outside the parties’ control.

If\nthe required Debt Financing and/or Alternative Debt Financing is not available at Closing, the Merger may be delayed or may not be completed.\nAny such delay or failure to complete the Merger could adversely affect Harte Hanks, its business, financial condition, results of operations\nand the market price of Harte Hanks Common Stock.

Star\nmay be required to seek alternative financing if the anticipated Debt Financing becomes unavailable.

Star\nintends to fund a portion of the Merger Consideration through borrowings under Harte Hanks’ existing credit facility. If that financing\nbecomes unavailable or is reasonably expected to become unavailable, Star would be required to seek Alternative Debt Financing. There\ncan be no assurance that alternative financing would be available on acceptable terms, in sufficient amounts or on a timely basis. Any\ninability to obtain alternative financing could delay the consummation of the Merger or prevent the Merger from being completed.

The\nMerger will increase the indebtedness of the combined company and could adversely affect its financial flexibility.

A\nportion of the Cash Consideration payable in the Merger will be funded through Debt Financing. As a result, the combined company will\nhave additional indebtedness following the Merger. Increased indebtedness may reduce financial flexibility, increase debt service obligations,\nrestrict the ability to pursue strategic opportunities, limit the ability to obtain additional financing and make the combined company\nmore vulnerable to adverse economic and industry conditions. The combined company’s ability to service its indebtedness will depend\non future operating performance and financial results, which will be subject to economic, financial, competitive and other factors beyond\nits control.

The\nunaudited pro forma condensed combined financial information included in this proxy statement/prospectus\nis preliminary and the actual consideration to be issued in the Merger as well as the actual financial condition and results of operations\nof the combined company after the Merger may differ materially.

The\nunaudited pro forma condensed combined financial information in this proxy statement/prospectus is presented for illustrative purposes\nonly and is not necessarily indicative of what the combined company’s actual financial condition or results of operations would\nhave been had the Merger been completed on the dates indicated. The unaudited pro forma condensed combined financial information reflects\nadjustments, which are based upon preliminary estimates, to record the Harte Hanks identifiable assets acquired and liabilities assumed\nat fair value and the resulting goodwill recognized. The Merger Consideration value allocation reflected in this document is preliminary,\nand the final allocation thereof will be based upon the value of the actual Merger Consideration and the fair value of the assets and\nliabilities of Harte Hanks as of the date of the completion of the Merger. The unaudited pro forma combined financial information reflects\nnumerous variables, expectations and assumptions available at the time it was prepared as to certain business decisions that are subject\nto change and does not take into account any circumstances or events occurring after the date it was prepared, including any recent developments,\nevents, and market volatility. Accordingly, the actual value of the Merger Consideration may vary significantly from the value used in\npreparing the unaudited pro forma condensed combined financial information in this document. Accordingly, the final acquisition accounting\nadjustments may differ materially from the pro forma adjustments reflected in this document and no assurances can be given that if the\nprospective financial information had been prepared as of the date of this proxy statement/prospectus, similar assumptions would be used.\nFor more information, see “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 117.

Certain\nof Harte Hanks’ directors and executive officers may have interests in the Merger that may differ from, or are in addition to,\nthe interests of Harte Hanks stockholders.

Harte\nHanks stockholders should be aware that certain Harte Hanks directors and executive officers may have interests in the Merger that differ\nfrom, or are in addition to, the interests of Harte Hanks stockholders generally, including because certain executive officers may receive\ntransaction-related compensation or benefits, hold Harte Hanks securities or have participated in the evaluation or negotiation of the\nMerger. The board of directors of Harte Hanks was aware of these interests and considered them, among other matters, in making its recommendation\nthat Harte Hanks stockholders approve the Merger Agreement. For a more complete description of these interests, please see “Interests\nof Harte Hanks Directors and Executive Officers in the Merger” beginning on page 93.

The\nMerger Agreement may be terminated in accordance with its terms and the Merger may not be completed.

The\nMerger Agreement contains a number of conditions that must be satisfied or waived before the Merger can be completed. These conditions\ninclude, among others, (i) approval of the Merger Agreement by the holders of a majority of the voting power of the outstanding shares\nof Harte Hanks Common Stock entitled to vote on the Merger, (ii) the effectiveness of the registration statement on Form S-4, (iii) the\nabsence of any law, injunction or governmental order prohibiting the Merger, (iv) the accuracy of the parties’ representations\nand warranties and compliance with their respective covenants, (v) the absence of a Company Material Adverse Effect and a Parent Material\nAdverse Effect, (vi) delivery of the amendment to Harte Hanks’ existing Debt Financing ABL credit facility, or delivery of an acceptable\nAlternative Debt Financing agreement, and (vii) the availability of at least $15.0 million of Debt Financing or Alternative Debt Financing\nat Closing.

These\nconditions may not be satisfied in a timely manner or at all. In particular, the Merger is dependent on the availability of Debt Financing\nand the execution of the ABL Loan Agreement Amendment, each of which is outside the complete control of the parties. If any closing condition\nis not satisfied or waived, the Merger may be delayed or may not be completed.

In\naddition, the Merger Agreement may be terminated under certain circumstances, including by mutual agreement of the parties, if the Merger\nis not completed by March 1, 2027, if the required Harte Hanks stockholder approval is not obtained, if certain closing conditions become\nincapable of being satisfied, if Harte Hanks accepts a Superior Proposal in accordance with the Merger Agreement, or in certain circumstances\ninvolving a change in the board of directors of Harte Hanks’ recommendation.

If\nthe Merger is not completed, Harte Hanks stockholders will not receive the Merger Consideration and Harte Hanks may be subject to a number\nof risks, including costs incurred in connection with the transaction, potential business disruptions and the diversion of management’s\nattention from ongoing business operations

Failure\nto complete the Merger could negatively impact Star and/or Harte Hanks.

If\nthe Merger is not completed for any reason, including as a result of Harte Hanks stockholders failing to approve the Harte Hanks Merger\nProposal, there may be various adverse consequences and Star and/or Harte Hanks may experience negative reactions from the financial\nmarkets and from their respective customers and employees. For example, Star’s or Harte Hanks’ businesses may have been impacted\nadversely by the failure to pursue other beneficial opportunities due to the focus of management on the Merger, without realizing any\nof the anticipated benefits of completing the Merger. Star and/or Harte Hanks also could be subject to litigation related to any failure\nto complete the Merger or to proceedings commenced against Star or Harte Hanks to perform their respective obligations under the Merger\nAgreement.

In\naddition, under the Merger Agreement, Harte Hanks may be required to pay Star a termination fee of $1.152 million in certain circumstances,\nincluding if the Merger Agreement is terminated following a change in the recommendation of the board of directors of Harte Hanks or\nif Harte Hanks terminates the Merger Agreement to enter into an agreement with respect to a Superior Proposal. The Merger Agreement provided\nfor a reduced $576,000 fee only if the definitive Alternative Acquisition Agreement with an Exempted Party was entered into on or prior\nto the No-Shop Period Start Date. Because no Alternative Acquisition Agreement was entered into on or prior to September 13, 2026, that\nreduced fee is no longer available and any later termination to enter into an alternative transaction with an Exempted Party would require\nthe full $1.152 million Company Termination Fee. Star may also be required to pay Harte Hanks a termination fee of $1.152 million in\ncertain circumstances involving Star’s failure to satisfy its closing obligations under the Merger Agreement. The payment of any\nsuch termination fee could have an adverse effect on the financial condition and results of operations of the party required to make\nthe payment

Additionally,\neach of Star and Harte Hanks has incurred and will incur substantial expenses in connection with the negotiation and completion of the\ntransactions contemplated by the Merger Agreement, as well as the costs and expenses of preparing, filing, printing and mailing this\nproxy statement/prospectus, and all filing and other fees paid in connection with the Merger. If the Merger\nis not completed, Star and Harte Hanks would have to pay these expenses without realizing the expected benefits of the Merger.

Further,\nif the Merger Agreement is not completed and the board of directors of Harte Hanks seeks another business combination, Harte Hanks stockholders\ncannot be certain that Harte Hanks will be able to find a party willing to enter into a transaction that is as favorable to Harte Hanks\nand its stockholders as the Merger.

Star\nand Harte Hanks will be subject to business uncertainties and Harte Hanks will be subject to contractual restrictions while the Merger\nis pending.

Uncertainty\nabout the effect of the Merger on employees and customers may have an adverse effect on Star and Harte Hanks. These uncertainties may\nimpair Star’s or Harte Hanks’ ability to attract, retain and motivate key personnel until the Merger is completed, and could\ncause customers and others that deal with Star or Harte Hanks to seek to change existing business relationships with Star or Harte Hanks.\nIn addition, subject to certain exceptions, Harte Hanks has to operate its business in the ordinary course in all material respects and\nto refrain from taking certain actions that may adversely affect its ability to consummate the transactions contemplated by the Merger\nAgreement on a timely basis without the consent of the other party. These restrictions may prevent Harte Hanks from pursuing attractive\nbusiness opportunities that may arise prior to the completion of the Merger. See “Additional Covenants” beginning on page\n105 for a description of the restrictive covenants applicable to Harte Hanks.

The\nannouncement of the proposed Merger could disrupt Star’s and Harte Hanks’ relationships with their customers, suppliers,\nbusiness partners and others, as well as their operating results and businesses generally.

Whether\nor not the Merger is ultimately consummated, as a result of uncertainty related to the Merger, risks relating to the impact of the announcement\nof the Merger on Star’s and Harte Hanks’ businesses include the following:

●\ntheir employees may experience uncertainty about their future roles, which might adversely affect Star’s and Harte Hanks’\nability to retain and hire key personnel and other employees;

●\ncustomers, suppliers, business partners and other parties with which Star and Harte Hanks maintain business relationships may experience\nuncertainty about their respective futures and seek alternative relationships with third parties, seek to alter their business relationships\nwith Star and Harte Hanks or fail to extend an existing relationship with Star and Harte Hanks; and

●\nStar and Harte Hanks have each expended and will continue to expend significant costs, fees and expenses for professional services and\ntransaction costs in connection with the proposed Merger.

If\nany of the aforementioned risks were to materialize, they could lead to significant costs which may impact each party’s results\nof operations and financial condition.

The\nMerger Agreement may discourage other companies from trying to acquire Harte Hanks.

Although\nthe Merger Agreement permits Harte Hanks and its representatives to actively solicit, initiate and engage in discussions regarding alternative\nAcquisition Proposals during a 30-day Go-Shop Period following execution of the Merger Agreement. Following the expiration of the Go-Shop\nPeriod Harte Hanks becomes subject to restrictions on its ability to solicit competing Acquisition Proposals and engage in discussions\nregarding alternative transactions, subject to certain exceptions designed to permit the board of directors of Harte Hanks to comply\nwith its fiduciary duties. In addition, after the Go-Shop Period, Harte Hanks is generally required to provide Star with notice of competing\nAcquisition Proposals and related developments and, in certain circumstances, an opportunity to negotiate revisions to the Merger Agreement\nbefore the board of directors of Harte Hanks may change its recommendation or terminate the Merger Agreement to enter into an alternative\ntransaction.

The\nMerger Agreement also provides that Harte Hanks may be required to pay Star a termination fee of up to $1.152 million if the Merger Agreement\nis terminated in connection with a Superior Proposal or certain other specified circumstances. The Merger Agreement provided for a reduced\n$576,000 fee only if an Alternative Acquisition Agreement with an Exempted Party was entered into on or prior to the No-Shop Period Start\nDate. Because no Alternative Acquisition Agreement was entered into on or prior to September 13, 2026, that reduced fee is no longer\navailable and any later termination to enter into an alternative transaction with an Exempted Party would require the full $1.152 million\nCompany Termination Fee. These provisions could discourage potential acquirors from pursuing an acquisition of Harte Hanks or proposing\na transaction that may be more favorable to Harte Hanks stockholders than the Merger. As a result, Harte Hanks stockholders may not have\nthe opportunity to consider a competing transaction that could provide greater value than the Merger Consideration contemplated by the\nMerger Agreement.

For\nmore information, see “Harte Hanks Termination Fee” and “Recommendation of Board of Directors of Harte Hanks”\nbeginning on page 50.

The\nshares of Star Preferred Stock to be received by Harte Hanks stockholders as a result of the Merger will have different rights from the\nshares of Harte Hanks Common Stock.

In\nthe Merger, Harte Hanks stockholders who receive stock consideration will become Star Preferred stockholders and their rights as stockholders\nwill be governed by Delaware law and the governing documents of Star following the Merger. The rights associated with Star Preferred\nStock are different from the rights associated with Harte Hanks Common Stock. See “Comparison of the Rights of Star Preferred stockholders\nand Harte Hanks stockholders” beginning on page 131 for a discussion of the different rights associated with Star Preferred Stock.\n

Harte\nHanks stockholders who receive Star Preferred Stock will cease to hold common equity with general voting rights and will not have voting\nrights with respect to Star.

Harte\nHanks stockholders currently have the right to vote in the election of the board of directors and on other matters affecting Harte Hanks.\nWhen the Merger is completed, each Harte Hanks stockholder who receives Star Preferred Stock consideration will become a holder of Preferred\nStock of Star without general voting rights, unless dividends on the Stock Preferred Stock are in arrears for six or more consecutive\nquarters. Because of this, Harte Hanks stockholders will have little to no influence on the management and policies of the combined company.\n

The\nliquidation preference of the Star Preferred Stock is not a guarantee of market value, redemption value or future payments.

The\nStar Preferred Stock has a liquidation preference of $10.00 per share. However, the liquidation preference does not represent the price\nat which the Star Preferred Stock will trade, the amount that holders may receive if they sell their shares in the market or an amount\nthat Star is required to pay upon any specified date.

Except\nupon a liquidation, dissolution or winding up of Star in accordance with the Certificate of Designations, holders of Star Preferred Stock\ngenerally have no right to receive the liquidation preference. The market price of the Star Preferred Stock may trade at a substantial\ndiscount to its liquidation preference for extended periods of time based on prevailing interest rates, market conditions, Star’s\nfinancial condition, liquidity in the trading market, investor perceptions regarding Star’s business prospects and other factors.\nAs a result, stockholders receiving Preferred Stock Consideration in the Merger may not be able to realize an amount equal to the liquidation\npreference if they sell their shares.

Dividends\non the Star Preferred Stock are cumulative but remain subject to numerous limitations and may not be paid when expected.

The\nStar Preferred Stock provides for cumulative dividend rights. However, the existence of cumulative dividends does not guarantee that\ndividends will be paid on any particular date or at all.

The\ndeclaration and payment of dividends will remain subject to applicable law, the availability of legally available funds, Star’s\nfinancial condition, results of operations, cash flows, contractual obligations, debt service requirements, financing arrangements, capital\nrequirements and other factors determined by Star’s board of directors. If Star does not have sufficient legally available funds\nor determines that payment of dividends would not be in the best interests of Star, dividends may accumulate for future payment rather\nthan being paid currently.

Any\nfailure by Star to pay dividends when expected may adversely affect the market value of the Star Preferred Stock and could materially\nreduce the attractiveness of the Preferred Stock Consideration to Harte Hanks stockholders.

The\nStar Preferred Stock ranks junior to all of Star’s indebtedness and may be adversely affected by future borrowings and financing\nactivities.

The\nStar Preferred Stock ranks junior in right of payment to all existing and future indebtedness and other non-equity claims against Star.\nAs a result, Star must satisfy its obligations to lenders and other creditors before it may make distributions to holders of Star Preferred\nStock.

Star\nmay incur additional indebtedness in the future, including indebtedness associated with financing the Merger, refinancing existing obligations\nor funding future acquisitions and business operations. Increased leverage could reduce cash available for dividend payments on the Star\nPreferred Stock, increase financial risk and negatively affect the market value of the Star Preferred Stock.

Stockholders\nreceiving Preferred Stock Consideration will receive a perpetual preferred equity security that is not redeemable at the holder’s\noption and is not convertible into Star common stock.

The\nStar Preferred Stockholders generally do not have the right to require Star to redeem or repurchase their shares. In addition, the Star\nPreferred Stock is not convertible into shares of Star Common Stock. As a result, Harte Hanks Stockholders receiving Preferred Stock\nConsideration will continue as equity holders of Star through ownership of a perpetual preferred security possessing the dividend, liquidation\nand other rights described elsewhere in this proxy statement/prospectus. The trading value of the Star Preferred Stock may be affected\nby numerous factors, including Star’s financial results, dividend payments, prevailing interest rates, market conditions and investor\ndemand for preferred securities.

Stockholder\nlitigation could prevent or delay the completion of the Merger or otherwise negatively impact the business and operations of Star and\nHarte Hanks.

Stockholders\nof Star and/or of Harte Hanks may file lawsuits against Star, Harte Hanks and/or the directors and officers of either company in connection\nwith the Merger. One of the conditions to the Closing is the absence of any law, injunction or governmental order prohibiting the Merger.\nIf any plaintiff were successful in obtaining an injunction prohibiting Star or Harte Hanks from completing the Merger or any of the\nother transactions contemplated by the Merger Agreement, then such injunction may delay or prevent the effectiveness of the Merger and\ncould result in significant costs to Star and/or Harte Hanks, including any cost associated with the indemnification of directors and\nofficers of each company. Star and Harte Hanks may incur costs in connection with the defense or settlement of any stockholder lawsuits\nfiled in connection with the Merger. Such litigation could have an adverse effect on the financial condition and results of operations\nof Star and Harte Hanks and could prevent or delay the completion of the Merger.

The\nopinion received by the board of directors of Harte Hanks from Citizens JMP Securities, LLC prior to the signing of the Merger Agreement\ndoes not reflect any changes in circumstances that may have occurred since the date of such opinion.

The\nopinion of Citizens JMP Securities, LLC regarding the fairness, from a financial point of view, of the Merger Consideration was rendered\nto the board of directors of Harte Hanks on, and was dated August 12, 2026. Changes in the operations and prospects of Harte Hanks or\nStar, general market and economic conditions and other factors which may be beyond the control of Harte Hanks may have altered the value\nof Harte Hanks and/or the value of the Merger Consideration pursuant to the Merger Agreement. Citizens JMP Securities, LLC’s opinion\ndated August 12, 2026 does not speak as of any date other than the date of such opinion.

The\nMerger may distract Star’s and Harte Hanks’ management from their other responsibilities.

The\npending Merger could cause Star’s and Harte Hanks’ management to focus its time and energies on matters related to the Merger\nthat otherwise would be directed to the business and operations of Star and Harte Hanks, respectively. Any such distraction on the part\nof management, if significant, could affect its ability to service existing business and develop new business and adversely affect the\nbusiness and earnings of Star and Harte Hanks.

The\nMerger will be a taxable transaction for U.S. federal income tax purposes, and Harte Hanks stockholders may be required to recognize\ntaxable gain without receiving entirely Cash Consideration.

The\nMerger is intended to be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder of Harte Hanks Common\nStock generally will recognize gain or loss equal to the difference between (i) the fair market value of the Merger Consideration received\nand (ii) such U.S. holder’s adjusted tax basis in its shares of Harte Hanks Common Stock. As a result, many Harte Hanks stockholders\nmay incur a current tax liability as a result of the Merger.

In\naddition, because stockholders may receive Star Preferred Stock as all or a portion of the Merger Consideration, stockholders may be\nrequired to pay taxes on gain recognized in the Merger even though they receive little or no Cash Consideration with which to satisfy\nthose taxes. Consequently, a stockholder could incur tax liabilities associated with the Merger while receiving insufficient cash proceeds\nto satisfy those liabilities. Such stockholders may be required to use funds from other sources, sell securities, or incur additional\ncosts to meet their tax obligations. Stockholders should consult their own tax advisors regarding the tax consequences of the Merger\nin light of their particular circumstances.

The\namount of gain or loss recognized, the character of such gain or loss and the overall tax consequences of the Merger will depend on a\nstockholder’s particular facts and circumstances, including the form of consideration received and the stockholder’s tax\nstatus. As a result, the tax consequences of the Merger may differ significantly from one stockholder to another.

Net\noperating loss carryforwards and certain other tax attributes of Harte Hanks are expected to be limited as a result of the Merger.

In\ngeneral, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change\nnet operating losses to offset future taxable income. In general, an ownership change occurs if the aggregate stock ownership of certain\nstockholders, generally stockholders beneficially owning five percent (5%) or more of a corporation’s common stock, applying certain\nlook-through and aggregation rules, increases by more than 50 percentage points over such stockholders’ lowest percentage ownership\nduring the testing period, generally three years. Harte Hanks is expected to experience an ownership change as a result of the Merger.\nConsequently, the combined company may not be able to utilize a portion of Harte Hanks’ net operating loss carryforwards and certain\nother tax attributes, which could have an adverse effect on cash flow and results of operations.

Risks\nRelating to Star’s Business

You\nshould read and consider risk factors specific to Star’s business that will also affect the combined company after the Merger.\nThese risks are described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition\nand Results of Operations” sections of Star’s Annual Report on Form 10-K for the year ended December 31, 2025. Please see\nthe section entitled “Where You Can Find More Information” beginning on page 135 of this proxy statement/prospectus for\nthe location of information available regarding Star in its public filings with the SEC.

Risks\nRelating to Harte Hanks’ Business

You\nshould read and consider risk factors specific to Harte Hanks’ business that will also affect the combined company after the Merger.\nThese risks are described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition\nand Results of Operations” sections of Harte Hanks’ Annual Report on Form 10-K for the year ended December 31, 2025. Please\nsee the section entitled “Where You Can Find More Information” beginning on page 135 of this proxy statement/prospectus\nfor the location of information available regarding Harte Hanks in its public filings with the SEC.

THE\nHARTE HANKS SPECIAL MEETING

This\nsection contains information for Harte Hanks stockholders about the Harte Hanks Special Meeting that board of directors of Harte Hanks\nhas called to allow Harte Hanks stockholders to consider and vote on the Harte Hanks Merger Proposal and the Non-Binding Advisory Compensation\nProposal. This proxy statement/prospectus is accompanied by a notice of the Harte Hanks Special Meeting and a form of proxy card that\nthe board of directors of Harte Hanks is soliciting for use by Harte Hanks stockholders at the Harte Hanks Special Meeting and at any\nadjournments or postponements of the Harte Hanks Special Meeting.

Date,\nTime and Place of the Meeting

Matters\nto Be Considered

At\nthe Harte Hanks Special Meeting, Harte Hanks stockholders will be asked to consider and vote upon the following proposals:

●\nthe Harte Hanks Merger Proposal; and

●\nthe Non-Binding Advisory Compensation Proposal.

Recommendation\nof Board of Directors of Harte Hanks

The\nboard of directors of Harte Hanks recommends that you vote “FOR” the Harte Hanks Merger Proposal and “FOR” the\nNon-Binding Advisory Compensation Proposal. See “Harte Hanks’ Reasons for the Merger; Recommendation of Board of Directors\nof Harte Hanks” beginning on page 82 for a more detailed discussion of the board of directors of Harte Hanks’ recommendations.\n

Record\nDate and Quorum

The\nboard of directors of Harte Hanks has fixed the close of business on [_____], 2026 as the Record Date for the determination of Harte\nHanks stockholders entitled to notice of and to vote at the Harte Hanks Special Meeting. As of the Harte Hanks Record Date, there were\n[_____] shares of Harte Hanks Common Stock outstanding.

The\npresence, in person or represented by proxy, of holders of shares representing a majority of the voting power of the outstanding shares\nof Harte Hanks Common Stock entitled to vote at the Harte Hanks Special Meeting will constitute a quorum for the transaction of business\nat the Harte Hanks Special Meeting. If you fail to submit a proxy prior to the Harte Hanks Special Meeting or to vote at the Harte Hanks\nSpecial Meeting, your shares of Harte Hanks Common Stock will not be counted towards a quorum. Abstentions will be included in determining\nthe number of shares present at the meeting for the purpose of determining the presence of a quorum, but not a broker non-vote or other\nfailure to vote.

Under\nthe Harte Hanks bylaws, if a quorum is not present at the Harte Hanks Special Meeting, the presiding officer of the Harte Hanks Special\nMeeting, if directed by the board of directors of Harte Hanks, may adjourn the Harte Hanks Special Meeting.

At\nthe Harte Hanks Special Meeting, each share of Harte Hanks Common Stock is entitled to one (1) vote on all matters properly submitted\nto Harte Hanks stockholders.

As\nof the close of business on the Record Date, Harte Hanks’ directors and executive officers and their affiliates were entitled to\nvote an aggregate of [______] shares of Harte Hanks Common Stock at the Harte Hanks Special Meeting, which represents approximately [______]%\nof the issued and outstanding shares of Harte Hanks Common Stock entitled to vote at the Harte Hanks Special Meeting.

Broker\nNon-Votes

A\nbroker non-vote occurs when a bank, broker, trustee or other nominee submits a proxy with respect to a proposal on which it has discretionary\nvoting authority but does not vote on a separate “non-routine” proposal because it has not received voting instructions from\nthe beneficial owner of the shares. Because both proposals to be considered at the Harte Hanks Special Meeting are non-routine matters,\nbroker non-votes are not expected at the Harte Hanks Special Meeting.

If\nyour bank, broker, trustee or other nominee holds your shares of Harte Hanks Common Stock in “street name,” that entity may\nvote your shares on the Harte Hanks Merger Proposal only if you provide voting instructions by following the instructions provided with\nthis proxy statement/prospectus. Accordingly, if you hold your shares in street name, you should instruct your bank, broker, trustee\nor other nominee how to vote your shares as promptly as possible.

Vote\nRequired; Treatment of Abstentions and Failure to Vote

Harte\nHanks Merger Proposal:

Vote\nRequired: Approval of the Harte Hanks Merger Proposal requires the affirmative vote of the holders of a majority of the voting power\nof the outstanding shares of Harte Hanks Common Stock entitled to vote on the Merger. Approval of the Harte Hanks Merger Proposal is\na condition to the completion of the Merger.

Effect\nof Abstentions and Failure to Vote: If you do not attend the Harte Hanks Special Meeting and do not respond by proxy or do not provide\nyour bank, broker, trustee or other nominee with instructions, as applicable, or if you attend the Harte Hanks Special Meeting and abstain\nfrom voting, or respond by proxy with an “ABSTAIN,” this will be considered votes cast “against” the Harte Hanks\nMerger Proposal.

Non-Binding\nAdvisory Compensation Proposal:

Vote\nRequired: Approval of the Non-Binding Advisory Compensation Proposal requires the affirmative vote of a majority of the votes cast\nat the Special Meeting, provided a quorum is present. Approval of this proposal is not a condition to completion of the Merger.

Effect\nof Abstentions and Failure to Vote: Assuming a quorum is present, abstentions will not be counted as votes cast and will have no\neffect on the outcome of the proposal. Broker non-votes and failures to vote or submit a proxy will not be counted as votes cast and\nwill have no effect on the outcome of the proposal.

Voting\nat the Harte Hanks Special Meeting

Shares\nof Harte Hanks Common Stock held directly in your name as the stockholder of record may be voted at the Harte Hanks Special Meeting.\nEven if you plan to attend the Harte Hanks Special Meeting, we recommend that you vote your shares of Harte Hanks Common Stock in advance\nas described above so that your vote will be counted if you later decide not to attend the Harte Hanks Special Meeting.

If\nyour shares of Harte Hanks Common Stock are registered in “street name” in the name of a broker or other nominee and you\nwish to vote at the Harte Hanks Special Meeting, you will need to obtain a legal proxy from your bank or brokerage firm. Please consult\nthe voting form sent to you by your bank or broker to determine how to obtain a legal proxy in order to vote at the meeting. See “Shares\nHeld in Street Name” below for further information.

Proxies

A\nholder of Harte Hanks Common Stock may vote by proxy at the Harte Hanks Special Meeting. If you hold your shares of Harte Hanks Common\nStock in your name as a record holder, to submit a proxy, you, as a holder of Harte Hanks Common Stock, may use one of the following\nmethods:

●\nthrough the internet: by visiting the website indicated on the accompanying proxy card and following the instructions; or

●\nby completing and returning the accompanying proxy card in the enclosed postage-paid envelope. The envelope requires no additional postage\nif mailed in the United States.

Harte\nHanks requests that Harte Hanks stockholders vote over the internet or by completing and signing the accompanying proxy card and returning\nit to Harte Hanks as soon as possible in the enclosed postage-paid envelope. When the accompanying proxy card is returned properly executed,\nthe shares of Harte Hanks Common Stock represented by it will be voted at the Harte Hanks Special Meeting in accordance with the instructions\ncontained on the proxy card. If you make no specification on your proxy card as to how you want your shares voted before signing and\nreturning it, your proxy will be voted “FOR” the Harte Hanks Merger Proposal and “FOR” the Non-Binding Advisory\nCompensation Proposal.

If\nyou are a beneficial owner, the holder should check the voting form used by your bank, broker, trustee or other nominee to determine\nwhether the holder may vote by telephone or the internet.

Every\nvote is important. Accordingly, you should sign, date and return the enclosed proxy card or vote via the internet whether or not you\nplan to attend the Harte Hanks Special Meeting. Sending in your proxy card or voting via the internet will not prevent you from voting\nyour shares at the meeting because you may revoke your proxy at any time before it is voted.

Shares\nHeld in Street Name

If\nyour shares are held in “street name” through a bank, broker, trustee or other nominee, you must instruct the bank, broker,\ntrustee or other nominee on how to vote your shares. Your bank, broker, trustee or other nominee will vote your shares only if you provide\nspecific instructions on how to vote by following the instructions provided to you by your bank, broker, trustee or other nominee.

Further,\nbanks, brokers, trustees or other nominees who hold shares of Harte Hanks Common Stock on behalf of their customers may not give a proxy\nto Harte Hanks to vote those shares with respect to any of the proposals without specific instructions from their customers, as banks,\nbrokers, trustees and other nominees do not have discretionary voting power on the proposal that will be voted upon at the Harte Hanks\nSpecial Meeting, including the Harte Hanks Merger Proposal.

Revocability\nof Proxies

If\nyou directly hold shares of Harte Hanks Common Stock in your name as a record holder, you can change your vote at any time before your\nproxy is voted at the Harte Hanks Special Meeting. You can do this by:

●\nsubmitting a written statement that you would like to revoke your proxy to the corporate secretary of Harte Hanks;

●\ncasting your vote by internet as provided on the proxy card;

●\nsigning and returning a proxy card with a later date prior to the Harte Hanks Special Meeting; or

●\nattending the Harte Hanks Special Meeting, requesting the return of your proxy and voting at the Harte Hanks Special Meeting.

If\nyour shares are held in street name, you should follow your bank’s, broker’s, trustee’s or other nominee’s instructions\nregarding the revocation of proxies.

Attendance\nat the Harte Hanks Special Meeting will not in and of itself constitute revocation of a proxy. A revocation or later-dated proxy received\nby Harte Hanks after the vote will not affect the vote. Written notices of revocation and other communications regarding the revocation\nof your proxy should be addressed to Harte Hanks, Inc., Attn: Corporate Secretary / General Counsel, 1 Executive Drive, Suite 303, Chelmsford,\nMA 01824. If the Harte Hanks Special Meeting is postponed or adjourned, it will not affect the ability of Harte Hanks stockholders of\nrecord as of the Record Date to exercise their voting rights or to revoke any previously granted proxy using the methods described above.\n

Delivery\nof Proxy Materials

As\npermitted by applicable law, only one (1) copy of this proxy statement/prospectus is being delivered to Harte Hanks stockholders residing\nat the same address, unless such Harte Hanks stockholders have notified Harte Hanks of their desire to receive multiple copies of the\nproxy statement/prospectus.

Harte\nHanks will promptly deliver, upon written request, a separate copy of the proxy statement/prospectus to\nany Harte Hanks stockholder residing at an address to which only one (1) copy of such document was mailed. Requests for additional copies\nshould be directed to Harte Hanks, Inc., Attn: Corporate Secretary / General Counsel, 1 Executive Drive, Suite 303, Chelmsford, MA 01824.

Solicitation\nof Proxies

The\nboard of directors of Harte Hanks is soliciting the Harte Hanks stockholders’ proxies in connection with the Harte Hanks Special\nMeeting. Harte Hanks has retained [_____] as proxy solicitor to assist with the solicitation of proxies in connection with the Harte\nHanks Special Meeting. Star is responsible for the expenses incurred in connection with the printing and mailing of this proxy statement/prospectus.\nHarte Hanks may also request banks, brokers, trustees and other intermediaries holding shares of Harte Hanks Common Stock beneficially\nowned by others to send this document to, and obtain proxies from, the beneficial owners and may reimburse such record holders for their\nreasonable out-of-pocket expenses in so doing. Solicitation of proxies by mail may be supplemented by telephone and other electronic\nmeans, advertisements and personal solicitation by the directors, officers or employees of Harte Hanks. No additional compensation will\nbe paid to Harte Hanks’ directors, officers or employees for solicitation.

You\nshould not send in any Harte Hanks stock certificates with your proxy card (or, if you are a beneficial owner, your voting instruction\ncard). Stockholders will receive an election form from the payment agent with instructions for the surrender of stock certificates prior\nto the completion of the Merger.

Other\nMatters to Come Before the Harte Hanks Special Meeting

Harte\nHanks management knows of no other business to be presented at the Harte Hanks Special Meeting, but if any other matters are properly\npresented to the meeting or any adjournments or postponements thereof, the persons named in the proxies will vote upon them in accordance\nwith the board of directors of Harte Hanks’ recommendations.

Assistance

If\nyou need assistance in completing your proxy card, have questions regarding the Harte Hanks Special Meeting or would like additional\ncopies of this proxy statement/prospectus, please contact Harte Hanks, Inc., Corporate Secretary / General Counsel, 1 Executive Drive,\nSuite 303, Chelmsford, MA 01824, telephone (512) 434-1100.

HARTE\nHANKS PROPOSALS

PROPOSAL\n1: HARTE HANKS MERGER PROPOSAL

Pursuant\nto the Merger Agreement, Harte Hanks is asking Harte Hanks stockholders to approve the Merger Agreement. Harte Hanks stockholders should\nread this proxy statement/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the\nMerger Agreement and the transactions contemplated thereby. A copy of the Merger Agreement is attached to this proxy statement/prospectus\nas Annex A.

After\ncareful consideration, the board of directors of Harte Hanks, by a unanimous vote of all directors, approved the Merger Agreement and\ndetermined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to, advisable, and in\nthe best interests of Harte Hanks and Harte Hanks stockholders. Accordingly, the board of directors of Harte Hanks unanimously recommends\nthat Harte Hanks stockholders vote “FOR” the approval of the Merger Agreement. Harte Hanks stockholders should carefully\nconsider the information contained in the proxy statement, including the discussion entitled “The Merger - Harte\nHanks’ Reasons for the Merger; Recommendation of Board of Directors of Harte Hanks” beginning on page 82 for a more detailed\ndiscussion of the board of directors of Harte Hanks’ recommendation.

The\napproval of the Harte Hanks Merger Proposal by Harte Hanks stockholders is a condition to the completion of the Merger.

Harte\nHanks is not asking stockholders to vote on a separate proposal to approve one or more adjournments of the Harte Hanks Special Meeting.\nUnder the Harte Hanks bylaws, the presiding officer of the Harte Hanks Special Meeting has authority to adjourn the meeting.

The\nboard of directors of Harte Hanks unanimously recommends a vote “FOR” the Harte Hanks Merger Proposal.

PROPOSAL\n2: THE NON-BINDING ADVISORY COMPENSATION PROPOSAL

Section\n14A of the Exchange Act and Rule 14a-21(c) thereunder require Harte Hanks to submit to a separate stockholder advisory vote the compensation\nthat may be paid or become payable to its named executive officers in connection with the Merger. Harte Hanks is asking Harte Hanks stockholders\nto approve, on an advisory (non-binding) basis, the compensation payable to Harte Hanks’ named executive officers that is based\non or otherwise relates to the Merger, as disclosed in the section titled “Interests of Harte Hanks Directors and Executive Officers\nin the Merger.”

RESOLVED,\nthat the stockholders of Harte Hanks, Inc. approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable\nto Harte Hanks’ named executive officers in connection with the Merger, as disclosed pursuant to Item 402(t) of Regulation S-K\nunder “Interests of Harte Hanks Directors and Executive Officers in the Merger” (which disclosure includes the Golden Parachute\nCompensation table and related narrative disclosures required pursuant to Item 402(t) of Regulation S-K).

The\nvote on this proposal is separate and apart from the vote to approve the Harte Hanks Merger Proposal. Approval of the Non-Binding Advisory\nCompensation Proposal is not a condition to completion of the Merger. If the Merger is completed, the merger-related compensation may\nbe paid to Harte Hanks’ named executive officers to the extent payable in accordance with the terms of the applicable compensation\nagreements and arrangements, even if Harte Hanks stockholders vote against the Non-Binding Advisory Compensation Proposal.

Approval\nof the Non-Binding Advisory Compensation Proposal requires the affirmative vote of a majority of the votes cast at the Special Meeting,\nprovided a quorum is present. Abstentions, broker non-votes and failures to vote or submit a proxy will not be counted as votes cast\nand will have no effect on the outcome of the proposal.

The\nboard of directors of Harte Hanks unanimously recommends a vote “FOR” the Non-Binding Advisory Compensation Proposal.

INFORMATION\nABOUT THE COMPANIES

Star\nEquity Holdings, Inc.

Star’s\nBuilding Solutions segment is currently made up of the following operating businesses: KBS EdgeBuilder, and Glenbrook, with the latter\ntwo managed together and referred to jointly as EBGL, and Timber TT. KBS is based in Maine and manufactures modular buildings, typically\nin the single and multi-family residential segments, servicing principally the New England market. EBGL is based in the Minneapolis-Saint\nPaul area and principally serves the Upper Midwest region. EBGL manufactures and delivers structural wall panels for single and multi-family\nresidential buildings, and other engineered wood-based products. EBGL also distributes building materials from two lumberyard locations\nprimarily focused on professional builder customers. TT is based outside the Minneapolis-St. Paul area and manufactures glue-laminated\ntimber products for various end markets and applications, including agriculture, industrial, infrastructure, and building construction\n(commercial and residential).

Star’s\nBusiness Services segment, which consists of HTS, delivers customized recruitment and contracting solutions to mid-to-large multinational\ncompanies, including RPO, project-based RPO, contingent workforce solutions, recruitment consulting, outsourced professional contract\nstaffing, and MSP services across eighteen countries across three geographic regions: the Americas, Asia Pacific, and Europe, Middle\nEast, and Africa. Star Equity’s RPO services include complete recruitment outsourcing, project-based outsourcing, contingent workforce\nsolutions, and recruitment consulting for clients’ permanent staff hires. RPO services leverage Star Equity’s consultants,\nsupported by Star Equity’s specialists, in the delivery of its proprietary methods to identify, select, and engage the best-fit\ntalent for critical client roles. In addition, Star Equity provides RPO clients with a range of outsourced professional contract staffing\nservices and managed service provider services offered sometimes on a standalone basis and sometimes as part of a blended total talent\nsolution. These services draw upon a combination of specialized recruiting and project management competencies to deliver a wide range\nof solutions. HTS RPO-employed professionals - either individually or as a team - are placed with client organizations for a defined\nperiod of time based on specific business needs of the client.

Star’s\nEnergy Services segment currently consists of ADT, a Wyoming and Texas based provider of drilling tools and services to the Energy industry,\na key sector of the economy. ADT is a full-service downhole drilling tool company which provides sale and rental tools in the Oil &\nGas, Geothermal, Mining, and Waterwells sectors. ADT is strategically located near premier oilfields in the Rockies, a geothermal and\nmining hub, and in Midland, TX within the Permian Basin. ADT’s business model allows for the majority of costs, such as freight,\nrepairs, and damages, to be passed directly to customers.

Star’s\nInvestments segment holds and manages certain of its own corporate-owned real estate, including a manufacturing facility in Maine that\nis leased to KBS and a manufacturing facility in Wisconsin that is leased to TT. In addition, the Investments segment manages internally\nfunded, concentrated minority investments in a small number of public companies. It also holds and manages a promissory note and a private\nequity stake in Catalyst, a provider of medical imaging equipment and services. These interests were acquired in May 2023 as a result\nof the sale of Digirad Health.

Star’s\nprincipal executive offices are located at 53 Forest Avenue, Suite 101, Old Greenwich, CT 06870, its phone number is (203) 489-9500 and\nits website is https://www.starequity.com/.

The\ninformation required by Item 14 of Form S-4, including a Description of Business, Description of Property, Legal Proceedings, Market\nPrice of and Dividends on the Registrant’s Common Equity, Management’s Discussion and Analysis of Financial Condition and\nResults of Operations (MD&A), and the audited and unaudited financial statements and related notes required by Regulation S-X, is\nset forth in Annex C to this proxy statement/prospectus and is incorporated by reference herein.

Merger\nSub

Merger\nSub’s principal administrative office is located at 53 Forest Avenue, Suite 101, Old Greenwich, CT 06870 and its phone number is\n(203) 489-9500.

Harte\nHanks, Inc.

●\nGrappling with data, AI and technology in a cookie-restricted digital environment;

●\nGrowing awareness, demand and sales for products;

●\nStoring, fulfilling and delivering samples, kits, materials and products direct to the door of consumers, influencers or\nbusinesses;

●\nDelivering better customer experience and support across multiple channels; and

●\nDelivering effectively with tighter budgets and talent shortages.

Harte\nHanks offers a uniquely diverse range of services and solutions in and across its service categories to businesses in the following industries:

●\nB2B Technology & Services including cloud, SaaS, hardware, software, semiconductors, health technology, fintech, electronics,\ndistributors and telecommunications

●\nHealthcare, Pharmaceuticals & Health Insurance

●\nConsumer Products including health, well-being and beauty; consumer tech/electronics; domestic appliances

●\nTravel, Hospitality, Streaming & Entertainment

●\nQSRs (Quick Service Restaurants)

●\nFinancial Services and Fintech

●\nAutomotive

●\nRetail

Operationally,\nstarting in 2024, Harte Hanks’ services are organized into three business units that span the end to end customer and product lifecycles:

●\nData, marketing, demand generation and managed marketing services (“Revenue Solutions”)

●\nCustomer Care

●\nFulfillment & Logistics

Data,\nMarketing, Demand Generation and Managed Marketing Services (Revenue Solutions)

Harte\nHanks’ key offerings in this business unit include:

● Research\n& Intelligence – Primary and secondary research to help its clients understand their customers, category, competitors\nand capabilities, either as a standalone deliverable or to inform the development of strategies for campaigns and\nprograms.

●\nStrategy – Provide strategic guidance to help clients efficiently and effectively plan and execute omnichannel marketing,\ndemand generation and customer experience programs that deliver business results. Harte Hanks leverages data and insights to enhance\nits clients’ understanding of their consumers, competitors and category dynamics, then applies those insights to develop the\nstrategies to fuel activities such as customer acquisition, engagement, purchase behavior, loyalty and advocacy. Harte Hanks’\nexpertise spans the range of strategies including targeting, Go-To-Market, commercial, product launch, customer experience,\ncampaign, content, ABM (Account Based Marketing) and demand strategy.

● Creative\n& Content - Full-service creative and content design, development and execution spanning traditional and digital channels,\nincluding creative concepts, messaging and content assets for print, broadcast, direct mail, website, app, display, social, mobile,\nsearch engine marketing, and voice.

● Marketing\nTechnology – Website and app development, e-commerce development and enablement, database building and management,\nplatform architecture creation, and marketing automation to serve as the foundation for digital and multi-channel marketing\nexecution.

● Digital\nand Multi-channel Marketing Execution & Advertising – Orchestration and execution of programs and campaigns across\nmultiple channels, territories and audiences, using data, strategies, content and Marketing technology, or “MarTech,”\nprovided either by Harte Hanks or by its clients. Setup and management of digital advertising programs and campaigns across the\nlatest advertising channels (e.g., Google, Meta, LinkedIn, TikTok) and platforms (DSPs, ABM advertising, industry\nnetworks).

● Demand\nGeneration and ABM – Providing intelligence-based B2B solutions that understand audiences and their behaviors, and then\ninspire and drive action to deliver results. These solutions help companies understand which accounts, sectors and persons to\ntarget, and then generate marketing qualified leads (“MQLs”) and pipelines for their marketing and sales team,\nthrough combining data, strategy, content, MarTech and digital/multi-channel execution.

● Lead\nGeneration – Combining data, lead generation resources and technology, Harte Hanks provides turnkey lead generation and\ndevelopment that converts interested or good fit prospects into leads for sales to qualify, nurture and sell to.

● Sales\nPlay Development – Designing sales plays and cadences to enable sales teams to find, plan, engage, nurture and convert\nprospects into sales opportunities.

Customer\nCare

Harte\nHanks’ global, omnichannel delivery model is focused on providing its clients three key services:

● Customer\nCare Technology and AI Transformation – Harte Hanks’ solution services teams configures various CRM solutions (e.g.,\nSalesforce, Zendesk) and channel /AI technology including Amazon Connect to create meaningful customer interactions by connecting\ncontent between agent, AI-driven interfaces and web-based self-help tools and community forums.

●\nSelf-Service Technology – Harte Hanks provides and maintains self-service solutions through Interactive Voice Response\n(“IVR”), Help Centers, online, and via apps and channel technology.

Fulfillment\n& Logistics Services

End\nto End Product, Print-On-Demand, and Mail Fulfillment Services

Harte\nHanks’ extensive fulfillment capabilities include:

● Print-On-Demand\n& Literature Distribution – Harte Hanks facilitates the seamless production and distribution of marketing materials,\nsales collateral, and product literature, ensuring businesses can effectively engage with customers, prospects, and\npartners.

●\nProduct Recall Management – Harte Hanks assists in efficient product recalls, ensuring regulatory compliance, customer safety,\nand brand reputation protection.

○\nNutritional supplements, medical foods, and baby formulas

○\nChocolates, coffee, tea, snack foods, nuts, and seeds

○\nPet food, treats, and nutritional supplements

Third-Party\nLogistics & Freight Optimization

●\nNationwide & Regional Shipping – Harte Hanks facilitates the shipping of millions of time-sensitive materials\nannually, leveraging its nationwide logistics network.

● Allink®360:\nProprietary Logistics Technology – Harte Hanks’ proprietary rate-shopping system, Allink 360, optimizes freight\ncosts and delivery timelines, ensuring shipments arrive on time and within budget.

●\nFlexible & Scalable Logistics Solutions – Harte Hanks offers customized logistics solutions designed to accommodate\nbusinesses of all sizes, from startups to Fortune 500 enterprises.

Client\nRelationship

Use\nof Subcontractors

Restructuring\nActivities

Customers

Sales\nand Marketing

Harte\nHanks had 12 employees in our corporate sales and marketing function as of December 31, 2025.

Competition

Seasonality

Harte\nHanks’ principal executive offices are located at 1 Executive Drive, Chelmsford, MA 01824, its phone number is (512) 434-1100 and\nits website is https://www.hartehanks.com.

The\ninformation required by Item 17 of Form S-4, including a Description of Business, Description of Property, Legal Proceedings, Market\nPrice of and Dividends on the Registrant’s Common Equity, Management’s Discussion and Analysis of Financial Condition and\nResults of Operations (MD&A), and the audited and unaudited financial statements and related notes required by Regulation S-X is\nset forth in Annex D to this proxy statement/prospectus and is incorporated by reference herein.

Beneficial\nOwnership of Common Stock by Principal Stockholders and Management

The\ninformation contained herein has been obtained from Harte Hanks’ records and from information furnished directly to Harte Hanks\nby each individual or entity. Applicable percentage ownership in each of the tables is based on [_____] shares of Harte Hanks Common\nStock outstanding as of [_____], 2026, the Record Date for the Harte Hanks Special Meeting. Except as otherwise indicated in the footnotes\nto the table, the beneficial owners listed have sole voting and investment power as to all of the shares beneficially owned by them (or,\nwhere applicable, shared power with such individual’s spouse). As used herein, “voting power” is the power to vote\nor direct the voting of shares, and “investment power” is the power to dispose or direct the disposition of shares. Beneficial\nownership is determined in accordance with Rule 13d-3 under the Exchange Act; however, the inclusion of shares in the table below will\nnot be deemed an admission of beneficial ownership of all the reported shares for any purpose. Except as otherwise indicated, the address\nfor each stockholder listed in the table below is c/o Harte Hanks, Inc., 1 Executive Drive, Suite 303, Chelmsford, MA 01824.

The\nfollowing table sets forth, as of the Record Date, the beneficial ownership of Harte Hanks Common Stock by: (i) each Harte Hanks director;\n(ii) each Harte Hanks named executive officer; (iii) all Harte Hanks directors and executive officers as a group; (iv) each person known\nby Harte Hanks to beneficially own more than 5% of Harte Hanks Common Stock; and (v) Star and its affiliates, if any, that beneficially\nown Harte Hanks Common Stock as of the Record Date.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Name and Address of Beneficial Owner⁽¹⁾⁽²⁾	Title of Class	Amount and Nature of Beneficial Ownership		Percent of Class
Named Executive Officers(5)
David Fisher	Common Stock		18,790		*
David A. Garrison	Common Stock		21,462		*
Robert Wyman (former General Counsel)⁽³⁾	Common Stock		27,217		*
Directors
John H. Griffin, Jr.	Common Stock		209,820		2.8	%
Genevieve C. Combes	Common Stock		26,283		*
Bradley L. Radoff⁽⁴⁾	Common Stock		423,447		5.7	%
Elizabeth Ross	Common Stock		12,048		*
All current directors and executive officers as a group (6 persons)⁽⁵⁾			711,880		9.6	%
5% Holders
William Blair & Company, L.L.C.⁽⁶⁾	Common Stock		660,845		8.9	%
Houston H. Harte (Estate of)⁽⁷⁾	Common Stock		660,816		8.9	%
Gary S. Rosenbach and Susan Rosenbach⁽⁸⁾	Common Stock		2,118,635		28.4	%

*less\nthan 1%.

(1)	The\n address of (a) William Blair & Company LLC is 150 North Riverside Plaza, Chicago, IL\n 60606, (b) Houston H. Harte is P.O. Box 17424, San Antonio, TX 78217, and (c) each other\n beneficial owner is c/o Harte Hanks, Inc., 1 Executive Drive, Suite 303, Chelmsford, MA 01824.

\n\n\n\n\n\n\n\n\n\n\n\n\n\n

(2)	Includes\n shares that may be acquired upon the exercise of options that are exercisable within 60 days\n of the Record Date; excludes shares subject to options that will not vest or become exercisable\n within 60 days of the Record Date.
(3)	The\n amount of shares and associated percentage is based solely on information available to Harte Hanks as of December 22, 2025, the last day of Mr. Wyman’s employment with Harte\n Hanks.
(4)	Mr.\n Radoff directly owns 403,447 shares of Harte Hanks’ common stock and indirectly\n owns (through his IRA) 20,000 shares of Harte Hanks’ common stock. Information relating\n to this stockholder is based on the amendment to the stockholder’s Schedule 13D, filed\n with the SEC on December 6, 2024, and stock transactions that Mr. Radoff informed Harte Hanks\n of since that time.
(5)	This\n group includes Harte Hanks’ current directors and executive officers as of March 26,\n 2026 and excludes Harte Hanks’ former Chief Executive Officer, Kirk Davis, whose last\n day of employment with Harte Hanks was February 14, 2025, and Harte Hanks’ former General\n Counsel, Robert Wyman, whose last day of employment with Harte Hanks was December 22, 2025.
(6)	Represents\n 660,845 shares of Harte Hanks’ common stock held by William Blair & Company, L.L.C.,\n in its capacity as investment adviser, to clients who have granted discretionary authority\n to dispose of or direct the disposition of the shares to William Blair & Company, L.L.C.\n Those clients have the right to receive, or the power to direct the receipt of, dividends\n from, or the proceeds from the sale of, such securities. Information relating to this stockholder\n is based on Amendment No. 4 to the stockholder’s Schedule 13G, filed with the SEC on\n February 12, 2024.
(7)	Represents\n 660,816 shares of Harte Hanks’ common stock held in the Harte Management Trust, over\n which Houston H. Harte, Carolyn Harte and Sarah Harte share voting and dispositive power.\n Information relating to this stockholder group is based on Amendment No. 3 to such group’s\n Schedule 13D, filed with the SEC on March 29, 2019.
(8)	Gary S. Rosenbach\n(“Mr. Rosenbach”) beneficially owns 2,118,635 shares of Harte Hanks’ common stock which is comprised of: (i)\n1,464,762 shares of common stock which Mr. Rosenbach and his spouse own jointly, (ii) 116,441 shares of common stock held in family trusts\nfor which each of Mr. Rosenbach and his spouse serve as a trustee, (iii) 532,562 shares of common stock held in the retirement account\nof Mr. Rosenbach and (iv) 4,870 shares of common stock held in the retirement account of Mr. Rosenbach’s spouse. Information relating\nto this stockholder is based on the Form 4, filed with SEC on March 30, 2025.

Recent\nDevelopments

On\nAugust 14, 2026, Star filed its Quarterly Report on Form 10-Q for the period ended June 30, 2026, and the unaudited financial statements\ncontained therein. Also on August 14, 2026, Harte Hanks filed its Quarterly Report on Form 10-Q for the period ended June 30, 2026, and\nthe unaudited financial statements contained therein. The discussion below presents highlights of the unaudited preliminary results of\noperations and financial condition as of and for the periods indicated. The financial information from each of Star and Harte Hanks constitutes\npreliminary financial results and is not a comprehensive statement of their respective financial results as of and for such period and\nhas not been audited by their respective independent registered public accounting firm.

The\nfollowing should be read in conjunction with each of Star’s and Harte Hanks’ consolidated financial statements and related\nnotes, as well as management’s discussion and analysis of financial condition and results of operations, included or incorporated\nby reference herein, as well as the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk\nFactors” in this proxy statement/prospectus and any other documents included in the annexes hereto.

Star\nResults at and for the Second Quarter and Six Months Ended June 30, 2026

On\nAugust 14, 2026, Star filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. Star reported a net loss attributable\nto common shareholders of $2.5 million, or $0.66 per basic and diluted share, for the quarter ended June 30, 2026, compared to a net\nloss of $0.7 million, or $0.23 per basic and diluted share, for the quarter ended June 30, 2025. For the six months ended June 30, 2026,\nStar reported a net loss attributable to common shareholders of $6.8 million, or $1.84 per basic and diluted share, compared to a net\nloss of $2.4 million, or $0.82 per basic and diluted share, for the six months ended June 30, 2025.

Total\nrevenues increased to $54.9 million for the quarter ended June 30, 2026 from $35.5 million for the quarter ended June 30, 2025. For the\nsix months ended June 30, 2026, total revenues increased to $105.0 million compared to $67.4 million for the same period in 2025. Gross\nprofit increased to $22.8 million for the quarter ended June 30, 2026 from $18.6 million for the quarter ended June 30, 2025. For the\nsix months ended June 30, 2026, gross profit increased to $43.4 million compared to $35.0 million for the corresponding period in 2025.

Operating\nexpenses increased to $24.2 million for the quarter ended June 30, 2026 from $18.8 million for the quarter ended June 30, 2025. For the\nsix months ended June 30, 2026, operating expenses increased to $48.7 million compared to $37.0 million for the corresponding period\nin 2025. As a result, Star reported an operating loss of $1.4 million for the quarter ended June 30, 2026, compared to an operating loss\nof $0.2 million for the quarter ended June 30, 2025, and an operating loss of $5.4 million for the six months ended June 30, 2026, compared\nto an operating loss of $1.9 million for the six months ended June 30, 2025.

Star’s\ntotal assets were $108.2 million as of June 30, 2026, compared to $113.2 million as of December 31, 2025. Cash and cash equivalents were\n$6.8 million as of June 30, 2026, compared to $10.3 million as of December 31, 2025. Total stockholders’ equity was $59.8 million\nas of June 30, 2026, compared to $65.7 million as of December 31, 2025.

For\nthe six months ended June 30, 2026, net cash used in operating activities was $3.1 million, compared to $0.7 million used in operating\nactivities for the corresponding period in 2025. As of June 30, 2026, Star had $9.0 million of short-term debt and $5.1 million of long-term\ndebt, compared to $8.5 million of short-term debt and $6.1 million of long-term debt as of December 31, 2025.

Harte\nHanks Results at and for the Second Quarter and Six Months Ended June 30, 2026

On\nAugust 14, 2026, Harte Hanks filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026.

Harte\nHanks reported a net loss of $5.0 million, or $0.67 per basic and diluted share, for the quarter ended June 30, 2026, compared to a net\nloss of $0.3 million, or $0.05 per basic and diluted share, for the quarter ended June 30, 2025. For the six months ended June 30, 2026,\nHarte Hanks reported a net loss of $5.6 million, or $0.76 per basic and diluted share, compared to a net loss of $0.7 million, or $0.10\nper basic and diluted share, for the six months ended June 30, 2025.

Revenue\nwas $38.0 million for the quarter ended June 30, 2026, compared to $38.6 million for the quarter ended June 30, 2025. For the six months\nended June 30, 2026, revenue was $75.2 million, compared to $80.2 million for the corresponding period in 2025. Operating expenses increased\nto $42.5 million for the quarter ended June 30, 2026 from $38.6 million for the quarter ended June 30, 2025, and increased modestly to\n$80.5 million for the six months ended June 30, 2026 from $80.2 million for the corresponding period in 2025.

As\na result, Harte Hanks reported an operating loss of $4.5 million for the quarter ended June 30, 2026, compared to operating income of\nless than $0.1 million for the quarter ended June 30, 2025. For the six months ended June 30, 2026, Harte Hanks reported an operating\nloss of $5.3 million, compared to an operating loss of less than $0.1 million for the corresponding period in 2025.

Total\nassets were $88.1 million as of June 30, 2026, compared to $91.8 million as of December 31, 2025. Cash and cash equivalents and restricted\ncash were $5.2 million as of June 30, 2026, compared to $5.6 million as of December 31, 2025. Total stockholders’ equity was $15.4\nmillion as of June 30, 2026, compared to $20.5 million as of December 31, 2025.

For\nthe six months ended June 30, 2026, net cash used in operating activities was $2.6 million, compared to $5.7 million used in operating\nactivities during the corresponding period in 2025. Capital expenditures during each of the six months ended June 30, 2026 and 2025 were\napproximately $0.3 million. As of June 30, 2026, Harte Hanks had $3.0 million of short-term debt and no long-term debt, compared to no\ndebt outstanding as of December 31, 2025.

Comparative\nMarket Value of Harte Hanks Common Stock and Star Preferred Stock

The\nfollowing table compares: (i) the historical market price of Harte Hanks Common Stock, (ii) the historical market price of Star Preferred\nStock; and (iii) the implied value of the Preferred Stock Consideration, in each case based upon closing trading prices on August 13,\n2026, the last trading day before public announcement of the Merger Agreement.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Historical Market Price Per Share		Equivalent Per Harte Hanks Share
Harte Hanks Common Stock	$	2.81			N/A
Star Preferred Stock	$	10.14			N/A
Preferred Stock Consideration (0.50 share of Star Preferred Stock)		N/A		$	5.07

The\nvalue of the Preferred Stock Consideration will fluctuate based on the market price of Star Preferred Stock. Accordingly, the value of\nthe Preferred Stock Consideration at the Effective Time may be greater or less than the value reflected in the table above. Because the\naggregate amount of cash payable in the Merger is capped at $19.2 million and elections are subject to proration, Harte Hanks stockholders\nmay receive a different form of consideration than elected.

THE\nMERGER

This\nsection of the proxy statement/prospectus describes material aspects of the Merger. This summary may not contain all of the information\nthat is important to you. You should carefully read this entire proxy statement/prospectus and the other documents we refer you to for\na more complete understanding of the Merger. In addition, Star incorporates important business and financial information into this document\nby reference. You may obtain the information incorporated by reference into this document without charge by following the instructions\nin the section entitled “Where You Can Find More Information” beginning on page 135.

Terms\nof the Merger

Each\nof Star’s and Harte Hanks’ respective boards of directors have approved the Merger Agreement. The Merger Agreement provides\nthat, pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Harte\nHanks, with Harte Hanks continuing as the Surviving Corporation and becoming a wholly owned subsidiary of Star.

Upon\nthe terms and subject to the conditions of the Merger Agreement, at the Effective Time, each share of Harte Hanks Common Stock issued\nand outstanding immediately before the Effective Time, other than shares held by Harte Hanks, Star, Merger Sub or certain of their wholly\nowned subsidiaries, will be converted into the right to receive, at the election of the holder and subject to the proration procedures\ndescribed below, either: Cash Consideration of $5.00 per share, without interest; or Preferred Stock Consideration of 0.50 shares of\nStar’s Preferred Stock, subject to adjustment.

Harte\nHanks stockholders may elect to receive Cash Consideration, Preferred Stock Consideration or a combination of both for their shares,\nincluding by electing Cash Consideration for some shares and Preferred Stock Consideration for others, subject to the proration procedures\nset forth in the Merger Agreement. Shares for which no valid election is made, or for which an election is revoked or deemed lost, will\nbe treated as non-electing shares. If aggregate cash elections are less than the Maximum Cash Amount available under the Merger Agreement,\nStar will determine whether non-electing shares receive Cash Consideration, Preferred Stock Consideration or a combination of both. If\naggregate cash elections exceed the Maximum Cash Amount, non-electing shares will receive Preferred Stock Consideration, and holders\nmaking cash elections will receive a prorated combination of Cash Consideration and Preferred Stock Consideration. The aggregate cash\npayable in the Merger, including cash payable in respect of certain Harte Hanks equity awards and cash paid in lieu of fractional shares\nof Star Preferred Stock, may not exceed $19,200,000.

If\naggregate cash elections are less than $19,200,000, cash-electing stockholders will receive Cash Consideration and preferred-stock-electing\nstockholders will receive Preferred Stock Consideration. Harte Hanks shares for which no valid election has been made may be converted,\nat Star’s election, into Cash Consideration, Preferred Stock Consideration or a combination of both, subject to the $19,200,000\ncap. If aggregate cash elections exceed $19,200,000, each cash-electing share will be converted into a prorated portion of the Cash Consideration\nand Preferred Stock Consideration for the remaining portion of that share; all Preferred-Stock-electing shares and non-electing shares\nwill receive Preferred Stock Consideration.

No\nfractional shares of Star Preferred Stock will be issued in the Merger. Instead, a holder otherwise entitled to a fractional share will\nreceive cash, without interest, equal to the fractional share multiplied by $10.00. The Merger Consideration is subject to customary\nadjustment for specified changes in Harte Hanks Common Stock, including stock splits, reverse stock splits, stock dividends, recapitalizations\nand similar events occurring after the date of the Merger Agreement and before the Effective Time.

Harte\nHanks stockholders are being asked to approve the Harte Hanks Merger Proposal. The affirmative vote of the holders of a majority of the\nvoting power of the outstanding shares of Harte Hanks Common Stock entitled to vote on the Merger is the only stockholder vote required\nto adopt the Merger Agreement and consummate the Merger. Stockholders will also be asked to vote on the Non-Binding Advisory Compensation\nProposal, but that advisory vote is separate and apart from the Harte Hanks Merger Proposal and is not a condition to completion of the\nMerger. See the section entitled “The Merger Agreement” beginning on page 98 for additional and more detailed information\nregarding the legal documents that govern the Merger, including information about the conditions to completion of the Merger and the\nprovisions for terminating or amending the Merger Agreement.

Background\nof the Merger

The\nterms of the merger agreement are the result of arm’s-length negotiations between representatives of Harte Hanks and Star. The\nfollowing is a summary of the events leading up to the signing of the merger agreement and key meetings, negotiations, discussions and\nactions taken among Harte Hanks, Star, and their respective advisors that preceded the public announcements of the merger; it does not\npurport to catalogue every conversation or interaction among representatives of Harte Hanks, Star and other parties.

The\nboard of directors of Harte Hanks and Harte Hanks’ management team regularly review Harte Hanks’ operating results, capital\nstructure, future growth opportunities and competitive position in its markets. These reviews have included consideration by the board\nof directors of Harte Hanks and Harte Hanks’ management team and, from time to time, discussions with outside financial advisors\nand other industry participants of various potential strategic transactions, as well as ongoing initiatives aimed at enhancing stockholder\nvalue, strengthening Harte Hanks’ financial and liquidity position, increasing its cash flows and growing its business organically,\nto prepare for and respond to changing market forces and resulting business risks and uncertainties in its markets.

Pre-2025\nActivities

In\nNovember 2019 and June 2020, Harte Hanks was approached by a party referred to as “Company A” and a party referred to as\n“Company B” who made offers to purchase the Harte Hanks Contact Center division (the call centers). Harte Hanks signed an\nexclusivity arrangement with Company B with an initial expiration date of August 2020 following these overtures. Because of an upturn\nin call center business, the discussions with Company B terminated in September 2020. Following these discussions, Harte Hanks retained\nan investment banker, on December 7, 2020, to support Harte Hanks with various strategic alternatives. From time to time, this investment\nbanker vetted early discussions to sell business units of Harte Hanks (for example, in July 2021, another inquiry about a purchase of\nthe call centers was received by Harte Hanks’ investment bank that was never followed by a formal offer).

Harte\nHanks returned to a national exchange on November 30, 2021 (NASDAQ) and obtained a $25 million revolving line of credit from Texas Capital\nBank in December 2021.

An\nunsolicited offer to buy Harte Hanks was made in January 2022 by a party referred to as “Company C”. In response to the offer,\nthe board of directors of Harte Hanks created a committee of non-management directors called the Special Transaction Committee and sought\nadvice from an outside financial advisor and its internal and external counsel. The discussions with this potential acquirer ended shortly\nthereafter without action by the board of directors of Harte Hanks.

Coincidently,\nalso in February 2022, John H. Griffin, Jr., Chairman of the board of directors of Harte Hanks, met Jeffrey E. Eberwein, Star’s\ncurrent Chief Executive Officer. The two discussed overlaps between Harte Hanks’ operations and Star’s businesses. On March\n28, 2022, Harte Hanks was informed by Mr. Eberwein, after consultation with the Star Board of Directors, that any transaction between\nthe companies would not occur for the foreseeable future, but from that time on, the two set up occasional meetings to discuss topics\nof common interest.

Later\nthat year, on December 1, 2022, Harte Hanks acquired InsideOut Solutions, LLC, for $7.5 million in cash and HHS stock, and simplified\nits corporate structure by repurchasing from Wipro, LLC all of Harte Hanks’ Series A Convertible Preferred Shares for cash and\nHHS stock.

Efforts\nby Harte Hanks to simplify its financial structure continued into 2024 with Harte Hanks paying $5.1 million and transferring $71.9 million\nin pension assets to the diversified insurance and financial services company Nationwide to finalize the termination of a Qualified Pension\nPlan as of August 1, 2024. Harte Hanks selected David A. Garrison as its Chief Financial Officer and David Fisher as its Chief Transformation\nOfficer in January 2024.

Initial\nDivestiture Efforts

On\nJanuary 13, 2025, Harte Hanks received an unsolicited offer from a party referred to as “Company D” to invest in, or take\nprivate, Harte Hanks. In response, Harte Hanks re-convened meetings of its Special Transaction Committee, with Bradley Radoff as its\nChairman, and agreed to retain a new investment advisor and outside counsel to evaluate the Company D offer. The Special Transaction\nCommittee’s primary function was to manage the investment advisor and outside counsel and the due diligence process; it was not\nauthorized to negotiate the terms of a strategic transaction without further authorization from the board of directors of Harte Hanks,\nand any definitive agreement remained subject to approval by the board of directors of Harte Hanks. Company D’s proposal contemplated\na commitment of up to $15 million in a new convertible preferred offering at a 20% premium or a common equity offering at the current\nstock price to sponsor a $40 million self-tender (assuming up to $25 million of additional leverage) at a 20% premium to the then-current\nstock price, following which Harte Hanks could delist its common stock. Stockholders who did not tender would have remained stockholders\nof Harte Hanks.

On\nJanuary 28, 2025, Harte Hanks announced that Kirk Davis had stepped down for personal reasons as Harte Hanks’ Chief Executive Officer,\nand that Mr. Fisher, Harte Hanks’ Chief Transformational Officer, would serve as interim Chief Operating Officer.

On\nFebruary 14, 2025, Harte Hanks informed Company D that because of its recent Chief Executive Officer transition, it would like to defer\ndiscussions to the near future.

The\noverture led Harte Hanks to focus on potential transformative transactions with greater focus. On February 17, 2025, Harte Hanks formally\nretained a new financial advisor (the “Wilson Financial Advisor”) for a divestiture transaction named “Project\nWilson,” which contemplated a sale of the Harte Hanks fulfillment and logistics businesses.

From\nFebruary 2025 to July 2025, Harte Hanks, through the Wilson Financial Advisor, entered into confidentiality and non-disclosure agreements\ncontaining customary mutual non-disclosure and non-use provisions, with 93 different parties. Discussions during this time resulted in\nten initial indications of interest, and ultimately three letters of intent from parties that we refer to as “Company E”,\n“Company F” and “Company G”.

On\nMay 20, 2025, Company F submitted a preliminary indication of interest for Harte Hanks’ fulfillment and logistics businesses at\nan enterprise value range of $50 million to $55 million, subject to adjustments for tax liabilities, deferred revenue, indebtedness,\naccrued compensation and other items.

On\nJune 30, 2025, Harte Hanks appointed Mr. Fisher as President.

Following\ndiligence, on July 22, 2025, Company F submitted a letter of intent at an enterprise value of up to $46 million, consisting of $38.5\nmillion in cash at closing and up to $7.5 million of contingent consideration based on post-closing EBITDA performance. In response to\na counterproposal from the board of directors of Harte Hanks, on July 29, 2025, Company F agreed to replace the contingent consideration\nwith a $5 million seller note, for total consideration of $43.5 million.

On\nJuly 31, 2025, Harte Hanks entered into an exclusivity agreement running through October 2, 2025 with Company F for Project Wilson. Harte\nHanks opted to pursue Company F exclusively for a variety of reasons, including that Company E had no committed capital and Company G\ndid not appear to be on the same timetable for a transaction as Harte Hanks. On the same day, Harte Hanks retained Baker Botts L.L.P.\n(“Baker Botts”) as external legal counsel for Project Wilson.

Extensive\nwork proceeded on an asset sale transaction with Company F, which included work on transactional documents and extensive due diligence.\nIn September 2025, Harte Hanks disclosed to Company F the impending loss of nearly all revenue of a significant customer for one of the\nunits that was attributable to Project Wilson. On October 2, 2025, the day before its exclusivity was set to expire, Company F informed\nHarte Hanks that it no longer had an interest in pursuing Project Wilson.

On\nOctober 14, 2025, the board of directors of Harte Hanks approved a new Operating Committee and delegated the responsibilities to evaluate\nand pursue potential strategic transactions and alternatives involving Harte Hanks and its business units to that Committee. Mr. Griffin\nand Ms. Combes were appointed to the Committee, with Mr. Griffin serving as Chairperson. The board of directors of Harte Hanks formed\nthe Operating Committee to provide more frequent oversight of the strategic process and direction to Harte Hanks’ advisors between\nmeetings of the full board. The Operating Committee reported regularly to the full board of directors of Harte Hanks, and any decision\nto enter into a definitive agreement remained reserved to the full board of directors. The Wilson Financial Advisor re-initiated discussions\nwith Company F about Project Wilson, and provided updated financial information to Company F.

During\nOctober 2025, Harte Hanks continued to meet with Company F and Company G, each of whom stated that a significant amount of diligence\nwould be required before making any offer. Company D also reengaged in conversations with Harte Hanks at this time.

On\nOctober 27, 2025, the Operating Committee met with representatives of the Wilson Financial Advisor to discuss ongoing exploratory discussions\nwith entities that had expressed interest in investing in or acquiring all or part of Harte Hanks. Representatives of the Wilson Financial\nAdvisor reported that Company G had expressed strong interest in pursuing a whole-company acquisition of Harte Hanks and that Company\nE remained interested in acquiring the fulfillment and logistics portion of Harte Hanks’ business. The Wilson Financial Advisor\nreported that both parties would likely require additional time before providing an offer, and the Operating Committee agreed to continue\ndiscussions with them in parallel.

The\nOperating Committee and its advisors also discussed transaction process considerations, including an internal valuation analysis to be\nprepared by the Wilson Financial Advisor and the possible use of a post-signing go-shop period if Harte Hanks received a proposal that\nthe Operating Committee believed reflected a satisfactory valuation and wished to pursue. The Operating Committee discussed fiduciary\nconsiderations associated with potential strategic transactions and noted that, although a transaction was being explored, no affirmative\ndetermination to pursue a sale had been made at that time.

The\nOperating Committee also discussed interest expressed by Company D and the desirability of keeping Company D informed while avoiding\npremature exclusivity. The Operating Committee agreed that Company D’s interest should be communicated to the Wilson Financial\nAdvisor for consideration with the other potential counterparties.

A\nmonth later, in November 2025, Mr. Eberwein reached out to Mr. Griffin to set up time to meet. While setting up that meeting, Mr. Eberwein\ninformed Mr. Griffin that Star had merged with Hudson Global, Inc. and had reduced costs by $2 million annually. Mr. Eberwein also shared\ninformation with Mr. Griffin about Star’s preferred stock. They arranged for a December meeting.

Also\nduring November and December 2025, Harte Hanks continued to discuss interest shown by Company G. Company G showed interest but continued\nto represent an elongated timeline prior to having the ability to make any offer or to confirm whether Company G intended to pursue part\nor all of Harte Hanks.

On\nNovember 14, 2025, the Operating Committee reviewed developments concerning Company G, including a presentation by members of Harte Hanks\nto the chief executive officer and chief financial officer of a Company G subsidiary, which representatives of the Wilson Financial Advisor\nand the Operating Committee also attended. The Operating Committee also reviewed continuing negotiations concerning a confidentiality\nagreement with Company D, including a standstill provision, and instructed Baker Botts to send a revised draft to Company D’s counsel.\n

The\nOperating Committee and its advisors discussed whether the exploratory inquiries and discussions undertaken to date indicated that Harte\nHanks was for sale. Baker Botts advised that those activities were exploratory and preliminary and did not constitute a definitive intention\nto sell Harte Hanks. The Operating Committee and its advisors also discussed considerations that would arise if Harte Hanks later decided\nto pursue a sale process.

During\nNovember and December 2025, a party referred to as “Party A” contacted Harte Hanks’ Chief Client Officer and Mr. Fisher\nregarding potential ways to expand the existing commercial relationship between Harte Hanks and Party A and potential strategic opportunities\ninvolving Harte Hanks, including a potential acquisition or merger. At that time, Harte Hanks was in advanced discussions with Company\nE regarding a letter of intent for Project Wilson, and those discussions were confidential. Accordingly, at the direction of the Operating\nCommittee, Harte Hanks referred Party A’s inquiries to the Wilson Financial Advisor. Party A did not submit an indication of interest\nor proposal to Harte Hanks at that time.

On\nDecember 1, 2025, the Operating Committee again reviewed the status of the confidentiality agreement with Company D, including Company\nD’s deletion of the proposed standstill provision. The Operating Committee instructed Baker Botts to offer Company D’s counsel\nanother opportunity to discuss the need for the standstill provision.

Company\nD discontinued conversations with Harte Hanks during December 2025 and no indication of interest or valuation range was shared between\nthe parties.

On\nDecember 12, 2025, Mr. Eberwein and Mr. Griffin met as planned. Following that meeting, Star delivered a draft confidentiality agreement\nto Harte Hanks. On December 29, 2025, the Operating Committee reviewed the proposed confidentiality agreement and discussed recent conversations\nbetween Mr. Griffin and Mr. Eberwein. Mr. Griffin reported that Mr. Eberwein had indicated that Star’s board of directors (the\n“Star Board”) had expressed renewed interest in pursuing a potential merger transaction with Harte Hanks. The Operating\nCommittee and its advisors discussed the appropriate process for responding to Star’s inquiry and agreed that Harte Hanks could\nenter into a confidentiality agreement with Star, subject to revisions including a mutual standstill provision. The Operating Committee\nrequested that Baker Botts revise the draft confidentiality agreement for distribution to Star.

The\nOperating Committee met frequently, often weekly or more often during active periods, with representatives of Baker Botts and, through\nApril 2026, the Wilson Financial Advisor, and later with representatives of Citizens and ODP. Because Harte Hanks’ strategic review\ninvolved multiple parallel discussions with potential counterparties for all or part of Harte Hanks on differing timelines and because\nHarte Hanks did not have a Chief Executive Officer for portions of 2025, the board of directors of Harte Hanks determined that a smaller\ncommittee could more efficiently oversee day-to-day process matters, such as the negotiation of confidentiality agreements, the sharing\nof diligence information and the direction of Harte Hanks’ advisors, between meetings of the full board of directors of Harte\nHanks. The Operating Committee was not authorized to approve a definitive agreement. Mr. Griffin regularly reported developments to the\nfull board of directors of Harte Hanks, which made the principal decisions in the process.

On\nJanuary 8, 2026, Star and Harte Hanks entered into a confidentiality agreement.

On\nJanuary 9, 2026, Mr. Griffin and Mr. Eberwein held a video call. During the call, Mr. Eberwein shared information on recent industry\ndevelopments.

On\nJanuary 16, 2026, Mr. Griffin discussed Star’s interest in Harte Hanks following the sale of the Project Wilson assets, which is\nreferred to as “Remainco,” with the Wilson Financial Advisor, who was formally retained to advise on Project Wilson only.

On\nJanuary 30, 2026, Company E submitted a revised letter of intent to Harte Hanks for Project Wilson.

On\nFebruary 3, 2026, a revised letter of intent was signed, and provided Company E with exclusivity for 60 days, through early April 2026.\nCompany E’s revised letter of intent proposed to acquire the equity interests of the fulfillment and logistics businesses for $41\nmillion on a cash-free, debt-free basis, less deferred taxes and amounts collected for services not yet rendered. The proposal was subject\nto a significant financing contingency, as Company E lacked cash and was reliant on letters of support from potential funders for all\nof the required debt financing and required equity. The proposal also assumed that the business would have trailing twelve-month EBITDA\nof not less than $6.8 million at closing and that the parties would enter into a 12-month transition services agreement.

On\nFebruary 11, 2026, Mr. Griffin reached out to Mr. Eberwein to have a February update and scheduled a time to speak by phone the following\nday.

On\nMarch 2, 2026, the board of directors of Harte Hanks was informed that the Wilson Financial Advisor had received an unsolicited inquiry\nfor all of Harte Hanks from Company B. As Harte Hanks was subject to an exclusivity arrangement with Company E at the time of the inquiry,\nthe board of directors of Harte Hanks determined not to respond to the March 2nd inquiry from Company B.

On\nApril 3, 2026, Mr. Eberwein reached out to Mr. Griffin via email and requested a short update call for the following week, and Mr. Griffin\nstated that he would be in the area and that they could get together in person.

On\nApril 8, 2026, Company E and Harte Hanks extended the exclusivity period through May 30, 2026.

On\nApril 10, 2026, Mr. Griffin met with Mr. Eberwein with the objective of assessing Star’s interest in Remainco.

On\nApril 15, 2026, the Wilson Financial Advisor alerted Harte Hanks’ directors that it would not be providing advisory services beyond\nProject Wilson and would therefore not advise Harte Hanks with respect to any transaction involving Remainco.

On\nApril 16, 2026, Mr. Eberwein and Mr. Griffin spoke. Mr. Griffin explained that Harte Hanks would be hiring another investment banker\nfor Remainco. Mr. Griffin agreed to share materials about Remainco with Mr. Eberwein, and Mr. Eberwein agreed to prepare a non-binding\nletter of intent for Remainco. It was understood that the Star proposal would not include the assets that Company E was planning to purchase\nas part of Project Wilson. Harte Hanks also stated that any offer must be subject to an opportunity to publicly confirm the adequacy\nof the purchase price through a “go-shop period”.

On\nApril 17, 2026, Mr. Griffin shared with Mr. Eberwein a projection deck for Remainco. The deck identified approximately $4 million in\npossible shared services reductions from merging the two publicly traded companies.

On\nApril 22, 2026, representatives of Oaklins DP, LLC (“ODP”), Harte Hanks’ financial advisor, contacted representatives\nof Citizens regarding the opportunity for Citizens to serve as lead financial advisor to Harte Hanks.

On\nApril 29, 2026, Mr. Eberwein emailed Mr. Griffin and Ms. Combes a draft indication of interest for Remainco. It referenced a presentation\ntitled “Remainco Reimagined” that Mr. Griffin and Ms. Combes had provided to Mr. Eberwein on April 17, 2026. That same day,\nMr. Griffin shared a draft letter of intent from Star with the board of directors of Harte Hanks and marketing decks for the selection\nof an investment banker.

On\nApril 30, 2026, representatives of Citizens had an introductory call with Mr. Griffin and Ms. Combes to discuss the scope of Citizens’\nengagement, which was expected to be limited to the sale of Harte Hanks’ marketing services and customer care divisions, and recent\ndevelopments regarding Project Wilson.

At\na May 5, 2026 meeting, the board of directors of Harte Hanks discussed the Star proposal with representatives of Harte Hanks’ outside\ncounsel at Baker Botts and internal Harte Hanks counsel. The board of directors of Harte Hanks concluded that the three current structures\nof the proposals for Remainco by Star were not in the best interest of Harte Hanks. The board of directors of Harte Hanks instructed\nMr. Griffin to inform Star that Harte Hanks would be hiring an investment banker to evaluate options for Harte Hanks.

On\nMay 8, 2026, the Citizens and ODP engagement letters were executed.

On\nMay 14, 2026, as part of the onboarding of its new advisors, Mr. Griffin shared with representatives of Citizens and ODP an unsolicited\ninquiry received by Harte Hanks from Company F, which Citizens might pursue once the exclusivity period of Project Wilson expired.

On\nMay 19, 2026, representatives of Citizens, ODP and Harte Hanks discussed the latest developments regarding Project Wilson,\nthe Company B inquiry, and an overview of the process and diligence related to the sale of the marketing services and customer care\nbusiness.

On\nthe same day, Mr. Eberwein informed Mr. Griffin that Star now had an “ATM offering” through Ladenburg of its preferred stock,\nwhich allowed it to raise capital for acquisitions and improve trading liquidity for the Star preferred stock.

On\nMay 27, 2026, at the request of Harte Hanks, representatives of Citizens established a virtual data room (the “VDR”)\nto facilitate the due diligence process in connection with the proposed Remainco transaction. Harte Hanks populated the VDR with diligence\nmaterials for review by prospective counterparties, including information relating to Harte Hanks’ marketing services and customer\ncare divisions.

On\nMay 30, 2026, the exclusivity period for Company E expired, although diligence activities and legal drafting continued for Project Wilson.

On\nJune 1, 2026, Mr. Eberwein submitted a non-binding indication of interest (the “June 1st Star IOI”) to the board of\ndirectors of Harte Hanks proposing to acquire 100% of the outstanding common stock of Harte Hanks for $5.00 per share, consisting of\n$2.50 per share in cash and $2.50 per share in Star’s 10% Series A Cumulative Perpetual Preferred Stock (Nasdaq: STRRP), the value\nof which is based on a liquidation preference of $10.00 per share. In proposing the preferred stock component of the merger consideration,\nStar indicated that it believed the Star Preferred Stock represented an attractive alternative form of consideration because it was listed\nfor trading on the Nasdaq Global Select Market, carried cumulative dividend rights at an annual rate of 10%, and had a stated liquidation\npreference of $10.00 per share.

On\nJune 5, 2026, a principal for a party referred to as “Company H” contacted Bradley L. Radoff, a member of the board of directors\nof Harte Hanks, expressing interest in acquiring Harte Hanks. Mr. Griffin introduced Company H to representatives of ODP and Citizens\nto discuss next steps regarding a potential transaction. That same day, Mr. Eberwein was introduced to representatives of ODP and Citizens\nto discuss next steps regarding a potential transaction.

On\nJune 8, 2026, Company E presented to the Harte Hanks Project Wilson Advisor a revised and reduced proposal, and suggested it was investigating\nan employee stock ownership plan structure with one potential financing source. Company E suggested a valuation of $30 million was now\nwarranted, plus an additional $3 million possible earnout, and up to $2 million in financing by Harte Hanks might be needed.

On\nJune 8, 2026, representatives of Citizens and ODP held an introductory call with Mr. Eberwein, who provided an overview of Star and the\nrationale for the June 1st Star IOI.

On\nJune 10, 2026, Harte Hanks and Company H executed a non-disclosure agreement.

On\nJune 11, 2026, representatives of Citizens and ODP held an introductory call with principals from Company H, who provided an overview\nof the company and its investment thesis for a merger with Harte Hanks, with next steps to include an initial diligence request list.

On\nJune 16, 2026, Company H submitted its initial diligence request list to representatives of Citizens and ODP.

On\nJune 23, 2026, Company E stated that only an employee stock ownership plan structure would be workable, with only $28 million in cash\npaid to Harte Hanks, along with $2 million in private preferred stock and a potential additional $3 million earn out. Only $850,000 would\nbe provided by Company E itself.

On\nJune 24, 2026, Harte Hanks provided Company H with VDR access and materials responsive to its initial diligence requests.

On\nJune 25, 2026, Star submitted its initial diligence request list to representatives of Citizens and representatives of ODP.

On\nJuly 1, 2026, Mr. Griffin was informed by its Project Wilson financial advisor that Company E had ended all work on a possible transaction\nfollowing its review of recent Company financial results for the month of May 2026.

On\nJuly 2, 2026, the Operating Committee notified Harte Hanks’ financial and legal advisors that discussions related to Project Wilson\nhad not resulted in a transaction. Accordingly, the scope of Citizens’ engagement was revised to encompass a sale of the entire\ncompany. Mr. Griffin, Ms. Combes and Mr. Radoff, from the board of directors of Harte Hanks, directed Harte Hanks’ legal and financial\nadvisors to share a process letter with Star and Company H setting a bid deadline of July 30, 2026, with bids to include a markup of\nthe merger agreement to be prepared by Baker Botts. At the request of the board of directors of Harte Hanks, representatives of Citizens\nshared the final process letter with Company H and Star the same day and requested letters of interest by July 30, 2026. That same day,\nHarte Hanks provided Star with access to the VDR.

On\nJuly 6, 2026, Mr. Eberwein called Mr. Griffin and said his team was prepared to send to Harte Hanks the deliverables that Harte Hanks\nrequested for July 31, 2026, namely a revised letter of intent and a marked up merger agreement.

On\nJuly 8, 2026, Star submitted its second phase of diligence requests to representatives of Citizens, covering financial, legal, pension\nand tax matters.

On\nJuly 13, 2026, Baker Botts delivered an initial draft of the merger agreement to Baker & Hostetler LLP (“Baker\nHostetler”), outside legal counsel to Star. The initial draft was structured as a reverse subsidiary merger in which\nMerger Sub would merge into Harte Hanks and Harte Hanks would survive as a wholly owned subsidiary of Star.

On\nJuly 15, 2026, Company H, through its principal, notified Mr. Radoff that it was exiting the process to focus on enterprise resource\nplanning related initiatives rather than dedicating resources to evaluating Harte Hanks. Following Company H’s withdrawal,\nStar was the only party that remained in the process and the only party that had submitted a recent proposal to acquire all of the outstanding\nshares of Harte Hanks. None of the prior proposals received by Harte Hanks since January 2025 had resulted in a transaction: the Company\nD proposal contemplated only a partial self-tender rather than an acquisition of Harte Hanks, the Company F and Company E proposals\nrelated solely to the fulfillment and logistics businesses and were terminated by those parties following diligence, and Company G’s\nextended timeframe for a closing added risks that were not acceptable to Harte Hanks.

On\nJuly 21, 2026, Patrick O’Brien, Managing Director of Harte Hanks’ fulfillment & logistics business, and Benjamin Chacko,\nManaging Director of Harte Hanks’ customer care business, traveled with Mr. Griffin and representatives of Citizens and ODP to\nGreenwich, Connecticut for in-person management meetings at Star’s office.

On\nJuly 27, 2026, representatives of Harte Hanks, Citizens, ODP and Star had a meeting to discuss Harte Hanks’ fulfillment &\nlogistics business.

On\nJuly 28, 2026, representatives of Harte Hanks, Citizens, ODP and Star had a meeting to discuss Harte Hanks’ revenue solutions\nbusiness and Harte Hanks’ current legal and tax services. That same day, Star shared a markup of the merger agreement with Harte\nHanks that, among other things, proposed a forward merger structure in which Harte Hanks would merge into Merger Sub and cease to exist,\ncontemplated a tax-free reorganization under Section 368(a) with extensive joint tax representations, and included a 30-day go-shop period,\na 4% Company Termination Fee, a 2% Exempted Party reduced fee, and a 2% Parent Termination Fee. The markup also provided a three-Business\nDay matching and notice period for superior proposals, limited Star’s monetary liability to the Parent Termination Fee, did not\nrequire the purchase of D&O tail insurance, and required non-public information provided to bidders to be shared within 24 hours.

On\nJuly 29, 2026, representatives of Harte Hanks, Citizens, ODP and Star had a meeting to discuss Harte Hanks’ corporate costs and\npotential cost synergies and the customer care business.

On\nJuly 30, 2026, representatives of Harte Hanks, Citizens, ODP and Star had a meeting to further discuss Harte Hanks’ fulfillment\n& logistics business, the sales team and its operations.

On\nJuly 31, 2026, Star delivered a revised letter of intent (the “July 31st Star LOI”) that introduced election mechanics\nincluding STRRP preferred stock, a fifteen (15)-day exclusivity period (with an automatic seven (7)-day extension), specific financing\nterms, detailed governance and integration provisions naming key personnel, enumerated closing conditions, and a thirty (30)-day go-shop\nperiod no longer conditioned on a one-month acceptance deadline. The July 31st Star LOI maintained the $5.00 per share price and consideration\nstructure comprised of 50% cash and 50% STRRP preferred stock. The July 31st Star LOI also stated that Star expected to fund approximately\n$12.5 million of the cash consideration through a draw on Harte Hanks’ existing Texas Capital Bank revolving credit facility,\nwith the balance funded from Star’s cash on hand, and that Star’s indemnification of directors and officers would replace\nthe need for a D&O tail insurance policy. Concurrently, Star delivered a comprehensive markup of the merger agreement.

The\nboard of directors of Harte Hanks discussed the July 31st Star LOI. Following the board of directors of Harte Hanks’ discussions,\nthe board of directors of Harte Hanks directed its legal and financial advisors to request that Star increase its offer to $6.50 per\nshare.

On\nJuly 31, 2026, the Audit Committee of the Star board met to discuss the proposed Merger. All members of the Audit Committee attended\nthe meeting, together with certain members of Star management and Star’s outside counsel and financial advisor.

On\nAugust 2, 2026, the board of directors of Harte Hanks, certain members of Harte Hanks’ management team, and representatives from\nCitizens and ODP held a call to discuss the July 31st Star LOI and the Merger Agreement received from Star on July 28, 2026. The board\nof directors of Harte Hanks and its advisors discussed Star’s positions on the merger structure, D&O insurance, the transaction-expense\ncap and its proposed scope, the asymmetry in the proposed termination fee structure, the absence of a parent guarantee, and the tax implications\nof the proposed transaction.

On\nAugust 3, 2026, following discussion, Star delivered a revised executed letter of intent (the “August 3rd Star LOI”)\nincreasing the price to $5.50 per share, with the incremental value effectively funded through an increased Texas Capital Bank facility\ndraw and a new transaction-expense cap of $2,365,000. The August 3rd Star LOI increased the proposed Texas Capital Bank facility draw\nfrom approximately $12.5 million to approximately $15.0 million to fund the additional cash consideration, with the balance and transaction\nexpenses funded from Star’s cash on hand. The August 3rd Star LOI also introduced a closing condition capping Harte Hanks’\naggregate transaction expenses at $2,365,000, defined broadly to include professional advisory fees, D&O tail insurance costs, and\ncertain transaction-related payments to employees and officers. Star continued to maintain that its indemnification of directors would\nreplace the need for a separate and customary D&O tail policy.

On\nAugust 5, 2026, management of Harte Hanks and Star, together with their respective legal and financial advisors, including representatives\nof Citizens, met to discuss regulatory matters for each line of business and the go-to-market strategies for Harte Hanks’ revenue\nsolutions and customer care businesses.

On\nAugust 6, 2026, management of Harte Hanks and Star, together with their respective legal and financial advisors, including representatives\nof Citizens, met to discuss legal matters, including ongoing litigation, with Harte Hanks, and customer case studies for the Revenue\nSolutions and Customer Care businesses. Separately, Mr. Fisher circulated a draft cash forecast for Citizens’ review and representatives\nof Citizens had a discussion with Mr. Eberwein regarding the transaction’s progress.

Also\non August 6, 2026, management of Harte Hanks finalized discussions it had been having with the Wilson Financial Advisor over fees and\nexpenses that it claimed it was owed.

On\nAugust 6, 2026, the Star board met to discuss the proposed Merger. All members of the Star Board attended the meeting. The Star Board\ndiscussed the proposed Merger and the additional due diligence then available.

On\nAugust 7, 2026, management of Harte Hanks and Star, together with their respective legal and financial advisors, including representatives\nof Citizens, met to discuss corporate structure and to provide a customer care technology demonstration for the Star team.

That\nsame day, Baker Botts shared a further revised draft of the Merger Agreement with Baker Hostetler that, among other things, reverted\nto a reverse subsidiary merger structure in which Merger Sub would merge into Harte Hanks and Harte Hanks would survive in order to avoid\ntriggering third-party consent requirements for pension plans, contracts, leases and permits; changed the intended tax treatment from\na tax-free reorganization to a taxable transaction and eliminated the joint tax representations article; added a customary six-year D&O\ntail insurance provision, including a prepaid tail policy option and a Maximum Annual Premium of 300% of Harte Hanks’ current\npremium; revised the proposed termination fees to 3% for Harte Hanks, 1.5% for an Exempted Party, and 3% for Star, and carved out any\nCompany Termination Fee obligation arising from failure of the Debt Financing; expanded Star’s representations regarding capitalization,\nSEC reports, financial statements and the financing commitment letter; added a Star performance guarantee; and reflected $5.50 per share\nconsideration.

On\nAugust 8, 2026, Harte Hanks executed a revised letter of intent (the “August 8th Star LOI”). At the request of the\nboard of directors of Harte Hanks, representatives of Citizens shared the executed August 8th Star LOI and an updated cash forecast and\nestimated transaction expenses with Star. The August 8th Star LOI maintained the $5.50 per share price and the 50% cash / 50% preferred\nstock consideration structure from the August 3rd Star LOI, but incorporated several governance changes: it removed the fixed exclusivity\nperiod and replaced it with exclusivity through August 14, 2026; agreed to obtain a customary D&O tail insurance policy prior to\nclosing, resolving a key issue from the August 3 board of directors of Harte Hanks discussion; dropped the transaction-expense cap as\na closing condition; and instead provided that Harte Hanks’ transaction expenses would be paid from Harte Hanks’ own cash\nprior to closing and would not reduce the purchase price payable to stockholders. The August 8th Star LOI also added a requirement for\nvoting and support agreements from Harte Hanks’ directors and certain executive officers.

Later\nthat day, Mr. Eberwein notified a representative of Citizens via email that Star was lowering its offer to $5.00 per share (50% cash\nand 50% preferred stock), and expected Star Board approval to sign the merger agreement the following Thursday, with a proposed signing\non August 13, 2026, and announcement on August 14, 2026. Mr. Eberwein attributed the revision in price to higher anticipated transaction\nexpenses of approximately $4.5 million, an approximately $6 million adverse swing in net debt, weaker-than-expected second-quarter results,\nand concerns over continued client loss, and noted that the $5.00 per share consideration represented a 119% premium to Harte Hanks’\nprior-Friday close of $2.28. The board of directors of Harte Hanks discussed the updated transaction terms.

On\nAugust 9, 2026, management of Harte Hanks and Star, together with their respective legal advisors, had a call to discuss certain key\nissues in the merger agreement and timing for the transaction. Key issues discussed included the Texas Capital Bank financing structure,\ntermination fees, treatment of Harte Hanks equity awards, directors and officers indemnification and insurance, and representations and\nwarranties.

On\nAugust 9, 2026, management of Harte Hanks and Star, together with their respective legal and financial advisors, including representatives\nof Citizens, met to discuss the top customers for each line of business.

On\nAugust 10, 2026, Baker Hostetler shared a further revised draft of the merger agreement with Baker Botts that, among other things, responded\nto the August 7 draft by providing for cash, preferred stock, or a combination of both for vested Company equity awards, while cancelling\nunvested awards without consideration; retained the six-year D&O tail insurance provision with a 300% premium cap; and revised the\ntermination fees to a 3% Company Termination Fee, a 1.5% Exempted Party reduced fee during the Go-Shop Period, and a 2% Parent Termination\nFee. That same day, Baker Hostetler also shared a form of Voting and Support Agreement with Baker Botts, together with a list of directors,\nofficers, and certain stockholders that Star was requesting to sign such an agreement.

On\nAugust 11, 2026, Mr. Garrison shared Harte Hanks’ projected operating model with Texas Capital Bank, supporting the feasibility\nof a $15 million draw on its loan in connection with the proposed transaction. Additionally, Baker Botts shared a revised draft of the\nmerger agreement with Baker Hostetler which reflected ongoing negotiations on open issues concerning the financing structure, termination\nfees, treatment of Company equity awards, directors’ and officers’ indemnification and insurance, and representations and\nwarranties.

On\nAugust 11, 2026, Star delivered a revised letter of intent (the “August 11th Star LOI”) reflecting its offer at $5.00\nper share, increasing the transaction-expense cap to $4,514,000 and including a closing condition that Harte Hanks’ aggregate\ntransaction expenses not exceed that amount. The August 11th Star LOI reverted to $5.00 per share from $5.50, reinstated the transaction-expense\ncap - now at $4,514,000, nearly double the original $2,365,000 cap - as a closing condition, and reversed the August 8th Star LOI’s\nconcession on D&O tail insurance by stating that Star’s indemnification would replace the need for a separate tail policy.\nMr. Eberwein again attributed the price reduction to higher anticipated transaction expenses of approximately $4.5 million, an approximately\n$6 million adverse swing in net debt, weaker-than-expected second-quarter results, and concerns over continued client loss. With respect\nto net debt, Harte Hanks had no borrowings and approximately $5.6 million of cash and cash equivalents as of December 31, 2025, compared\nwith $3.0 million of borrowings under its Texas Capital Bank credit facility and approximately $5.2 million of cash and cash equivalents\nas of June 30, 2026, and Harte Hanks’ cash forecast reflected the use of cash on hand through closing to pay transaction expenses.

During\nthe course of the negotiations, including at meetings held on August 7, 11, and 12, 2026, the board of directors of Harte Hanks, together\nwith representatives of Harte Hanks’ management and its financial and legal advisors, discussed certain concerns and risks relating\nto the proposed transaction, including: (i) the lack of a committed debt financing letter and Star’s reliance on a draw of up to\n$15 million on Harte Hanks’ existing Texas Capital Bank facility, the availability of which was subject to Harte Hanks’\nborrowing base and Texas Capital Bank’s consent, and the corresponding closing condition, which the board of directors sought to\nmitigate by excluding any Company Termination Fee obligation arising from a financing failure and requiring Star to bear lender financing\ncosts if the transaction terminates; (ii) the value and liquidity of the Star Preferred Stock to be received by Harte Hanks stockholders\nand the importance of diligence on Star’s financial condition; (iii) whether contractual indemnification by Star would adequately\nprotect Harte Hanks’ directors and officers in the absence of a prepaid D&O tail insurance policy; (iv) Star’s proposed\ncap on transaction expenses and the risk that excess expenses would reduce the consideration payable to stockholders; (v) the asymmetric\ntermination fees initially proposed by Star and their potential effect on the credibility of the go-shop period; (vi) the terms of the\nvoting and support agreements requested by Star, including the need to preserve the ability of signatories to support a superior proposal;\nand (vii) the risk that Star would not proceed with a transaction at all, and the absence of other proposals for the entire Company.\nThe board of directors of Harte Hanks also discussed the reduced price with representatives of Citizens and Baker Botts. Representatives\nof Citizens had previously advised the board of directors of Harte Hanks that the uncertainty regarding the availability of financing\nunder the Texas Capital Bank facility, Harte Hanks’ second-quarter results and the size of ongoing strategic transaction expenses\nmay each affect Star’s offer, and that Star might revert to its original $5.00 per share price. In determining to continue negotiations\nat $5.00 per share, the board of directors of Harte Hanks considered, among other things, that the $5.00 per share price represented\na premium of more than 100% to the $2.28 closing price of Harte Hanks Common Stock on August 7, 2026; that no other party had submitted\na recent proposal to acquire the entire Company; that prior efforts to sell the fulfillment and logistics businesses had not resulted\nin a transaction; Harte Hanks’ recent financial performance and loss of business from certain clients; the risks of continuing\nas a standalone public company; and that the Merger Agreement would include a 30-day go-shop period with a reduced termination fee, permitting\nHarte Hanks to solicit superior proposals following announcement.

On\nAugust 12, 2026, representatives of Harte Hanks, Star, Citizens, ODP, Baker Botts and Baker Hostetler participated in an all-hands call\nto discuss key outstanding issues in the Merger Agreement. Key outstanding issues discussed included the termination fee structure, the\ntreatment of Company equity awards, the scope of directors’ and officers’ indemnification and insurance, and the terms of\nthe Voting and Support Agreement. The outstanding issues discussed by the parties during the final phase of negotiations included the\nfinancing structure, termination fees, treatment of Company equity awards, directors’ and officers’ indemnification and insurance,\nand representations and warranties.

Later\non August 12, 2026, the board of directors of Harte Hanks held a meeting with Harte Hanks’ management and its financial and legal\nadvisors. Harte Hanks’ legal advisors summarized the terms of the Merger Agreement and provided an overview of the board of directors’\nfiduciary duties. The representatives of Citizens presented their financial analysis and their opinion that the merger consideration\nto be received by the holders of the Harte Hanks Common Stock (other than Owned Company Shares) in the merger is fair, from a financial\npoint of view, to such holders. Citizens subsequently shared its written opinion dated August 12, 2026 with the board of directors of\nHarte Hanks.

That\nsame day, Baker Hostetler shared a revised form of Voting and Support Agreement with Baker Botts.

On\nAugust 13, 2026, Baker Botts shared a further revised draft of the merger agreement with Baker Hostetler that, among other things, reflected\n$5.00 per share consideration and a 50% cash cap, and revised the treatment of Company equity awards so that specified options and RSUs\ncould receive elected cash or preferred stock consideration while all PSUs would be cancelled without consideration. It also added alternative\ndebt financing and related cost-reimbursement provisions, restored D&O indemnification protections, and retained the 3% Company Termination\nFee, 1.5% Exempted Party reduced fee and 3% Parent Termination Fee. That same day, Baker Botts shared a revised draft of the Voting and\nSupport Agreement with Baker Hostetler, which was finalized by the parties that day.

Also\non August 13, 2026, Texas Capital Bank shared a letter with Harte Hanks confirming its confidence to provide up to the $15 million loan\nin connection with the transaction. Later that day, the board of directors of Harte Hanks held a meeting, including certain members of\nHarte Hanks’ management, representatives of Citizens and representatives of ODP, and representatives of Baker Botts to discuss\nthe status of key items required prior to signing and the planned timing for signing and announcement. Following discussions, the board\nof directors of Harte Hanks approved the Merger Agreement.

On\nAugust 13, 2026, the Star board met again to consider the Merger Agreement and the transactions contemplated by the Merger Agreement.\nAll members of the Star board attended the meeting. The Star board received an update regarding additional due diligence conducted since\nits August 6, 2026 meeting. Following its consideration of the updated due diligence and the proposed transaction, the Star board determined\nto proceed with the Merger and approved the merger agreement and the transactions contemplated thereby.

Later\nthat same day, Baker Botts and Baker Hostetler held multiple calls to discuss open issues in the merger agreement, and Baker Hostetler\nshared a further revised draft of the merger agreement with Baker Botts that, among other things, finalized the $5.00 per share consideration\nand $19.2 million Maximum Cash Amount, specified the options and RSUs eligible for elected cash or preferred stock consideration, and\ncancelled the PSUs without consideration. The draft narrowed the alternative debt financing obligation to commercially reasonable efforts\non terms substantially similar to the ABL Loan Agreement or otherwise acceptable to Star, retained the six-year D&O insurance tail\nwhile narrowing related indemnification language, and fixed Harte Hanks, Exempted Party reduced, and Parent Termination Fees at\n$1,152,000, $576,000, and $1,152,000, respectively; it also preserved Star’s entitlement to the Company Termination Fee where otherwise\npayable while excluding damages arising solely from financing failure.

Early\nin the morning on August 14, 2026, Baker Botts shared a further revised draft of the merger agreement with Baker Hostetler and the Merger\nAgreement by and between Harte Hanks and Star was executed. The deal was publicly announced later that day.

On\nAugust 14, 2026, Star and Harte Hanks each issued a press release announcing the execution of the Merger Agreement.

Also\non August 14, 2026, Star filed a Form 8-K announcing the execution of and entry into the Merger Agreement, including the Merger Agreement\nand Form of Voting and Support Agreement as exhibits.

Following\nthe execution of the Merger Agreement, on August 21, 2026, representatives of Star and Harte Hanks participated in a call with a significant\nstockholder of Harte Hanks. During the call, representatives of Star and Harte Hanks discussed the proposed transaction and reviewed\nterms that had previously been publicly disclosed.

Following\nthe call, representatives of Star emailed the stockholder to continue the discussion regarding the proposed transaction, and counsel\nfor such parties had a discussion to consider the terms under which those discussions could occur. On September 8, 2026, counsel for\nsuch stockholder informed Star’s counsel that it would require a waiver under its existing cooperation agreement with Harte Hanks\nbefore engaging in further discussions regarding the proposed transaction. Counsel for Star thereafter requested such a waiver from Harte\nHanks. On September 11, 2026, the stockholder’s counsel advised Star’s counsel by email that the stockholder did not intend\nto engage in any discussions regarding the proposed transaction prior to its review of the proxy statement/prospectus.

By\nunanimous written consent dated September 23, 2026, the board of directors of Harte Hanks extended the term of the Operating Committee\nthrough December 31, 2026.

Post-Signing\nGo-Shop Activity

Pursuant\nto the Merger Agreement, during the Go-Shop Period from August 14, 2026 through September 13, 2026 at 11:59 p.m. Eastern Time, Harte\nHanks and its representatives were permitted to initiate, solicit, encourage and engage in discussions or negotiations with third parties\nregarding alternative Acquisition Proposals and to furnish non-public information to such third parties, subject to specified conditions\nset forth in the Merger Agreement.

During\nthe Go-Shop Period, Citizens and ODP, Harte Hanks’ financial advisors, together with Harte Hanks, solicited interest from 93 third\nparties. Harte Hanks entered into Acceptable Confidentiality Agreements (as defined in the Merger Agreement) with nine parties, and each\nof those parties was provided access to a virtual data room containing non-public information regarding Harte Hanks. Two parties submitted\nAcquisition Proposals during the Go-Shop Period.

On\nAugust 21, 2026, Party A executed an Acceptable Confidentiality Agreement, and on August 23, 2026, Party A received access to the virtual\ndata room. On September 1, 2026, Party A participated in a management presentation. On September 7, 2026, Party A submitted a letter\nof intent proposing to acquire all outstanding shares of Harte Hanks Common Stock for $4.50 per share in cash. The proposal was not subject\nto a financing condition, although Party A’s financing proposals from institutional lenders were non-binding and subject to credit\napproval and definitive documentation.

On\nSeptember 8, 2026, Citizens delivered the Party A proposal to Star pursuant to the notice requirements of the Merger Agreement. From\nSeptember 8 through September 10, 2026, Citizens, on behalf of the board of directors of Harte Hanks, communicated with Party A regarding\nfinancing certainty, alternative financing sources, the proposed Parent Termination Fee, potential enhancements to the proposed merger\nagreement and purchase-price improvement.

On\nSeptember 9, 2026, Party A delivered a markup of a merger agreement to Baker Botts, together with enhanced proposal information addressing\nthe board’s questions regarding financing certainty, balance-sheet resources and shareholder commitment.

On\nSeptember 11, 2026, Party A submitted a revised proposal increasing the purchase price to $4.60 per share, subject to the Texas Capital\nBank line of credit being paid in full at closing, and increasing the proposed Parent Termination Fee from approximately $1.152 million\nto $2.3 million.

On\nSeptember 3, 2026, a party referred to as “Party B” executed an Acceptable Confidentiality Agreement and received access\nto the virtual data room. On September 8, 2026, Party B submitted a proposal providing for the contribution of substantially all of Harte\nHanks’ assets, other than its federal and state net operating loss carryforwards, to a newly formed entity, with Harte Hanks receiving\n$20.0 million in cash and 3,953,611 common units in the newly formed entity. The cash was intended to be returned to Harte Hanks stockholders\nthrough a special dividend, self-tender offer or other mechanism. The proposal did not include a fixed per-share acquisition price. Party\nB indicated that funding would come from cash and liquidity on hand and that the proposal was not subject to a financing contingency.\nThe proposal was non-binding and subject to negotiation of definitive documentation, completion of due diligence, required approvals\nand customary conditions.

On\nSeptember 9, 2026, Citizens circulated a Superior Proposal Assessment to the board of directors of Harte Hanks. The board held an update\nmeeting with Harte Hanks’ management and its financial and legal advisors to discuss the status of the Star transaction, the Party\nA proposal, the Party B proposal and the Citizens assessment.

On\nSeptember 11, 2026, the board held an update meeting with Harte Hanks’ management and representatives of Citizens and Baker Botts.\nThe board discussed the revised Party A proposal, a comparison of the Star and Party A merger agreements and Exempted Party considerations.\nFollowing consultation with Citizens and Baker Botts, the board unanimously determined in good faith that each of the Party B proposal\nand the Party A proposal would reasonably be expected to result in a Superior Proposal, as defined in the Merger Agreement, and designated\neach proposer as an Exempted Party under the Merger Agreement. The board did not determine at that time that either proposal constituted\na Superior Proposal. The board reaffirmed the Company Board Recommendation in favor of the Star Merger Agreement and the Merger.

Also\non September 11, 2026, Harte Hanks delivered the notice required by Section 5.3(a) of the Merger Agreement to Star, identifying Party\nA and Party B as Exempted Parties and providing the information and documents required by the Merger Agreement.

On\nSeptember 12, 2026, Harte Hanks and its advisors discussed the post-Go-Shop process for continued engagement with Party A as an Exempted\nParty. The Go-Shop Period expired at 11:59 p.m. Eastern Time on September 13, 2026, and the No-Shop Period Start Date occurred immediately\nthereafter.

Also\non September 13, 2026, Party B delivered a letter to Citizens formally withdrawing its Acquisition Proposal. Party B stated that, after\nconsidering the board’s response to its proposal, Party B was unwilling to supplement its proposal to provide an all-cash purchase\nof all of Harte Hanks’ outstanding stock or assets on terms that the board would likely be in a position to determine constituted\na Superior Proposal. Party B stated that it remained interested in Harte Hanks and its businesses and would welcome the opportunity to\nre-engage if the Star Merger or any other acquisition transaction failed to be consummated.

Also\non September 13, 2026, Harte Hanks sent return-or-destroy notices to all NDA counterparties other than Party A and Party B, and Citizens\nconfirmed that no additional Acquisition Proposals had been received after the revised Party A proposal.

On\nSeptember 14, 2026, Harte Hanks notified Star that Party B was no longer an Exempted Party and Harte Hanks sent a return-or-destroy notice\nto Party B.

On\nSeptember 14 and 17, 2026, the board held an update meeting with Harte Hanks’ management and representatives of Citizens and Baker\nBotts to discuss Party A proposal and a comparison of the Star and Party A merger agreements and a return draft of a proposed merger\nagreement to Party A.

On\nSeptember 18, 2026, following continued discussions with Party A in accordance with the terms of the Merger Agreement, Party A provided\na financing work plan and timeline to representatives of Citizens. On the same date, Baker Botts, on behalf of Harte Hanks, delivered\nto Party A’s counsel a revised draft of a proposed merger agreement between Harte Hanks and Party A. In accordance with the Merger\nAgreement, on September 20, 2026, Harte Hanks provided Star with a copy of the proposed merger agreement sent to Party A, along with\nthe financing working plan and timeline received from Party A.

On\nOctober 8, 2026, following continued discussions with Party A in accordance with the terms of the Merger Agreement, Party A’s counsel\ndelivered to Baker Botts a revised draft of the proposed merger agreement. Among other things, the revised draft (i) provided for a reduction\nof the per share cash merger consideration, on a dollar-for-dollar basis, by the amount of the outstanding obligations under Harte Hanks’\nexisting Texas Capital Bank credit facility to be repaid at closing, any shortfall of Harte Hanks’ closing cash below a specified\ntarget amount and any Company Transaction Expenses in excess of a specified budget; (ii) added restrictions on Harte Hanks’ borrowings\nunder its existing credit facility, interim financial reporting obligations and covenants regarding Harte Hanks’ transaction expenses;\n(iii) added conditions to Party A’s obligation to pay a termination fee in certain circumstances and narrowed the circumstances\nin which Party A would reimburse Harte Hanks for financing-related costs; and (iv) identified a different lender as the source of Party\nA’s proposed debt financing. Harte Hanks provided a copy of the revised draft to Star in accordance with the Merger Agreement.\nHarte Hanks and its advisors are reviewing the revised draft, and the board of directors of Harte Hanks has not yet considered the revised\ndraft.

As\nof the date of this proxy statement/prospectus, one Exempted Party, Party A, remained engaged in discussions with Harte Hanks following\nthe expiration of the Go-Shop Period in accordance with the terms of the Merger Agreement. The board of directors of Harte Hanks has\nnot determined that either the Party A proposal or the now-withdrawn Party B proposal constitutes a Superior Proposal. There can be no\nassurance that the continuing discussions with Party A will result in a Superior Proposal or that any alternative transaction will be\nentered into or consummated.

Under\nthe Merger Agreement, the reduced Company Termination Fee of $576,000 was available only if Harte Hanks terminated the Merger Agreement\nto enter into an Alternative Acquisition Agreement with an Exempted Party on or prior to the No-Shop Period Start Date. Because no Alternative\nAcquisition Agreement was entered into on or prior to September 13, 2026, the reduced fee is no longer available. If Harte Hanks terminates\nthe Merger Agreement after the Go-Shop Period to enter into an Alternative Acquisition Agreement with an Exempted Party, the full $1,152,000\nCompany Termination Fee would be payable.

Harte\nHanks’ Reasons for the Merger; Recommendation of Board of Directors of Harte Hanks

In\nevaluating the Merger Agreement and the Merger and in reaching its determination to approve the Merger Agreement and recommend that Harte\nHanks stockholders vote “FOR” the Harte Hanks Merger Proposal, the board of directors of Harte Hanks consulted with Harte\nHanks’ management and its legal and financial advisors and considered a number of factors, including the factors described below.\nThe board of directors of Harte Hanks considered these factors as a whole and did not assign relative weights to any particular factor.\n

The\npositive factors considered by the board of directors of Harte Hanks included, among others:

●\nthe $5.00 per share Merger Consideration, which represented a significant premium of approximately 119% over the closing price of Harte\nHanks Common Stock of $2.28 on August 7, 2026;

●\nthe mixed consideration structure, pursuant to which Harte Hanks stockholders may receive Merger Consideration in cash and in Star Preferred\nStock that pays a 10% annual dividend;

●\nthe 30-day Go-Shop Period, during which the board of directors of Harte Hanks could actively solicit superior proposals, together with\nthe reduced 1.5% Company Termination Fee that was available only if the applicable conditions were satisfied on or prior to the No-Shop\nPeriod Start Date;

●\nthe board of directors of Harte Hanks’ view that the terms of the Merger Agreement were the product of extensive arm’s-length\nnegotiations;

●\nthe fairness opinion received from Citizens JMP Securities, LLC on August 12, 2026;

●\nthe board of directors of Harte Hanks’ understanding of the company’s business, operations, financial condition, earnings and prospects,\nincluding the loss of a significant customer and weaker-than-expected second-quarter results;

●\nthe terms of the Merger Agreement, including the ability to respond to unsolicited superior proposals after the Go-Shop Period, subject\nto compliance with the Merger Agreement’s terms;

●\nthe six-year survival of the D&O indemnification protections following the Closing, including the D&O tail insurance provision;

●\nthe board of directors of Harte Hanks’ assessment of the alternatives to the Merger, including continuing as a standalone public\ncompany, and the risks associated with those alternatives; and

●\nthe board of directors of Harte Hanks’ review of the strategic process conducted by its financial advisors since early 2025, including\noutreach to 93 parties, multiple letters of intent, and the ultimate narrowing of the process.

The\npotentially negative factors and risks considered by the board of directors of Harte Hanks included, among others:

●\nthe risk that the Merger might not be completed in a timely manner or at all;

●\nthe restrictions on Harte Hanks’ ability to solicit alternative proposals after the Go-Shop Period;

●\nthe potential that Harte Hanks could be required to pay Star a termination fee under specified circumstances;

●\nthe fact that the receipt of the Merger Consideration would be taxable to Harte Hanks stockholders;

●\nStar’s financing structure, including the absence of a debt commitment letter and Star’s reliance on commercially reasonable\nefforts to obtain financing;

●\nthe potential that certain directors and officers have interests in the Merger that differ from, or are in addition to, the interests\nof Harte Hanks stockholders generally;

●\ntransaction costs payable whether or not the Merger is completed;

●\nthe fact that Harte Hanks stockholders would not participate in any future growth or value creation of Harte Hanks as a standalone entity;\nand

●\nthe risk that the $5.00 per share price reflected a lower price than the $5.50 previously offered, driven by higher transaction expenses,\nan adverse swing in net debt and weaker-than-expected second-quarter results.

After\nconsidering the foregoing and other relevant factors and risks, and their overall impact on the stockholders and other constituencies\nof Harte Hanks, the board of directors of Harte Hanks concluded that the anticipated benefits of the Merger outweighed the anticipated\nrisks of the transaction. Accordingly, the board of directors of Harte Hanks unanimously approved and deemed advisable the Merger Agreement\nand the Merger, and the board of directors of Harte Hanks unanimously recommends that Harte Hanks stockholders vote “FOR”\nthe Harte Hanks Merger Proposal.

It\nshould be noted that this explanation of the board of directors of Harte Hanks’ reasoning and all other information presented in\nthis section includes information that is forward-looking in nature, and, therefore, should be read in light of the factors discussed\nunder the heading “Cautionary Statement Regarding Forward-Looking Statements.”

Harte\nHanks stockholders should also be aware that directors and executive officers of Harte Hanks may have interests in the Merger that are\ndifferent from, or in addition to, those of other Harte Hanks stockholders. See “Interests of Harte Hanks Executive Officers and\nDirectors in the Merger.”

Unaudited\nProspective Financial Information

Harte\nHanks does not, as a matter of course, publicly disclose forecasts as to future performance, earnings or other results due to the unpredictability\nof the underlying assumptions and estimates. However, Harte Hanks has included in this proxy statement a summary of certain unaudited\nprospective financial information of Harte Hanks for fiscal years 2026 through 2029 (the “Financial Forecasts”), certain\nof which were furnished to our financial advisor and to Star Equity.

The\nFinancial Forecasts were not prepared with a view toward public disclosure or complying with the guidelines established by the American\nInstitute of Certified Public Accountants for preparation and presentation of prospective financial data, published guidelines of the\nSEC regarding forward-looking statements or generally accepted accounting principles in the United States (“GAAP”).

No\nassurances can be made regarding future events, and the estimates and assumptions underlying the Financial Forecasts involve judgments\nwith respect to, among other things, future economic, competitive, regulatory and financial market conditions and future business decisions\nthat may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties\nand contingencies, including, among other things, the inherent uncertainty of the business and economic conditions affecting the marketing\nand business services industries in which Harte Hanks operates, the timing and financing of future growth and development projects, and\nthe risks and uncertainties described in the section of this proxy statement entitled “Cautionary Statement Regarding Forward-Looking\nStatements,” all of which are difficult to predict and many of which are outside the control of Harte Hanks and, upon consummation\nof the Merger, will be beyond the control of Parent and the surviving corporation. Company stockholders are urged to review Harte Hanks’\nSEC filings for a description of risk factors with respect to Harte Hanks’ business. There can be no assurance that the assumptions\nunderlying the Financial Forecasts will prove to be accurate or that the projected results will be realized. Actual results may differ\nmaterially from those reflected in the Financial Forecasts, whether or not the Merger is consummated. The inclusion in this proxy statement\nof the Financial Forecasts should not be regarded as an indication that Harte Hanks, the Board, our financial advisors or any other person\nconsidered, or now consider, these forecasts to be a reliable predictor of future results.

The\nFinancial Forecasts, while presented with numerical specificity, were based on numerous variables and assumptions that necessarily involve\njudgments with respect to, among other things, future economic, competitive, regulatory and financial market conditions, all of which\nare difficult or impossible to predict and many of which are beyond Harte Hanks’ control. Because the Financial Forecasts cover\nmultiple years, by their nature, they become subject to greater uncertainty with each successive year. In addition, the Financial Forecasts\nmay be affected by Harte Hanks’ ability to achieve strategic goals, objectives and targets over the applicable periods.

The\nFinancial Forecasts are not fact, and neither they nor any underlying assumptions should be relied on as being indicative of future results.\nThe Financial Forecasts are not, and should not be considered to be, a guarantee of future operating results. In light of the foregoing\nfactors and the uncertainties inherent in the Financial Forecasts, readers of this proxy statement are cautioned not to place undue,\nif any, reliance on the Financial Forecasts included in this proxy statement, including in making a decision as to whether to vote in\nfavor of adoption of the Merger Agreement.

The\nFinancial Forecasts assumed that Harte Hanks would continue to operate as a standalone company, assume organic company growth without\nbusiness expansions from mergers and acquisitions or alternative business models, and do not anticipate any material acquisitions or\ndivestitures by Harte Hanks. The Financial Forecasts do not take into account any circumstances, transactions or events occurring after\nthe date on which the Financial Forecasts were prepared and do not give effect to any changes or expenses incurred after the date on\nwhich they were made, including as a result of the Merger or any effects of the Merger. The Financial Forecasts also do not reflect any\ndivestitures or other restrictions that may be imposed in connection with the receipt of any necessary governmental or regulatory approvals,\nor any changes to Harte Hanks’ operations or strategy that may be implemented after completion of the Merger.

Certain\nof the financial measures included in the Financial Forecasts are “non-GAAP financial measures.” These are financial performance\nmeasures that are not calculated in accordance with GAAP. Investors should also note that the non-GAAP financial measures presented in\nthis proxy statement are not prepared under any comprehensive set of accounting rules or principles and do not reflect all of the amounts\nassociated with Harte Hanks’ results of operations as determined in accordance with GAAP. Investors should also note that the\nnon-GAAP financial measures presented in this proxy statement have no standardized meaning prescribed by GAAP and, therefore, have limits\nin their usefulness to investors. The non-GAAP financial measures in this proxy statement may be calculated differently from, and may\nnot be directly comparable to, similarly titled measures used by Harte Hanks’ competitors and other companies.

Due\nto the inherent limitations of non-GAAP financial measures, investors should consider non-GAAP measures only as a supplement to, not\nas a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

The\nnon-GAAP financial measures included in the Financial Forecasts were prepared by Harte Hanks’ management and reviewed by the Board\nfor use by and were used and relied on at the direction of Harte Hanks’ management by its Financial Advisors in connection with\nrendering its opinion and performing its financial analysis in connection therewith and by the Board for its consideration of the Merger.\nFinancial measures included in forecasts provided to a financial advisor and a Board in connection with a business combination transaction,\nsuch as the Financial Forecasts, are excluded from the definition of “non-GAAP financial measures” under applicable SEC rules\nand regulations. As a result, the Financial Forecasts are not subject to SEC rules regarding disclosures of non-GAAP financial measures,\nwhich would otherwise require a reconciliation of a non-GAAP financial measure to the most directly comparable GAAP financial measure.\nReconciliations of these non-GAAP financial measures were not provided to or relied on by the Board or our Financial Advisors in connection\nwith their respective evaluations of the Merger. Accordingly, Harte Hanks has not provided a reconciliation of the non-GAAP financial\nmeasures included in the Financial Forecasts to the relevant GAAP financial measures.

The\nFinancial Forecasts included in this document have been prepared by, and are the responsibility of, Harte Hanks’ management. Wolf\n& Company P.C., Harte Hanks’ independent registered public accounting firm, has not audited, reviewed, examined, compiled\nor applied agreed-upon procedures with respect to the accompanying Financial Forecasts and, accordingly, Wolf & Company P.C. does\nnot express an opinion or any other form of assurance with respect thereto.

By\nincluding in this proxy statement the Financial Forecasts below, neither Harte Hanks nor any of its representatives has made or makes\nany representation to any person regarding the ultimate performance of Harte Hanks compared to the information contained in the Financial\nForecasts. Harte Hanks makes and has made no representation to Parent or Merger Sub, in the Merger Agreement or otherwise, concerning\nthe Financial Forecasts.

Accordingly,\nthe Financial Forecasts should not be construed as financial guidance, nor relied on as such, and the Financial Forecasts may differ\nin important respects from other guidance provided by Harte Hanks and which Harte Hanks’ management prepared based on a different\nset of assumptions. The inclusion of the Financial Forecasts in this proxy statement does not constitute an admission or representation\nby Harte Hanks that the information contained therein is material. The Financial Forecasts reflected the opinions, estimates and judgments\nof Harte Hanks’ management at the time they were prepared and have not been updated to reflect any subsequent changes. NONE OF\nHARTE HANKS, PARENT, MERGER SUB OR, AFTER CONSUMMATION OF THE MERGER, THE SURVIVING CORPORATION, UNDERTAKES ANY OBLIGATION, EXCEPT AS\nREQUIRED BY LAW, TO UPDATE OR OTHERWISE REVISE THE FINANCIAL FORECASTS TO REFLECT CIRCUMSTANCES EXISTING SINCE THEIR PREPARATION, CHANGES\nIN GENERAL ECONOMIC OR INDUSTRY CONDITIONS OR THE OCCURRENCE OF UNANTICIPATED EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE UNDERLYING\nASSUMPTIONS ARE SHOWN TO BE IN ERROR.

The\nFinancial Forecasts were prepared by Harte Hanks’ management in connection with management’s long range plan for Harte Hanks,\nand reviewed by the Board, in the ordinary course of business as part of its strategic planning. The Financial Forecasts reflect assumptions\nas to certain business decisions that are subject to change, including, but not limited to, assumptions regarding: revenue growth rates\nacross Harte Hanks’ segments; overall industry performance, competitive landscape and market conditions; wage and employee\nexpense escalation; and changes in net working capital. The foregoing is a summary of certain key assumptions and does not purport to\nbe a comprehensive overview of all assumptions reflected in the Financial Forecasts.

The\nFinancial Forecasts were relied on by the Board in reaching its determination on August 13, 2026 to authorize and approve the execution,\ndelivery and performance by Harte Hanks of the Merger Agreement, to declare the Merger Agreement advisable and to resolve to recommend\nthat the holders of Company Common Stock adopt the Merger Agreement and were used at the direction of the management of Harte Hanks and\nreviewed by the Board for use and reliance by our financial advisors in connection with presenting its financial analyses to the Board\non August 12, 2026 followed by the rendering and delivery to the Board of its opinion dated as of Augst 12, 2026, as summarized in the\nsection of this proxy statement entitled “Opinion of Harte Hanks’ Financial Advisor.”

The\nfollowing table sets forth a summary of the Financial Forecasts. The summary of the Financial Forecasts is not included in this proxy\nstatement to induce any Company stockholder to vote in favor of adopting the Merger Agreement proposal or approving any other proposals\nto be voted on at the Special Meeting or to influence any Company stockholder or holder of rollover shares to make any investment decision\nwith respect to the Merger.

Financial\nForecasts

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n\n \n \n \n \n \n

($ in millions)	2026E			2027E			2028E		2029E
Revenues	$	160.2			$	166.1		$	173.7		$	182.5

EBITDA	$	3.4			$	6.9		$	9.1		$	11.2
(+) Restructure/Severance		0.8				-			0.1			0.1
(+) Stock Compensation		0.9				0.9			0.9			0.9
(+) Strategic Alternative Effort		2.5				-			-			-
ADJ EBITDA	$	7.5*			$	7.8		$	10.1		$	12.2
Less: Changes in NWC	$	(2.4	)		$	(2.9	)	$	(2.9	)	$	(2.9	)
Less: Capital Expenditures		(0.6	)			(0.6	)		(0.6	)		(0.6	)
Unlevered Free Cash Flow	$	4.5			$	4.3		$	6.6		$	8.7

*\ndoes not sum due to rounding.

Opinion\nof Harte Hanks’ Financial Advisor

At\na meeting of the board of directors of Harte Hanks on August 12, 2026, Citizens rendered its oral opinion, subsequently confirmed in\nits written opinion dated August 12, 2026, to the board of directors of Harte Hanks that, as of the date thereof and based upon and subject\nto, among other things, the assumptions made, procedures followed, matters considered, and qualifications and limitations on the review\nundertaken by Citizens in connection with the opinion (which are stated in its written opinion), the Merger Consideration to be received\nby the holders of Harte Hanks Common Stock (other than Owned Company Shares (as defined in the Merger Agreement)) in the Merger was fair\nto such holders from a financial point of view.

In\narriving at its opinion, Citizens, among other things:

(i) reviewed\ncertain publicly available financial statements and certain other business and financial information relating to Harte Hanks furnished\nto Citizens;

(ii) reviewed\ncertain internal financial statements and other financial and operating data concerning Harte Hanks prepared by the management of Harte\nHanks;

(iii)\nreviewed certain financial forecasts prepared by the management of Harte Hanks;

(iv) compared\nthe financial performance of Harte Hanks with that of certain other publicly-traded companies that Citizens believed were generally comparable\nto Harte Hanks;

(v) reviewed\nthe financial terms, to the extent publicly available, of certain acquisition transactions involving companies in lines of business that\nCitizens believed were generally comparable to Harte Hanks;

(vi) participated\nin discussions with members of the senior management of Harte Hanks with respect to the business prospects and financial outlook of Harte\nHanks;

(vii)\nreviewed the Merger Agreement draft dated as of August 10, 2026 and certain related documents; and

(viii)\nperformed such other analysis and considered such other factors as Citizens deemed appropriate.

Company\nFinancial Analyses

Selected\nPublic Companies Analysis

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	EV/CY2026E EBITDA	EV/CY2027E EBITDA
YOC AG	5.3x	4.0x
Vianet Group	4.2x	4.1x
Microlise Group	3.4x	2.8x
Mean	4.3x	3.6x
Median	4.2x	4.0x

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Multiples	Implied\n prices per \n share of Harte Hanks \n Common Stock
EV/CY2026E\n EBITDA:	3.8x\n - 4.7x	$1.84\n – $2.70

EV/CY2027E\n EBITDA:	3.6x\n - 4.4x	$1.77\n – $2.60

Selected\nPrecedent Transactions Analysis

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Year\n Announced	Target	Acquiror\n	EV/TTM\n EBITDA
2025	Burroughs	Loomis	6.5x
2023	CBW\n Resources	Super\n Group Holdings	4.2x
2022	HyperPointe	XpresSpa\n Group	5.4x
2020	Personiv	eClerx	4.7x
Mean			5.2x
Median			5.1x

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Multiples	Implied\n prices per share of Harte Hanks Common Stock
EV/CY2026E\n EBITDA:	4.6x\n - 5.6x	$2.61\n - $3.64
EV/CY2027E\n EBITDA:	4.6x\n – 5.6x	$2.81\n - $3.88

Discounted\nCash Flow Analysis

Implied\nprices per share of Harte Hanks Common Stock:

Discounted\nCash Flow Analysis: $3.57 – $4.44

Star\nPreferred Stock Analysis

General

Citizens\nis not a legal, tax or regulatory advisors and relied upon, without independent verification, the assessment of Harte Hanks and its legal,\ntax or regulatory advisors with respect to legal, tax or regulatory matters. Citizens is not in the business of appraising tangible assets\nand has not made any independent valuation or appraisal of any or all of the assets or liabilities (including any contingent, derivative\nor off-balance-sheet assets or liabilities) of Harte Hanks, nor has Citizens been furnished with any such valuations or appraisals. In\naddition, Citizens has not evaluated the solvency of any party to the Merger Agreement under any state or federal laws relating to bankruptcy,\ninsolvency or similar matters. Citizens’ opinion is necessarily based on financial, economic, market and other conditions as in\neffect on, and the information made available to Citizens as of, the date of the Merger Agreement. Events occurring after the date of\nthe opinion may affect the opinion and the assumptions used in preparing it, and Citizens does not assume any obligation to update, revise\nor reaffirm the opinion.

Citizens\nwas not requested to consider, and its opinion does not address, Harte Hanks’ underlying business decision to enter into the Merger\nAgreement and pursue the Merger, or the relative merits of the Merger as compared to any alternative business strategies that might exist\nfor Harte Hanks or the effect of any other transaction in which Harte Hanks might engage. Citizens was not requested to consider, and\nits opinion does not address, the non-financial terms of the Merger Agreement or the Merger, nor does it address the terms of any of\nthe related agreements to be entered into by the parties. Its opinion addresses only the Merger Consideration to be received by the holders\nof Harte Hanks Common Stock (other than Owned Company Shares) in the Merger. Citizens was not requested to consider, and its opinion\ndoes not address, the fairness of any consideration to be received in the Merger by the holders of any other class or series of capital\nstock, creditors or other constituencies of Harte Hanks, the allocation of the Merger Consideration amongst the holders of any class\nor series of capital stock, creditors or other constituencies of Harte Hanks, the conversion ratio pursuant to the Merger Agreement for\nany class or series of capital stock or any election, proration or adjustment of the Merger Consideration. Citizens has assumed that\nthe value of the Star Preferred Stock is the liquidation preference of $10.00 per share, and Citizens expressed no opinion as to the\nprice at which the Star Preferred Stock may be sold in the future. Furthermore, Citizens expressed no opinion with respect to the amount\nor nature of any compensation to be received by any officers, directors or employees of any party to the Merger, or any class of such\npersons, relative to the Merger Consideration to be paid to the holders of Harte Hanks Common Stock in the Merger or otherwise, or with\nrespect to the fairness of any such compensation.

For\nmore information, see Annex B.

Citizens\nJMP Securities, LLC’s Relationship with Harte Hanks and Star

Citizens\nJMP Securities, LLC (“Citizens”) is acting as financial advisor to Harte Hanks in connection with the Merger. Harte\nHanks selected Citizens based on Citizens’ qualifications, expertise and reputation in providing financial advisory services in\ntransactions similar to the Merger, as well as Citizens’ familiarity with Harte Hanks and its business. Oaklins DP, LLC (“ODP”)\nis also serving as a financial advisor to Harte Hanks in connection with the Merger.

Pursuant to an engagement\nletter dated May 8, 2026 between Harte Hanks and ODP (the “ODP Engagement Letter”), together with a separate engagement\nletter dated May 8, 2026 between Harte Hanks and Citizens (the “Citizens Engagement Letter”, and together with the\nODP Engagement Letter, the “Advisor Engagement Letters”), Harte Hanks engaged Citizens and ODP as co-advisors to provide\nfinancial advisory and investment banking services in connection with a sale of Harte Hanks. Pursuant to the Advisor Engagement Letters\nand the Retainer Fee Split Agreement between ODP and Citizens dated May 20, 2026, the aggregate success fee described below (excluding\nexpense reimbursements) is allocated 75% ($1,500,000) to Citizens and 25% ($500,000) to ODP. Harte Hanks has agreed to pay Citizens\nand ODP an aggregate success fee of $2,000,000 in connection with the Merger. Of the aggregate success fee, (i) $100,000, of which $25,000\nis allocable to ODP, became payable to Citizens upon execution of the Citizens Engagement Letter as a retainer fee, which is credited\nagainst Citizens’ and ODP’s respective portions of the success fee, (ii) $750,000 became payable to Citizens upon\ndelivery of its opinion as an opinion fee, which is credited against Citizens’ portion of the success fee, and which was not contingent\nupon the conclusion reached in the opinion or the consummation of the Merger and (iii) the remaining $1,150,000 (consisting of $675,000\npayable to Citizens and $475,000 payable to ODP) is contingent upon the consummation of the Merger. Harte Hanks has also agreed\nto reimburse ODP for its reasonable and documented out-of-pocket expenses, and to reimburse Citizens for its reasonable and documented\nexpenses, and to indemnify each of ODP and Citizens and certain related parties against certain liabilities that may arise out of their\nengagement.

During\nthe two years preceding the date of its opinion, other than pursuant to the Advisor Engagement Letters, Citizens and its affiliates have\nnot had a material relationship with, received fees from, or provided investment banking or other financial services to, Harte Hanks\nor its affiliates or Star or its affiliates. During the same period, other than pursuant to the Advisor Engagement Letters, ODP and its\naffiliates have not had a material relationship with, received fees from, or provided investment banking or other financial services\nto, Harte Hanks or its affiliates or Star or its affiliates.

Certain\nEstimated Synergies Attributable to the Merger

The\nmanagement of Star and the management of Harte Hanks developed and provided to their respective boards of directors certain prospective\nfinancial information relating to the anticipated strategic, financial and operational benefits to, and synergies to be realized by,\nStar following the completion of the Merger beginning in 2027.

In\nconnection with Star’s evaluation of the Merger, Star management prepared and provided to the Star board of directors certain preliminary\nestimates regarding the potential strategic, financial and operational benefits expected to result from the Merger. These estimates were\nprepared as part of Star’s preliminary due diligence process and were based on information available at the time, including assumptions\nthat were subject to further diligence, negotiation and integration planning.

Star\nmanagement’s preliminary estimates identified potential annual run-rate cost synergies of approximately $15.0 million, consisting\nof approximately $10.0 million of public-company and corporate-overhead cost savings and up to approximately $5.0 million of operational\ncost savings. Star management viewed the public-company and corporate-overhead cost savings as the higher-confidence and more near-term\ncomponent of the preliminary synergy estimate. The operational cost-savings estimate was expected to be phased in over an integration\nperiod.

The\npublic-company and corporate-overhead savings were expected to result principally from eliminating duplicative costs associated with\noperating Harte Hanks as a standalone public company, including listing, audit, legal, insurance, investor-relations and corporate general-and-administrative\nexpenses. The operational cost savings were expected to result from the consolidation of certain back-office functions onto Hudson Talent\nSolutions’ infrastructure, including systems, facilities and procurement, as well as from leveraging Star’s sales, marketing,\nfinance, human-resources and information-technology capabilities across the combined business-services platform.

For\npurposes of Star’s preliminary pro forma analysis, Star management assumed the realization of $10.0 million of public-company cost\nsynergies in each of fiscal years 2027, 2028 and 2029, and operational cost synergies of $2.0 million in fiscal year 2027, $4.0 million\nin fiscal year 2028 and $5.0 million in fiscal year 2029. The presentation did not assume any revenue synergies in the pro forma financial\nprojections.

Star\nmanagement also identified potential revenue opportunities from cross-selling among Hudson Talent Solutions, Harte Hanks and Star’s\nother business-services operations. In particular, Star management believed that the businesses’ shared blue-chip clients and common\npurchasing decision-makers could create opportunities to offer a broader range of outsourcing services across the combined platform.\nHowever, Star management had not quantified these potential revenue opportunities, did not include them in the preliminary pro forma\nanalysis and did not treat them as part of the estimated cost synergies described above.

The\npreliminary estimates also did not quantify the one-time costs necessary to achieve the anticipated synergies. Star identified severance,\nsystems migration, the wind-down of duplicative corporate and public-company functions, employee retention, pension administration and\nother integration-related matters as items requiring further diligence and integration planning.

The\nestimated synergies are forward-looking statements and are subject to numerous assumptions, risks and uncertainties. The estimated synergies\nmay not be achieved in full or at all, may be achieved later than anticipated, and may be offset in whole or in part by integration costs,\ntransaction costs, costs necessary to retain employees or customers, operating dis-synergies, revenue declines, changes in market conditions\nor other factors. In particular, the preliminary presentation noted that the estimates were subject to confirmatory diligence and that\nactual results could differ materially.

See\nabove in this section for further information regarding the uncertainties underlying the prospective financial information, including\nthe synergy estimates, as well as the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk\nFactors” beginning on pages 40 and 42, respectively, for further information regarding the uncertainties and factors associated\nwith realizing synergies in connection with the Merger.

Interests\nof Harte Hanks Directors and Executive Officers in the Merger

The\ninterests of Harte Hanks directors and executive officers in the Merger are described below, including the treatment of equity awards,\ntransaction bonuses, severance amendments and Voting and Support Agreements.

Voting\nand Support Agreements

Each\nsupporting stockholder entered into the applicable Voting and Support Agreement solely in his or her capacity as a Harte Hanks stockholder\nand not in his or her capacity as a director, officer or employee of Harte Hanks.

As\nof the Record Date, the supporting stockholders beneficially own, in the aggregate, [____] shares of Harte Hanks Common Stock, representing\napproximately [____]% of the outstanding shares of Harte Hanks Common Stock. The Voting and Support Agreements cover the Owned Shares.\nUntil the applicable Voting and Support Agreement terminates, each supporting stockholder has agreed, at every Harte Hanks stockholder\nmeeting, including the Harte Hanks Special Meeting, and at every adjournment or postponement of any such meeting, and in any written\nconsent or other circumstance in which Harte Hanks stockholder approval is sought, to appear at the meeting or otherwise cause his or\nher owned shares to be counted as present for purposes of establishing a quorum; to vote, or cause to be voted, all owned shares in favor\nof the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated by the Merger Agreement; to\nvote all owned shares against any action that would reasonably be expected to impede, frustrate, interfere with, delay, postpone, prevent,\nnullify or adversely affect the approval of the Merger Agreement or the Merger, result in a breach of the supporting stockholder’s\nobligations under the applicable Voting and Support Agreement or, to the supporting stockholder’s knowledge, result in a material\nbreach by Harte Hanks of its obligations under the Merger Agreement; and to vote all owned shares against any Acquisition Proposal, other\nthan the Merger, any proposal made in opposition to, in competition with or inconsistent with the Merger, or any alternative Merger,\nconsolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up involving\nHarte Hanks. Each supporting stockholder also agreed not to commit, agree or publicly propose to take any action inconsistent with these\nvoting commitments.

Each\nsupporting stockholder has agreed not to transfer any owned shares before the applicable Voting and Support Agreement terminates, except\nfor specified permitted transfers. Permitted transfers include transfers by operation of laws of descent and distribution upon death,\npursuant to a qualified domestic-relations order, divorce settlement, divorce decree or separation agreement, in connection with a legal,\nregulatory or other order, or to or with an affiliate of the supporting stockholder; any transferee in a permitted transfer must agree\nto be bound by the applicable Voting and Support Agreement. The agreement expressly provides that holding shares in a margin account\nor pledging shares under the terms of such an account does not itself constitute a prohibited transfer. Each supporting stockholder also\nagreed not to enter into a voting agreement or voting trust, grant a proxy or power of attorney, or enter into any other agreement or\nundertaking, in each case with respect to owned shares, that is inconsistent with or would interfere with the obligations under the applicable\nVoting and Support Agreement. Any purported transfer or vote in violation of the applicable Voting and Support Agreement is void ab initio.

Each\nsupporting stockholder agreed to comply with the Merger Agreement’s no-solicitation and public-statements-and-disclosure provisions\nas though the supporting stockholder were an original signatory to the Merger Agreement and, for purposes of the no-solicitation provision,\nas though references to Harte Hanks also referred to the supporting stockholder. These obligations do not require a supporting stockholder\nto take or refrain from taking any action in his or her capacity as a Harte Hanks director or officer and do not limit the exercise of\nthe supporting stockholder’s fiduciary duties in that capacity. Until termination of the applicable Voting and Support Agreement,\neach supporting stockholder also has agreed not to commence, join, facilitate, assist or encourage, and to take all actions within his\nor her power necessary to opt out of, a class action or other claim against Star, Merger Sub, Harte Hanks or their respective successors\nor directors that challenges the validity of, or seeks to enjoin the operation of, any provision of the Voting and Support Agreement\nor alleges a breach of fiduciary duty in connection with the evaluation, negotiation or entry into the Merger Agreement. This covenant\ndoes not apply to claims arising out of fraud and does not limit a supporting stockholder’s ability to enforce rights under the\nVoting and Support Agreement or other transaction agreements to which he or she is a party.

Each\nVoting and Support Agreement terminates upon the earliest of the Effective Time; the valid termination of the Merger Agreement in accordance\nwith its terms; an adverse recommendation change by the board of directors of Harte Hanks in accordance with the Merger Agreement; an\namendment or modification of the Merger Agreement, without the applicable supporting stockholder’s consent, that reduces or changes\nthe form, timing or allocation of the Merger Consideration payable to Harte Hanks stockholders or otherwise changes the material terms\nof the Merger Agreement in a manner materially adverse to Harte Hanks stockholders; or the mutual written agreement of Star, Harte Hanks\nand the applicable supporting stockholder. Termination does not relieve a party of liability for a material willful or intentional breach\nof, or fraud in connection with, the applicable Voting and Support Agreement.

See\n“Voting and Support Agreements” for additional information about these agreements.

Amendments\nto Employment Agreements

In\nconnection with the Merger, Harte Hanks amended the employment agreement with each of David Fisher, President of Harte Hanks, and David\nA. Garrison, Chief Financial Officer of Harte Hanks, in each case, to provide for a closing incentive bonus and to modify the treatment\nof severance payable under the employment agreement. Each amendment is conditional upon, and effective as of, the Closing.

In\nconsideration of their efforts to consummate the Merger, and in lieu of any 2026 annual bonus award for which they otherwise would have\nbeen eligible under the Harte Hanks annual incentive plan, Mr. Fisher and Mr. Garrison will receive a closing incentive bonus of $200,000\nand $150,000, respectively. The bonus will be payable to each executive upon the Closing, provided that he has not voluntarily left employment\nwith Harte Hanks before the Closing.

Before\nthe amendment, the severance, in the form of continued payment of base salary for 12 months, that would be payable to each of Mr. Fisher\nand Mr. Garrison under his employment agreement on termination without “cause” or resignation for “good reason”\n(as such terms are defined in the employment agreement) ceased if he obtained other employment before the severance was paid in full.\nThe amendment waives the requirement that he remain unemployed in order to receive the severance benefits, provided that he remains employed\nby Harte Hanks through the Closing.

Other\nthan these revisions, the terms of each executive’s employment agreement remain unchanged.

Acceleration\nof Equity Awards and Conversion into Merger Consideration

At\nthe Effective Time, each RSU identified on the disclosure schedules to the Merger Agreement that remains outstanding immediately prior\nto the Effective Time will be cancelled and converted into the right to receive Merger Consideration with respect to each share of Harte\nHanks Common Stock underlying such RSU, and each Harte Hanks stock option identified on the disclosure schedules to the Merger Agreement\nthat is outstanding and unexercised immediately prior to the Effective Time will automatically be cancelled and converted into the right\nto receive Merger Consideration based on the in-the-money value of such option.

The\nfollowing table sets forth the number of RSUs held by each director and executive officer of Harte Hanks as of the Record Date, and the\nvalue of those RSUs, assuming that the value per share of Harte Hanks Common Stock at the Effective Time is $3.97 (which, in accordance\nwith SEC requirements, is the average price of Harte Hanks Common Stock over the first five business days following the first public\nannouncement of the Merger).

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Name	RSUs (#)		RSUs ($)
Benjamin Chacko		30,834		122,411
Patrick O’Brien		4,167		16,543
David Fisher		53,334		211,736
David A. Garrison		16,667		66,168
John H. Griffin, Jr		27,861		110,608
Genevieve C. Combes		27,861		110,608
Bradley L. Radoff		27,861		110,608
Elizabeth Ross		27,861		110,608

As\nof the Record Date, David Fisher held a stock option to purchase 32,400 shares of Harte Hanks Common Stock with an exercise price of\n$4.55 per share. At the $3.97 assumed value per share of Harte Hanks Common Stock, this option would have no in-the-money value at the\nEffective Time.

Golden\nParachute Compensation

In\naccordance with Item 402(t) of Regulation S-K, the table below sets forth the estimated amounts of the payments and benefits that each\nof Harte Hanks’ named executive officers would have received in connection with the Merger, assuming the Effective Time had occurred\non the Record Date and, immediately thereafter, each named executive officer had experienced a qualifying termination. This compensation\nis subject to an advisory vote of Harte Hanks’ stockholders, as described under the section titled “The Non-Binding Advisory\nCompensation Proposal.”

The\namounts below have been calculated assuming that (a) the value per share of Harte Hanks Common Stock at the Effective Time is $3.97 (which,\nin accordance with SEC requirements, is the average price of Harte Hanks Common Stock over the first five business days following the\nfirst public announcement of the Merger), (b) neither of the currently employed named executive officers receives any additional equity\nawards or increases in base salary before the Effective Time, and (c) each of the currently employed named executive officers executes\nthe release of claims necessary to receive the “double trigger” severance payments below.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Name	Cash ($) (1)		Equity ($) (2)		Perquisites/ Benefits ($)	Total ($)
David Fisher President		600,000		211,736		—	811,736
David A. Garrison Chief Financial Officer		525,000		66,168		—	591,168
Kirk Davis (3) Former Chief Executive Officer		—		—		—	—
Robert Wyman (4) Former General Counsel		—		—		—	—

(1)

These\n amounts reflect (a) the “double trigger” severance, in the form of continued\n payment of base salary for 12 months, that would be payable to each of Mr. Fisher and Mr.\n Garrison under his employment agreement on termination without “cause” or resignation\n for “good reason” and (b) the “single trigger” closing incentive\n bonus that would be payable to each of Mr. Fisher and Mr. Garrison upon the Closing, provided\n that he has not voluntarily left employment with Harte Hanks before the Closing. The breakdown\n of the amounts in this column is as follows:

\n \n \n \n \n \n \n \n \n \n \n \n \n

Name

Severance

($)

Closing Incentive Bonus

($)

David Fisher

400,000

200,000

David A. Garrison

375,000

150,000

\n\n\n\n\n

	(2)	These\n amounts reflect the value of the “single trigger” acceleration, and cancellation\n and conversion into the right to receive Merger Consideration, at the Effective Time pursuant\n to the terms of the Merger Agreement, of the RSUs held by each of Mr. Fisher and Mr. Garrison.\n This amount for Mr. Fisher does not include his stock option to purchase 32,400 shares of\n Harte Hanks Common Stock with an exercise price of $4.55 per share because, at the $3.97\n assumed value per share of Harte Hanks Common Stock, this option would have no in-the-money\n value at the Effective Time.
	(3)	Kirk\n Davis ceased to serve as Harte Hanks’ Chief Executive Officer effective February 14,\n 2025. Mr. Davis is not eligible to receive any payments or benefits that are based on or\n otherwise relate to the Merger.
	(4)	Robert\n Wyman ceased to serve as Harte Hanks’ General Counsel effective December 22, 2025.\n Mr. Wyman is not eligible to receive any payments or benefits that are based on or otherwise\n relate to the Merger.

Governance\nof the Combined Company After the Merger

Star\nwill remain the publicly traded parent company following the Merger. Accordingly, the directors and officers of Star immediately before\nthe Effective Time will continue to serve as the directors and officers of Star following the Effective Time. Harte Hanks will survive\nthe Merger as a wholly owned subsidiary of Star. The directors of Merger Sub immediately before the Effective Time will become the directors\nof Harte Hanks as the Surviving Corporation, and the officers of Merger Sub immediately before the Effective Time will become the officers\nof Harte Hanks as the Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified\nin accordance with applicable law and the organizational documents of the Surviving Corporation. The certificate of incorporation and\nbylaws of Merger Sub, subject to specified conforming changes, will become the certificate of incorporation and bylaws of Harte Hanks\nas the Surviving Corporation.

Accounting\nTreatment

Star\nand Harte Hanks prepare their respective financial statements in accordance with GAAP. The Merger will be accounted for as an acquisition\nof Harte Hanks by Star under the acquisition method of accounting, and Star will be treated as the acquirer for accounting purposes.\n

Regulatory\nApprovals and Other Conditions to Closing

The\nMerger is not subject to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 because the transaction does not meet the applicable\nsize-of-transaction threshold. Accordingly, no filing under the HSR Act is required and no HSR waiting period applies. To complete the\nMerger, Star, Merger Sub and Harte Hanks must file a certificate of Merger with the Secretary of State of the State of Delaware and make\nany corresponding filings required under the laws of the states in which Harte Hanks and its subsidiaries are qualified to do business.

Star\nfiled this Registration Statement on Form S-4 with the SEC on [___], 2026, registering the shares of Star Preferred Stock to be issued\nin the Merger. As of the date of this proxy statement/prospectus, the Registration Statement has not yet been declared effective by the\nSEC. Completion of the Merger is conditioned on the Form S-4 having been declared effective under the Securities Act and not being subject\nto any stop order or proceedings seeking a stop order.

The\nMerger cannot be completed if any law, injunction, judgment, order or other legal restraint issued by a governmental authority prohibits,\nrestrains or makes illegal the consummation of the Merger. Accordingly, a condition to Closing is the absence of any governmental order\nor legal restraint preventing the parties from completing the transaction. Although the Merger is not subject to federal antitrust notification\nrequirements, state attorneys general could take action under applicable state antitrust laws as they deem necessary or desirable in\nthe public interest, including seeking to enjoin completion of the Merger or permitting completion subject to conditions.

The\nMerger is also conditioned on the delivery of the ABL Loan Agreement Amendment with Texas Capital Bank, and on the availability of not\nless than $15.0 million of proceeds under such facility (or any permitted Alternative Debt Financing) on the Closing Date. As of the\ndate of this proxy statement/prospectus, the parties are continuing to negotiate the ABL Loan Agreement Amendment with Texas Capital\nBank. There can be no assurance that the ABL Loan Agreement Amendment will be obtained on the anticipated terms or at all. For additional\ninformation, see “Debt Financing and Alternative Debt Financing” beginning on page 34.

In\naddition, the Merger Agreement requires the receipt of certain third-party consents, waivers, approvals and notices under specified contracts\nand arrangements identified in the Merger Agreement and related disclosure schedules. Star’s obligation to consummate the Merger\nis conditioned upon receipt of such specified consents, except where failure to obtain a consent would not have a Company Material Adverse\nEffect.

Although\nneither Star nor Harte Hanks is aware of any reason why the requisite approvals, consents and conditions cannot be satisfied in a timely\nmanner, there can be no assurance as to when or if they will be obtained or satisfied, or that the granting of any approval or satisfaction\nof any condition will not involve the imposition of additional conditions on the completion of the Merger.

Stock\nExchange Listing

Star’s\nPreferred Stock is listed on the Nasdaq Global Select Market under the symbol “STRRP.” Harte Hanks stockholders that elect,\nor are allocated, Preferred Stock Consideration in the Merger will receive shares of Star Preferred Stock, not shares of Star Common\nStock. The Merger Agreement provides that, before the Effective Time, Star will authorize and reserve for issuance a sufficient number\nof shares of Star Preferred Stock to pay the Preferred Stock Consideration. The Star Preferred Stock issued in the Merger will have the\nrights, preferences, privileges and restrictions set forth in the certificate of designations, rights and preferences of Star’s\n10% Series A Cumulative Perpetual Preferred Stock. Star Common Stock and Star Preferred Stock are expected to continue to trade on the\nNasdaq Global Select Market following the Merger.

Dissenters’\nRights in the Merger

Neither\nStar stockholders nor Harte Hanks stockholders are entitled to dissenters rights under the DGCL for the Merger.

THE\nMERGER AGREEMENT

This\nsection of the proxy statement/prospectus describes the material terms of the Merger Agreement. The description in this section and\nelsewhere in this proxy statement/prospectus is subject to, and qualified in its entirety by reference to, the complete text of the\nMerger Agreement, which is attached as Annex A to this document and incorporated by reference herein. This summary does not\npurport to be complete and may not contain all of the information about the Merger Agreement that is important to you. We urge you\nto read the full text of the Merger Agreement, as it is the legal document governing the Merger. This section is not intended to\nprovide you with any factual information about Star or Harte Hanks. Such information can be found elsewhere in this proxy\nstatement/prospectus and in the public filings Star makes with the SEC, as described in the section entitled “Where You Can\nFind More Information” beginning on page 135 of this proxy statement/prospectus.

Explanatory\nNote Regarding the Merger Agreement

The\nMerger Agreement and this summary of terms are included to provide you with information regarding the terms of the Merger Agreement.\nFactual disclosures about Star and Harte Hanks contained in this proxy statement/prospectus or in the public reports of Star filed with\nthe SEC may supplement, update or modify the factual disclosures about Star and Harte Hanks contained in the Merger Agreement. The Merger\nAgreement contains representations and warranties by Harte Hanks, on the one hand, and by Star and Merger Sub, on the other hand, made\nsolely for the benefit of the other. The representations, warranties and covenants made in the Merger Agreement by Star, Merger Sub,\nand Harte Hanks were made solely for the benefit of the parties to the Merger Agreement and are qualified and subject to important limitations\nagreed to by Star, Merger Sub, and Harte Hanks in connection with negotiating the terms of the Merger Agreement. In particular, in your\nreview of the representations and warranties contained in the Merger Agreement and described in this summary, it is important to bear\nin mind that the representations and warranties were negotiated with the principal purpose of establishing circumstances in which a party\nto the Merger Agreement may have the right not to consummate the Merger if the representations and warranties of the other party prove\nto be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the Merger Agreement, rather than\nestablishing matters as facts. The representations and warranties also may be subject to a contractual standard of materiality different\nfrom those generally applicable to stockholders and reports and documents filed by Star with the SEC, and some are qualified by the matters\ncontained in the confidential disclosure schedules that Harte Hanks delivered in connection with the Merger Agreement and certain documents\nfiled by Star with the SEC. Moreover, information concerning the subject matter of the representations and warranties, which do not purport\nto be accurate as of the date of this proxy statement/prospectus, may have changed since the date of the Merger Agreement. Accordingly,\nthe representations and warranties in the Merger Agreement should not be relied on by any persons as characterizations of the actual\nstate of facts about Star and Harte Hanks at the time they were made or otherwise.

Structure\nof the Merger

Each\nof Star and Harte Hanks’ respective board of directors has unanimously approved and adopted the Merger Agreement. The Merger Agreement\nprovides that, at the Effective Time of the Merger, Merger Sub will merge with and into Harte Hanks. Merger Sub will cease to exist as\na separate corporation, and Harte Hanks will continue as the Surviving Corporation and a wholly owned subsidiary of Star.

Closing\nand Effective Time of the Merger

The\nClosing of the Merger will occur by remote exchange of electronic copies of documents and signatures on (a) a date to be agreed upon\nby Star, Merger Sub and Harte Hanks that is no later than the second business day after the satisfaction or waiver, to the extent permitted,\nof the last condition to Closing set forth in Article VII of the Merger Agreement, other than conditions that by their terms are to be\nsatisfied at the Closing, or (b) such other time, location and date as Star, Merger Sub and Harte Hanks may mutually agree in writing.\nThe date on which the closing occurs is the “Closing Date”.

On\nthe Closing Date, the parties will file a certificate of Merger with the Secretary of State of the State of Delaware. The Merger will\nbecome effective at the Effective Time.

Merger\nConsideration

At\nthe Effective Time, each issued and outstanding share of Harte Hanks Common Stock, par value $1.00 per share, other than shares held\nby Harte Hanks as treasury stock, or owned by Star, Merger Sub or any direct or indirect wholly owned subsidiary of Star or Merger Sub,\nwill be converted into the right to receive, at the holder’s election and subject to the election, proration and adjustment provisions\ndescribed below, either: (i) the Cash Consideration; or (ii) the Preferred Stock Consideration. A holder may elect Cash Consideration\nfor all of the holder’s shares, Preferred Stock Consideration for all of the holder’s shares, or a combination of both by\nelecting Cash Consideration for some shares and Preferred Stock Consideration for others, subject to the election, proration and adjustment\nprovisions described below. The Cash Consideration, Preferred Stock Consideration, any combination of the two and any cash paid instead\nof fractional shares of Star Preferred Stock, are referred to collectively, as the “Merger Consideration”. Shares\nfor which a holder does not properly make a cash or preferred-stock election, or for which an election is revoked or lost, are referred\nto as “Non-Electing Company Shares”. Non-Electing Company Shares may be converted into Cash Consideration, Preferred\nStock Consideration or a combination of both, as Star elects, subject to the maximum aggregate cash limit described below.

Each\nshare of Harte Hanks Common Stock held as treasury stock or owned by Star, Merger Sub or any direct or indirect wholly owned subsidiary\nof Star or Merger Sub immediately before the Effective Time will be cancelled and extinguished without conversion or payment of consideration.

The\nMerger Agreement provides for adjustment of the Merger Consideration to reflect the effect of a stock split, reverse stock split, stock\ndividend, reorganization, recapitalization, reclassification, combination, share exchange or similar change in Harte Hanks Common Stock\noccurring after August 14, 2026 and before the Effective Time.

Maximum\nCash Amount and Proration

The\naggregate cash payable for Harte Hanks Common Stock and Company equity awards under the Merger Agreement, together with cash paid instead\nof fractional shares of Star Preferred Stock, may not exceed the Maximum Cash Amount.

If\nthe aggregate cash that would be payable for all shares as to which holders validly elect cash is less than the Maximum Cash Amount,\neach cash-electing share will receive the Cash Consideration and each preferred-stock-electing share will receive the Preferred Stock\nConsideration. Star may determine whether each Non-Electing Company Share receives Cash Consideration, Preferred Stock Consideration\nor a combination of the two, provided that the aggregate cash payment does not exceed the Maximum Cash Amount.

If\nthe aggregate cash that would be payable for all cash-electing shares exceeds the Maximum Cash Amount, each Preferred-Stock-electing\nshare and each Non-Electing Company Share will receive Preferred Stock Consideration. Each cash-electing share will receive a prorated\nportion of the Cash Consideration, determined by multiplying the Cash Consideration by a fraction whose numerator is the Maximum Cash\nAmount and whose denominator is the aggregate cash that would have been payable if all cash-electing shares received the Cash Consideration\nin full. The remaining portion of each cash-electing share will receive Preferred Stock Consideration.

No\nfractional shares of Star Preferred Stock will be issued. Instead, a holder otherwise entitled to a fractional share will receive cash,\nwithout interest, equal to the fractional share multiplied by $10.00.

Before\nthe Effective Time, Star must authorize and reserve enough shares of Star Preferred Stock to satisfy the Preferred Stock Consideration.\nThe Star Preferred Stock issued in the Merger will have the rights, preferences, privileges and restrictions stated in the certificate\nof designations, rights and preferences of Star’s 10% Series A Cumulative Perpetual Preferred Stock.

Election\nProcedures

Star\nwill prepare a form of election, and Harte Hanks will have a reasonable opportunity to review and comment on it. Each record holder of\nHarte Hanks Common Stock and each holder of Award Company Shares may use the form of election to elect to receive Cash Consideration,\nPreferred Stock Consideration or a combination of both with respect to the holder’s shares of Harte Hanks Common Stock or Award\nCompany Shares, as applicable, in each case subject to the Maximum Cash Amount and proration procedures.

Star\nand Harte Hanks will use reasonable best efforts to mail it to record holders as of the Record Date for the Harte Hanks stockholder meeting,\neither with the proxy statement or separately, and to make it available to persons who become record holders between that Record Date\nand the Election Date.

To\nmake a valid election, the payment agent must receive by 5:00 p.m., Eastern Time, on the Election Date, a properly completed and signed\nform of election and the required supporting materials. The “Election Date” will be the date of the Harte Hanks stockholder\nmeeting, unless the Closing Date is more than four business days after that meeting; in that case, it will be two business days before\nthe Closing Date. Star and Harte Hanks may agree to, and publicly announce, another Election Date. Star and Harte Hanks will publicly\nannounce the anticipated Election Date at least five business days before the anticipated Closing Date. If the Closing Date is delayed,\nthe Election Date will be similarly delayed and the parties will announce the delay and rescheduled Election Date when determined.

A\nholder may revoke an election, in whole or in part, by delivering written notice to the payment agent by 5:00 p.m., Eastern Time, on\nthe Election Date. An election will be deemed lost or not properly made if the payment agent determines that the election form was not\nproperly completed, signed or timely received. Shares subject to a revoked, lost or invalid election will be treated as Non-Electing\nCompany Shares. All elections will automatically be revoked if the Merger Agreement is terminated. The payment agent’s determinations\nconcerning the validity, revocation or loss of elections and its proration computations will be conclusive and binding absent manifest\nerror.

Exchange\nand Payment Procedures

No\nlater than three business days before the Closing Date, Star will select a bank or trust company reasonably acceptable to Harte Hanks\nto act as payment agent and will enter into a customary payment-agent agreement reasonably acceptable to Harte Hanks.

At\nor promptly after the Effective Time, Star will deposit or cause to be deposited with the payment agent the cash and book-entry shares\nof Star Preferred Stock necessary to pay the aggregate Cash Consideration, Preferred Stock Consideration and cash payable instead of\nfractional shares. The cash and Preferred Stock deposited with the payment agent, together with any investment proceeds, are referred\nto as the “Exchange Fund”. To the extent the amendment to Harte Hanks’ asset-based lending loan agreement is\neffective at that time, the Exchange Fund may include proceeds of borrowings by Harte Hanks or a subsidiary under that facility, up to\n$15,000,000 (the “Maximum Debt Financing Amount”).

The\npayment agent may invest the cash portion of the Exchange Fund, as directed by Star or the Surviving Corporation, only in specified short-term\nUnited States government obligations, highly rated commercial paper or specified bank instruments. Star or the Surviving Corporation\nmust promptly replace or restore any shortfall in the Exchange Fund so that it remains sufficient to make the required payments and deliveries.\nInvestment income belongs to Star or the Surviving Corporation, as Star directs.

Within\nfive business days after the Effective Time, Star and the Surviving Corporation will cause the payment agent to mail record holders of\ncertificated and uncertificated Harte Hanks shares a customary letter of transmittal and instructions for surrendering certificated shares\nor transferring uncertificated shares. Upon proper surrender of certificates or book-entry transfer of uncertificated shares, a holder\nwill receive the Merger Consideration to which the holder is entitled, including cash instead of any fractional share of Star Preferred\nStock. No interest will be paid on Cash Consideration. A holder of uncertificated shares will not be required to deliver a certificate\nor an executed letter of transmittal to receive the Merger Consideration.

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Star\nand Harte Hanks will establish procedures with the payment agent and The Depository Trust Company so that, after the Effective Time and\nfinal proration calculations, the payment agent can transmit the applicable Merger Consideration through The Depository Trust Company\nfor shares held of record by it or its nominees.

If\nMerger Consideration is to be delivered to a person other than the registered holder, the applicable certificate must be properly endorsed,\nor appropriate transfer instructions must be presented for uncertificated shares. The requesting person also must pay any required transfer\ntaxes or establish to Star’s reasonable satisfaction that those taxes have been paid or are not payable.

Any\nportion of the Exchange Fund that remains undistributed one year after the Effective Time may be delivered to Star upon demand. Thereafter,\nholders that have not surrendered or transferred their shares will look only to Star, as general creditors, for payment or delivery of\nthe Merger Consideration, subject to abandoned-property, escheat and similar laws. Any unclaimed amounts or shares remaining two years\nafter the Effective Time, or earlier if required to avoid escheat, may become the property of Star or the Surviving Corporation to the\nextent permitted by applicable law. Neither the payment agent, Star nor the Surviving Corporation will be liable for amounts properly\npaid to a public official under applicable abandoned-property, escheat or similar laws.

Following\nthe Effective Time, shares of Harte Hanks Common Stock will cease to be outstanding and will cease to exist, other than the right to\nreceive the Merger Consideration. No further transfers of Harte Hanks Common Stock will be registered, other than transfers reflecting\ncustomary settlement procedures for trades made before the Effective Time. If a certificate is lost, stolen or destroyed, the holder\nmust provide an affidavit of that fact and may be required by Star or the payment agent to provide a customary indemnity bond before\nreceiving the applicable Merger Consideration.

No\ndividends or distributions on Surviving Corporation capital stock with a Record Date on or after the Effective Time will be paid to holders\nof unsurrendered certificates or uncertificated shares.

Treatment\nof Harte Hanks Equity Awards

At\nthe Effective Time, each outstanding and unexercised Harte Hanks option identified on the Harte Hanks disclosure letter will be cancelled\nand converted into the right to receive the Cash Consideration, Preferred Stock Consideration or a combination of both, as elected by\nits holder and subject to the same Maximum Cash Amount and proration procedures that apply to Harte Hanks Common Stock. The amount payable\nfor a listed option will equal the excess, if any, of the applicable Merger Consideration over the option’s per-share exercise\nprice, multiplied by the number of shares subject to that option. Any Harte Hanks option not identified on the disclosure letter will\nbe cancelled without payment or other consideration.

Each\noutstanding Harte Hanks restricted stock unit identified on the disclosure letter will be cancelled and converted into the right to receive\nthe Cash Consideration, Preferred Stock Consideration or a combination of both, as elected by its holder and subject to the same Maximum\nCash Amount and proration procedures, for each share of Harte Hanks Common Stock covered by the restricted stock unit.

Each\nHarte Hanks performance stock unit will be cancelled at the Effective Time without payment or other consideration. Star will cause the\nSurviving Corporation to maintain sufficient cash and shares of Star Preferred Stock to satisfy its obligations to holders of Harte Hanks\nequity awards. Star will cause the Surviving Corporation to pay amounts due for equity awards through its payroll system as promptly\nas practicable after the Effective Time, subject to the Merger Agreement’s requirements applicable to awards subject to Section\n409A of the Internal Revenue Code.

Withholding

The\npayment agent, Star, Merger Sub, and Harte Hanks may deduct and withhold from amounts otherwise payable or deliverable to holders of\nHarte Hanks Common Stock or equity awards any amounts required to be withheld under tax law. Amounts so withheld and remitted to the\nappropriate governmental authority will be treated as paid or delivered to the applicable holder. If withholding is required with respect\nto Preferred Stock Consideration, Star or the payment agent may satisfy that obligation by deducting from cash otherwise payable or withholding\na portion of the Star Preferred Stock otherwise deliverable.

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If\nStar determines that withholding is required with respect to a payment or delivery, Star must notify the affected holder in writing promptly\nand no later than 10 business days before the Closing Date, describe the basis for the withholding and reasonably cooperate with the\nholder to eliminate or reduce it, including through forms or certificates provided by the holder.

Intended\nTax Treatment of the Merger

Star\nand Harte Hanks will treat the Merger as a taxable transaction for U.S. federal income tax purposes, report, act and file all tax returns\nin all respects and for all purposes consistent with such tax treatment and not take any action or position for tax purposes that is\ninconsistent with such tax treatment, except as otherwise required by a “determination” as defined in Section 1313(a) of\nthe Code or any corresponding or similar resolution under applicable state or local law.

Certificate\nof Incorporation, Bylaws, Directors and Officers

At\nthe Effective Time, Harte Hanks’ certificate of incorporation will be amended and restated to be substantially identical to Merger\nSub’s certificate of incorporation immediately before the Effective Time, subject to specified modifications preserving Harte Hanks’\nname, date of incorporation, registered office and registered agent and omitting provisions naming Merger Sub’s incorporator, initial\ndirectors or original subscribers. The amended and restated certificate of incorporation will become the Surviving Corporation’s\ncertificate of incorporation, subject to later amendment in accordance with its terms and Delaware law.

At\nthe Effective Time, Merger Sub’s bylaws will become the bylaws of the Surviving Corporation, subject to later amendment in accordance\nwith their terms, the Surviving Corporation’s certificate of incorporation and Delaware law.

The\ndirectors of Merger Sub immediately before the Effective Time will become the directors of the Surviving Corporation, and Merger Sub’s\nofficers immediately before the Effective Time will become the Surviving Corporation’s officers. Each will serve in accordance\nwith the Surviving Corporation’s organizational documents and Delaware law until a successor is duly elected or appointed and qualified.

Proxy\nStatement and Harte Hanks Stockholder Meeting

The\naffirmative vote of the holders of a majority of the voting power of the outstanding shares of Harte Hanks Common Stock entitled to vote\non the Merger is the only vote of Harte Hanks stockholders required to adopt the Merger Agreement and approve the Merger. Star stockholder\napproval is not required to adopt the Merger Agreement or consummate the Merger. The Non-Binding Advisory Compensation Proposal is advisory\nonly, is separate and apart from the Harte Hanks Merger Proposal and is not a condition to completion of the Merger.

Harte\nHanks must establish a Record Date for, duly call, give notice of, convene and hold a meeting of its stockholders as promptly as reasonably\npracticable after mailing the proxy statement, for the purpose of obtaining the required Harte Hanks stockholder approval. Harte Hanks\nmay not change the meeting Record Date without Star’s prior written consent, which Star may not unreasonably withhold, condition\nor delay. Subject to the Merger Agreement’s provisions regarding Acquisition Proposals and recommendation changes, Harte Hanks\nmust use reasonable best efforts to solicit proxies in favor of adoption of the Merger Agreement and must include the board of directors\nof Harte Hanks’ recommendation in the proxy statement.

Conduct\nof Harte Hanks’ Business Pending the Merger

From\nAugust 14, 2026 until the earlier of the Effective Time and termination of the Merger Agreement, Harte Hanks must, subject to specified\nexceptions, operate its business in the ordinary course of business, maintain its existence and good standing, preserve its assets, properties,\ncontracts, licenses and business organization, keep its current officers and key employees available and preserve relationships with\nmaterial customers, suppliers, distributors, lessors, licensors, licensees, creditors, contractors and other business counterparties.

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Except\nas expressly contemplated or permitted by the Merger Agreement, required by law or a binding governmental order, disclosed in the applicable\nsections of the Harte Hanks disclosure letter or approved by Star in writing, Harte Hanks and its subsidiaries may not, among other things:

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amend\n their organizational documents or adopt a plan of liquidation, dissolution, Merger, consolidation,\n restructuring, recapitalization or other reorganization;

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issue\n or sell Harte Hanks securities, other than specified equity awards and issuances upon exercise\n or settlement of equity awards under their existing terms; repurchase or redeem securities,\n subject to specified exceptions; split, combine or reclassify capital stock; declare or pay\n dividends or other distributions, other than certain dividends by wholly owned subsidiaries;\n pledge or encumber capital stock; or modify the terms of capital stock;

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incur\n borrowed-money indebtedness or issue debt securities, except for specified ordinary-course\n items, indebtedness under the existing asset-based lending facility or other existing arrangements\n in the circumstances permitted by the Merger Agreement, and other indebtedness up to $750,000\n in aggregate principal amount;

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make\n loans, advances, capital contributions or investments, except for specified ordinary-course\n customer credit, employee expense advances, indemnification obligations and transactions\n with wholly owned subsidiaries;

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acquire,\n lease, license, sell, abandon, transfer, assign, guarantee, exchange, mortgage, pledge or\n otherwise encumber assets above specified thresholds, subject to enumerated ordinary-course,\n financing, capital-expenditure and other exceptions;

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except\n as required under an employee plan, materially alter employee plans or benefits, increase\n compensation, pay special bonuses, grant new pension, severance, retention, transaction or\n change-in-control benefits, enter into or amend specified compensatory arrangements, accelerate\n compensation or equity awards, grant equity awards, or take specified hiring, promotion,\n termination, furlough or layoff actions involving officers or employees whose annual compensation\n exceeds $150,000;

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settle,\n release, waive or compromise claims, except for specified claims and settlements, including\n solely monetary settlements of no more than $100,000 individually and $250,000 in the aggregate;

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make\n material changes in accounting principles, practices, policies or procedures, or make, change\n or settle specified material tax matters in a manner reasonably expected to materially increase\n taxes payable by the Harte Hanks group;

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make\n capital expenditures other than those permitted by the agreed capital-expenditure budget,\n certain insured casualty repairs or replacements, or other capital expenditures of up to\n $250,000 in the aggregate;

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enter\n into, modify, amend, waive material rights under, consent to assignment of, or terminate\n material contracts, subject to specified exceptions; or

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enter\n into related-party transactions required to be disclosed under Item 404 of Regulation S-K;\n take actions reasonably expected to trigger notice, consultation, bargaining, consent or\n similar obligations under the WARN Act or comparable law; materially modify restrictive-covenant\n obligations; materially modify privacy or information-security policies and safeguards; grant\n material refunds or credits outside the ordinary course; acquire another person or material\n equity interest or enter into specified joint ventures; enter into a collective bargaining\n agreement; or adopt a stockholder rights plan applicable to the Merger.

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Harte\nHanks also may not agree or commit to take an action prohibited by these covenants. The foregoing restrictions are subject to the Merger\nAgreement’s stated exceptions, including matters disclosed in the Harte Hanks disclosure letter and Star’s consent right.

No\nSolicitation of Acquisition Proposals; Go-Shop Process

During\nthe Go-Shop Period, Harte Hanks and its affiliates and representatives may solicit, initiate, propose or induce, and knowingly encourage,\nfacilitate or assist, Acquisition Proposals. During that Go-Shop Period, Harte Hanks may, subject to an acceptable confidentiality agreement,\nfurnish nonpublic information about Harte Hanks to, and afford access to, potential bidders and participate in discussions or negotiations\nconcerning Acquisition Proposals.

If\nHarte Hanks provides nonpublic information to a potential bidder that it has not previously provided to Star, Harte Hanks must provide\nthat information or access to Star promptly and in any event within 48 hours. At the conclusion of the Go-Shop Period, Harte Hanks must\nnotify Star in writing of each Exempted Party, parties that entered into acceptable confidentiality agreements and parties that submitted\nAcquisition Proposals during the Go-Shop Period, together with the information and documents required by the Merger Agreement to the\nextent not previously delivered to Star.

An\n“Exempted Party” is a person or group from which Harte Hanks received a qualifying Acquisition Proposal during the\nGo-Shop Period that the board of directors of Harte Hanks, after consulting with outside counsel and its financial advisor, determines\nin good faith before the start of the No-Shop Period either is a Superior Proposal or is reasonably expected to result in a Superior\nProposal. An Exempted Party ceases to be an Exempted Party if its proposal is withdrawn, terminated or modified so that it no longer\nconstitutes or is reasonably expected to result in a Superior Proposal.

No-Shop\nRestrictions After the Go-Shop Period

Beginning\nat the end of the Go-Shop Period and until the earlier of the Effective Time and termination of the Merger Agreement (the “No-Shop\nPeriod”), Harte Hanks must cease prohibited solicitations, discussions and negotiations, seek the prompt return or destruction\nof nonpublic information provided to specified parties during the preceding six months and terminate their data-room access. Except as\nexpressly permitted by the Merger Agreement, Harte Hanks may not solicit, initiate, propose or knowingly encourage, facilitate or assist\nan Acquisition Proposal; provide nonpublic information or access to a potential bidder to induce an Acquisition Proposal; engage in related\ndiscussions or negotiations; or enter into a letter of intent, memorandum of understanding, Merger Agreement, acquisition agreement or\nother agreement relating to an Acquisition Transaction.

Harte\nHanks may continue to engage with an Exempted Party after the Go-Shop Period only while that party remains an Exempted Party and the\nboard of directors of Harte Hanks determines in good faith, after consulting with its financial advisor and outside counsel, that discontinuing\nthe discussions would be inconsistent with the directors’ fiduciary duties under applicable law. In that event, Harte Hanks must\nprovide Star with specified nonpublic information and written materials within 48 hours and keep Star reasonably informed, on a current\nbasis and in any event within 48 hours, of material developments, discussions and negotiations.

After\nthe Go-Shop Period but before Harte Hanks obtains the required stockholder approval, Harte Hanks may clarify the terms of an unsolicited\nAcquisition Proposal that did not result from a material breach of its non-solicitation obligations. If the board of directors of Harte\nHanks determines in good faith, after consulting with its independent financial advisor and outside legal counsel, that such proposal\nconstitutes or is reasonably expected to result in a Superior Proposal, Harte Hanks may negotiate with the bidder, enter into an acceptable\nconfidentiality agreement and provide nonpublic information, subject to providing Star with any new nonpublic information within 48 hours.\nHarte Hanks must also provide Star with written Acquisition Proposals, term sheets, draft agreements, financing commitments and other\nmaterial written materials within 48 hours and keep Star informed of material developments.

For\nthese purposes, a “Superior Proposal” is a bona fide written Acquisition Proposal for a transaction involving more\nthan 50% of Harte Hanks’ outstanding voting power or assets, revenue or net income that the board of directors of Harte Hanks determines\nin good faith, after consulting with its financial advisor and outside legal counsel, is reasonably likely to be completed and would\nbe more favorable to Harte Hanks stockholders from a financial point of view than the Merger, after considering the proposal’s\nlegal, regulatory, financing and other aspects, certainty of closing, bidder identity and any written revisions to the Merger Agreement\nproposed by Star.

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Recommendation\nof the Board of Directors of Harte Hanks; Recommendation Changes

The\nMerger Agreement prohibits the board of directors of Harte Hanks from withdrawing, amending, qualifying or modifying its recommendation\nin a manner materially adverse to Star; approving, endorsing or recommending an Acquisition Proposal; failing to reaffirm its recommendation\nwithin 10 business days after Star’s written request following public disclosure of an Acquisition Proposal, subject to a maximum\nof two requests; failing to take the required position on a tender or exchange offer; or failing to include its recommendation in the\nproxy statement. Each of these actions is a “Company Board Recommendation Change”, subject to the exceptions described\nbelow.

Before\nHarte Hanks obtains the required stockholder approval, its board of directors may make a recommendation change in response to an intervening\nevent if the board of directors of Harte Hanks determines in good faith, after consultation with outside legal counsel, that not doing\nso would be inconsistent with its fiduciary duties. An “Intervening Event” is a material development regarding Harte\nHanks that was not known to or reasonably expected by the board of directors of Harte Hanks on August 14, 2026, other than an Acquisition\nProposal and subject to specified exclusions concerning forecasts and market-price changes. Harte Hanks must give Star at least three\nbusiness days’ prior written notice identifying the Intervening Event in reasonable detail and must negotiate in good faith with\nStar during that period, if Star wishes to negotiate, over proposed Merger Agreement adjustments.

The\nboard of directors of Harte Hanks may also make a Company Board Recommendation Change or authorize Harte Hanks to terminate the Merger\nAgreement to enter into an alternative acquisition agreement for a Superior Proposal, but only if the board of directors of Harte Hanks\ndetermines in good faith, after consulting with its financial advisor and outside legal counsel, that failing to do so would be inconsistent\nwith its fiduciary duties; Harte Hanks has complied in all material respects with its non-solicitation obligations; and Harte Hanks gives\nStar at least three business days’ prior written notice. The notice must identify the Superior Proposal, the bidder, the material\nterms and the board of directors of Harte Hanks’ intended action and provide copies of the material proposal documents. During\nthe notice period, Harte Hanks must negotiate in good faith with Star if Star elects to negotiate. A material revision to the Acquisition\nProposal requires a new notice and a two-business-day notice period. If Harte Hanks terminates to enter into an alternative acquisition\nagreement, it must pay the applicable Harte Hanks termination fee before or concurrently with termination.

From\nthe beginning of the No-Shop Period until the earlier of the Effective Time and termination of the Merger Agreement, Harte Hanks must\npromptly, and in any event within 48 hours, notify Star of the receipt of an Acquisition Proposal, identify the bidder, provide copies\nof written proposals and related written materials or a written summary of an oral proposal, and keep Star reasonably informed about\nthe proposal and related discussions.

Additional\nCovenants

Efforts;\nConsents and Approvals

Star,\nMerger Sub and Harte Hanks must use commercially reasonable efforts to take the actions and do the things necessary, proper or advisable\nto consummate the Merger as expeditiously as practicable. These obligations include working to satisfy closing conditions, obtain required\ngovernmental consents, waivers, approvals, orders and authorizations, make required governmental filings, and obtain third-party consents,\nwaivers, approvals and notices under material contracts to preserve for the Surviving Corporation the benefits of those contracts. Harte\nHanks is not required to agree to consent fees, profit-sharing payments, increased or accelerated payments, additional security or guarantees\nin connection with obtaining material-contract consents.

Harte\nHanks agreed to provide Star updates at least every 15 days regarding material increases in anticipated transaction expenses compared\nto the transaction expense estimate delivered in connection with the Merger Agreement.

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Access\nto Information

Until\nthe earlier of the Effective Time and termination of the Merger Agreement, Harte Hanks must provide Star and its representatives reasonable\naccess during normal business hours and upon reasonable advance notice to Harte Hanks’ properties, books, records and personnel,\nsubject to customary limitations. Harte Hanks may restrict access where required by law, where access would create a material risk of\nwaiver of privilege, violate or create a default under a contract, disclose a third party’s trade secrets, relate to the negotiation\nand execution of the Merger Agreement or specified adverse litigation, or relate to an Acquisition Proposal. Access must not unreasonably\ninterfere with Harte Hanks’ business or create risk of property damage, and does not include invasive environmental testing.

Public\nStatements and Transaction Litigation

The\nparties must use commercially reasonable efforts to consult with one another before participating in media interviews, analyst or investor\nmeetings or calls, or making public statements reasonably likely to become public concerning the Merger, subject to specified exceptions,\nincluding disclosures required by law, regulation or stock-exchange requirements.

Harte\nHanks must promptly notify Star of litigation relating to the Merger, provide copies of pleadings and keep Star reasonably informed.\nStar has the opportunity to participate in the defense, settlement or prosecution of that litigation, and Harte Hanks must consult with\nStar; Harte Hanks may not settle or compromise transaction litigation without Star’s written consent, which may not be unreasonably\nwithheld, conditioned or delayed. Star must similarly provide Harte Hanks prompt notice of its transaction litigation and keep Harte\nHanks reasonably informed.

Delisting\nand Deregistration

Before\nthe Effective Time, Harte Hanks will cooperate with Star and use commercially reasonable efforts to cause Harte Hanks Common Stock to\nbe delisted from Nasdaq as promptly as practicable after the Effective Time and deregistered under the Exchange Act as promptly as practicable\nafter delisting.

Debt\nFinancing

The\nMerger Agreement contemplates the debt financing of a portion of the Cash Consideration and cash paid instead of fractional shares of\nStar Preferred Stock, up to the Maximum Debt Financing Amount, through a draw by Harte Hanks under its existing $25,000,000 secured revolving\ncredit facility, subject to an amendment to that facility.

The\nMerger Agreement requires Harte Hanks to use commercially reasonable efforts to arrange and consummate the Debt Financing or, if necessary,\nStar and Merger Sub to use commercially reasonable efforts to obtain Alternative Debt Financing, in each case, including by negotiating\nand executing definitive agreements, participating in financing due diligence and satisfying or obtaining waivers of financing conditions\napplicable to them. Harte Hanks must use commercially reasonable efforts to arrange and consummate the Debt Financing on the Closing\nDate, including by complying with the existing credit facility, maintaining availability for borrowing of at least the Maximum Debt Financing\nAmount, negotiating the required credit-facility amendment and related financing documents, and satisfying or obtaining waivers of conditions\napplicable to Harte Hanks.

If\nany portion of the contemplated Debt Financing becomes unavailable or is reasonably expected to become unavailable, Harte Hanks must\npromptly notify Star, and Star must use commercially reasonable efforts to obtain Alternative Debt Financing in an amount sufficient,\ntogether with available funds, to pay the Merger Consideration, repay or satisfy indebtedness required to be addressed at Closing, pay\napplicable transaction fees and expenses and consummate the transactions.

If\nthe Merger Agreement is terminated under specified provisions before the Effective Time, Star must reimburse the Harte Hanks group for\nspecified out-of-pocket debt-financing and alternative-debt-financing costs, including certain fees and expenses of Texas Capital Bank.\nIf the Closing occurs, costs incurred by the Harte Hanks group in connection with the Debt Financing or Alternative Debt Financing will\nbe borne by the Surviving Corporation and will not be treated as Harte Hanks transaction expenses for purposes of the Merger Agreement.

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Employee\nMatters

After\nthe Effective Time, the Surviving Corporation must provide continuing employees severance benefits in accordance with the employees’\nwritten employment agreements in effect at the Effective Time and identified in the Harte Hanks disclosure letter. The Surviving Corporation\nmust honor each employee plan according to its terms in effect immediately before the Effective Time, including any change in control\ntriggers, subject to amendments or terminations permitted by that plan.

For\nthe fiscal year in which the Effective Time occurs, Star will consider in its sole discretion, or cause the Surviving Corporation to\nconsider, paying an annual cash bonus to each continuing employee. Any bonus will be in an amount determined by Star and, if paid, will\nbe paid as soon as practicable after the end of the closing year and no later than May 1 of the following fiscal year.

If\na new employee benefit plan is made available to a continuing employee after the Effective Time, the Surviving Corporation and its subsidiaries\nmust credit the employee’s pre-Effective-Time service with Harte Hanks for eligibility, vesting and benefit purposes where service\nis relevant, including vacation accrual and severance-pay entitlement, except to avoid duplication of benefits. For applicable new plans,\ncontinuing employees must receive credit for satisfied waiting periods under comparable Harte Hanks plans, waivers of pre-existing-condition\nlimitations and actively-at-work requirements to the applicable extent, and credit for eligible expenses incurred during the relevant\nprior plan year toward deductibles, coinsurance and out-of-pocket limits.

At\nleast 10 business days before the Closing Date, Star may request that Harte Hanks terminate its 401(k) plan, effective no later than\nthe day before the Closing Date. If Star makes that request, Harte Hanks must take all reasonably necessary actions, including adopting\nboard resolutions, and provide Star drafts of related resolutions, notices, amendments and other documents before taking action. Star\nmust then take reasonably necessary action to permit continuing employees to participate in a Star or affiliate 401(k) plan on or as\nsoon as reasonably practicable after the Closing Date and to cause such 401(k) plan to accept eligible rollover distributions, including\nloans, from the terminated Harte Hanks 401(k) plan if elected by continuing employees.

The\nemployee provisions do not guarantee employment or prohibit Star, the Surviving Corporation or their subsidiaries from terminating a\ncontinuing employee’s employment. They also do not require continuation of any employee plan, create third-party-beneficiary rights\nor establish, amend or modify any benefit plan, program, agreement or arrangement.

Directors’\nand Officers’ Indemnification and Insurance

The\nSurviving Corporation and its subsidiaries must honor and fulfill all obligations of the Harte Hanks group under indemnification agreements,\nincluding indemnification provisions in employment agreements, with current or former directors and officers and persons who become directors\nor officers before the Effective Time, as well as employees, for acts or omissions occurring before the Effective Time.

For\na period commencing on the Effective Time and ending on the sixth anniversary of Effective Time, the Surviving Corporation and its subsidiaries\nmust maintain charter, bylaw and similar organizational-document provisions regarding indemnification, exculpation and advancement of\nexpenses that are at least as favorable as those of Harte Hanks and its subsidiaries in effect on August 14, 2026, unless a change is\nrequired by law. For that same six-year period, the Surviving Corporation must indemnify and hold harmless the applicable indemnified\npersons, to the fullest extent provided in the applicable pre-signing organizational documents and indemnification agreements, against\nspecified costs, expenses, judgments, fines, losses, claims, damages, liabilities and settlement amounts arising from acts or omissions\noccurring at or before the Effective Time, including the Merger Agreement and the transactions. A timely asserted indemnification claim\nsurvives until finally resolved.

For\na period commencing on the Effective Time and ending on the sixth anniversary of the Effective Time, the Surviving Corporation must maintain\nHarte Hanks’ existing directors’ and officers’ liability insurance for pre-Effective-Time acts or omissions on terms\nequivalent to the existing coverage, subject to a maximum annual premium equal to 300% of the amount Harte Hanks paid for coverage in\nits last full fiscal year. If equivalent coverage exceeds that limit, the Surviving Corporation must obtain the greatest available coverage\nnot exceeding the premium limit from a carrier with the same or better credit rating. Before the Effective Time, Harte Hanks may, or\nif requested by Star must, purchase a prepaid tail policy meeting the stated credit-rating and cost conditions. If Harte Hanks purchases\nthat policy, the Surviving Corporation must maintain it and honor its obligations while it remains in force.

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Conditions\nto Complete the Merger

The\nobligations of Star, Merger Sub and Harte Hanks to complete the Merger are subject to the satisfaction or waiver, to the extent legally\npermissible, of the following conditions before the Effective Time:

●

Harte\n Hanks must receive the required stockholder approval at the Harte Hanks Special Meeting.

●

The\n Form S-4 must have become effective under the Securities Act and must not be subject to a\n stop order or proceedings seeking a stop order.

●

No\n temporary restraining order, preliminary or permanent injunction, judgment, order or other\n legal or regulatory restraint or prohibition preventing the Merger may be in effect; no action\n may have been taken by a governmental authority of competent jurisdiction; and no statute,\n rule, regulation or order may have been enacted, entered, enforced or deemed applicable to\n the Merger, that, in each case, prohibits, makes illegal or enjoins the Merger.

Star’s\nand Merger Sub’s obligations are also subject to the satisfaction or waiver by Star of the following conditions:

●

Harte\n Hanks’ representations and warranties must be true and correct at Closing, subject\n to the distinct materiality, Company Material Adverse Effect and de minimis standards specified\n in the Merger Agreement for different categories of representations.

●

Harte\n Hanks must have performed and complied in all material respects with its required covenants,\n obligations and conditions, and Star and Merger Sub must have received an officer’s\n certificate of Harte Hanks certifying that the applicable representation-and-warranty and\n performance conditions have been satisfied.

●

No\n Company Material Adverse Effect may have occurred after August 14, 2026 and be continuing.

●

Harte\n Hanks must have delivered the ABL Loan Agreement Amendment, duly executed by each party thereto\n other than Star or Merger Sub.

●

All\n conditions precedent to the debt financing or alternative debt financing, as applicable,\n must have been satisfied or waived by Texas Capital Bank or the applicable alternative lender\n or lenders, other than conditions that by their nature are to be satisfied at Closing, and\n Harte Hanks and its subsidiaries must have at least the Maximum Debt Financing Amount available\n for borrowing on the Closing Date under the ABL Loan Agreement or alternative debt financing,\n as applicable.

●

Star\n must have received evidence reasonably satisfactory to it that all required notices, consents,\n waivers, approvals and assignment notices, including those identified on Schedule 7.2(g)\n to the Merger Agreement, have been given, obtained or delivered, as applicable, and remain\n in full force and effect, except where the failure to obtain the applicable consent would\n not have a Company Material Adverse Effect.

Harte\nHanks’ obligation is also subject to the satisfaction or waiver by Harte Hanks of the following conditions:

●

Star’s\n representations and warranties must be true and correct at Closing, subject to the distinct\n materiality, Parent Material Adverse Effect and de minimis standards specified in the Merger\n Agreement for different categories of representations.

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●

Star\n and Merger Sub must have performed and complied in all material respects with their required\n covenants, obligations and conditions, and Harte Hanks must have received an officer’s\n certificate of Star and Merger Sub certifying that the applicable representation-and-warranty\n and performance conditions have been satisfied.

●

No\n Parent Material Adverse Effect may have occurred after August 14, 2026 and be continuing.

No\nparty may rely on the failure of a closing condition as a basis for failing to complete the Merger or terminating the Merger Agreement\nif that party’s breach of a representation, warranty, covenant or agreement, or failure to perform its obligations, primarily caused\nor primarily resulted in the condition’s failure or otherwise gave rise to a termination right.

Representations\nand Warranties

The\nMerger Agreement contains representations and warranties made by Harte Hanks to Star and Merger Sub and by Star and Merger Sub to Harte\nHanks. These representations and warranties are qualified by the matters disclosed in specified Securities and Exchange Commission filings,\nsubject to the limitations set forth in the Merger Agreement, and, in the case of Harte Hanks, by the Harte Hanks disclosure letter.\nThe representations and warranties are made as of the dates specified in the Merger Agreement and should not be read as statements of\nfact made as of any other date. The representations and warranties are subject to materiality, material-adverse-effect, knowledge and\nother qualifications contained in the Merger Agreement.

Harte\nHanks’ representations and warranties address, among other matters:

●

its\n organization, good standing, corporate power and authority, enforceability of the Merger\n Agreement and the validity of its organizational documents;

●

the\n unanimous approval and recommendation of the board of directors of Harte Hanks, receipt of\n the Citizens JMP Securities, LLC fairness opinion, the inapplicability of Section 203 of\n the Delaware General Corporation Law and other takeover laws, and the absence of a stockholder\n rights plan;

●

the\n required Harte Hanks stockholder approval as the only Harte Hanks capital-stockholder vote\n required to adopt the Merger Agreement and complete the Merger;

●

non-contravention\n of organizational documents, material contracts and applicable law; required governmental\n approvals; and the absence of impermissible liens resulting from the Merger;

●

capitalization,\n including the number of authorized, issued, outstanding and treasury shares of Harte Hanks\n Common Stock as of June 30, 2026, as well as outstanding options, restricted stock units\n and performance stock units as of that date;

●

subsidiaries\n and their capitalization, ownership and organizational status;

●

Securities\n and Exchange Commission reports, financial statements, disclosure controls, internal controls,\n indebtedness and undisclosed liabilities;

●

the\n absence of specified changes, including the absence of a Company Material Adverse Effect\n through the signing date, and the absence of specified actions since March 31, 2026;

●

material\n contracts, real property and tangible assets, environmental matters, intellectual property,\n privacy and data security, taxes, employee plans, labor matters, permits and legal compliance,\n litigation, insurance and related-person transactions;

●

brokers,\n trade controls, sanctions and anti-corruption matters;

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●

information\n supplied for inclusion or incorporation by reference in the Form S-4 and proxy statement/prospectus;\n and

●

Harte\n Hanks’ good-faith estimate, as of signing, of its transaction expenses.

Star\nand Merger Sub make representations and warranties to Harte Hanks concerning, among other matters:

●

their\n organization, good standing, power and authority, enforceability of the Merger Agreement,\n non-contravention and required governmental approvals;

●

Star’s\n capitalization, including the authorization and reservation of sufficient shares of Star\n Preferred Stock for the Preferred Stock Consideration, and the valid issuance of that stock\n when issued in accordance with the Merger Agreement and the applicable certificate of designations;

●

subsidiaries\n and their capitalization and ownership; Securities and Exchange Commission reports; financial\n statements; disclosure controls; internal controls; undisclosed liabilities; absence of specified\n changes; permits; legal compliance; and litigation;

●

ownership\n of Harte Hanks Common Stock, brokers, the limited operations of Merger Sub and the absence\n of a required Star stockholder vote;

●

the\n absence, as of signing, of specified stockholder and management arrangements with Harte Hanks\n stockholders, directors, officers, employees and other affiliates, except for the Voting\n and Support Agreements;

●

sufficiency\n of available cash and/or immediately available funds, assuming the Debt Financing is provided\n or Alternative Debt Financing is secured, to pay the Merger Consideration, repay or otherwise\n satisfy specified Harte Hanks indebtedness, pay applicable fees and expenses and complete\n the transactions;

●

the\n absence of exclusive financial-advisory or debt-financing arrangements of the type specified\n in the Merger Agreement;

●

solvency\n of Star and the Surviving Corporation and its subsidiaries immediately after the transactions;\n and

●

information\n supplied for inclusion or incorporation by reference in the Form S-4 and proxy statement/prospectus.

The\nrepresentations and warranties of Star, Merger Sub and Harte Hanks terminate at the Effective Time, except for covenants that by their\nterms survive the Effective Time.

Voting\nand Support Agreements

Immediately\nafter execution and delivery of the Merger Agreement, certain Harte Hanks stockholders, John H. Griffin, Jr., Genevieve C. Combes, Bradley\nL. Radoff, Elizabeth Ross, David Fisher and David A. Garrison entered into voting and support agreements with Harte Hanks and Star under\nwhich those stockholders will agree, among other things, to vote their Harte Hanks Common Stock in favor of adoption of the Merger Agreement,\nsubject to the terms and conditions of those agreements. As of the Record Date, these directors and executive officers held [____] shares\nof Harte Hanks Common Stock, which represented approximately [____]% of the outstanding shares of Harte Hanks Common Stock.

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Termination\nof the Merger Agreement

The\nMerger Agreement may be terminated before the Effective Time only in the following circumstances:

●

Star\n and Harte Hanks may terminate the Merger Agreement at any time before the Effective Time\n by mutual written agreement.

●

Either\n Star or Harte Hanks may terminate the Merger Agreement before the Effective Time if a final\n and nonappealable injunction, judgment, order or other legal or regulatory restraint or prohibition,\n or any action by a governmental authority, prohibits, makes illegal or enjoins the Merger,\n or if any statute, rule, regulation or order has been enacted, entered, enforced or deemed\n applicable to the Merger that prohibits, makes illegal or enjoins the Merger. This termination\n right is unavailable to a party that has failed to comply with its obligations under the\n Merger Agreement to use commercially reasonable efforts to resist, appeal, obtain consent\n for, resolve or lift the applicable restraint or prohibition.

●

Either\n Star or Harte Hanks may terminate the Merger Agreement before the Effective Time if the Effective\n Time has not occurred by 11:59 p.m., Eastern Time, on March 1, 2027 (the “Termination\n Date”), subject to the limitations in the Merger Agreement. Those limitations include\n that this termination right is unavailable if the other party has the applicable valid termination\n right under the Merger Agreement or if the terminating party’s breach was the primary\n cause of the failure to satisfy its closing conditions or consummate the Merger by the Termination\n Date.

●

Either\n Star or Harte Hanks may terminate the Merger Agreement before the Effective Time if Harte\n Hanks does not obtain the required stockholder approval at the Harte Hanks Special Meeting\n or any adjournment or postponement thereof at which a vote is taken.

●

Star\n may terminate the Merger Agreement before the Effective Time if a condition to Star’s\n and Merger Sub’s obligations to complete the Merger has failed to be satisfied or has\n become incapable of being satisfied by the Termination Date. If the failure is capable of\n being cured by the Termination Date, Star must first provide Harte Hanks with written notice\n and wait until the earlier of 30 days after that notice and the Termination Date, unless\n the failure is cured before then.

●

Star\n may terminate the Merger Agreement before Harte Hanks receives the required stockholder approval\n if the board of directors of Harte Hanks or a committee thereof has effected a Company Board\n Recommendation Change.

●

Harte\n Hanks may terminate the Merger Agreement before the Effective Time if a condition to Harte\n Hanks’ obligation to complete the Merger has failed to be satisfied or has become incapable\n of being satisfied by the Termination Date. If the failure is capable of being cured by the\n Termination Date, Harte Hanks must first provide Star with written notice and wait until\n the earlier of 30 days after that notice and the Termination Date, unless the failure is\n cured before then.

●

Before\n Harte Hanks receives the required stockholder approval, Harte Hanks may terminate the Merger\n Agreement if it has received a Superior Proposal; the board of directors of Harte Hanks or\n a committee thereof has authorized Harte Hanks to enter into, and Harte Hanks substantially\n concurrently enters into, a definitive alternative acquisition agreement for that Superior\n Proposal; Harte Hanks has complied in all material respects with its non-solicitation obligations;\n and Harte Hanks pays, or causes to be paid, the Company Termination Fee before or concurrently\n with the termination.

●

Harte\n Hanks may terminate the Merger Agreement before the Effective Time if: (i) the mutual closing\n conditions and the closing conditions in favor of Star and Merger Sub have been satisfied\n or waived, other than closing conditions that are capable of being satisfied at closing;\n (ii) Harte Hanks has irrevocably notified Star in writing that it is ready, willing and able\n to close and that its closing conditions have been satisfied, other than closing conditions\n that are capable of being satisfied at closing, or that Harte Hanks is willing to waive any\n unsatisfied Harte Hanks closing conditions; (iii) Star and Merger Sub fail to complete the\n Merger on the date required by the Merger Agreement; (iv) Harte Hanks has provided at least\n three business days’ prior written notice of its intention to terminate; and (v) Star\n and Merger Sub fail to complete the Merger by the end of that three-business-day period and\n on the required closing date.

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If\nthe Merger Agreement is validly terminated, it will generally be of no further force or effect. Termination does not relieve a party\nof liability for a willful breach. A “willful breach” is a material breach resulting from an act or omission made\nwith actual knowledge or intent that it would constitute, or reasonably be expected to constitute, a material breach.

Fees\nand Expenses

Except\nas otherwise provided in the Merger Agreement, each party will pay its own fees and expenses, whether or not the Merger is completed.\nStar or the Surviving Corporation will pay all payment-agent fees and expenses. Star will pay transfer, stamp, documentary, sales, use,\nreal-property transfer and similar taxes or fees arising from the Merger Agreement and the Merger, and will timely file the related tax\nreturns with reasonable cooperation from Harte Hanks.

Harte\nHanks Termination Fee

Harte\nHanks may be required to pay Star a termination fee of $1,152,000 if:

●

the\n Merger Agreement is terminated because the Merger has not closed by the Termination Date,\n Harte Hanks has not obtained the required stockholder approval, or a closing condition in\n favor of Star and Merger Sub has failed; an Acquisition Proposal for an Acquisition Transaction\n has been publicly announced or disclosed before the termination; and, within one year after\n termination, Harte Hanks enters into a definitive agreement for or consummates an Acquisition\n Transaction meeting the modified 50% threshold stated in the Merger Agreement; or

●

Star\n terminates following a Company Board Recommendation Change.

If\nHarte Hanks terminates the Merger Agreement to enter into an alternative acquisition agreement for a Superior Proposal, Harte Hanks must\npay the $1,152,000 termination fee before or concurrently with termination. The Merger Agreement provided for a reduced $576,000 fee\nonly if the alternative acquisition agreement was with an Exempted Party, that party was an Exempted Party when Harte Hanks terminated\nand the agreement was entered into on or before the No-Shop Period Start Date. Because no Alternative Acquisition Agreement was entered\ninto on or prior to September 13, 2026, the reduced fee is no longer available and any later termination to enter into an Alternative\nAcquisition Agreement with an Exempted Party requires the full $1,152,000 Company Termination Fee.

The\nMerger Agreement also contains special limitations relating to Debt Financing and Alternative Debt Financing. In particular, Harte Hanks\nwill not be required to pay the termination fee or damages based solely on specified financing failures, financing defaults, financing-condition\nfailures or unavailability, except to the extent those matters were materially caused by Harte Hanks’ failure to comply with specified\nfinancing-cooperation obligations.

Star\nTermination Fee

Star\nmust pay Harte Hanks a termination fee of $1,152,000 if Harte Hanks validly terminates because a condition to its obligation has failed\nor become incapable of satisfaction, or because Star and Merger Sub fail to close after Harte Hanks delivers the required three-business-day\nnotice and otherwise satisfies the applicable conditions.

The\naggregate monetary recovery from Star, Merger Sub and related parties for claims arising from the Merger Agreement, the transactions,\ntermination, breach or failure to close is generally capped at $1,152,000, plus applicable debt-financing costs payable under the Merger\nAgreement.

Amendment\nand Waiver

The\nparties may amend the Merger Agreement at any time by a written instrument signed on behalf of Star, Merger Sub and Harte Hanks. After\nHarte Hanks receives the required stockholder approval, the parties may not amend the Merger Agreement in a way that requires additional\nHarte Hanks stockholder approval under Delaware law without obtaining that approval.

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Before\nthe Effective Time, a party may extend performance deadlines, waive inaccuracies in representations and warranties made to it, or waive\ncompliance with agreements or conditions for its benefit, in each case to the extent legally permitted. Any extension or waiver must\nbe in a written instrument signed by the party granting it.

Specific\nPerformance; Governing Law; Forum and Jury-Trial Waiver

The\nparties acknowledge that a breach of the Merger Agreement may cause irreparable harm for which monetary damages are not an adequate remedy.\nSubject to the Merger Agreement’s limitations, each party may seek injunctions, specific performance and other equitable relief,\nin addition to other available remedies. Harte Hanks may specifically enforce Star’s and Merger Sub’s obligation to close\nonly if the conditions to Star’s and Merger Sub’s closing obligations have been satisfied or waived, the Debt Financing or\nAlternative Debt Financing has been or will be funded substantially concurrently, Harte Hanks confirms in writing that it will close\nif specific performance is granted and financing is funded, and Star and Merger Sub are otherwise required to close.

Harte\nHanks may not receive both specific performance that results in the Closing and monetary damages, including the Star termination fee\nor monetary damages in lieu of specific performance. A party seeking equitable relief is not required to post a bond or other security.

The\nMerger Agreement is governed by Delaware law, without regard to Delaware conflicts-of-law principles. The parties have agreed to the\nexclusive jurisdiction of the Delaware Court of Chancery and Delaware appellate courts, or, if the Court of Chancery declines jurisdiction\nover a particular matter, a federal court in Delaware, for disputes arising out of the Merger Agreement. Each party has irrevocably waived\nany right to a jury trial in a legal proceeding arising out of or relating to the Merger Agreement, the Merger, the Debt Financing or\nany Alternative Debt Financing.

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MATERIAL\nU.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The\nfollowing is a discussion of the material U.S. federal income tax consequences of the Merger to U.S. holders and non-U.S. holders (collectively\nreferred to as “holders”) which hold their shares of Harte Hanks Common Stock (“Shares”) as capital\nassets within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all\nU.S. federal income tax consequences relevant to a holder’s particular circumstances, including the Medicare contribution tax on\nnet investment income or the Foreign Account Tax Compliance Act (including the U.S. Treasury regulations promulgated thereunder and intergovernmental\nagreements entered pursuant thereto or in connection therewith), nor does it address any tax consequences arising under the laws of any\nU.S. state or local or non-U.S. jurisdiction, or under any U.S. federal laws other than those pertaining to U.S. federal income taxes.\nIn addition, it does not address tax consequences relevant to holders subject to special rules under the U.S. federal income tax laws,\nincluding, without limitation:

●\nbanks, financial institutions or insurance companies;

●\nreal estate investment trusts;

●\nregulated investment companies or mutual funds;

●\ndealers and brokers in stocks and securities or currencies;

●\ntraders in securities that use a mark-to-market method of tax accounting;

●\ntax-exempt entities or governmental organizations;

●\ncertain former citizens or long-term residents of the United States;

●\npersons that received Shares pursuant to the exercise of compensatory options or stock purchase plans or otherwise as compensation\nfor the performance of services;

●\npersons that hold Shares through individual retirement or other tax-deferred accounts;

●\npersons that hold Shares as part of a hedge, straddle, appreciated financial position, conversion or other “synthetic\nsecurity” or integrated investment or risk reduction transaction for U.S. federal income tax purposes;

●\nS-corporations or other pass-through entities (or investors in S-corporations or other pass-through entities);

●\npersons whose “functional currency” is not the U.S. dollar;

●\npersons subject to special tax accounting rules as a result of any item of gross income with respect to the Shares being taken into\naccount in an applicable financial statement;

●\ncontrolled foreign corporations;

●\npersons that own or have owned (directly, indirectly or constructively) 5% or more of the Shares (by vote or value);

●\npassive foreign investment companies; or

●\npersons that are subject to the alternative minimum tax.

If\na partnership, or any entity or arrangement treated as a partnership for U.S. federal income tax purposes, holds Shares, the tax treatment\nof a partner in such entity or arrangement will generally depend on the status of the partner and the activities of the entity or arrangement.\nA partner in such an entity or arrangement holding Shares should consult its own tax advisor regarding the tax consequences of the Merger.

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This\ndiscussion is based on current provisions of the Code, the U.S. Treasury regulations promulgated thereunder, judicial opinions and published\npositions of the Internal Revenue Service (“IRS”), each as in effect as of the date of this proxy statement/prospectus\nand all of which are subject to change or differing interpretations, possibly with retroactive effect. Any such change or differing interpretation\ncould affect the accuracy of the statements and conclusions set forth herein. Neither Star nor Harte Hanks has sought, or intends to\nseek, any opinion of counsel or any ruling from the IRS with respect to the statements made and the conclusions reached in the following\ndiscussion, and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any\nchallenge by the IRS in the event of litigation. As a result, there can be no assurances that the IRS will not assert, or that a court\nwould not sustain, a position contrary to any of the conclusions set forth below.

Definitions\nof U.S. Holder and Non-U.S. Holder

For\npurposes of this discussion, a “U.S. holder” is a beneficial owner of Shares who or which is for U.S. federal income\ntax purposes:

●\na citizen or resident of the United States;

●\na corporation (or other entity or arrangement treated as a corporation for U.S. federal income tax purposes) created or organized in\nor under the laws of the United States, any state thereof, or the District of Columbia;

●\nan estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

●\na trust if such trust has validly elected to be treated as a U.S. person for U.S. federal income tax purposes or if (1) a court\nwithin the United States is able to exercise primary supervision over its administration and (2) one or more U.S. persons have the\nauthority to control all of the substantial decisions of such trust.

For\npurposes of this discussion, the term “non-U.S. holder” means a beneficial owner of Shares who or which is not a U.S.\nholder and is not an entity or arrangement treated as a partnership for U.S. federal income tax purposes.

THIS\nDISCUSSION IS PROVIDED FOR GENERAL INFORMATION ONLY AND IS NOT A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL U.S. FEDERAL INCOME\nTAX CONSEQUENCES OF THE MERGER. EACH HOLDER IS STRONGLY URGED TO CONSULT WITH AND RELY UPON ITS OWN TAX ADVISOR AS TO THE SPECIFIC U.S.\nFEDERAL, STATE OR LOCAL OR NON-U.S. TAX CONSEQUENCES TO SUCH HOLDER OF THE MERGER, TAKING INTO ACCOUNT ITS OWN PARTICULAR CIRCUMSTANCES.

Consequences\nto U.S. Holders of the Merger

The\nMerger will constitute a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder generally will recognize\ngain or loss equal to the difference between: (a) the sum of (i) the amount of cash received in the Merger, including cash received in\nlieu of any fractional share of Star Preferred Stock, and (ii) the fair market value, determined as of the Effective Time, of any Star\nPreferred Stock received in the Merger; and (b) the U.S. holder’s adjusted tax basis in the Shares surrendered in the Merger.

Such\ngain or loss will be capital gain or loss and generally will be long-term capital gain or loss if the U.S. holder’s holding period\nfor the surrendered Shares exceeds one year as of the Effective Time. Long-term capital gain recognized by certain non-corporate U.S.\nholders generally is eligible for preferential rates, subject to applicable limitations. The deductibility of capital losses is subject\nto limitations. If a U.S. holder acquired different blocks of Shares at different times or different prices, such U.S. holder must determine\nits adjusted tax basis and holding period separately with respect to each block of Shares that it holds.

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A\nU.S. holder’s aggregate initial tax basis in the Star Preferred Stock received in the Merger generally will equal the fair market\nvalue of that Star Preferred Stock as of the Effective Time. A U.S. holder’s holding period for the Star Preferred Stock generally\nwill begin on the day after the Effective Time.

Consequences\nto Non-U.S. Holders of the Merger

Subject\nto the below discussion regarding backup withholding, a non-U.S. holder who or which receives the Merger Consideration in exchange for\nsuch non-U.S. holder’s Shares in the Merger generally will not be subject to U.S. federal income tax on any gain realized on the\ndisposition, unless (i) such non-U.S. holder is an individual who is present in the United States for 183 or more days during the taxable\nyear of the completion of the Merger and certain other conditions are met, or (ii) the gain is effectively connected with the conduct\nof a trade or business in the United States by the non-U.S. holder (and, in the case of certain income tax treaties, is attributable\nto a permanent establishment or fixed base within the United States).

If\nyou are a non-U.S. holder who is an individual and has been present in the United States for 183 or more days during the taxable year\nof the completion of the Merger and certain other conditions are satisfied, you will be subject to tax at a rate of 30% (or such lower\nrate as may be specified in an applicable income tax treaty) on any gain realized, which generally may be offset by certain U.S. source\ncapital losses.

If\nyou are a non-U.S. holder and your gain is effectively connected with the conduct of a United States trade or business by you (and, in\nthe case of certain income tax treaties, is attributable to a permanent establishment or fixed base within the United States), you will\nbe subject to U.S. federal income tax on any gain realized on a net basis in the same manner as a U.S. holder. Non-U.S. holders which\nare corporations also may be subject to a branch profits tax on such effectively connected income at a rate of 30% (or such lower rate\nas may be specified in an applicable income tax treaty), subject to adjustments.

Each\nNon-U.S. holder is strongly urged to consult its own tax advisor with respect to such NON-U.S. holder’s specific tax consequences\nof the merger, taking into account its own particular circumstances.

Potential\nApplication of Section 304

Notwithstanding\nthe discussion above, the receipt of Cash Consideration by holders that also actually or constructively own Star stock may be subject\nto Section 304 of the Code if holders who own (including by attribution) 50% or more of the total combined voting power or total value\nof the Shares before the Merger own (including by attribution), immediately after the Merger, 50% or more of the total combined voting\npower or total value of the Star stock. If Section 304 of the Code applies to the Cash Consideration received in the Merger, then a holder\nthat actually or constructively owns Star stock might recognize dividend income up to the amount of such Cash Consideration unless such\nholder’s receipt of the Cash Consideration qualifies for exchange treatment under the tests set forth in Section 302 of the Code.

To the knowledge\nof Star and Harte Hanks, one or more persons do not control both Star and Harte Hanks within the meaning of Section 304 of the Code.\nHowever, because of the complex constructive ownership rules, Star and Harte Hanks do not have sufficient information to determine definitively\nthat Section 304 of the Code does not apply to the Merger. In light of the potential application of Section 304 of the Code to the Cash\nConsideration, holders should consult their own tax advisors regarding the application of the foregoing rules to their particular circumstances,\nand any actions that may be taken to mitigate the potential application of such rules. Additionally, non-U.S. holders are urged to consult\ntheir own tax advisors regarding the possibility that, in the event that an applicable withholding agent is unable to determine whether\nthe Cash Consideration should be treated as a dividend for U.S. federal income tax purposes, such withholding agent may withhold tax\nat a rate of 30% (or such lower rate as may be specified in an applicable income tax treaty) on the gross amount of any Cash Consideration\npayable to such non-U.S. holder, regardless of whether such Cash Consideration is properly treated as a dividend for U.S. federal income\ntax purposes.

Information\nReporting and Backup Withholding

The\nreceipt of the Merger Consideration in exchange for Shares pursuant to the Merger may be subject, under certain circumstances, to information\nreporting and backup withholding (currently at a rate of 24%). To avoid backup withholding, a U.S. holder that does not otherwise establish\nan exemption should properly complete and execute and timely return to the applicable paying agent an IRS Form W-9, certifying that such\nU.S. holder is a “United States person” (within the meaning of the Code), that the taxpayer identification number provided\nis correct and that such U.S. holder is not subject to backup withholding. Certain types of U.S. holders (including, with respect to\ncertain types of payments, corporations) are exempt from backup withholding. A Non-U.S. holder generally may establish an exemption from\nbackup withholding by certifying its status as a non-United States person under penalties of perjury on an IRS Form W-8BEN or other applicable\nIRS Form W-8. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or\ncredited against a holder’s U.S. federal income tax liability, if any, provided that such holder furnishes the required information\nto the IRS in a timely manner.

THE\nDISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE APPLICABLE OR OF IMPORTANCE TO A PARTICULAR HOLDER.\nTHE TAX CONSEQUENCES OF THE MERGER WILL DEPEND ON A HOLDER’S SPECIFIC SITUATION. EACH HOLDER SHOULD CONSULT HIS, HER OR ITS TAX\nADVISOR ABOUT THE TAX CONSEQUENCES TO SUCH HOLDER OF THE MERGER IN LIGHT OF THE HOLDER’S OWN CIRCUMSTANCES, AS WELL AS THE APPLICABILITY\nAND EFFECT OF ANY U.S. FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER TAX LAWS.

116

UNAUDITED\nPRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Introduction

The\nfollowing unaudited pro forma condensed combined financial information is presented to illustrate the estimated effects of the HH Merger\ndescribed below and should be read together with the accompanying notes and the historical consolidated financial statements of Star\nEquity Holdings, Inc. (“Star,” the “Company,” “we,” “us,” or “our”) and Harte\nHanks, Inc. (“Harte Hanks”).

The\nunaudited pro forma condensed combined financial information should be read in conjunction with:

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

	●	the\n accompanying notes to the unaudited pro forma condensed combined financial information;

	●	the\n audited consolidated financial statements of Star for the fiscal year ended December 31,\n 2025 and the related notes, included in Star’s Annual Report on Form 10-K for the fiscal\n year ended December 31, 2025;

	●	the\n audited consolidated financial statements of Harte Hanks for the fiscal year ended December\n 31, 2025 and the related notes, included in Harte Hanks’ Annual Report on Form 10-K\n for the fiscal year ended December 31, 2025;

	●	the\n unaudited condensed consolidated financial statements of Star as of and for the fiscal quarter\n ended June 30, 2026 and the related notes, included in Star’s Quarterly Report on Form\n 10-Q for the fiscal quarter ended June 30, 2026; and

	●	the\n unaudited condensed consolidated financial statements of Harte Hanks as of and for the fiscal\n quarter ended June 30, 2026 and the related notes, included in Harte Hanks’ Quarterly\n Report on Form 10-Q for the fiscal quarter ended June 30, 2026.

The\nunaudited pro forma condensed combined financial information is presented for informational purposes only. It does not purport to represent\nwhat the actual combined results of operations or financial position of Star and Harte Hanks would have been had the HH Merger occurred\non the dates assumed, nor is it necessarily indicative of future combined results of operations or financial position, and it does not\nreflect any cost savings, operating synergies, or revenue enhancements that the combined company may achieve.

Description\nof the Merger

Pursuant\nto the Plan of Merger (the “HH Merger Agreement”), Merger Sub will merge with and into Harte Hanks, with Harte Hanks surviving\nthe merger as a wholly owned subsidiary of Star (the “HH Merger”).

At\nthe effective time of the HH Merger, each share of Harte Hanks common stock outstanding immediately prior to the effective time (other\nthan shares held in treasury or owned by Star or Merger Sub, which will be cancelled without consideration), and each share underlying\na Harte Hanks equity award entitled to consideration under the HH Merger Agreement, will be converted into the right to receive, at the\nholder’s election and subject to proration, (i) $5.00 in cash or (ii) 0.50 shares of Star’s 10% Series A Cumulative Perpetual\nPreferred Stock, par value $0.001 per share (the “Series A Preferred Stock”). Holders may elect cash for all of their shares,\nSeries A Preferred Stock for all of their shares, or a combination of both by electing cash for some shares and Series A Preferred Stock\nfor others, subject to proration. Aggregate cash consideration, including cash payable in lieu of fractional shares of Series A Preferred\nStock, may not exceed $19.2 million. If cash elections exceed that amount, cash will be allocated pro rata among cash-electing shares\nand the balance of the consideration will be paid in Series A Preferred Stock.

Each\nHarte Hanks equity award that vests in connection with the consummation of the HH Merger will be cancelled in exchange for the same consideration,\nin the form elected by the holder. Unvested options, options with an exercise price at or above the per share merger consideration, restricted\nstock units that do not vest at closing, and all performance stock units will be cancelled without payment.

A\nmore complete description of the HH Merger Agreement and its terms and conditions can be found in the section titled “The Merger\nAgreement” beginning on page 98 of this proxy statement/prospectus .

Accounting\nfor the Merger

The\nHH Merger will be accounted for using the acquisition method of accounting under ASC 805, Business Combinations, with Star as the accounting\nacquirer. That conclusion reflects, among other factors, that Star will transfer cash and issue Series A Preferred Stock as consideration,\nthat Harte Hanks will become a wholly owned subsidiary of Star, and that holders of Star common stock will retain their voting interest\nin the combined company. Star’s cost to acquire Harte Hanks will be allocated to the assets acquired and liabilities assumed based\non their estimated fair values as of the acquisition date, with any excess recorded as goodwill.

The\nallocation of the purchase price reflected in the unaudited pro forma condensed combined financial information is preliminary and based\non estimates and assumptions that are subject to change. The final purchase price allocation will not be determinable until consummation\nof the HH Merger and may differ materially from the preliminary allocation presented herein. Star will finalize the acquisition accounting\nduring the measurement period, which will not exceed one year from the acquisition date.

117

Unaudited\nPro Forma Condensed Combined Balance Sheet

As\nof June 30, 2026

(In\nthousands)

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Historical			Pro Forma
ASSETS	Star Equity Holdings, Inc.			Harte Hanks, Inc.			Transaction Accounting Adjustments		Footnotes		Unaudited Pro Forma Combined
Current assets:
Cash and cash equivalents and restricted cash	$	8,374			$	5,188		$	(4,192	)		A	$	9,370
Investments in equity securities		4,262				-			-					4,262
Accounts receivable, net of allowance for doubtful accounts		30,898				27,431			-					58,329
Unbilled accounts receivable and contract assets		4,042				7,971			-					12,013
Inventories, net		6,954				-			-					6,954
Note receivable, current portion		236				-			-					236
Prepaid and other		3,059				4,766			-					7,825
Total current assets		57,825				45,356			(4,192	)				98,989
Property and equipment, net		16,598				6,866			-					23,464
Operating and finance lease right-of-use assets		13,718				18,597			2,441			B		34,756
Goodwill		5,899				295			4,976			C		11,170
Intangible assets, net		1,355				273			30,227			C		31,855
Long term investments		953				-			-					953
Notes receivable, net of current portion		8,948				-			-					8,948
Deferred tax assets, net		2,374				15,982			(15,982	)		D		2,374
Restricted cash, non-current		551				-			-					551
Other assets		15				690			-					705
Total assets	$	108,236			$	88,059		$	17,470				$	213,765
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,352			$	13,238		$	-				$	18,590
Accrued salaries, commissions, and benefits		7,734				3,165			350			E		11,249
Accrued expenses and other current liabilities		5,237				8,220			500			E		13,957
Short-term debt		8,962				3,000			-					11,962
Deferred revenue and customer advances		1,442				2,552			-					3,994
Customer postage and program deposits		-				693			-					693
Operating and finance lease obligations, current		729				4,003			-					4,732
Total current liabilities		29,456				34,871			850					65,177
									-
Income tax payable		101				-			-					101
Operating and finance lease obligations		13,383				17,035			-					30,418
Pension liabilities - Qualified plans		-				3,390			-					3,390
Pension liabilities - Nonqualified plan		-				16,525			-					16,525
Long-term debt, net of current portion		5,123				-			15,000			F		20,123
Other liabilities		376				888			-					1,264
Total liabilities		48,439				72,709			15,850					136,998

Commitments and contingencies
Stockholders’ equity:
Series A preferred stock		3				-			2			G		5
Common stock		5				12,221			(12,221	)		H		5
Additional paid-in capital		530,922				99,393			(81,925	)		G, H		548,390
(Accumulated deficit) / retained earnings		(441,575	)			808,181			(808,681	)		H		(442,075	)
Accumulated other comprehensive loss, net of applicable tax		(1,528	)			(14,919	)		14,919			H		(1,528	)
Treasury stock		(28,030	)			(889,526	)		889,526			H		(28,030	)
Total stockholders’ equity		59,797				15,350			1,620					76,767
Total liabilities and stockholders’ equity	$	108,236			$	88,059		$	17,470				$	213,765

See\naccompanying notes to the unaudited pro forma condensed combined financial information

118

Unaudited\nPro Forma Condensed Combined Statement of Operations

For\nthe Twelve Months Ended December 31, 2025

(In\nthousands, except share and per share amounts)

	Historical			Pro Forma
	Star Equity Holdings, Inc.			Harte Hanks, Inc.			Pre-Acquisition Star Operating Companies, Inc. & Alliance Drilling Tools		Transaction Accounting Adjustments		Footnotes		Unaudited Pro Forma Combined
Revenue	$	172,159			$	159,570		$	52,558		$	-		I	$	384,287
Cost of revenues and operating expenses		175,847				159,184			56,644			3,958		I, J, K		395,633
Operating income (loss)		(3,688	)			386			(4,086	)		(3,958	)			(11,346	)
Non-operating income (expense):
Interest income (expense), net		260				(248	)		(182	)		(890	)	I, L		(1,060	)
Other income (expense), net		(428	)			(1,146	)		4,396			394		I , M		3,216
Loss before provision for income taxes		(3,856	)			(1,008	)		128			(4,454	)			(9,190	)
Provision for income taxes		2,061				(197	)		(1,731	)		-		I, Q		133
Net (loss) income		(5,917	)			(811	)		1,859			(4,454	)	I		(9,323	)
Dividend on Series A perpetual preferred stock		(740	)			-			(1,756	)		(1,918	)	I, N		(4,414	)
Net loss attributable to common shareholders	$	(6,657	)		$	(811	)	$	103		$	(6,372	)		$	(13,737	)

Basic Loss per Share	$	(1.85	)		$	(0.11	)								$	(2.54	)
Diluted Loss per Share	$	(1.85	)		$	(0.11	)								$	(2.54	)
Basic Loss per Share, attributable to common shareholders	$	(2.08	)												$	(3.74	)
Diluted Loss per Share, attributable to common shareholders	$	(2.08	)												$	(3.74	)
Basic weighted-average shares outstanding		3,198,000				7,393,000			473,084			(7,393,000	)	O		3,671,084
Diluted weighted-average shares outstanding		3,198,000				7,393,000			473,084			(7,393,000	)	O		3,671,084
Dividends declared per share of Series A perpetual preferred stock	$	0.275						$	0.725					P	$	1.00

119

Unaudited\nPro Forma Condensed Combined Statement of Operations

For\nthe Six Months Ended June 30, 2026

(In\nthousands, except share and per share amounts)

	Historical
	Star Equity Holdings, Inc.			Harte Hanks, Inc.			Transaction Accounting Adjustments		Footnotes		Unaudited Pro Forma Combined
Revenue	$	105,002			$	75,248		$	-				$	180,250
Cost of revenues and operating expenses		110,387				80,506			1,729			R		192,622
Operating loss		(5,385	)			(5,258	)		(1,729	)				(12,372	)
Non-operating income (expense):
Interest income (expense), net		(13	)			(159	)		(445	)		S		(617	)
Other income (expense), net		(239	)			(464	)		228			T		(475	)
Loss before provision for income taxes		(5,637	)			(5,881	)		(1,946	)				(13,464	)
Provision for (benefit from) income taxes		4				(250	)		-			X		(246	)
Net loss		(5,641	)			(5,631	)		(1,946	)				(13,218	)
Dividend on Series A perpetual preferred stock		(1,195	)						(959	)		U		(2,154	)
Net loss attributable to common shareholders	$	(6,836	)		$	(5,631	)	$	(2,905	)			$	(15,372	)
Basic Loss per Share	$	(1.51	)		$	(0.76	)						$	(3.55	)
Diluted Loss per Share	$	(1.51	)		$	(0.76	)						$	(3.55	)
Basic Loss per Share, attributable to common shareholders	$	(1.84	)										$	(4.13	)
Diluted Loss per Share, attributable to common shareholders	$	(1.84	)										$	(4.13	)
Basic weighted-average shares outstanding		3,723,622				7,423,000			(7,423,000	)		V		3,723,622
Diluted weighted-average shares outstanding		3,723,622				7,423,000			(7,423,000	)		V		3,723,622
Dividends declared per share of Series A perpetual preferred stock	$	0.50										W	$	0.50

120

Notes\nto Unaudited Pro Forma Condensed Combined Financial Statements

(amounts\nare in thousands except for share and per share data and as otherwise noted)

Note\n1. Basis of Presentation

The\nunaudited pro forma condensed combined financial statements (the “pro forma financial statements”) are presented to illustrate\nthe estimated effects of the proposed acquisition of Harte Hanks, Inc. (“Harte Hanks”) by Star Equity Holdings, Inc. (“Star\nEquity,” “Star,” the “Company,” “we,” or “our”), pursuant to the Agreement and\nPlan of Merger entered into on August 14, 2026 (the “HH Merger Agreement”). Under the terms of the HH Merger Agreement, Merger\nSub – R, Inc., a wholly owned subsidiary of the Company (“Merger Sub” or “HH Merger Sub”), will merge with\nand into Harte Hanks, with Harte Hanks surviving the merger as a wholly owned subsidiary of the Company (the “HH Merger”).

At\nthe effective time of the HH Merger, each share of Harte Hanks common stock outstanding immediately prior to the effective time (other\nthan shares held in treasury or owned by the Company or HH Merger Sub, which will be cancelled without consideration), and each share\nunderlying a Harte Hanks equity award entitled to consideration under the HH Merger Agreement, will be converted into the right to receive,\nat the holder’s election and subject to proration, (i) $5.00 per share in cash or (ii) 0.50 shares of the Company’s Series\nA Preferred Stock. Aggregate cash consideration, including cash payable in lieu of fractional shares of Series A Preferred Stock, may\nnot exceed $19.2 million. If cash elections exceed that amount, cash will be allocated pro rata among cash-electing shares and the balance\nof the consideration will be paid in Series A Preferred Stock.

The\nunaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X, as amended.\nThe unaudited pro forma condensed combined balance sheet as of June 30, 2026 gives effect to the HH Merger as if it had been consummated\non June 30, 2026. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025 and the six\nmonths ended June 30, 2026 give effect to the transaction described above as if it had been consummated on January 1, 2025.

The\nunaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative\nof the results of operations or financial position that would have been achieved had the transactions been consummated on the dates indicated,\nnor is it indicative of future results of operations or financial position. The pro forma financial information does not reflect any\ncost savings, operating synergies, or revenue enhancements that the combined company may achieve, or the costs necessary to achieve them.

Prior\ntransactions given pro forma effect

The\nunaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 also gives effect to (i) the merger\ncompleted on August 22, 2025 pursuant to which Star Operating Companies, Inc. (“Star Operating,” formerly known as Star Equity\nHoldings, Inc.) became a wholly owned subsidiary of the Company, following which the Company changed its name to Star Equity Holdings,\nInc. and its Nasdaq trading symbols to STRR and STRRP, and (ii) the acquisition of Alliance Drilling Tools (“ADT”) completed\non March 3, 2025. The historical results of Star Operating and ADT are included in the Company’s historical financial statements\nonly from their respective acquisition dates. The column captioned “Pre-Acquisition Star Operating Companies, Inc. and Alliance\nDrilling Tools” presents the historical results of those businesses for the periods from January 1, 2025 through their respective\nacquisition dates.

Note\n2. Transaction Consideration and Preferred Stock Terms

At\nthe effective time of the HH Merger, each outstanding share of Harte Hanks common stock (other than shares held as treasury stock or\nheld directly by Star or HH Merger Sub, which will be cancelled without consideration) will be converted into the right to receive, at\nthe holder’s election and subject to proration, (i) $5.00 in cash (the “Cash Consideration”) or (ii) 0.50 shares of\nStar’s 10% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”)\n(collectively, the “Merger Consideration”). Shares for which no election is made will be converted into cash, Series A Preferred\nStock or a combination of both, as determined by Star. Aggregate cash, including cash payable in lieu of fractional preferred shares\nat $10.00 per share, may not exceed $19.2 million (the “Maximum Cash Amount”). If cash elections exceed that amount, cash\nis allocated pro rata among cash-electing shares and the balance of the Merger Consideration is paid in Series A Preferred Stock.

121

Each\nHarte Hanks equity award that vests in connection with the consummation of the HH Merger will be cancelled in exchange for the Merger\nConsideration for each underlying share, in the form elected by the holder. Unvested options, options with an exercise price at or above\nthe per share Merger Consideration, restricted stock units that do not vest at closing, and all performance stock units will be cancelled\nwithout payment.

No\nelections have been made as of the date of this proxy statement/prospectus. For purposes of the pro forma financial information, the\nCompany has assumed that 50% of the shares entitled to Merger Consideration will elect cash and 50% will elect Series A Preferred Stock.\nUnder that assumption, aggregate cash does not exceed the Maximum Cash Amount. The actual allocation will depend on the elections made\nby Harte Hanks stockholders and may differ materially.

\n \n \n \n \n \n \n \n \n \n \n \n \n

Harte Hanks common shares outstanding at July 31, 2026		7,454,240
Equity Awards Entitled to Merger Consideration		216,446
Total Shares Entitled to Merger Consideration		7,670,686
Total Value Available to Shareholders at $5.00 per share	$	38,353

\n \n \n \n \n \n \n \n \n \n \n \n \n

Shares assumed to elect cash (50%)		3,835,343
Cash Consideration at $5.00 per share	$	19,177
Cash Settlement of Vested in-the-money Stock Options	$	15
Total Cash Consideration	$	19,192

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Shares Assumed to Elect Series A Preferred Stock (50%)		3,835,343
Conversion Factor		0.50
Shares of Series A Preferred Stock to be Issued		1,917,672
Series A Preferred Stock Consideration at $9.11 per share	$	17,470

Total Fair Value of Merger Consideration	$	36,662

Share\ncounts are as of July 31, 2026, the most recent practicable date, and are held constant through the assumed closing. Cash settlement\nof vested in-the-money stock options represents $15 payable to Harte Hanks’ Chief Executive Officer in cancellation of vested stock\noptions with a per share exercise price below the per share Merger Consideration; the related option shares are not included in the 216,446\nshares underlying equity awards presented above. Amounts payable in respect of Harte Hanks equity awards include consideration payable\nto Harte Hanks’ directors and executive officers. See “Interests of Harte Hanks’ Directors and Executive Officers in\nthe Merger.”

For\npurposes of these pro forma financial statements, the Preferred Stock Consideration has been measured using the closing price of the\nSeries A Preferred Stock on the Nasdaq Global Select Market (symbol: STRRP) of $9.11 per share on October 14, 2026. The Series A Preferred\nStock will be measured at fair value on the closing date, and the amount ultimately recorded will differ, potentially materially, from\nthe amount presented.

Sensitivity\nof Merger Consideration to the Price of Series A Preferred Stock.

The\nfair value of the Preferred Stock Consideration will be measured using the price of the Series A Preferred Stock on the closing date,\nwhich may differ materially from the price used in these pro forma financial statements. The following table shows how the total fair\nvalue of the Merger Consideration would change if the per share price of the Series A Preferred Stock (Nasdaq: STRRP) were $1.00 higher\nor $1.00 lower than the closing price of $9.11 per share on October 14, 2026. The table assumes that 50% of the shares entitled to Merger\nConsideration elect cash and 50% elect Series A Preferred Stock. Holding the cash consideration and the number of preferred shares issued\nconstant, a $1.00 change in the per share price of the Series A Preferred Stock would increase or decrease the total fair value of the\nMerger Consideration by approximately $1,918, with a corresponding change to goodwill. A change in the price would not affect pro forma\nnet loss or the dividends on the Series A Preferred Stock.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	STRRP Price of $9.11		STRRP Increase $1.00 ($10.11)			STRRP Decrease $1.00 ($8.11)
Total Cash Consideration	$	19,192		$	19,192		$	19,192

Shares Assumed to Elect Series A Preferred Stock (50%)		3,835,343			3,835,343			3,835,343
Conversion Factor		0.50			0.50			0.50
Shares of Series A Preferred Stock to be Issued		1,917,672			1,917,672			1,917,672
Series A Preferred Stock Consideration at assumed price per share	$	17,470		$	19,388		$	15,552

Total Fair Value of Merger Consideration	$	36,662		$	38,580		$	34,744

122

Merger\nConsideration Assuming All Holders Elect Series A Preferred Stock.

As\ndescribed above, the pro forma financial statements assume that 50% of the shares entitled to Merger Consideration elect cash and 50%\nelect Series A Preferred Stock. Because the actual form of consideration will depend on the elections made by Harte Hanks stockholders,\nthe following table compares that assumption with a scenario in which the holders of all shares entitled to Merger Consideration elect\nto receive Series A Preferred Stock, in each case based on the closing price of the Series A Preferred Stock of $9.11 per share on October\n14, 2026. Under the all-preferred scenario, Star would issue 3,835,343 shares of Series A Preferred Stock with a fair value of\n$34,940 and would pay cash only in settlement of vested in-the-money stock options of $15, resulting in total Merger Consideration of\n$34,955, or $1,707 less than under the assumed elections, with a corresponding decrease in goodwill. Because substantially no cash consideration\nwould be payable, Star would not expect to borrow funds under the TCB facility, and the $15,000 of borrowings and related pro forma interest\nexpense of $890 for the year ended December 31, 2025 and $445 for the six months ended June 30, 2026 would not be incurred. However,\nannual cumulative dividends on the Series A Preferred Stock issued in the HH Merger would increase by $1,917, to $3,835.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	50% Cash / 50% Preferred Stock		All Preferred (0% Cash)
Shares Assumed to Elect Cash		3,835,343			0
Cash Consideration at $5.00 per share	$	19,177		$	0
Cash Settlement of Vested in-the-money Stock Options	$	15		$	15
Total Cash Consideration	$	19,192		$	15

Shares Assumed to Elect Series A Preferred Stock		3,835,343			7,670,686
Conversion Factor		0.50			0.50
Shares of Series A Preferred Stock to be Issued		1,917,672			3,835,343
Series A Preferred Stock Consideration at $9.11 per share	$	17,470		$	34,940

Total Fair Value of Merger Consideration	$	36,662		$	34,955

Annual Dividends on Series A Preferred Stock Issued	$	1,918		$	3,835
Borrowings to Fund Cash Consideration	$	15,000		$	0

The\nrequisite service period with respect to the Harte Hanks equity awards that vest in connection with the HH Merger was completed as of\nthe acquisition date. Accordingly, the full settlement value of these awards is attributable to pre-combination service and is included\nin consideration transferred. No amount related to equity awards is recognized as post-combination compensation expense.

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The\nSeries A Preferred Stock has a $10.00 per share liquidation preference and accrues cumulative dividends at a rate of 10.0% per annum,\nor $1.00 per share annually, payable quarterly. The Series A Preferred Stock is perpetual, has no mandatory redemption date, and ranks\nsenior to Star common stock with respect to dividends and distributions upon liquidation. The Series A Preferred Stock issued in connection\nwith the HH Merger will be part of the same series as Star’s outstanding Series A Preferred Stock and will have the same rights\nand priority as the outstanding Series A Preferred Stock. Because the Series A Preferred Stock is not mandatorily redeemable, the shares are classified in permanent equity, and there is no redemption feature outside the Company’s\ncontrol that would require temporary equity classification under ASC 480. The Series A Preferred Stock issued in the HH Merger will result\nin approximately $1,918 of incremental annual cumulative preferred dividends, which are deducted in determining pro forma net income\navailable to common shareholders.

Note\n3. Accounting Treatment

The\nHH Merger is accounted for using the acquisition method of accounting under ASC 805, Business Combinations. Star management has evaluated\nthe guidance in ASC 805 with respect to the identification of the acquirer and concluded that Star is the acquirer for financial accounting\npurposes. That conclusion reflects, among other factors, that Star will transfer cash and issue Series A Preferred Stock as consideration,\nthat Harte Hanks will become a wholly owned subsidiary of Star, and that holders of Star common stock will retain all of the outstanding\nvoting interest in the combined company. Accordingly, Star’s cost to acquire Harte Hanks has been allocated to the assets acquired\nand liabilities assumed based upon their estimated fair values as of the acquisition date, with any excess recorded as goodwill.

The\nallocation of the purchase price is preliminary and is dependent upon estimates and valuations that are subject to change. In addition,\nthe consideration transferred will not be determinable until the consummation of the HH Merger and, as described in Note 2, is affected\nby the fair value of the Series A Preferred Stock on the closing date and by the elections made by Harte Hanks stockholders. Accordingly,\nthe final acquisition accounting adjustments may be materially different from the preliminary unaudited pro forma adjustments presented.\nStar will finalize the acquisition accounting during the measurement period, which will not exceed one year from the acquisition date.

Star\nis in the process of reviewing Harte Hanks’ accounting policies. This review may identify differences between the accounting policies\nof the two companies that, when conformed, could have a material effect on the combined financial statements. No adjustments for any\nsuch differences are reflected in the pro forma financial statements.

There\nwere no transactions between Star and Harte Hanks requiring elimination. Acquisition-related transaction costs are expensed as incurred\nin accordance with ASC 805 and are not included in consideration transferred. Transaction costs incurred through June 30, 2026 are reflected\nin the historical financial statements, and no adjustment has been made to remove them. Estimated remaining transaction costs of $500\nare reflected as a transaction accounting adjustment to accrued liabilities and accumulated deficit in the pro forma condensed combined\nbalance sheet and as an expense in the pro forma condensed combined statement of operations for the year ended December 31, 2025. The\npro forma financial statements do not reflect any cost savings, operating synergies or revenue enhancements that may result from the\nHH Merger.

Note\n4. Transaction Accounting Adjustments – Unaudited Pro Forma Condensed Combined Balance Sheet and Statements of Operations

The\nunaudited pro forma adjustments include the following:

Pro\nForma Balance Sheet as of June 30, 2026:

Cash\n and cash equivalents and restricted cash. Reflects a net decrease in cash of $4,192,\n consisting of the payment of $19,192 of cash consideration described in Note 2, partially\n offset by $15,000 of proceeds from the debt financing described in F below. The Company expects\n to fund the cash portion of the Merger Consideration with available cash together with a\n drawdown not to exceed $15,000 under Harte Hanks’ existing credit facility with Texas\n Capital Bank, or alternative debt financing acceptable to Star. Consummation of the debt\n financing is a condition to closing.

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\n\n\n\n\n\n\n\n\n\n\n\n\n

	B.	Operating\n lease right-of-use assets. This adjustment reflects increasing the value of operating\n lease right-of-use assets by approximately $2,441 to equal the value of short- and long-term\n operating lease obligations in connection with purchase accounting adjustments. Under ASC\n 842-10-55-12, the right-of-use asset is measured as if the acquisition date were the lease\n commencement date. The Company has not yet remeasured the acquired leases using its own incremental\n borrowing rate; the amount presented is preliminary.
	C.	Intangible\n assets and goodwill. These adjustments reflect the recognition of net additional amortizable\n intangible assets and goodwill, representing the excess of purchase price consideration above\n the preliminary estimated fair values of the net assets acquired in the HH Merger.
	D.	Deferred\n tax assets, net. Star maintains a full valuation allowance against its own $215.4 million\n of federal and state net operating loss carryforwards (as of December 31, 2025). A full valuation\n allowance has therefore been recorded against the related U.S. net deferred tax assets\n and liabilities, resulting in the elimination of Harte Hanks’ historical net deferred\n tax assets of $16.0 million and no net deferred tax liability from the additional amortizable\n intangible assets in the unaudited pro forma condensed combined balance sheet. The amounts\n presented are preliminary and the final deferred tax amounts, including any change in valuation\n allowance, may differ materially. Any change in Star’s valuation allowance resulting\n from the HH Merger will be recognized in income tax expense rather than as an adjustment\n to goodwill, in accordance with ASC 805-740-30-3.
	E.	Accrued\n expenses. Acquisition-related transaction costs are expensed as incurred in accordance\n with ASC 805-10-25-23 and are not included in consideration transferred. Transaction costs\n incurred through June 30, 2026 are reflected in the historical financial statements, and\n no adjustment has been made to remove them. Estimated remaining transaction costs of $500\n are reflected as an increase to accrued expenses and other current liabilities, with an offset\n in (Accumulated deficit) / retained earnings, and transaction bonuses of $350 are reflected\n as an increase to accrued salaries, commissions, and benefits, with an offset in goodwill.\n The combined company may incur expenses in addition to these.
	F.	Long-term\n debt, net of current portion. Reflects anticipated borrowings of $15,000 incurred to\n fund the majority of the cash consideration reflected in the preliminary purchase price.\n The borrowings are expected to be drawn under Harte Hanks’ existing credit facility\n with Texas Capital Bank (“TCB”), or under alternative debt financing acceptable\n to Star, and bear interest at a floating rate equal to the Secured Overnight Financing Rate\n (“SOFR”) plus a margin of 225 basis points per annum. For purposes of these unaudited\n pro forma condensed combined financial statements, an assumed rate of 5.93% per annum has\n been applied, based on SOFR of 3.68% as of August 31, 2026. The related pro forma interest\n expense is described in Note 4(L). No adjustment has been made for debt issuance costs, which\n have not yet been determined.
	G.	Series\n A preferred stock and additional paid-in capital. Reflects the issuance of 1,917,672\n shares of Series A Preferred Stock with an aggregate fair value of $17,470, recorded as $2\n of par value and $17,468 of additional paid-in capital.
	H.	Elimination\n of Harte Hanks historical equity. Reflects the elimination of Harte Hanks’ historical\n common stock, additional paid-in capital, accumulated deficit, accumulated other comprehensive\n loss and treasury stock, aggregating $15,350.

Pro\nForma Income Statement for the twelve months ended December 31, 2025:

\n\n\n\n

	I.	Star\n Operating Companies and Alliance Drilling Tools pre-acquisition data. Pro forma adjustments\n related to the merger with Star Operating Companies, Inc. (“Star Operating”),\n completed on August 22, 2025, and the acquisition of Alliance Drilling Tools (“ADT”),\n completed on March 3, 2025, reflect the inclusion of the results of operations of Star Operating\n and ADT for the periods prior to their respective acquisition dates. These adjustments resulted\n in the addition of approximately $52.6 million of revenue and $1.9 million of net income,\n and net income attributable to common shareholders of $0.1 million. The adjustments were\n necessary because the historical financial statements of Star Equity Holdings include the\n results of operations of Star Operating and ADT only from their respective acquisition dates.
	J.	Amortization\n of acquired intangible assets. Reflects amortization of the identifiable intangible assets\n recognized in the preliminary purchase price allocation. A pro forma adjustment has been\n included to reflect incremental amortization expense of approximately $3,458 for the twelve\n months ended December 31, 2025. This adjustment is based on the estimated fair values assigned\n to identifiable amortizable intangible assets acquired in the transaction, representing additional\n expense that would have been recognized had the acquisition occurred on January 1, 2025.

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\n\n\n\n\n\n\n\n\n\n\n\n\n\n

	K.	Transaction\n costs. Estimated remaining transaction costs of $500 are reflected as an increase to\n operating expenses in the unaudited pro forma condensed combined statement of operations\n for the year ended December 31, 2025. This charge is directly attributable to the HH Merger,\n is nonrecurring, and is not expected to have a continuing impact on the results of the combined\n company.
	L.	Interest\n expense. Reflects interest expense on the $15,000 of borrowings described in Note 4(F),\n incurred under Harte Hanks’ existing credit facility with Texas Capital Bank (“TCB”)\n in connection with the HH Merger. The borrowings bear interest at a floating rate equal to\n the Secured Overnight Financing Rate (“SOFR”) plus a margin of 225 basis points\n per annum. For purposes of the unaudited pro forma condensed combined financial information,\n an assumed rate of 5.93% per annum has been applied, based on SOFR of 3.68% as of August\n 31, 2026, resulting in additional interest expense of $890 for the year ended December 31,\n 2025. A change of 0.125% in the assumed interest rate would change pro forma interest expense\n by approximately $19 annually.
	M.	Pension\n Expense. Represents the reversal of amounts reflected in net periodic pension benefit\n cost amortized out of Accumulated Other Comprehensive Loss of $394, reflecting the elimination\n of historical equity account balances in connection with the HH Merger transaction as if\n it had been consummated on January 1, 2025.
	N.	Dividend\n on Series A perpetual preferred stock. Reflects dividends on the 1,917,672 shares\n of Series A Preferred Stock assumed to be issued in the HH Merger, at the stated rate of\n 10.0% per annum, equivalent to $1.00 per share annually. The adjustment is $1,918 for the\n year ended December 31, 2025. Dividends on the Series A Preferred Stock are cumulative and\n are deducted in determining net loss attributable to common shareholders in accordance with\n ASC 260-10-45-11, whether or not declared. The Series A Preferred Stock is not convertible\n into common stock and therefore has no dilutive effect on pro forma net income or loss per\n share. Potentially dilutive securities of Star have been excluded from the computation of\n diluted net loss per share because their effect would be antidilutive.
	O.	Weighted-average\n shares outstanding. Reflects the elimination of the historical weighted-average shares\n of Harte Hanks common stock. No shares of Star common stock will be issued in the HH Merger,\n and accordingly no adjustment has been made to increase the weighted-average shares of Star\n common stock outstanding.
	P.	Dividends\n declared per share of Series A perpetual preferred stock. Reflects preferred dividends\n as if the acquisitions of Star Operating Companies, Alliance Drilling Tools, and Harte Hanks\n took place on January 1, 2025 at the rate of $1.00 per share per annum.
	Q.	Income\n Taxes. No adjustment to the provision for income taxes has been reflected. The Company\n has recorded valuation allowances against a portion of its deferred tax assets, and the tax\n effect of the pro forma adjustments is not expected to be material. The effective tax rate\n of the combined company could differ from the rates assumed for purposes of preparing the\n pro forma financial information.

Pro\nForma Income Statement for the six months ended June 30, 2026:

\n\n\n\n\n\n

	R.	Amortization\n of acquired intangible assets. Reflects amortization of the identifiable intangible assets\n recognized in the preliminary purchase price allocation. A pro forma adjustment has been\n included to reflect incremental amortization expense of approximately $1,729 for the six\n months ended June 30, 2026. This adjustment is based on the estimated fair values assigned\n to identifiable amortizable intangible assets acquired as part of the Harte Hanks acquisition.
	S.	Interest\n expense. Reflects interest expense on the $15,000 of borrowings described in Note 4(F),\n incurred under Harte Hanks’ existing credit facility with Texas Capital Bank (“TCB”)\n in connection with the HH Merger. The borrowings bear interest at a floating rate equal to\n the Secured Overnight Financing Rate (“SOFR”) plus a margin of 225 basis points\n per annum. For purposes of the unaudited pro forma condensed combined financial information,\n an assumed rate of 5.93% per annum has been applied, based on SOFR of 3.68% as of August\n 31, 2026, resulting in additional interest expense of $445 for the six months ended June\n 30, 2026. A change of 0.125% in the assumed interest rate would change pro forma interest\n expense by approximately $9 for the six months ended June 30, 2026.
	T.	Pension\n Expense. Represents the reversal of amounts reflected in net periodic pension benefit\n cost amortized out of Accumulated Other Comprehensive Loss of $228, reflecting the elimination\n of historical equity account balances in connection with the HH Merger transaction as if\n it had been consummated on January 1, 2025.

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\n\n\n\n\n\n\n\n

	U.	Dividends\n on Series A perpetual preferred stock. Reflects dividends on the 1,917,672 shares\n of Series A Preferred Stock assumed to be issued in the HH Merger, at the stated rate of\n 10.0% per annum, equivalent to $1.00 per share annually. The adjustment is $959 for the six\n months ended June 30, 2026. Dividends on the Series A Preferred Stock are cumulative and\n are deducted in determining net loss attributable to common shareholders in accordance with\n ASC 260-10-45-11, whether or not declared. The Series A Preferred Stock is not convertible\n into common stock and therefore has no dilutive effect on pro forma net loss per share. Potentially\n dilutive securities of Star have been excluded from the computation of diluted net loss per\n share because their effect would be antidilutive.
	V.	Weighted-average\n shares outstanding. Reflects the elimination of the historical weighted-average shares\n of Harte Hanks common stock. No shares of Star common stock will be issued in the HH Merger,\n and accordingly no adjustment has been made to increase the weighted-average shares of Star\n common stock outstanding.
	W.	Dividends\n declared per share of Series A perpetual preferred stock. Reflects preferred dividends\n as if the acquisitions of Star Operating Companies, Alliance Drilling Tools, and Harte Hanks\n took place on January 1, 2025, with outstanding preferred shares earning dividends at the\n rate of $1.00 per share per annum.
	X.	Income\n Taxes. No adjustment to the provision for income taxes has been reflected. The Company\n has recorded valuation allowances against a portion of its deferred tax assets, and the tax\n effect of the pro forma adjustments is not expected to be material. The effective tax rate\n of the combined company could differ from the rates assumed for purposes of preparing the\n pro forma financial information.

Note\n5. Preliminary Purchase Price Allocation

The\nfollowing is a preliminary estimate of the allocation of the purchase price:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Asset / Liability Amounts
Tangible assets acquired	$	87,491
Intangible assets acquired		568
Liabilities assumed		(72,709	)
Intangible assets		30,227
Goodwill		4,976
Operating lease right-of-use assets step up		2,441
Deferred Tax write down		(15,982	)
Accrued expenses		(350	)
Total estimated purchase price	$	36,662

The\nfinal allocation will be based on fair value appraisals and determinations.

Note\n6. Merger Costs

Transaction\ncosts incurred or expected to be incurred in connection with the merger, such as legal, advisory, accounting, and integration expenses,\nare estimated at approximately $500 and are reflected as an adjustment to accumulated deficit.

Note\n7. Intangible Assets

Amortization\nexpense is computed using the straight-line method over the following estimated useful lives:

\n \n \n \n \n \n \n \n \n \n

Brand name		Indefinite
Customer relationships		8 years
Developed technology		3 years

Dividend\nInformation

Star\nhas not declared or paid dividends on its common stock. However, holders of Star’s 10% Series A Cumulative Perpetual Preferred\nStock are entitled to receive preferential cumulative cash dividends, when and if declared by the board of directors, at a rate of 10.0%\nper annum. Dividends are payable quarterly in arrears in March, June, September, and December, to holders of record as of the first day\nof each payment month.

Following\nthe completion of the merger, the combined company does not expect to pay any cash dividends on its common stock in the foreseeable future.\nThe board of directors believes that in general, repurchases of Company common stock represent a more effective use of capital. The declaration\nand payment of any future dividends by the combined company will be subject to the discretion of its board of directors and will depend\nupon many factors, including the combined company’s financial condition, earnings, legal requirements, and other factors the board\nof directors deems relevant.

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DESCRIPTION\nOF STAR 10% Series A Cumulative Perpetual Preferred Stock

As\na result of the Merger, Harte Hanks stockholders who receive shares of Star Preferred Stock in the Merger will become Star Preferred\nStockholders. Your rights as a Star Preferred Stockholder will be governed by Delaware law, Star’s Certificate of Designations,\nRights and Preferences of 10% Series A Cumulative Perpetual Preferred Stock, Star’s amended and restated certificate of incorporation,\nand Star’s bylaws. The following description of the material terms of Star’s Preferred Stock reflects the anticipated state\nof affairs upon consummation of the Merger. We urge you to read the applicable provisions of Delaware law, Star’s Certificate of\nDesignations, Rights and Preferences of 10% Series A Cumulative Perpetual Preferred Stock and Star’s amended and restated certificate\nof incorporation, and Star’s bylaws carefully and in their entirety.

General

The\nCompany’s certificate of incorporation, as amended (the “Charter”), authorizes the issuance of 10,000,000 shares\nof preferred stock, par value $0.001 per share. The Charter authorizes the Board of Directors to issue preferred stock in one or more\nseries and, subject to the Charter, to establish for each series its number of shares and relative rights and preferences, including\ndividend, redemption, liquidation, conversion and voting rights.

Pursuant\nto the Certificate of Designations, Rights and Preferences of 10% Series A Cumulative Perpetual Preferred Stock (the “Certificate\nof Designations”), the Company has designated 8,000,000 shares as 10% Series A Cumulative Perpetual Preferred Stock, par value\n$0.001 per share (the “Star Preferred Stock”). The Company may issue additional shares of Star Preferred Stock, up\nto the 8,000,000 shares constituting the series. As of the Record Date, Star has [_________] shares of Star Preferred Stock issued\nand outstanding.

Rank

With\nrespect to dividend rights and rights upon the liquidation, dissolution or winding up of the Company, the Star Preferred Stock ranks\n(i) senior to the Company’s common stock and all other equity securities that expressly rank junior to the Star Preferred Stock;\n(ii) on a parity with all equity securities that expressly rank on a parity with the Star Preferred Stock (collectively, “Parity\nPreferred Stock”); and (iii) junior to all equity securities that expressly rank senior to the Star Preferred Stock and to\nall existing and future indebtedness of the Company. For this purpose, “equity securities” does not include convertible debt\nsecurities.

Dividends

Holders\nof the Star Preferred Stock are entitled to receive, when and as authorized by the Board of Directors (or a duly authorized committee)\nand declared by the Company, out of funds legally available for dividends, preferential cumulative cash dividends at a rate of 10% per\nannum of the $10.00 liquidation preference per share, equivalent to $1.00 per share annually. Dividends accumulate from, but excluding,\nthe original issue date and are payable quarterly in arrears on or before the last day of March, June, September and December of each\nyear, or, if that day is not a Business Day, on the immediately succeeding Business Day, or on a later date designated by the Board of\nDirectors with the same force and effect as if paid on that date. “Business Day” means a calendar day on which the\nNasdaq Global Select Market is open for trading.

For\na partial dividend period, dividends are computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends are payable\nto holders of record at the close of business on the first day of March, June, September and December, whether or not a Business Day,\nin which the relevant dividend payment date falls.

Dividends\naccumulate whether or not the Company has earnings, whether or not funds are legally available for their payment, whether restrictions\notherwise exist, and whether or not the dividends are authorized or declared. Accumulated but unpaid dividends do not bear interest.\nIf dividends are not paid in full, or a sum sufficient for payment is not set aside, on the Star Preferred Stock and any Parity Preferred\nStock, dividends declared on those securities must be declared pro rata in accordance with their respective accumulated dividends per\nshare.

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Unless\nfull cumulative dividends on the Star Preferred Stock for all past dividend periods are paid, or declared and funds sufficient for payment\nare set aside, the Company may not declare or pay dividends or other distributions on, or purchase or otherwise acquire for consideration,\nits common stock or other stock ranking junior to or on a parity with the Star Preferred Stock as to dividends or liquidation. This restriction\ndoes not apply to dividends in common stock or other securities ranking junior to the Star Preferred Stock as to dividends and liquidation.\nPayments on the Star Preferred Stock are first credited against the earliest accumulated unpaid dividend.

Liquidation\nPreference

Upon\nany voluntary or involuntary liquidation, dissolution or winding up of the Company, holders of Star Preferred Stock are entitled to receive,\nbefore any distribution to holders of common stock or other securities ranking junior to the Star Preferred Stock as to liquidation rights,\n$10.00 per share plus accumulated and unpaid dividends to, but excluding, the payment date, without interest. If the assets legally available\nfor distribution are insufficient to pay the full liquidation preference on the Star Preferred Stock and any Parity Preferred Stock,\navailable assets are distributed pro rata in accordance with the respective per-share liquidation preferences.

After\nholders receive the full liquidation preference and accumulated and unpaid dividends to which they are entitled, they have no right or\nclaim to the Company’s remaining assets. A consolidation, conversion or Merger involving the Company, a statutory share exchange,\nor a sale, lease, transfer or conveyance of all or substantially all of the Company’s property or business does not constitute\na liquidation, dissolution or winding up for this purpose.

Voting\nRights and Protective Provisions

Holders\nof Star Preferred Stock have no voting rights except as described below or as otherwise required by law.

If\ndividends on any shares of Star Preferred Stock are in arrears for six or more consecutive quarterly dividend periods (a “Preferred\nDividend Default”), holders of the Star Preferred Stock and holders of Parity Preferred Stock with equivalent exercisable voting\nrights vote together as a single class to elect two additional directors (the “Preferred Stock Directors”). The election\noccurs at the next annual meeting or at a special meeting requested in writing by holders of record of at least 20% of the Star Preferred\nStock or at least 20% of an affected series of Parity Preferred Stock, except that a request received fewer than 90 days before the next\nannual or special stockholder meeting is considered at the earlier of those meetings. The right continues until all accumulated dividends\nfor prior dividend periods and the dividend for the current dividend period are paid in full or declared and funds sufficient for payment\nare set aside.

For\na meeting to elect Preferred Stock Directors, a quorum consists of a majority of the outstanding Star Preferred Stock and affected Parity\nPreferred Stock represented in person or by proxy. The Preferred Stock Directors are elected by a plurality of votes cast by the holders\npresent and voting at a meeting with a quorum. During a Preferred Dividend Default, a Preferred Stock Director may be removed, with or\nwithout cause, only by the vote of a majority of the outstanding Star Preferred Stock and affected Parity Preferred Stock voting together\nas a class. A vacancy may be filled by written consent of the remaining Preferred Stock Director or, if no Preferred Stock Director remains\nin office, by the vote of a majority of the outstanding Star Preferred Stock and affected Parity Preferred Stock voting together as a\nclass.

If\nthe Company does not call a special meeting within 30 days after a valid request for the election of Preferred Stock Directors, holders\nof record of at least 20% of the outstanding Star Preferred Stock may designate a holder to call the meeting at the Company’s expense.\nEach Preferred Stock Director has one vote on every matter submitted to the Board of Directors.

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So\nlong as any Star Preferred Stock remains outstanding, the Company may not, without the affirmative vote or consent of holders of at least\na majority of the then-outstanding Star Preferred Stock, voting separately as a class, amend, alter or repeal any Charter provision,\nincluding the terms of the Star Preferred Stock, whether by Merger, consolidation or otherwise, in a manner that materially and adversely\naffects any right, preference, privilege or voting power of the Star Preferred Stock. This class vote is not required for an event in\nwhich the Star Preferred Stock, or substitute securities of a surviving entity, remains outstanding with terms that are materially unchanged,\nor for an increase in the authorized number of Star Preferred Stock or other preferred stock, or the creation or issuance of other preferred\nstock, that ranks on a parity with or junior to the Star Preferred Stock as to dividends and liquidation.

Other\nProvisions

The\nStar Preferred Stock is not convertible into or exchangeable for other Company property or securities. It has a perpetual term and is\nnot subject to a sinking fund. Holders have no preemptive right, solely by virtue of their ownership of Star Preferred Stock, to purchase\nor subscribe for additional Company securities. Any Star Preferred Stock repurchased by the Company becomes authorized but unissued preferred\nstock.

The\nStar Preferred Stock is initially represented by one or more global certificates registered in the name of the securities depository\nor its nominee, and no transfer is registered to a person other than the securities depository or its nominee. If the Company is not\nsubject to Section 13 or Section 15(d) of the Exchange Act while any Star Preferred Stock remains outstanding, the Company must use best\nefforts to mail holders the annual and quarterly reports it would otherwise be required to file with the SEC, without exhibits, within\n15 days after the applicable filing deadline that would apply to a non-accelerated filer, and must provide copies to prospective holders\nupon written request.

Charter\nand Bylaws Provisions Applicable to Star Preferred Stock Holders

The\nStar bylaws provide that, unless the Company consents in writing to another forum, specified internal corporate claims must be brought\nexclusively in the Delaware Court of Chancery (or, if that court lacks jurisdiction, the federal district court for the District of Delaware),\nand Securities Act claims must be brought exclusively in the federal district courts of the United States. A person acquiring or holding\nCompany capital stock is deemed to have notice of and consented to that provision.

Stock\nExchange Listing

The\nStar Preferred Stock is listed on the Nasdaq Global Select Market under the trading symbol “STRRP.”

Transfer\nAgent and Registrar

Star’s\ntransfer agent and registrar for the Star Preferred Stock is Computershare, Inc., 150 Royall Street, Suite 101, Canton, MA 02021.

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COMPARISON\nOF THE RIGHTS OF STAR PREFERRED STOCKHOLDERS AND HARTE HANKS STOCKHOLDERS

If\nthe Merger is completed, Harte Hanks stockholders may receive shares of Star Preferred Stock in the Merger, and they will cease to be\nHarte Hanks stockholders.

Harte\nHanks and Star are both organized under the laws of the State of Delaware. The following is a summary of certain material differences\nbetween (i) the current rights of Harte Hanks stockholders under the Harte Hanks certificate of incorporation and bylaws and Delaware\nlaw and (ii) the current rights of Star Preferred Stockholders under Star’s Certificate of Designations, Star’s amended and\nrestated certificate of incorporation, Star’s bylaws, and Delaware law.

The\nfollowing summary is not a complete statement of the rights of stockholders of the two companies or a complete description of the specific\nprovisions referred to below. The summary is qualified in its entirety by reference to Harte Hanks’ and Star’s governing\ndocuments, which we urge you to read carefully and in their entirety. Copies of Star’s governing documents have been filed with\nthe SEC. See “Where You Can Find More Information” beginning on page 135.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Star\n Preferred Stockholders	Harte\n Hanks Common Stockholders
Authorized\n Capital Stock	10%\n Series A Cumulative Perpetual Preferred Stock is a designated series of Star Preferred Stock. The Certificate of Designations authorizes\n 8,000,000 10% Series A Cumulative Perpetual Preferred shares. Star’s Charter, as amended, authorizes 20,000,000 common shares\n and 10,000,000 preferred shares.	Harte\n Hanks’ certificate of incorporation, as amended, authorizes 25,000,000 common shares, par value $1.00 per share, and 1,000,000\n preferred shares, par value $1.00 per share.

Rank	Senior\n to Star Common Stock and equity securities expressly junior to Star Preferred Stock as to dividends and liquidation; pari passu with\n equity expressly designated as parity preferred; junior to equity expressly senior and to all Star indebtedness.	Junior\n to any Harte Hanks preferred stock as to dividends and liquidation; common holders receive dividends only after applicable preferred-dividend\n and sinking-fund requirements and receive residual assets only after the applicable preferred liquidation preference is paid.

Dividends	Entitled,\n when authorized and declared from legally available funds, to cumulative cash dividends at 10% annually of the $10.00 liquidation\n preference, a fixed annual amount of $1.00 per share, payable quarterly in arrears. Dividends accumulate irrespective of earnings,\n legally available funds, or declaration, but do not bear interest. Until full cumulative dividends are paid or set aside, Star generally\n may not pay cash/property dividends or make distributions on, or repurchase, junior or parity equity.	Dividends\n may be declared by the board, subject to the charter’s preferred-stock priority and applicable law.

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\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Liquidation\n / Dissolution	Receives\n $10.00 per share plus accumulated and unpaid dividends (without interest) before any distribution to Star common stock or other stock\n junior in liquidation. After that payment, Star Preferred stockholders have no claim to residual assets. A Merger, consolidation,\n statutory share exchange, or sale/lease/transfer of all or substantially all assets is expressly not a liquidation event.	Receives\n ratably the residual assets available for distribution only after the full preferential amount payable to Harte Hanks preferred stock\n has been distributed.

Conversion\n Rights	Not\n convertible into or exchangeable for any other Star property or securities.	No\n conversion or exchange right.

Redemption\n Right	None.	None.

Preemptive\n Right	None.	None.

Information\n Rights	If\n Star is not subject to Exchange Act Section 13 or 15(d) reporting while Star Preferred Stock remains outstanding, Star must use best\n efforts to deliver the annual and quarterly reports it would otherwise be required to file, within 15 days after the hypothetical\n filing deadline.	The\n bylaws require a stockholder list to be open for examination for a meeting-related purpose for at least 10 days before a meeting.

\n \n \n \n \n \n \n

Voting\n Rights

No\n general voting right. If dividends are in arrears for six or more consecutive quarters, they vote separately with applicable parity\n preferred holders to elect two additional directors; the class-vote quorum is a majority of outstanding Star Preferred Stock and\n applicable parity preferred shares, and the directors are elected by plurality. Holders of at least 20% of Star Preferred Stock (or\n an applicable parity series) may request the meeting, and if Star does not call it within 30 days, designated holders of at least\n 20% of Star Preferred Stock may call it at Star’s expense. The preferred-director right ends when all accumulated dividends\n and the current-period dividend are paid or declared and set aside. While Star Preferred Stock is outstanding, a separate vote or\n written consent of at least a majority of outstanding Star Preferred Stock shares is required for a Charter amendment, alteration,\n or repeal (including through a Merger or consolidation) that materially and adversely affects its rights, preferences, privileges,\n or voting powers; specified increases in authorized or parity/junior preferred stock are excluded. Star Preferred stockholders may\n remove the two preferred directors only when the dividend-default voting right is in effect and only by the applicable preferred\n class vote. The documents do not grant Star Preferred stockholders general special-meeting, written-consent, nomination, or stockholder-business\n rights solely by reason of holding Star Preferred Stock.

Generally,\n one vote per share on all matters. Common holders elect directors annually by majority of votes cast in an uncontested election and\n by plurality in a contested election. They may remove directors by majority vote of shares entitled to vote in director elections.\n Charter amendments generally require majority approval of outstanding voting stock, with a 66 2/3% vote for amendments to specified\n charter articles; bylaws may be amended by the specified board approval or a 66 2/3% stockholder vote. Stockholder written consent\n is prohibited. Common holders cannot call special meetings, which only the board, chairman, or CEO may call. Annual-meeting business\n and nominations require advance notice 90–120 days before the prior annual meeting anniversary, subject to the bylaws’\n alternative timing rule and detailed disclosure requirements.

132

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Board\n Size, Classification, Vacancies, and Removal	Star\n Preferred Stock does not generally elect or remove Star directors. Its two preferred directors, if elected during a dividend default,\n may be removed only by the applicable preferred holders voting as a class. Star’s general board framework is not a Star Preferred\n stockholder right except when Star Preferred Stock voting rights are triggered.	The\n board of directors of Harte Hanks currently consists of four directors. Board size is set by the board (default seven) and directors\n serve one-year terms. Vacancies are filled by a majority of remaining directors, even if less than a quorum. Common stockholders\n may remove directors by majority vote of shares entitled to vote in director elections.

Special\n Meetings	No\n general right to call a Star stockholder meeting is granted solely by holding Star Preferred Stock. During a preferred dividend default,\n the 20% mechanism described above applies for the election of preferred directors.	Common\n stockholders have no right to call a special meeting. Only the board, chairman, or CEO may call one.

Written\n Consent	No\n general voting right is granted to Star Preferred stockholders, but the Star Preferred Stock protective vote may be given in writing\n or at a meeting.	Stockholder\n action by written consent is prohibited; action must be taken at a duly noticed annual or special meeting.

Advance\n Notice of Stockholder Business / Nominations	No\n Star Preferred Stock voting rights or separate nomination/business-proposal right.	A\n record holder must deliver notice for annual-meeting business or nominations 90–120 days before the anniversary of the prior\n annual meeting, subject to the bylaws’ alternative timing rule.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Transfer\n and Form of Holding	Star\n Preferred Stock is initially represented by one or more global certificates registered in the name of the securities depository or\n its nominee. The Certificate of Designations provides that no transfer registration is made on Star’s books to any person other\n than the depository or nominee.	Shares\n may be certificated or uncertificated if the board so resolves. Transfers are made on Harte Hanks’ books by the registered\n holder or authorized attorney, and certificated transfers require surrender of the certificate.

Amendment\n of Charter and Bylaws	None.	Charter\n amendments generally require a majority of outstanding voting stock, but amendments to Articles Fifth, Seventh, Eighth, Tenth, and\n Eleventh require 66 2/3%. Bylaw amendments require either the specified board approval or 66 2/3% of voting power; heightened protections\n apply where an interested stockholder or affiliated director proposes the change.

Exclusive\n Forum	Delaware\n Court of Chancery (or, if it lacks jurisdiction, the U.S. District Court for the District of Delaware) is the exclusive forum for\n specified internal corporate claims unless Star consents otherwise. Federal district courts are the exclusive forum for Securities\n Act claims.	Unless\n Harte Hanks consents in writing, the Delaware Court of Chancery is the exclusive forum for specified internal corporate claims, with\n Delaware state court and then the U.S. District Court for the District of Delaware as successive alternatives if jurisdiction is\n unavailable.

Director\n Liability and Indemnification	Star\n Preferred Stock does not receive a separate holder-specific indemnification or exculpation right.	Common\n stockholders do not receive a holder-specific indemnification or exculpation right. Harte Hanks directors have exculpation rights,\n and Harte Hanks directors, officers, employees, and agents have exculpation/ indemnification/ advancement rights to the fullest extent\n permitted under the DGCL.

Appraisal\n / Dissenters’ Rights	None.	None.

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LEGAL\nMATTERS

The\nvalidity of Star 10% Series A Cumulative Perpetual Preferred Stock to be issued in connection with the Merger will be passed upon for\nStar by Baker & Hostetler LLP, counsel for Star.

EXPERTS

Star

The\nconsolidated financial statements of Star as of December 31, 2025 and 2024, and for each of the years in the two-year period ended December\n31, 2025, have been included herewith in reliance on the report of Wolf & Company, P.C., an independent registered public accounting\nfirm, upon the authority of said firm as experts in accounting and auditing.

Harte\nHanks

The\nconsolidated financial statements of Harte Hanks as of December 31, 2025 and 2024, and for each of the years in the two-year period ended\nDecember 31, 2025, have been included herewith in reliance on the report of Wolf & Company, P.C., independent registered public accounting\nfirm, upon the authority of said firm as experts in accounting and auditing.

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WHERE\nYOU CAN FIND MORE INFORMATION

Star\nand Harte Hanks file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an\nInternet website that contains reports, proxy and information statements, and other information regarding issuers that file electronically\nwith the SEC, including both Star and Harte Hanks, which you can access at www.sec.gov. In addition, you may obtain free copies of the\ndocuments Star files with the SEC, including the registration statement on Form S-4, of which this proxy statement/prospectus forms a\npart, by going to Star’ Internet website at https://www.starequity.com/ and you may obtain free copies of the documents Harte Hanks\nfiles with the SEC by going to Harte Hanks’ Internet website at https://www.hartehanks.com/. The Internet website addresses of\nStar and Harte Hanks are provided as inactive textual references only. The information provided on the Internet websites of Star and\nHarte Hanks, other than copies of the documents listed below that have been filed with the SEC, is not part of this proxy statement/prospectus\nand, therefore, is not incorporated herein by reference.

You\ncan obtain any documents from the SEC through the SEC’s website at the address indicated above or from Harte Hanks or Star, as\napplicable, by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers.

Star\nEquity Holdings, Inc.

53\nForest Avenue, Suite 101

Old\nGreenwich, CT 06870

(203)\n489-9500

Attention:\nCorporate Secretary

Harte\nHanks, Inc.

1\nExecutive Drive, Suite 303

Chelmsford,\nMA 01824

Attention:\nCorporate Secretary / General Counsel

(512)\n434-1100

This\ndocument does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this document, or\nthe solicitation of a proxy, in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer, solicitation\nof an offer or proxy solicitation in such jurisdiction. Neither the delivery of this document nor any distribution of securities pursuant\nto this document shall, under any circumstances, create any implication that there has been no change in the information set forth or\nincorporated into this document by reference or in Star’s and Harte Hanks’ affairs since the date of this document. Star\nprovided the information contained in this document with respect to Star and Harte Hanks provided the information contained in this document\nwith respect to Harte Hanks.

135

Annex\nA

AGREEMENT\nAND PLAN OF MERGER

by\nand among

Star\nEquity Holdings, Inc.,

Merger\nSub - R, Inc.

and

Harte\nHanks, Inc.

Dated\nas of August 14, 2026

136

TABLE OF CONTENTS

		Page

ARTICLE I DEFINITIONS & INTERPRETATIONS	140
1.1	Certain Definitions	140
1.2	Additional Definitions	153
1.3	Certain Interpretations	155
ARTICLE II THE MERGER	156
2.1	The Merger	156
2.2	The Effective Time	157
2.3	The Closing	157
2.4	Effect of the Merger	157
2.5	Certificate of Incorporation and Bylaws	157
2.6	Directors and Officers	157
2.7	Effect on Capital Stock	157
2.8	Election Procedures.	160
2.9	Company Equity Awards	161
2.10	Exchange of Certificates	162
2.11	No Further Ownership Rights in Company Common Stock	164
2.12	Lost, Stolen or Destroyed Certificates	164
2.13	Withholding Rights	164
2.14	Dividends or Distributions	165
2.15	Necessary Further Actions	165
2.16	Intended Tax Treatment	165
ARTICLE III REPRESENTATIONS AND WARRANTIES\n OF THE COMPANY	165
3.1	Organization; Good Standing	165
3.2	Corporate Power; Enforceability	166
3.3	Company Board Approval; Fairness Opinion; Anti-Takeover\n Laws	166
3.4	Requisite Stockholder Approval	166
3.5	Non-Contravention	167
3.6	Requisite Governmental Approvals	167
3.7	Company Capitalization	167
3.8	Subsidiaries	168
3.9	Company SEC Reports	169
3.10	Company Financial Statements; Internal Controls;\n Indebtedness	169
3.11	No Undisclosed Liabilities	170
3.12	Absence of Certain Changes	170
3.13	Material Contracts	170
3.14	Real Property	171
3.15	Environmental Matters	172
3.16	Intellectual Property	173
3.17	Tax Matters	175
3.18	Employee Plans	176
3.19	Labor Matters	178
3.20	Permits; Compliance with Laws	178
3.21	Legal Proceedings; Orders	179
3.22	Insurance	179

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3.23	Related Person Transactions	179
3.24	Brokers	180
3.25	Trade Controls; Anti-Corruption Laws	180
3.26	No Reliance	181
3.27	Information Supplied	181
3.28	Transaction Expenses	181

ARTICLE IV REPRESENTATIONS AND WARRANTIES\n OF PARENT AND MERGER SUB	182
4.1	Organization; Good Standing	182
4.2	Power; Enforceability	182
4.3	Non-Contravention	183
4.4	Requisite Governmental Approvals	183
4.5	Parent Capitalization	183
4.6	Subsidiaries	184
4.7	Parent SEC Reports	184
4.8	Parent Financial Statements; Internal Controls;\n Indebtedness	184
4.9	No Undisclosed Liabilities	185
4.10	Absence of Certain Changes	185
4.11	Permits; Compliance with Laws	185
4.12	Legal Proceedings; Orders	186
4.13	Ownership of Company Capital Stock	186
4.14	Brokers	186
4.15	Operations of Parent and Merger Sub	186
4.16	No Parent Vote or Approval Required	186
4.17	Stockholder and Management Arrangements	186
4.18	Financing	186
4.19	Solvency	187
4.20	Information Supplied	187
4.21	Exclusivity of Representations and Warranties	187
ARTICLE V INTERIM OPERATIONS OF THE COMPANY	188
5.1	Affirmative Obligations	188
5.2	Forbearance Covenants	189
5.3	No Solicitation	192
ARTICLE VI ADDITIONAL COVENANTS	197
6.1	Required Action and Forbearance; Efforts	197
6.2	Form S-4; Proxy Statement; Other Required SEC Filings	198
6.3	Stockholder Meeting	199
6.4	Anti-Takeover Laws	200
6.5	Access	200
6.6	Section 16(b) Exemption	201
6.7	Directors’ and Officers’ Exculpation,\n Indemnification and Insurance	201
6.8	Employee Matters	202
6.9	Obligations of Merger Sub	204
6.10	Notification of Certain Matters	204
6.11	Public Statements and Disclosure	204
6.12	Company Transaction Litigation	204
6.13	Parent Transaction Litigation	205

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6.14	Stock Exchange Delisting; Deregistration	205
6.15	Additional Agreements	205
6.16	No Control of the Other Party’s Business	205
6.17	No Employment Discussions	205
6.18	Debt Financing Matters	205
6.19	Alternative Debt Financing	208
6.20	Debt Financing Costs	208
6.21	Transaction Expense Update	208
ARTICLE VII CONDITIONS TO THE MERGER	208
7.1	Conditions to Each Party’s Obligations to\n Effect the Merger	208
7.2	Conditions to the Obligations of Parent and Merger\n Sub	209
7.3	Conditions to the Company’s Obligations to\n Effect the Merger	210
7.4	Frustration of Closing Conditions	211
ARTICLE VIII TERMINATION, AMENDMENT AND\n WAIVER	211
8.1	Termination	211
8.2	Manner and Notice of Termination; Effect of Termination	213
8.3	Fees and Expenses	213
8.4	Amendment	217
8.5	Extension; Waiver	217
ARTICLE IX GENERAL PROVISIONS	217
9.1	Survival of Representations, Warranties and Covenants	217
9.2	Notices	218
9.3	Assignment	218
9.4	Confidentiality	219
9.5	Entire Agreement	219
9.6	Third Party Beneficiaries	219
9.7	Severability	219
9.8	Remedies	219
9.9	Governing Law	220
9.10	Consent to Jurisdiction	220
9.11	WAIVER OF JURY TRIAL	221
9.12	Company Disclosure Letter References	221
9.13	Counterparts	221
9.14	No Limitation	221
9.15	Performance Guarantee	221

139

AGREEMENT\nAND PLAN OF MERGER

THIS\nAGREEMENT AND PLAN OF MERGER (this “Agreement”)\nis made and entered into as of August 14, 2026, by and among Star Equity Holdings, Inc., a Delaware corporation (“Parent”),\nMerger Sub - R, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger\nSub”), and\nHarte Hanks, Inc., a Delaware corporation (the “Company”).\nEach of Parent, Merger Sub and the Company are sometimes referred to as a “Party.”\nAll capitalized terms that are used in this Agreement have the respective meanings given to them in Article\nI.

RECITALS

A.\nThe Company Board has (i) determined that it is in the best interests of the Company and its stockholders to enter into this Agreement\nproviding for the merger of Merger Sub with and into the Company, with the Company surviving and Merger Sub ceasing to exist (the “Merger”),\nand declared this Agreement advisable, in accordance with the General Corporation Law of the State of Delaware (the “DGCL”)\nupon the terms and subject to the conditions set forth herein; (ii) approved the execution and delivery of this Agreement by the Company,\nthe performance by the Company of its covenants and other obligations hereunder, and the consummation of the Merger upon the terms and\nsubject to the conditions set forth herein; and (iii) resolved to recommend that the stockholders of the Company vote in favor of\nthe adoption of this Agreement and approve the Merger in accordance with the DGCL.

B.\nEach of the board of directors of Parent and the board of directors of Merger Sub have (i) declared it advisable to enter into this Agreement;\nand (ii) approved the execution and delivery of this Agreement, the performance of their respective covenants and other obligations hereunder,\nand the consummation of the Merger upon the terms and subject to the conditions set forth herein.

C.\nImmediately after the execution and delivery of this Agreement, certain stockholders of the Company will enter into voting and support\nagreements (the “Voting\nand Support Agreements”)\nwith the Company and Parent, pursuant to which such stockholders will agree, among other things, to vote their shares of Company Common\nStock in favor of the adoption of this Agreement, on the terms and subject to the conditions set forth therein.

D.\nParent, Merger Sub and the Company desire to (i) make certain representations, warranties, covenants and agreements in connection with\nthis Agreement and the Merger; and (ii) prescribe certain conditions with respect to the consummation of the Merger.

AGREEMENT

NOW,\nTHEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements set forth herein,\nas well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, and intending\nto be legally bound hereby, Parent, Merger Sub and the Company agree as follows:

Article\nI
DEFINITIONS\n& INTERPRETATIONS

1.1Certain\nDefinitions. For\nall purposes of and pursuant to this Agreement, the following capitalized terms have the following respective meanings:

(a)“ABL\nLoan Agreement”\nmeans that certain Loan Agreement, dated as of December 21, 2021, among the Company, the subsidiary guarantors party thereto and Texas\nCapital Bank, as amended by that certain First Amendment to Loan Agreement, dated as of

140

December\n29, 2023, and that certain Second Amendment to Loan Agreement, dated as of June 24, 2025 (as further amended, restated, supplemented or\notherwise modified from time to time).

(b)\n“ABL Loan\nAgreement Amendment”\nmeans an amendment to the ABL Loan Agreement, in form and substance satisfactory to Parent, (i) providing for the Debt Financing, (ii)\nevidencing Texas Capital Bank’s consent to the consummation of the Closing subject to and in accordance with the terms of this Agreement,\nand (iii) providing for the continued financing of the Company’s business from and after the Closing.

(c)“Acceptable\nConfidentiality Agreement”\nmeans an agreement with the Company that is either (i) in effect as of the execution and delivery of this Agreement; or (ii) executed,\ndelivered and effective after the execution and delivery of this Agreement, in either case, that contains customary provisions that require\nany counterparty thereto (and any of its Affiliates and representatives named therein) that receives material non-public information of\nor with respect to the Company to keep such information confidential; provided, however, that, in each case, the provisions contained\ntherein are no less restrictive in any material respect to such counterparty (and any of its Affiliates and representatives named therein)\nthan the terms of the Confidentiality Agreement and do not prohibit the Company from complying with its obligations under this Agreement,\nincluding Section\n5.3.

(d)“Acquisition\nProposal”\nmeans any bona fide offer or proposal (other than an offer or proposal by Parent or Merger Sub) to engage in an Acquisition Transaction.\n

(e)“Acquisition\nTransaction”\nmeans any transaction or series of related transactions (other than the Merger) involving:

(i)any\ndirect or indirect purchase or other acquisition by any Person or “group” (as defined pursuant to Section 13(d) of the Exchange\nAct) of Persons, whether from the Company or any other Person(s), of securities representing more than 25% of the total outstanding voting\npower of the Company after giving effect to the consummation of such purchase or other acquisition, including pursuant to a tender offer\nor exchange offer by any Person or “group” of Persons that, if consummated in accordance with its terms, would result in such\nPerson or “group” of Persons beneficially owning more than 25% of the total outstanding voting power of the Company after\ngiving effect to the consummation of such tender or exchange offer;

(ii)any\ndirect or indirect purchase (including by way of merger, consolidation, business combination, recapitalization, reorganization, liquidation,\ndissolution or other transaction), license or other acquisition by any Person or “group” (as defined pursuant to Section 13(d)\nof the Exchange Act) of Persons of assets constituting or accounting for more than 25% of the consolidated assets, revenue or net income\nof the Company Group, taken as a whole (measured by the fair market value thereof as of the date of such purchase or acquisition, as determined\nin good faith by the Company Board or a committee thereof); or

(iii)any\nmerger, consolidation, business combination, recapitalization, reorganization, liquidation, dissolution or other transaction involving\nthe Company pursuant to which any Person or “group” (as defined pursuant to Section 13(d) of the Exchange Act) of Persons\nwould hold securities representing more than 25% of the total outstanding voting power of the Company outstanding after giving effect\nto the consummation of such transaction.

(f)“Affiliate”\nmeans, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control\nwith such Person. For purposes

141

of\nthis definition, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled\nby” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly,\nof the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities,\nby contract or otherwise.

(g)“Antitrust\nLaw” means\nthe Sherman Antitrust Act, the Clayton Antitrust Act, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the Federal Trade Commission\nAct and all other laws, whether in any domestic or foreign jurisdiction, that are designed or intended to prohibit, restrict or regulate\nactions having the purpose or effect of monopolization or restraint of trade or significant impediments or lessening of competition or\nthe creation or strengthening of a dominant position through merger or acquisition, in any case that are applicable to the Merger.

(h)“Audited\nCompany Balance Sheet”\nmeans the consolidated balance sheet (and the notes thereto) of the Company Group as of December 31, 2025 set forth in the Company’s\nAnnual Report on Form 10-K filed by the Company with the SEC for the fiscal year ended December 31, 2025.

(i)“Business\nDay” means\neach day that is not a Saturday, Sunday or other day on which the Federal Reserve Bank of New York is closed.

(j)“Code”\nmeans the Internal Revenue Code of 1986, as amended.

(k)“Company\nBoard” means\nthe Board of Directors of the Company.

(l)“Company\nCapital Stock”\nmeans the Company Common Stock.

(m)“Company\nCommon Stock”\nmeans the common stock, par value $1.00 per share, of the Company.

(n)“Company\nEquity Awards”\nmeans the Company Options, the Company RSUs and the Company PSUs.

(o)“Company\nEquity Plans”\nmeans the Company’s 2020 Equity Incentive Plan, the Company’s Amended and Restated 2013 Omnibus Incentive Plan and the Company’s\n2023 Inducement Equity Incentive Plan.

(p)“Company\nGroup” means\nthe Company and its Subsidiaries.

(q)“Company\nIntellectual Property”\nmeans any Intellectual Property that is owned by the Company Group.

(r)“Company\nMaterial Adverse Effect”\nmeans any fact, change, event, violation, inaccuracy, effect, occurrence or circumstance (each, an “Effect”)\nthat, individually or taken together with all other Effects, has had or would reasonably be expected to have a material adverse effect\non the business, financial condition, or results of operations of the Company Group, taken as a whole, or would reasonably be expected\nto, individually or in the aggregate, make impossible the ability of the Company to satisfy the conditions precedent to the Merger or\nconsummate the Merger and the other transactions contemplated by this Agreement prior to the Termination Date; provided,\nhowever,\nthat none of the following (by itself or when aggregated) will be deemed to be or constitute a Company Material Adverse Effect or will\nbe taken into account when determining whether a Company Material Adverse Effect has occurred or may, would or could occur (subject to\nthe limitations set forth below):

(i)changes\nin general economic conditions in the United States or any other country or region in the world, or changes in conditions in the global\neconomy generally;

142

(ii)changes\nin conditions in the financial markets or capital markets in the United States or any other country or region in the world, including\n(A) changes in exchange rates for the currencies of any country or (B) any suspension of trading in securities (whether equity, debt,\nderivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States or any\nother country or region in the world;

(iii)changes\nin conditions in the industries in which the Company Group conducts business;

(iv)changes\nin regulatory, legislative or political conditions in the United States or any other country or region in the world;

(v)any\ngeopolitical conditions, cyberattack, outbreak of hostilities, acts of war, sabotage, terrorism or military actions (including any escalation\nor general worsening of any such hostilities, acts of war, sabotage, terrorism or military actions) in the United States or any other\ncountry or region in the world;

(vi)earthquakes,\nhurricanes, tsunamis, tornadoes, floods, mudslides, wildfires or other natural disasters or weather conditions, epidemics, pandemics,\ndisease outbreaks or other force majeure events or acts of God in the United States or any other country or region in the world;

(vii)any\nEffect resulting from the negotiation, execution, delivery, announcement, pendency, performance, compliance with the terms of or consummation\nof this Agreement or the Transactions, including the impact thereof on the relationships, contractual or otherwise, of the Company Group\nwith employees, suppliers, customers, partners, vendors or any other third Person;

(viii)any\naction taken or refrained from being taken by the Company or its Subsidiaries, Affiliates or Representatives that is expressly required\nby the terms of this Agreement, or is consented to by Parent;

(ix)any\naction taken or refrained from being taken, in each case by any member of the Company Group to which Parent has expressly approved, consented\nto or requested in writing following the date of this Agreement;

(x)changes\nor proposed changes in GAAP or other accounting standards or in any applicable laws or regulations (or the enforcement or interpretation\nof any of the foregoing);

(xi)changes\nin the price or trading volume of the Company Common Stock or changes or prospective changes to the Company’s credit rating (it\nbeing understood that any cause of such change may be deemed to constitute, in and of itself, a Company Material Adverse Effect and may\nbe taken into consideration when determining whether a Company Material Adverse Effect has occurred to the extent not otherwise falling\nwithin any of the exceptions set forth in clauses (i) through (xiv) other than this clause (xi));

(xii)any\nfailure by the Company Group to meet (A) any public estimates or expectations of the Company’s revenue, earnings, cash flows, EBITDA\nor other financial performance or results of operations for any period; or (B) any internal budgets, plans, or projections or internal\nforecasts of its

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revenues,\nearnings, cash flows, EBITDA or other financial performance or results of operations (it being understood that any cause of any such failure,\nand any Effect underlying or contributing to such failure, may be deemed to constitute, in and of itself, a Company Material Adverse Effect\nand may be taken into consideration when determining whether a Company Material Adverse Effect has occurred to the extent not otherwise\nfalling within any of the exceptions set forth in clauses (i) through (xiv) other than this clause (xii));

(xiii)any\nCompany Transaction Litigation; and

(xiv)any\nbreach, violation or non-performance by Parent or Merger Sub of any of their respective obligations under this Agreement.

provided,\nfurther, that the exceptions set forth in clauses (i), (ii), (iii), (iv), (v), (vi) and (x) shall not apply to the extent that such Effect\nhas had, or would reasonably be expected to have, a disproportionate adverse effect on the Company Group, taken as a whole, relative to\nother companies operating in the industries in which the Company Group operates.

(s)“Company\nOption” means\nan option to purchase shares of Company Common Stock granted pursuant to any of the Company Equity Plans.

(t)“Company\nPSU” means\na performance stock unit award granted pursuant to any of the Company Equity Plans that vests in whole or in part upon the achievement\nof one or more performance goals (notwithstanding that the vesting of such award may also be conditioned upon the continued services of\nthe holder thereof).

(u)“Company\nRegistered Intellectual Property”\nmeans all of the Registered Intellectual Property owned by, or filed in the name of, the Company Group.

(v)“Company\nRSU” means\na restricted stock unit award granted pursuant to any of the Company Equity Plans that vests in whole upon the continued services of the\nholder thereof.

(w)“Company\nStockholders”\nmeans the holders of shares of Company Capital Stock.

(x)“Company\nTransaction Expenses”\nmeans the fees and expenses of (i) the Company’s financial advisor and any other investment banker, broker, advisor or similar party,\nand (ii) any accountant, legal counsel, proxy solicitor, stockholder meeting and proxy voting system manager, tax advisor, outside general\ncounsel or consultant, or other Person, as well as the costs of all D&O Insurance (including any “tail policy” purchased\npursuant to Section\n6.7(c)), and all\namounts payable by the Company (or any of its Subsidiaries), whether immediately or in the future, under any “change of control,”\nretention, termination, compensation, severance or other similar arrangements by reason of (either alone or in conjunction with any other\nevent, such as termination or continuation of employment) the consummation of the Transactions or any Transaction document (including\nsuch amounts payable to any employee of any member of the Company (or any of its Subsidiaries) at the election of such employee pursuant\nto any such arrangements), in each case incurred or arising in connection with this Agreement or the Transactions; provided, however,\nthat “Company Transaction Expenses” shall not include any amounts payable in respect of Award Company Shares pursuant to Section\n2.9 or any amount\npayable in connection with the Debt Financing or any Alternative Debt Financing pursuant to Section\n6.20.

(y)“Company\nTransaction Litigation”\nmeans any Legal Proceeding commenced or threatened against the Company or any of its Subsidiaries or Affiliates or otherwise relating\nto, involving or affecting such Party or any of its Subsidiaries or Affiliates, in each case in

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connection\nwith, arising from or otherwise relating to the Transactions, including any Legal Proceeding alleging or asserting any misrepresentation\nor omission in the Proxy Statement or any Other Required Filing, other than any Legal Proceedings among the Parties related to this Agreement.

(z)“Continuing\nEmployee”\nmeans an individual who is an employee of a member of the Company Group immediately prior to the Effective Time and who continues to be\nan employee of Parent or one of its Subsidiaries (including the Surviving Corporation) immediately following the Effective Time.

(aa)“Contract”\nmeans any written contract, subcontract, note, bond, mortgage, indenture, lease, license, sublicense or other binding agreement.

(ab)“Debt\nFinancing”\nmeans a proposed financing of a portion of the Cash Consideration and any cash in lieu of fractional shares of Parent Preferred Stock\npayable pursuant to Section\n2.7, up to a cap\nof $15,000,000 (the “Maximum\nDebt Financing Amount”),\npursuant to a draw by the Company on its $25,000,000 existing secured revolving credit facility under the ABL Loan Agreement.

(ac)“Environmental\nLaw” means\nany law, statute, code, rule, regulation, decree, injunction or order in effect as of the date of this Agreement relating to pollution\nor the protection of the environment.

(ad)“ERISA”\nmeans the Employee Retirement Income Security Act of 1974.

(ae)“Exchange\nAct” means\nthe Securities Exchange Act of 1934.

(af)“Exempted\nParty” means\nany Person, group of Persons or group that includes any Person (so long as such Person, together with all other members of such group,\nif any, who were members of such group that included such Person immediately prior to the expiration of the Go-Shop Period, represent\nat least 50% of the equity financing of such group at all times following the expiration of the Go-Shop Period), from whom the Company\nor any of its Representatives has received, after the execution of this Agreement and prior to the expiration of the Go-Shop Period, an\nAcquisition Proposal that the Company Board (or a committee thereof) determines in good faith (such determination to be made no later\nthan prior to the No-Shop Period Start Date), after consultation with outside counsel and its financial advisors, is a Superior Proposal\nor would reasonably\nbe expected to result in a Superior Proposal; provided,\nhowever,\nthat such Person or group of Persons shall immediately and irrevocably cease to be an Exempted Party if, at any time after the No-Shop\nPeriod Start Date, the Acquisition Proposal submitted by such Person or group of Persons is withdrawn or terminated or modified in a manner\nsuch that, in the good faith determination of the Company Board (or a committee thereof) after consultation with outside counsel and its\nfinancial advisors, as modified, it no longer constitutes or is reasonably expected to result in a Superior Proposal.

(ag)“GAAP”\nmeans generally accepted accounting principles, consistently applied, in the United States.

(ah)“Governmental\nAuthority”\nmeans any government, governmental or regulatory entity or body, department, commission, board, agency or instrumentality, and any court,\ntribunal, arbitrator (public or private) or judicial body, in each case whether federal, state, county or provincial, and whether local\nor foreign.

(ai)“Hazardous\nSubstance”\nmeans any substance, material or waste that is regulated by a Governmental Authority as, “hazardous,” “toxic”\nor “radioactive” or words of similar import, pursuant to any Environmental Law, including petroleum and petroleum products,\npolychlorinated biphenyls and asbestos.

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(aj)“HIPAA”\nmeans the Health Insurance Portability and Accountability Act of 1996, as amended, including the Health Information Technology for Economic\nand Clinical Health Act, and all regulations promulgated thereunder.

(ak)“Indebtedness”\nmeans any of the following liabilities or obligations: (i) indebtedness for borrowed money (including any principal, premium, accrued\nand unpaid interest, related expenses, prepayment penalties, commitment and other fees, sale or liquidity participation amounts, reimbursements,\nindemnities and all other amounts payable in connection therewith); (ii) liabilities evidenced by bonds, debentures, notes or other\nsimilar instruments or debt securities; (iii) liabilities pursuant to or in connection with letters of credit or banker’s acceptances\nor similar items (in each case whether or not drawn, contingent or otherwise); (iv) liabilities pursuant to capitalized or finance\nleases; (v) net obligations under interest rate and currency swap arrangements and any other arrangements designed to provide protection\nagainst fluctuations in interest or currency rates; (vi) deferred purchase price liabilities related to past acquisitions which would\nappear as liabilities on a balance sheet in accordance with GAAP; (vii) arising in connection with earnouts or other contingent payment\nobligations, in each case to the extent that such liabilities or obligations would appear as liabilities on a balance sheet in accordance\nwith GAAP; and (viii) indebtedness of others guaranteed by the Company Group or secured by any lien or security interest on the assets\nof the Company Group.

(al)“Health\nLaw” means\nany law, statute, code, rule, regulation, decree, guidance, GFI, injunction or order in effect as of the date of this Agreement, including\nbut not limited to, the Federal Food, Drug, and Cosmetic Act, state equivalent food, drug, and cosmetic acts, state pharmacy practice\nacts, state drug manufacturing acts, the Drug Quality and Security Act, state wholesale laws, and any local equivalents.

(am)“Intellectual\nProperty”\nmeans the rights associated with the following: (i) all United States and foreign priority, provisional, utility, and design patents\nand applications therefor (including all reissues, reexaminations, divisions, continuations, continuations in part, and extensions thereof)\n(“Patents”);\n(ii) all copyrights and rights in original works of authorship (whether registered or unregistered) (“Copyrights”);\n(iii) trademarks, trademark registrations, trademark applications, service marks, service mark registrations, service mark applications,\ntrade dress rights (including trade dress, trade dress registrations, trade dress applications), trade names, business names, brand names,\ndesigns, and similar designation of origin and rights therein (“Marks”);\n(iv) rights in trade secrets, proprietary information, and confidential information, and other intellectual property rights in inventions,\nstudies, manufacturing processes, know how, ideas, developments, drawings, software and data; (v) internet domain name and domain\nname registrations; (vi) any other intellectual property or proprietary rights or similar, corresponding or equivalent rights to any\nof the foregoing anywhere in the world; and (vii) registrations and applications for registration of any of the foregoing.

(an)“IRS”\nmeans the United States Internal Revenue Service or any successor thereto.

(ao)“Knowledge”\nof the Company, with respect to any matter in question, means the actual knowledge of any one of David Fisher, David Garrison, Doug Graham,\nPatrick O’Brien, or Benjamin Chacko, in each case after reasonable inquiry of those employees who would reasonably be expected to have\nactual knowledge of the matter in question. With respect to matters involving Intellectual Property, Knowledge does not require the Company,\nor any of its directors, officers or employees, to have conducted or have obtained any freedom to operate opinions or any Patent, Marks\nor other Intellectual Property clearance searches, and if not conducted or obtained, no knowledge of any third Person Patents, Marks or\nother Intellectual Property that would have been revealed by such opinions or searches will be imputed to the Company or any of its directors,\nofficers or employees.

(ap)“Legal\nProceeding”\nmeans any claim, action, charge, complaint, audit, lawsuit, litigation, investigation (to the Knowledge of the Company, as used in relation\nto the Company),

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or\nother similar legal proceeding brought by or pending before any Governmental Authority, arbitrator (public or private), mediator or other\ntribunal.

(aq)“Material\nContract”\nmeans any of the following Contracts of the Company Group (other than an Employee Plan):

(i)any\n“material contract” (as defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC, other than those agreements and\narrangements described in Item 601(b)(10)(iii) of Regulation S-K) with respect to the Company Group, taken as a whole;

(ii)any\nContract with any staffing agency, employee leasing company, professional employer organization (PEO) or other labor supplier pursuant\nto which individuals provide services to the Company or any of its Subsidiaries;

(iii)any\nContract with any supplier, vendor, subcontractor or service provider that received aggregate payments from the Company Group in excess\nof $1,000,000 during fiscal year 2025 or during year-to-date fiscal year 2026;

(iv)any\nContract with any customer that has made aggregate payments to the Company Group in excess of $1,000,000 during fiscal year 2025 or during\nyear-to-date fiscal year 2026 (each, a “Material\nCustomer”);

(v)any\nIP Contracts;

(vi)any\nContract providing for the research, development, design, enhancement, creation, authorship, invention, discovery, reduction to practice\nor other development of any material Intellectual Property for the benefit of the Company or any of its Subsidiaries;

(vii)any\nContract containing any covenant or other provision (A) limiting the right of the Company Group to engage in any material line of business\nor to compete with any Person in any line of business that is material to the Company; (B) prohibiting the Company or any of its Subsidiaries\nfrom engaging in any material business with any Person or levying a material fine, charge or other payment for doing so; or (C) containing\nand limiting the right of the Company Group pursuant to any “most favored nation” or “exclusivity” provisions,\nin each case other than any such Contracts that (1) may be cancelled without material liability to the Company Group upon notice of 90\ndays or less, or (2) are not material to the Company Group, taken as a whole;

(viii)any\nContract (A) relating to the disposition or acquisition of assets by the Company Group with a value greater than $250,000 after the date\nof this Agreement other than in the ordinary course of business; (B) pursuant to which the Company Group will acquire any material\nownership interest in any other Person or other business enterprise other than any Subsidiary of the Company; or (C) with respect\nto any acquisition or divestiture pursuant to which the Company Group has continuing indemnification, “earn-out” or other\ncontingent payment obligations;

(ix)any\nmortgages, indentures, guarantees, loans or credit agreements, security agreements or other Contracts relating to the borrowing of money\nor extension of credit or other Indebtedness, in each case in which the outstanding obligation, individually, is in excess of $1,000,000\nother than (A) accounts receivables and payables in the ordinary course of

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business;\n(B) loans to one or more members of the Company Group by one or more other members of the Company Group; and (C) extensions of credit\nto customers in the ordinary course of business;

(x)any\nLease or sublease as set forth in Section\n3.14(b) of the\nCompany Disclosure Letter;

(xi)any\nContract providing for the payment, increase or vesting of any material benefits or compensation in connection with the Merger (other\nthan Company Equity Plans);

(xii)any\nContract providing for indemnification of any officer, director or employee by the Company Group, other than Contracts entered into on\nsubstantially the same form as the Company’s standard forms previously made available to Parent;

(xiii)any\nContract containing any support, maintenance or service obligation on the part of the Company Group that represents revenue in excess\nof $1,000,000 on an annual basis, other than those Contracts that may not be cancelled without liability to the Company Group upon notice\nof 90 days or less;

(xiv)other\nthan in respect of the ABL Loan Agreement, any Contract that prohibits the payment of dividends or distributions in respect of the capital\nstock of the Company Group, prohibits the pledging of the capital stock of the Company Group, prohibits the issuance of guarantees by\nthe Company Group or grants any rights of first refusal or right of first offer or similar right or that limits or proposes to limit the\nability of the Company Group or Affiliates to sell, transfer, pledge, or otherwise dispose of any assets or businesses in excess of $250,000;

(xv)any\nContract that contains a put, call or similar right pursuant to which the Company Group could be required to purchase or sell, as applicable,\nany equity interests of any Person or assets, in each case with a value in excess of $250,000;

(xvi)any\nsettlement, conciliation or similar agreement with any Governmental Authority, Person, or pursuant to which the Company Group has any\ncontinuing obligations, including any remaining payment obligations in excess of $100,000 or any other material obligations following\nthe date of this Agreement;

(xvii)any\nContract that involves a joint venture entity, strategic alliance, limited liability company, partnership or other similar agreement or\narrangement relating to the formation, creation, operation, management or control of any of the foregoing (excluding, for avoidance of\ndoubt, reseller agreements and other commercial agreements that do not involve the formation of an entity with any third Person);

(xviii)any\nContract (A) between the Company or any of its Subsidiaries, on the one hand, and any director or officer of the Company or any of its\nSubsidiaries or any Person beneficially owning five percent (5%) or more of the outstanding shares of Company Common Stock, on the other\nhand (other than any Employee Plan), or (B) that would be required to be disclosed pursuant to Item 404 of Regulation S-K;

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(xix)any\nContract that obligates the Company or any of its Subsidiaries to make any future capital investment or capital expenditure outside the\nordinary course of business in excess of $250,000; and

(xx)any\nContract that is reasonably likely to result in payments by the Company Group of more than $1,000,000 in the aggregate over the remaining\nterm of such Contract.

(ar)“NASDAQ”\nmeans The NASDAQ Global Market and any successor stock exchange or inter dealer quotation system operated by The Nasdaq Stock Market,\nLLC or any successor thereto.

(as)“Non-Recourse\nCompany Party”\nmeans the former, current and future direct and indirect equityholders, controlling persons, directors, officers, employees, Affiliates\n(other than Company), members, managers, general partners, limited partners, attorneys, agents, representatives and assignees of Company.

(at)“Non-Recourse\nParent Party”\nmeans the former, current and future direct and indirect equityholders, controlling persons, directors, officers, employees, Affiliates\n(other than Parent and Merger Sub), members, managers, general partners, limited partners, attorneys, agents, representatives and assignees\nof Parent and Merger Sub.

(au)“Parent\nCommon Stock”\nmeans the common stock, par value $0.001 per share, of Parent.

(av)“Parent\nGroup” means\nParent and its Subsidiaries.

(aw)“Parent\nMaterial Adverse Effect”\nmeans any Effect that, individually or taken together with all other Effects, has had or would reasonably be expected to have a material\nadverse effect on the business, financial condition, or results of operations of the Parent Group, taken as a whole, or would reasonably\nbe expected to, individually or in the aggregate, make impossible the ability of the Parent to satisfy the conditions precedent to the\nMerger or consummate the Merger and the other transactions contemplated by this Agreement prior to the Termination Date; provided,\nhowever,\nthat none of the following (by itself or when aggregated) will be deemed to be or constitute a Parent Material Adverse Effect or will\nbe taken into account when determining whether a Parent Material Adverse Effect has occurred or may, would or could occur (subject to\nthe limitations set forth below):

(i)changes\nin general economic conditions in the United States or any other country or region in the world, or changes in conditions in the global\neconomy generally;

(iii)changes\nin conditions in the industries in which the Parent Group conducts business;

(iv)changes\nin regulatory, legislative or political conditions in the United States or any other country or region in the world;

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(vii)any\nEffect resulting from the negotiation, execution, delivery, announcement, pendency, performance, compliance with the terms of or consummation\nof this Agreement or the Transactions, including the impact thereof on the relationships, contractual or otherwise, of the Parent Group\nwith employees, suppliers, customers, partners, vendors or any other third Person;

(viii)any\naction taken or refrained from being taken by the Parent or its Subsidiaries, Affiliates or Representatives that is expressly required\nby the terms of this Agreement, or is consented to by the Company;

(ix)any\naction taken or refrained from being taken, in each case by any member of the Parent Group to which the Company has expressly approved,\nconsented to or requested in writing following the date of this Agreement;

(x)changes\nor proposed changes in GAAP or other accounting standards or in any applicable laws or regulations (or the enforcement or interpretation\nof any of the foregoing);

(xi)changes\nin the price or trading volume of the Parent Common Stock or changes or prospective changes to the Parent’s credit rating (it being\nunderstood that any cause of such change may be deemed to constitute, in and of itself, a Parent Material Adverse Effect and may be taken\ninto consideration when determining whether a Parent Material Adverse Effect has occurred to the extent not otherwise falling within any\nof the exceptions set forth in clauses (i) through (xiii) other than this clause (xi));

(xii)any\nfailure by the Parent Group to meet (A) any public estimates or expectations of the Parent’s revenue, earnings, cash flows, EBITDA\nor other financial performance or results of operations for any period; or (B) any internal budgets, plans, or projections or internal\nforecasts of its revenues, earnings, cash flows, EBITDA or other financial performance or results of operations (it being understood that\nany cause of any such failure, and any Effect underlying or contributing to such failure, may be deemed to constitute, in and of itself,\na Parent Material Adverse Effect and may be taken into consideration when determining whether a Parent Material Adverse Effect has occurred\nto the extent not otherwise falling within any of the exceptions set forth in clauses (i) through (xiii) other than this clause (xii));\nand

(xiii)any\nbreach, violation or non-performance by Company of any of its obligations under this Agreement;

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provided,\nfurther, that the exceptions set forth in clauses (i), (ii), (iii), (iv), (v), (vi) and (x) shall not apply to the extent that such Effect\nhas had, or would reasonably be expected to have, a disproportionate adverse effect on the Parent Group, taken as a whole, relative to\nother companies operating in the industries in which the Parent Group operates.

(ax)“Parent\nPreferred Stock”\nmeans the 10% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, of Parent.

(ay)“Parent\nSecurities”\nmeans any (i) Parent Capital Stock, (ii) outstanding shares of capital stock of, or other equity or voting interest in, Parent; (iii)\noutstanding securities of Parent convertible into or exchangeable or exercisable for shares of capital stock of, or other equity or voting\ninterest (including voting debt) in, Parent; (iv) outstanding options, warrants or other rights or binding arrangements to acquire\nfrom Parent, or that obligate Parent to issue, any capital stock of, or other equity or voting interest in, or any securities convertible\ninto or exchangeable for shares of capital stock of, or other equity or voting interest (including voting debt) in, Parent; (v) obligations\nof Parent to grant, extend or enter into any subscription, warrant, right, convertible, exchangeable or exercisable security, or other\nsimilar Contract relating to any capital stock of, or other equity or voting interest (including any voting debt) in, Parent; and\n(vi) outstanding shares of restricted stock, restricted stock units, stock appreciation rights, performance shares, contingent value rights,\n“phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly,\non the value or price of, any capital stock of, or other securities or ownership interests in, Parent.

(az)“Parent\nTransaction Litigation”\nmeans any Legal Proceeding commenced or threatened against Parent or any of its Subsidiaries or Affiliates or otherwise relating to, involving\nor affecting such Party or any of its Subsidiaries or Affiliates, in each case in connection with, arising from or otherwise relating\nto the Transactions, including any Legal Proceeding alleging or asserting any misrepresentation or omission in the Proxy Statement or\nany Other Required Filing, other than any Legal Proceedings among the Parties related to this Agreement.

(ba)“Permitted\nLiens” means\nany of the following: (i) liens for Taxes, assessments and governmental charges or levies either not yet delinquent or that are being\ncontested in good faith and by appropriate proceedings; (ii) mechanics, carriers’, workmen’s, warehouseman’s, repairmen’s,\nmaterialmen’s or other liens or security interests that are not yet due or that are being contested in good faith and by appropriate\nproceedings and for which appropriate reserves have been established to the extent required by GAAP; (iii) leases, subleases and real\nestate licenses (other than capital or finance leases and leases underlying sale and leaseback transactions), the terms of which that\ndo not, individually or in the aggregate, adversely affect in any material respect the current use or value of any real property subject\nthereto; (iv) liens imposed by applicable law (other than Tax law); (v) pledges or deposits to secure obligations pursuant to\nworkers’ compensation laws or similar legislation or to secure public or statutory obligations; (vi) pledges and deposits to\nsecure the performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar\nnature, in each case in the ordinary course of business; (vii) covenants, conditions, restrictions, easements, imperfections of title\nand other similar non-monetary matters affecting title to such Person’s owned or leased real property that do not materially impair\nthe occupancy or use of such real property for the purposes for which it is currently used in connection with such Person’s businesses;\n(viii) any right of way or easement related to public roads and highways that do not materially impair the occupancy or use of such real\nproperty for the purposes for which it is currently used in connection with such Person’s businesses; (ix) zoning, building\nand other land use regulations imposed by Governmental Authorities having jurisdiction over such Person’s owned or leased real property\nthat are not violated by the current use and operation of such real property; (x) liens (or other encumbrances of any type) securing\n(a) obligations under the ABL Loan Agreement, (b) other secured Indebtedness of the Company Group that is not contemplated to be paid\noff at Closing in accordance with the terms hereof or (c) other liabilities reflected on the balance sheet or in the notes to the consolidated\nfinancial statements of the Company included in the Company SEC Reports filed as of the date of this Agreement; (xi) licenses to or\nof Company Intellectual

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Property;\n(xii) any other liens that do not secure a liquidated amount, that have been incurred or suffered in the ordinary course of business,\nand that would not, individually or in the aggregate, have a material effect on the Company Group, taken as a whole; or (xiii) statutory,\ncommon law or contractual liens of landlords or liens against the interests of a landlord or owner of any Leased Real Property unless\ncaused by the Company Group.

(bb)“Person”\nmeans any individual, corporation (including any non-profit corporation), limited liability company, joint stock company, general partnership,\nlimited partnership, limited liability partnership, joint venture, estate, trust, firm, Governmental Authority or other enterprise, association,\norganization or entity.

(bc)“Registered\nIntellectual Property”\nmeans all United States, international and foreign (i) issued Patents and Patent applications (including provisional applications);\n(ii) registered Marks and applications to register Marks (including intent-to-use applications, or other registrations or applications\nrelated to Marks); and (iii) registered Copyrights and applications for Copyright registration.

(bd)“Sarbanes-Oxley\nAct” means\nthe Sarbanes-Oxley Act of 2002.

(be)“SEC”\nmeans the United States Securities and Exchange Commission or any successor thereto.

(bf)“Securities\nAct” means\nthe Securities Act of 1933.

(bg)“Subsidiary”\nof any Person means (i) a corporation more than 50% of the combined voting power of the outstanding voting stock of which is owned, directly\nor indirectly, by such Person or by one or more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries\nof such Person; (ii) a partnership of which such Person or one or more other Subsidiaries of such Person or such Person and one or\nmore other Subsidiaries thereof, directly or indirectly, is the general partner and has the power to direct the policies, management and\naffairs of such partnership; (iii) a limited liability company of which such Person or one or more other Subsidiaries of such Person\nor such Person and one or more other Subsidiaries of such Person, directly or indirectly, is the managing member and has the power to\ndirect the policies, management and affairs of such company; or (iv) any other Person (other than a corporation, partnership or limited\nliability company) in which such Person or one or more other Subsidiaries of such Person or such Person and one or more other Subsidiaries\nof such Person, directly or indirectly, has at least a majority ownership and the power to direct the policies, management and affairs\nthereof.

(bh)“Superior\nProposal”\nmeans any bona fide written Acquisition Proposal for an Acquisition Transaction on terms that the Company Board (or a committee thereof)\nhas determined in good faith (after consultation with its financial advisor and outside legal counsel) is reasonably likely to be consummated\nin accordance with its terms, taking into account all legal, regulatory and financing aspects of the proposal (including certainty of\nclosing) and the identity of the Person making the proposal and other aspects of the Acquisition Proposal that the Company Board (or a\ncommittee thereof) deems relevant, and if consummated, would be more favorable, from a financial point of view, to the Company Stockholders\n(in their capacity as such) than the Merger (taking into account any revisions to this Agreement made or proposed in writing by Parent\nprior to the time of such determination). For purposes of the reference to an “Acquisition Proposal” in this definition, all\nreferences to “25%” in the definition of “Acquisition Transaction” will be deemed to be references to “50%.”

(bi)“Tax”\nmeans any United States federal, state, local and non-United States taxes, assessments and similar governmental charges and impositions\nin the nature of taxes imposed by any Governmental Authority (including taxes based upon or measured by gross receipts, income, profits,\nsales, use and occupation and value added, ad valorem, transfer, franchise, withholding, payroll, employment, excise and property taxes,\ntogether with all interest, penalties and additions imposed by any Governmental Authority with respect to such amounts).

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(bj)“Transactions”\nmeans the Merger and the other transactions contemplated by this Agreement, including the Debt Financing (or any Alternative Debt Financing),\nto the extent consummated as of the Effective Time, and the ABL Loan Agreement Amendment, to the extent consummated as of the Effective\nTime.

(bk)“WARN”\nmeans the Worker Adjustment and Retraining Notification Act of 1988.

1.2Additional\nDefinitions. The\nfollowing capitalized terms have the respective meanings given to them in the respective Sections of this Agreement set forth opposite\neach of the capitalized terms below:\n

\n	\n	\n	\n	\n
Term	Section\n Reference
Advisor	3.3(b)
Agreement	Preamble
Alternative\n Acquisition Agreement	5.3(b)
Alternative\n Debt Financing	6.19
Alternative\n Debt Financing Agreements	6.18(b)(i)
Announcement	6.11
Award\n Company Share	2.7(a)(ii)
Bylaws	3.1
Capitalization\n Date	3.7(a)
Cash\n Consideration	2.7(a)(ii)(A)
Cash\n Electing Company Share	2.7(a)(ii)(A)
Certificate\n of Merger	2.2
Certificates	2.10(c)
Charter	2.5(a)
Chosen\n Courts	9.10(a)
Closing	2.3
Closing\n Date	2.3
Closing\n Year	6.8(c)
Collective\n Bargaining Agreement	3.19(a)
Company	Preamble
Company\n 401(k) Plan	6.8(f)
Company\n Board Recommendation	3.3(a)
Company\n Board Recommendation Change	5.3(d)(i)
Company\n Disclosure Letter	Article\n III
Company\n Liability Limitation	8.3(g)(iii)
Company\n Related Parties	8.3(f)(iii)
Company\n SEC Reports	3.9
Company\n Securities	3.7(c)
Company\n Stockholder Meeting	6.3(a)
Company\n Termination Fee	8.3(b)(i)
Confidentiality\n Agreement	9.4
Consent	3.6
DGCL	Recitals
DTC	2.10(d)
Effective\n Time	2.2

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\n	\n	\n	\n	\n
Term	Section\n Reference
Electing\n Company Shares	2.7(a)(ii)(B)\n
Election\n Date	2.8(c)
Electronic\n Delivery	9.13
Employee\n Plans	3.18(a)
Exchange\n Fund	2.10(b)
FCPA	3.25(b)
Form\n of Election	2.8(a)
Form\n S-4	6.2(a)
Go-Shop\n Period	5.3(a)
Indemnified\n Persons	6.7(a)
Intervening\n Event	5.3(e)(i)
IP\n Contracts	3.16(f)
Lease	3.14(b)
Leased\n Real Property	3.14(b)
Maximum\n Cash Amount	2.7(a)(iv)
Merger	Recitals
Merger\n Consideration	2.7(a)(ii)(B)
Merger\n Sub	Preamble
New\n Plan	6.8(d)
No-Shop\n Period Start Date	5.3(a)
Non-U.S.\n Plan	3.18(f)
Notice\n Period	5.3(e)(ii)(3)
Old\n Plan	6.8(d)
Other\n Required Company Filing	6.2(b)
Other\n Required Filing	6.2(h)
Other\n Required Parent Filings	6.2(h)
Owned\n Company Shares	2.7(a)(iii)
Parent	Preamble
Parent\n 401(k) Plan	6.8(f)
Parent\n Liability Limitation	8.3(f)(i)
Parent\n Preferred Stock	2.7(a)(ii)(B)
Parent\n Recent SEC Reports	Article\n IV
Parent\n Related Parties	8.3(f)(i)
Parent\n Termination Fee	8.3(c)
Party	Preamble
Payment\n Agent	2.10(a)
Permits	3.20(a)
Preferred\n Stock Consideration	2.7(a)(ii)(B)
Preferred\n Stock Electing Company Share	2.7(a)(ii)(B)
Proxy\n Statement	6.2(a)
Recent\n SEC Reports	Article\n III
Representatives	5.3(a)
Requisite\n Stockholder Approval	3.4
Surviving\n Corporation	2.1

154

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n	\n	\n	\n	\n
Term	Section\n Reference
Tax\n Returns	3.17(a)
Termination\n Date	8.1(c)
Trade\n Control Laws	3.25(a)(i)
Voting\n and Support Agreements	Recitals
Uncertificated\n Shares	2.10(c)

1.3Certain\nInterpretations.

(a)When\na reference is made in this Agreement to an Article or a Section, such reference is to an Article\nor a Section\nof this Agreement unless otherwise indicated. When a reference is made in this Agreement to a Schedule or Exhibit, such reference is to\na Schedule or Exhibit to this Agreement, as applicable, unless otherwise indicated.

(b)When\nused herein, (i) the words “hereof,” “herein” and “herewith” and words of similar import will, unless\notherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement; and (ii)\nthe words “include,” “includes” and “including” will be deemed in each case to be followed by the\nwords “without limitation.”

(c)Unless\nthe context otherwise requires, “neither,” “nor,” “any,” “either” and “or”\nare not exclusive.

(d)The\nword “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and does\nnot simply mean “if.”

(e)When\nused in this Agreement, references to “$” or “Dollars” are references to U.S. dollars.

(f)The\nmeaning assigned to each capitalized term defined and used in this Agreement is equally applicable to both the singular and the plural\nforms of such term, and words denoting any gender include all genders. Where a word or phrase is defined in this Agreement, each of its\nother grammatical forms has a corresponding meaning.

(g)When\nreference is made to any party to this Agreement or any other agreement or document, such reference includes such party’s successors\nand permitted assigns. References to any Person include the successors and permitted assigns of that Person.

(h)Unless\nthe context otherwise requires, all references in this Agreement to the Subsidiaries of a Person will be deemed to include all direct\nand indirect Subsidiaries of such Person.

(i)When\nused in this Agreement, references to “ordinary course” or “ordinary course of business” will be construed to\nmean “ordinary course of business, consistent with past practices.”

(j)A\nreference to any specific legislation or to any provision of any legislation includes any amendment to, and any modification, re-enactment\nor successor thereof, any legislative provision substituted therefor and all rules, regulations and statutory instruments issued thereunder\nor pursuant thereto, except that, for purposes of any representations and warranties in this Agreement that are made as of a specific\ndate, references to any specific legislation will be deemed to refer to such legislation or provision (and all rules, regulations and\nstatutory instruments issued thereunder or pursuant thereto) as of such date. References to any agreement or Contract are to that agreement\nor Contract as amended, modified or supplemented from time to time, unless otherwise indicated.

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(k)All\naccounting terms used herein will be interpreted, and all accounting determinations hereunder will be made, in accordance with GAAP.

(l)The\ntable of contents and headings set forth in this Agreement are for convenience of reference purposes only and will not affect or be deemed\nto affect in any way the meaning or interpretation of this Agreement or any term or provision hereof.

(m)The\nmeasure of a period of one month or year for purposes of this Agreement will be the date of the following month or year corresponding\nto the starting date. If no corresponding date exists, then the end date of such period being measured will be the next actual date of\nthe following month or year (for example, one month following May 18 is June 18 and one month following May 31 is July 1).

(n)The\nParties agree that they have been represented by legal counsel during the negotiation and execution of this Agreement and therefore waive\nthe application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will\nbe construed against the Party drafting such agreement or document.

(o)No\nsummary of this Agreement or any Exhibit or Schedule delivered herewith prepared by or on behalf of any Party will affect the meaning\nor interpretation of this Agreement or such Exhibit or Schedule.

(p)The\ninformation contained in this Agreement and in the Company Disclosure Letter is disclosed solely for purposes of this Agreement, and no\ninformation contained herein or therein will be deemed to be an admission by any Party to any third Person of any matter whatsoever, including\n(i) any violation of law or breach of contract; or (ii) that such information is material or that such information is required to\nbe referred to or disclosed under this Agreement.

(q)The\nrepresentations and warranties in this Agreement are the product of negotiations among the Parties and are for the sole benefit of the\nParties. Any inaccuracies in such representations and warranties are subject to waiver by the Parties in accordance with Section\n8.5 without notice\nor liability to any other Person. In some instances, the representations and warranties in this Agreement may represent an allocation\namong the Parties of risks associated with particular matters regardless of the knowledge of any of the Parties. Consequently, Persons\nother than the Parties may not rely on the representations and warranties in this Agreement as characterizations of actual facts or circumstances\nas of the date of this Agreement or as of any other date.

(r)Documents\nor other information or materials will be deemed to have been “made available” by the Company if such documents, information\nor materials (i) have been posted to a virtual data room managed by the Company at https://app.global.datasite.com/en/platform/diligence/6a184cbb7b968dcd3ad4d20e/documents/content/index/6a45dc8150c1bee13757ffa5\nat least 24 hours prior to the execution and delivery of this Agreement and Parent has received written notification of the document delivery\nwithin the aforementioned timeframe or (ii) have been sent via email to, and acknowledged by, Parent or its counsel, prior to the execution\nand delivery of this Agreement.

Article\nII
THE\nMERGER

2.1The\nMerger. Upon the\nterms and subject to the conditions set forth in this Agreement and the applicable provisions of the DGCL, at the Effective Time, (a)\nMerger Sub will be merged with and into the Company; (b) the separate corporate existence of Merger Sub will thereupon cease;\nand (c) the Company will continue as the surviving corporation of the Merger and a wholly owned Subsidiary of Parent. The Company, as\nthe surviving corporation of the Merger, is sometimes referred to herein as the “Surviving\nCorporation.”

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2.2The\nEffective Time.\nUpon the terms and subject to the conditions set forth in this Agreement, on the Closing Date, Parent, Merger Sub and the Company will\ncause the Merger to be consummated pursuant to the DGCL by filing a certificate of merger in customary form and substance (the “Certificate\nof Merger”)\nwith the Secretary of State of the State of Delaware in accordance with the applicable provisions of the DGCL (the time of such filing\nwith the Secretary of State of the State of Delaware, or such later time as may be agreed in writing by Parent, Merger Sub and the Company\nand specified in the Certificate of Merger, being referred to herein as the “Effective\nTime”).

2.3The\nClosing. The consummation\nof the Merger (the “Closing”)\nshall take place by the remote exchange of electronic copies of documents and signatures (including by Electronic Delivery) on (a) a date\nto be agreed upon by Parent, Merger Sub and the Company that is no later than the second Business Day after the satisfaction or waiver\n(to the extent permitted hereunder) of the last to be satisfied or waived of the conditions set forth in Article\nVII (other than\nthose conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver (to the extent permitted\nhereunder) of such conditions); or (b) such other time, location and date as Parent, Merger Sub and the Company mutually agree in\nwriting. The date on which the Closing actually occurs is referred to as the “Closing\nDate.”

2.4Effect\nof the Merger.\nAt the Effective Time, the effect of the Merger will be as provided in this Agreement and the applicable provisions of the DGCL. Without\nlimiting the generality of the foregoing, and subject thereto, at the Effective Time all (a) of the property, rights, privileges, powers\nand franchises of the Company and Merger Sub will vest in the Surviving Corporation; and (b) debts, liabilities and duties of the\nCompany and Merger Sub will become the debts, liabilities and duties of the Surviving Corporation.

2.5Certificate\nof Incorporation and Bylaws.

(a)Certificate\nof Incorporation.\nAt the Effective Time, the Amended and Restated Certificate of Incorporation of the Company, as amended (the “Charter”),\nwill be amended and restated in its entirety to read substantially identically to the certificate of incorporation of Merger Sub as in\neffect immediately prior to the Effective Time (except that all references in the certificate of incorporation of Merger Sub (i) to its\nname, date of incorporation, registered office and registered agent shall instead refer to the name, date of incorporation, registered\noffice and registered agent, respectively, of the Company as provided in the Charter immediately prior to the Effective Time and (ii)\nnaming the incorporator(s), the initial board of directors, or original subscribers for shares of Merger Sub shall be omitted) and such\namended and restated certificate of incorporation will become the certificate of incorporation of the Surviving Corporation until, subject\nto the provisions of Section\n6.7(a), thereafter\namended in accordance with the applicable provisions of the DGCL and such certificate of incorporation.

(b)Bylaws.\nThe Parties shall take all necessary action such that the bylaws of Merger Sub as in effect immediately prior to the Effective Time will\nbecome the bylaws of the Surviving Corporation until, subject to the provisions of Section\n6.7(a), thereafter\namended in accordance with the applicable provisions of the DGCL, the certificate of incorporation of the Surviving Corporation and such\nbylaws.

2.6Directors\nand Officers.

(a)Directors.\nThe Parties shall take all necessary action such that the directors of Merger Sub as of immediately prior to the Effective Time shall\nbe, from and after the Effective Time, the directors of the Surviving Corporation, each to hold office in accordance with the applicable\nprovisions of the DGCL and the certificate of incorporation and bylaws of the Surviving Corporation until their respective successors\nare duly elected or appointed and qualified.

(b)Officers.\nThe officers of Merger Sub immediately prior to the Effective Time shall be, from and after the Effective Time, the officers of the Surviving\nCorporation, each to hold office in accordance with the applicable provisions of the DGCL and the certificate of incorporation and bylaws\nof the Surviving Corporation until their respective successors are duly appointed.

2.7Effect\non Capital Stock.

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(a)Capital\nStock. Upon the\nterms and subject to the conditions set forth in this Agreement, at the Effective Time, by virtue of the Merger and without any action\non the part of Parent, Merger Sub, the Company or the holders of any of the following securities, the following will occur:

(i)each\nshare of Merger Sub common stock, par value $0.01 per share, that is outstanding as of immediately prior to the Effective Time will be\nconverted into one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation, and thereupon each\ncertificate representing ownership of such shares of common stock of Merger Sub will thereafter represent ownership of shares of common\nstock of the Surviving Corporation;

(ii)each\nshare of Company Common Stock, and each share of Company Common Stock underlying a Company Equity Award that is entitled to receive consideration\npursuant to Section\n2.9 (an “Award\nCompany Share”),\nthat is outstanding as of immediately prior to the Effective Time (other than Owned Company Shares) shall, subject to adjustments pursuant\nto Sections 2.7(a)(iv)\nand 2.7(b),\nbe converted into the right to receive the following consideration, without interest:

(A)each\nshare of Company Common Stock and each Award Company Share, with respect to which an election to receive cash has been properly made and\nnot revoked or lost pursuant to Section\n2.8 (each, a “Cash\nElecting Company Share”),\nshall be converted into the right to receive cash in an amount equal to $5.00 per share, without interest (the “Cash\nConsideration”);

(B)each\nshare of Company Common Stock and each Award Company Share, with respect to which an election to receive preferred stock has been properly\nmade and not revoked or lost pursuant to Section\n2.8 (each, a “Preferred\nStock Electing Company Share”\nand, together with the Cash Electing Company Shares, the “Electing\nCompany Shares”),\nshall be converted into the right to receive 0.50 shares of validly issued, fully paid and nonassessable Parent Preferred Stock, subject\nto adjustment (the “Preferred\nStock Consideration,”\nand together with the Cash Consideration, and any combination thereof, and any cash in lieu of fractional shares of Parent Preferred Stock\npayable pursuant to this Article\nII, collectively,\nthe “Merger\nConsideration”);\nand

(C)each\nshare of Company Common Stock and each Company Award Share, in each case, other than Cash Electing Company Shares or Preferred Stock Electing\nCompany Shares for which a stock election has been properly made and not revoked or lost pursuant to Section\n2.8 (each, a “Non-Electing\nCompany Share”)\nshall be converted into the right to receive the Cash Consideration, the Preferred Stock Consideration or a combination of both.

(iii)each\nshare of Company Common Stock that is (A) held by the Company as treasury stock; (B) owned by Parent or Merger Sub; or (C) owned\nby any direct or indirect wholly owned Subsidiary of Parent or Merger Sub as of immediately prior to the Effective Time (collectively,\nthe “Owned\n

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Company\nShares”)\nwill be cancelled and extinguished without any conversion thereof or consideration paid therefor.

(iv)Proration.\nNotwithstanding anything to the contrary in this Agreement, the aggregate amount of cash payable in respect of shares of Company Common\nStock and Award Company Shares pursuant to Sections\n2.7(a)(ii) and\n2.9,\ntogether with any cash payable in lieu of fractional shares of Parent Preferred Stock, shall not exceed $19,200,000 (the “Maximum\nCash Amount”).\nThe allocation of the Cash Consideration and the Preferred Stock Consideration among Cash Electing Company Shares and Preferred Stock\nElecting Company Shares and Non-Electing Company Shares shall be determined as follows:

(A)Undersubscription\nfor Cash. If the\naggregate amount of cash that would be paid in respect of all Cash Electing Company Shares is less than the Maximum Cash Amount, then:

1.each\nCash Electing Company Share shall be converted into the right to receive the Cash Consideration;

2.each\nPreferred Stock Electing Company Share shall be converted into the right to receive the Preferred Stock Consideration; and

3.each\nNon-Electing Company Share shall be converted into the right to receive, at Parent’s election, the Cash Consideration, the Preferred\nStock Consideration or a combination of both; provided that the aggregate cash paid pursuant to Section\n2.7(a)(ii) shall\nnot exceed the Maximum Cash Amount.

(B)Oversubscription\nfor Cash. If the\naggregate amount of cash that would be paid in respect of all Cash Electing Company Shares exceeds the Maximum Cash Amount, then:

1.each\nPreferred Stock Electing Company Share and each Non-Electing Company Share shall be converted into the right to receive the Preferred\nStock Consideration; and

2.each\nCash Electing Company Share shall be converted into the right to receive (x) a prorated portion of the Cash Consideration, based on a\nfraction, the numerator of which is the Maximum Cash Amount and the denominator of which is the aggregate amount of cash that would be\npaid in respect of all Cash Electing Company Shares if all such Cash Electing Company Shares received the Cash Consideration in full,\nand (y) the Preferred Stock Consideration in respect of the remaining portion of such Cash Electing Company Share not converted into the\nright to receive cash pursuant to clause (x).

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(C)No\nFractional Shares.\nNo fractional shares of Parent Preferred Stock shall be issued in the Merger. In lieu of any fractional share of Parent Preferred Stock\nthat otherwise would be issuable pursuant to this Section\n2.7(a)(iv), the\nholder thereof shall be entitled to receive an amount in cash, without interest, equal to such fractional share multiplied by $10.00.

(v)Parent\nPreferred Stock.\nPrior to the Effective Time, Parent shall authorize and reserve for issuance a number of shares of Parent Preferred Stock sufficient to\npay the Preferred Stock Consideration. The Parent Preferred Stock issued in the Merger shall have the rights, preferences, privileges\nand restrictions set forth in the Certificate of Designations, Rights and Preferences of 10% Series A Cumulative Perpetual Preferred Stock\nfiled as Exhibit 3.7 to Parent’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

(b)Adjustment\nto the Merger Consideration.\nThe Merger Consideration will be adjusted appropriately to reflect the effect of any stock split, reverse stock split, stock dividend\n(including any dividend or other distribution of securities convertible into Company Common Stock), reorganization, recapitalization,\nreclassification, combination, exchange of shares or other similar change with respect to the Company Common Stock occurring on or after\nthe date of this Agreement and prior to the Effective Time.

2.8Election\nProcedures.

(a)Election\nForm. Parent shall\nprepare, and the Company shall have a reasonable opportunity to review and comment on, a form of election in form and substance reasonably\nacceptable to the Company (the “Form\nof Election”),\npursuant to which each record holder of shares of Company Common Stock and each holder of Award Company Shares may elect to receive the\nCash Consideration, the Preferred Stock Consideration or a combination of both with respect to such holder’s shares of Company Common\nStock or Award Company Shares, as applicable, subject in each case to the proration procedures set forth in Section\n2.7(a)(iv). The\nForm of Election shall be filed as an exhibit to, or otherwise included with or incorporated into, the Form S-4, and shall specify that\ndelivery shall be effected, and risk of loss and title to any Certificates shall pass, only upon proper delivery of the Form of Election\nand any Certificates to the Payment Agent.

(b)Mailing\nof Form of Election.\nParent and the Company shall use reasonable best efforts to cause the Form of Election to be mailed to each Person who is a record holder\nof shares of Company Common Stock or of Award Company Shares as of the record date for the Company Stockholder Meeting, either together\nwith the Proxy Statement or under separate cover, as Parent and the Company may reasonably determine in consultation with the Payment\nAgent. Parent and the Company shall use reasonable best efforts to make the Form of Election available to all Persons who become record\nholders of shares of Company Common Stock or of Award Company Shares during the period between such record date and the Election Date.

(c)Election\nDate. Any election\nshall have been properly made only if the Payment Agent shall have received at its designated office, by 5:00 p.m., New York City\ntime, on (i) the date of the Company Stockholder Meeting or (ii) if the Closing Date is more than four Business Days following the Company\nStockholder Meeting, the date that is two Business Days prior to the Closing Date, or, in each case, such other date as Parent and the\nCompany may mutually agree and publicly announce (the “Election\nDate”), a\nForm of Election properly completed and signed and accompanied by (A) Certificates representing the shares of Company Common Stock to\nwhich such Form of Election relates, duly endorsed in blank or otherwise in form acceptable for transfer on the books of the Company,\nor an appropriate guarantee of delivery of such Certificates as set forth in the Form of Election, or (B) in the case of Uncertificated\nShares or

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Award\nCompany Shares, any additional documents or instructions required by the procedures set forth in the Form of Election.

(d)Public\nAnnouncement of Election Date.\nParent and the Company shall publicly announce the anticipated Election Date at least five Business Days prior to the anticipated Closing\nDate. If the Closing Date is delayed to a subsequent date, the Election Date shall be similarly delayed to a subsequent date, and Parent\nand the Company shall promptly announce any such delay and, when determined, the rescheduled Election Date.

(e)Revocation;\nLoss of Election.\nAny election may be revoked with respect to all or a portion of the shares of Company Common Stock or Award Company Shares subject thereto\nby the holder who submitted the applicable Form of Election by written notice received by the Payment Agent prior to 5:00 p.m., New\nYork City time, on the Election Date. Any election shall be deemed to have been lost or not properly made if the Payment Agent determines\nthat the applicable Form of Election was not properly completed, signed or timely received in accordance with this Section\n2.8. Any shares\nof Company Common Stock or Award Company Shares with respect to which an election has been revoked, lost or not properly made shall be\ndeemed Non-Electing Company Shares. All elections shall automatically be revoked if this Agreement is terminated in accordance with Article\nVIII.

(f)Determinations.\nThe Payment Agent shall make all determinations as to whether elections have been properly made, revoked or lost and all computations\nas to the proration contemplated by Section\n2.7(a)(iv), and,\nabsent manifest error, such determinations and computations shall be conclusive and binding.

2.9Company\nEquity Awards.

(a)Company\nOptions. As of\nthe Effective Time, each Company Option that is set forth on Section\n2.9(a) of the Company\nDisclosure Letter and that is outstanding and unexercised immediately prior to the Effective Time shall be cancelled, treated as an Award\nCompany Share, and converted automatically into the right to receive Cash Consideration, Preferred Stock Consideration, or a combination\nof the two (as elected by the holder thereof, in the same manner and subject to the same proration procedures and Maximum Cash Amount\ncap set forth in Section\n2.7(a)(iv)) in\nan amount equal to the product of (i) the excess, if any, of the Merger Consideration over the per share exercise price of such Company\nOption, multiplied by (ii) the number of shares of Company Common Stock covered by such Company Option. For the avoidance of doubt, any\nCompany Option that is not set forth on Section\n2.9(a) of the Company\nDisclosure Letter shall be cancelled at the Effective Time without payment or consideration.

(b)Company\nRSUs. As of the\nEffective Time, each Company RSU that is outstanding immediately prior to the Effective Time, as disclosed in Section\n2.9(b) of the Company\nDisclosure Letter, shall be cancelled, treated as an Award Company Share, and converted into a right to receive a payment of Cash Consideration,\nPreferred Stock Consideration, or a combination of both (as elected by the holder thereof, in the same manner and subject to the same\nproration procedures and Maximum Cash Amount cap set forth in Section\n2.7(a)(iv)) in\nan amount equal to the Merger Consideration for each share of Company Common Stock covered by such Company RSU.

(c)Company\nPSUs. As of the\nEffective Time, each Company PSU shall be cancelled without payment or consideration.

(d)Parent\nshall cause the Surviving Corporation to, at all times from and after the Effective Time, maintain sufficient cash and shares of Parent\nPreferred Stock to satisfy its obligations to holders of Company Equity Awards pursuant to this Section\n2.9.

(e)As\npromptly as practicable following the Effective Time, Parent shall cause the Surviving Corporation to pay through its payroll system (whether\nin Cash Consideration, Preferred Stock Consideration, or a combination of both, as elected by the holder thereof, in the same manner and\nsubject to the same proration procedures and Maximum Cash Amount cap set

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forth\nin Section\n2.7(a)(iv)) to\neach holder of a Company Equity Award, the amount payable to such holder pursuant to this Section\n2.9 in respect\nof such Company Equity Award; provided\nthat, to the extent that a Company Equity Award constitutes nonqualified deferred compensation subject to Section 409A of the Code, such\namount shall be paid to the holder of such Company Equity Award at the earliest time permitted under the terms of such Company Equity\nAward that will not result in a tax or penalty under Section 409A of the Code.

2.10Exchange\nof Certificates.

(a)Payment\nAgent. Not less\nthan three Business Days prior to the Closing, Parent will (i) select a bank or trust company reasonably acceptable to the Company to\nact as the payment agent for the Company Stockholders and holders of Award Company Shares to receive the Cash Consideration, the Preferred\nStock Consideration and any cash in lieu of fractional shares of Parent Preferred Stock to which they have become entitled pursuant to\nSections 2.7\nand 2.9\n(the “Payment\nAgent”);\nand (ii) enter into a payment agent agreement, in customary form and substance reasonably acceptable to the Company, with such Payment\nAgent.

(b)Exchange\nFund. At or promptly\nfollowing the Effective Time on the Closing Date, Parent will deposit, or will cause to be deposited (including, but only to the extent\nthe ABL Loan Agreement Amendment is effective at such time, with proceeds of borrowings under the ABL Loan Agreement by the Company or\nany of its Subsidiaries in the amount of the Maximum Debt Financing Amount), with the Payment Agent, for the benefit of the holders of\nCertificates, Uncertificated Shares and Award Company Shares, (i) by wire transfer of immediately available funds, an amount of cash sufficient\nto pay the aggregate Cash Consideration and any cash in lieu of fractional shares of Parent Preferred Stock payable to such holders pursuant\nto Section 2.7,\nand (ii) evidence of book-entry shares representing the aggregate number of shares of Parent Preferred Stock issuable to such holders\npursuant to Sections 2.7\nand 2.9\n(such cash, shares of Parent Preferred Stock and any proceeds thereon, the “Exchange\nFund”). Until\ndisbursed in accordance with the terms and conditions of this Agreement, the cash portion of the Exchange Fund may be invested by the\nPayment Agent, as directed by Parent or the Surviving Corporation, in (i) obligations of or fully guaranteed by the United States or any\nagency or instrumentality thereof and backed by the full faith and credit of the United States with a maturity of no more than 30 days;\n(ii) commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation,\nrespectively; or (iii) certificates of deposit, bank repurchase agreements or banker’s acceptances of commercial banks with\ncapital exceeding $1,000,000,000 (based on the most recent financial statements of such bank that are then publicly available) and, in\nany case of the foregoing clauses (i) through (iii), no such instrument shall have a maturity exceeding three months. To the extent that\n(A) there are any losses with respect to any investments of the cash portion of the Exchange Fund; (B) the Exchange Fund diminishes\nfor any reason below the level required for the Payment Agent to promptly pay and deliver the Merger Consideration contemplated by Sections 2.7\nand 2.9;\nor (C) all or any portion of the Exchange Fund is unavailable for Parent (or the Payment Agent on behalf of Parent) to promptly pay and\ndeliver the Merger Consideration contemplated by Sections 2.7\nand 2.9\nfor any reason, Parent will, or will cause the Surviving Corporation to, promptly replace or restore the amount of cash in the Exchange\nFund so as to ensure that the Exchange Fund is at all times fully available for distribution and maintained at a level sufficient for\nthe Payment Agent to make the payments and deliveries contemplated by Sections 2.7\nand 2.9.\nAny income from investment of the cash portion of the Exchange Fund will be payable to Parent or the Surviving Corporation, as Parent\ndirects.

(c)Payment\nProcedures. Promptly\nfollowing the Effective Time, and in any event not more than five Business Days thereafter, Parent and the Surviving Corporation will\ncause the Payment Agent to mail to each holder of record (as of immediately prior to the Effective Time) of (i) a certificate or certificates\nthat immediately prior to the Effective Time represented outstanding shares of Company Common Stock (other than Owned Company Shares)\n(the “Certificates”);\nand (ii) uncertificated shares of Company Common Stock that represented outstanding shares of Company Common Stock (other than Owned Company\nShares) (the “Uncertificated\nShares”)\n(A) a letter of transmittal in customary form and reasonably acceptable to the Company (which will specify that delivery will be effected,\nand risk of loss and title to the Certificates will pass, only upon delivery of the Certificates to the Payment Agent); and (B)

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instructions\nfor use in effecting the surrender of the Certificates and Uncertificated Shares in exchange for the Merger Consideration payable in respect\nthereof pursuant to Section 2.7.\nUpon surrender of Certificates for cancellation to the Payment Agent, together with such letter of transmittal, duly completed and validly\nexecuted in accordance with the instructions thereto, the holders of such Certificates will be entitled to receive, and the Payment Agent\nshall promptly pay and deliver in exchange therefor, the Cash Consideration, the Preferred Stock Consideration, any combination thereof\nand any cash in lieu of fractional shares of Parent Preferred Stock, in each case as such holder is entitled to receive pursuant to Section 2.7,\nand the Certificates so surrendered will forthwith be cancelled. Upon receipt of an “agent’s message” by the Payment\nAgent (or such other evidence, if any, of transfer as the Payment Agent may reasonably request) in the case of a book-entry transfer of\nUncertificated Shares, the holders of such Uncertificated Shares will be entitled to receive, and the Payment Agent shall promptly pay\nand deliver, in exchange therefor, the Cash Consideration, the Preferred Stock Consideration, any combination thereof and any cash in\nlieu of fractional shares of Parent Preferred Stock, in each case as such holder is entitled to receive pursuant to Section 2.7,\nand the transferred Uncertificated Shares so surrendered will be cancelled. The Payment Agent will accept such Certificates and transferred\nUncertificated Shares upon compliance with such reasonable terms and conditions as the Payment Agent may impose to cause an orderly exchange\nthereof in accordance with normal exchange practices. No interest will be paid or accrued for the benefit of holders of the Certificates\nand Uncertificated Shares on any cash payable as Merger Consideration pursuant to Section 2.7.\nUntil so surrendered, outstanding Certificates and Uncertificated Shares will be deemed from and after the Effective Time to evidence\nonly the right to receive the Merger Consideration payable in respect thereof pursuant to Section 2.7.\nNotwithstanding anything to the contrary in this Agreement, no holder of Uncertificated Shares will be required to provide a Certificate\nor an executed letter of transmittal to the Payment Agent in order to receive the Merger Consideration that such holder is entitled to\nreceive pursuant to Section\n2.7.

(d)DTC\nPayment. Prior\nto the Effective Time, Parent and the Company will cooperate to establish procedures with the Payment Agent and the Depository Trust Company\n(“DTC”)\nwith the objective that, as promptly as practicable following the Effective Time and the final determination of the proration calculations\npursuant to Section\n2.7(a)(iv), the\nPayment Agent will transmit to DTC or its nominees the Cash Consideration, the Preferred Stock Consideration, any combination thereof\nand any cash in lieu of fractional shares of Parent Preferred Stock, in each case as DTC or its nominees are entitled to receive pursuant\nto Section 2.7\nin respect of the shares of Company Common Stock, other than Owned Company Shares held of record by DTC or such nominees immediately prior\nto the Effective Time.

(e)Transfers\nof Ownership. If\na transfer of ownership of shares of Company Common Stock is not registered in the stock transfer books or ledger of the Company, or if\nthe Merger Consideration is to be paid or delivered in a name other than that in which the Certificates or Uncertificated Shares surrendered\nor transferred in exchange therefor are registered in the stock transfer books or ledger of the Company, the Merger Consideration may\nbe paid or delivered to a Person other than the Person in whose name the Certificate or Uncertificated Share so surrendered or transferred\nis registered in the stock transfer books or ledger of the Company only if, in the case of shares of Company Common Stock represented\nby a Certificate, such Certificate is properly endorsed and otherwise in proper form for surrender and transfer or, in the case of Uncertificated\nShares, a proper transfer instruction is presented, and, in the case of shares of Company Common Stock represented by Certificates or\nUncertificated Shares, the Person requesting such payment has paid to Parent (or any agent designated by Parent) any transfer Taxes required\nby reason of the payment or delivery of the Merger Consideration to a Person other than the registered holder of such shares, or established\nto the reasonable satisfaction of Parent (or any agent designated by Parent) that such transfer Taxes have been paid or are otherwise\nnot payable.

(f)No\nLiability. Notwithstanding\nanything to the contrary set forth in this Agreement, none of the Payment Agent, Parent, the Surviving Corporation or any other Party\nwill be liable to a holder of shares of Company Common Stock for any amount properly paid to a public official pursuant to any applicable\nabandoned property, escheat or similar law.

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(g)Distribution\nof Exchange Fund to Parent.\nAny portion of the Exchange Fund that remains undistributed to the holders of the Certificates or Uncertificated Shares on the date that\nis one year after the Effective Time will be delivered to Parent upon demand, and any holders of shares of Company Common Stock that were\nissued and outstanding immediately prior to the Effective Time who have not theretofore surrendered or transferred their Certificates\n(or otherwise complied with Section\n2.12 in the case\nof lost, stolen or destroyed Certificates) or Uncertificated Shares representing such shares of Company Common Stock for exchange pursuant\nto this Section\n2.10 will thereafter\nlook for payment or delivery of the Merger Consideration payable in respect of such shares of Company Common Stock solely to Parent (which\nshall remain responsible for payment or delivery of the Merger Consideration in respect thereof, subject to abandoned property, escheat\nor similar laws), solely as general creditors thereof, for any claim to the Merger Consideration to which such holders may be entitled\npursuant to Section\n2.7. Any amounts\nor shares remaining unclaimed by such holders two years after the Effective Time, or at such earlier time as is immediately prior to the\ntime at which such amounts would otherwise escheat to, or become property of, any Governmental Authority, will, to the extent permitted\nby applicable law, become the property of Parent or the Surviving Corporation, as Parent directs, free and clear of any claims or interest\nof any such holders (and their successors, assigns or personal representatives) previously entitled thereto.

2.11No\nFurther Ownership Rights in Company Common Stock.\nFrom and after the Effective Time, (a) all shares of Company Common Stock will no longer be outstanding and will automatically be converted\nor cancelled and retired, as applicable in accordance with Section\n2.7, and cease\nto exist; and (b) holders of each Certificate or Uncertificated Share theretofore representing any shares of Company Common Stock\nwill cease to have any rights with respect thereto, except the right to receive the Merger Consideration payable therefor in accordance\nwith Section\n2.7. The Merger\nConsideration paid in accordance with the terms of this Article\nII will be deemed\nto have been paid in full satisfaction of all rights pertaining to such shares of Company Common Stock. From and after the Effective Time,\nthere will be no further registration of transfers on the records of the Surviving Corporation of shares of Company Common Stock that\nwere issued and outstanding immediately prior to the Effective Time, other than transfers to reflect, in accordance with customary settlement\nprocedures, trades effected prior to the Effective Time. If, after the Effective Time, Certificates or Uncertificated Shares are presented\nto the Surviving Corporation for any reason, they will (subject to compliance with the exchange procedures of Section\n2.10(c)) be cancelled\nand exchanged as provided in this Article\nII.

2.12Lost,\nStolen or Destroyed Certificates.\nIn the event that any Certificates have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming\nsuch Certificate to be lost, stolen or destroyed, the Payment Agent will pay and deliver to such Person the Merger Consideration payable\nin respect of the shares of Company Common Stock represented by such Certificates pursuant to Section\n2.7. Parent or\nthe Payment Agent may, in its discretion and as a condition precedent to the payment or delivery of such Merger Consideration, require\nthe Person claiming such Certificates to be lost, stolen or destroyed to deliver a bond in customary form in such amount as it may reasonably\ndetermine as indemnity against any claim that may be made against Parent, the Surviving Corporation or the Payment Agent with respect\nto the Certificates alleged to have been lost, stolen or destroyed.

2.13Withholding\nRights. Each of\nthe Payment Agent, Parent, Merger Sub, the Company and the Surviving Corporation will be entitled to deduct and withhold from any amounts\notherwise payable or deliverable pursuant to this Agreement to any holder or former holder of shares of Company Common Stock or Company\nEquity Awards such amounts as are required to be deducted or withheld therefrom pursuant to any Tax laws. To the extent that such amounts\nare so deducted or withheld and paid over to the appropriate Governmental Authority, such amounts will be treated for all purposes of\nthis Agreement as having been paid or delivered to the Person to whom such amounts would otherwise have been paid or delivered. To the\nextent withholding is required with respect to any Preferred Stock Consideration, Parent, the Surviving Corporation or the Payment Agent,\nas applicable, shall be entitled to satisfy such withholding obligation by deducting from any cash otherwise payable to such Person or\nwithholding a portion of the Parent Preferred Stock otherwise deliverable to such Person. Parent shall notify such Person promptly, and\nin any event no later than ten Business Days prior to the Closing Date, in writing if Parent determines that any withholding or deduction\nis required under any provision of Tax law with respect to any portion of any such payment or delivery (and such notice shall describe\nthe basis for such deduction or withholding), and Parent shall reasonably cooperate with such Person to eliminate or reduce any such

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required\ndeduction or withholding (including through the provision by such Person of forms or certificates).

2.14Dividends\nor Distributions.\nNo dividends or other distributions with respect to capital stock of the Surviving Corporation with a record date on or after the Effective\nTime will be paid to the holder of any unsurrendered Certificates or Uncertificated Shares.

2.15Necessary\nFurther Actions.\nIf, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and\nto vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises\nof the Company and Merger Sub, then Parent shall cause the Surviving Corporation and its directors and officers to take all such lawful\nand necessary action.

2.16Intended\nTax Treatment.\nFor U.S. federal income tax purposes (and applicable state and local Tax purposes), the Parties (a) agree to treat the Merger as a taxable\ntransaction and (b) shall, and shall cause their respective Affiliates to, (i) report, act and file all Tax Returns in all respects and\nfor all Tax purposes consistent with such Tax treatment and (ii) not take any action or position for Tax purposes (whether on any Tax\nReturn, in any audit, examination or other Legal Proceeding with respect to Taxes or otherwise) that is inconsistent with such Tax treatment,\nexcept as otherwise required by a “determination” as defined in Section 1313(a) of the Code or any corresponding or similar\nresolution under applicable state or local law.

Article\nIII
REPRESENTATIONS\nAND WARRANTIES OF THE COMPANY

With\nrespect to any Section of this Article\nIII, except (a)\nas disclosed in the reports, statements and other documents filed by the Company with the SEC or furnished by the Company to the SEC,\nin each case pursuant to the Exchange Act on or after January 1, 2024 and prior to the date of this Agreement (other than any disclosures\ncontained or referenced therein under the captions “Risk Factors,” “Special Note Regarding Forward-Looking Statements,”\n“Quantitative and Qualitative Disclosures About Market Risk” and any other disclosures contained or referenced therein of\ninformation, factors or risks that are predictive, cautionary or forward-looking in nature) (the “Recent\nSEC Reports”)\n(it being understood that (i) any matter disclosed in any Recent SEC Report will be deemed disclosed only with respect to the particular\nrepresentation or warranty to which such disclosure is specifically applicable and only to the extent the applicability of such disclosure\nto such representation or warranty is reasonably apparent on the face of such disclosure, and (ii) this clause (a) shall not apply to\nSection\n3.1, Section\n3.2, Section\n3.3, Section\n3.4, Section\n3.5, Section\n3.6, Section\n3.7, Section\n3.12(a)(ii), Section\n3.24 and Section\n3.26); and\n(b) as set forth in the disclosure letter delivered by the Company to Parent and Merger Sub on the date of this Agreement (the “Company\nDisclosure Letter”),\nwhich is hereby made a part of this Agreement; provided, that (x) any disclosure set forth in a particular section or subsection of\nthe Company Disclosure Letter shall be deemed to qualify only the corresponding representation or warranty in this Agreement, except to\nthe extent the applicability of such disclosure to another representation or warranty is reasonably apparent on the face of such disclosure,\n(y) no disclosure shall constitute a disclosure for any representation or warranty merely by virtue of its inclusion in the Company Disclosure\nLetter, and (z) the Company shall not be entitled to update or modify the Company Disclosure Letter after the execution and delivery of\nthis Agreement, and any update or modification made or purported to have been made after such time shall be disregarded for all purposes\nof this Agreement; provided\nfurther, that nothing\nin this clause (z) shall limit the Company’s obligations under Section\n6.10(a) (Notification\nof Certain Matters) or affect the remedies available to the Parties under this Agreement), the Company hereby represents and warrants\nto Parent and Merger Sub as follows:

3.1Organization;\nGood Standing.\nThe Company (a) is a corporation duly organized, validly existing and in good standing pursuant to the DGCL; and (b) has the requisite\ncorporate power and authority to conduct its business as it is presently being conducted and to own, lease or operate its properties and\nassets. The Company is duly qualified to do business and is in good standing in each jurisdiction where the character of its properties\nowned or leased or the nature of its activities make such qualification necessary (to the extent that the concept of “good standing”\nis applicable in the case of any jurisdiction outside the United States), except where the failure to be so qualified or in good standing\n

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would\nnot have a Company Material Adverse Effect. The Company has made available to Parent true, correct and complete copies of the Charter\nand the Fifth Amended and Restated Bylaws of the Company, as amended (the “Bylaws”),\neach as amended to date. The Charter and Bylaws are in full force and effect on the date of this Agreement. The Company is not in violation\nof the Charter or the Bylaws.

3.2Corporate\nPower; Enforceability.\nThe Company has the requisite corporate power and authority to (a) execute and deliver this Agreement; (b) perform its covenants and\nobligations hereunder; and (c) subject to receiving the Requisite Stockholder Approval, consummate the Merger. The execution and delivery\nof this Agreement by the Company, the performance by the Company of its covenants and obligations hereunder, and the consummation of the\nMerger have been duly authorized by all necessary corporate action on the part of the Company and no additional corporate actions on the\npart of the Company are necessary to authorize (i) the execution and delivery of this Agreement by the Company; (ii) the performance\nby the Company of its covenants and obligations hereunder; or (iii) subject to the receipt of the Requisite Stockholder Approval,\nthe consummation of the Merger. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization,\nexecution and delivery by Parent and Merger Sub, constitutes a legal, valid and binding obligation of the Company, enforceable against\nthe Company in accordance with its terms, except as such enforceability (A) may be limited by applicable bankruptcy, insolvency, reorganization,\nmoratorium and other similar laws affecting or relating to creditors’ rights generally; and (B) is subject to general principles\nof equity (the “Enforceability\nLimitations”).

3.3Company\nBoard Approval; Fairness Opinion; Anti-Takeover Laws.

(a)Company\nBoard Approval.\nThe Company Board (at a meeting or meetings duly called and held) has unanimously (i) determined that it is in the best interests of the\nCompany and its stockholders to enter into this Agreement and consummate the Merger upon the terms and subject to the conditions set forth\nherein; (ii) declared this Agreement advisable; (iii) approved the execution and delivery of this Agreement by the Company, the\nperformance by the Company of its covenants and other obligations hereunder, and the consummation of the Merger upon the terms and conditions\nset forth herein; and (iv) resolved to recommend that the Company Stockholders vote in favor of adoption of this Agreement and approve\nthe Merger in accordance with the DGCL (collectively, the “Company\nBoard Recommendation”),\nwhich Company Board Recommendation has not been withdrawn, rescinded or modified in any way as of the date of this Agreement.

(b)Fairness\nOpinion. Prior\nto the execution of this Agreement, the Company Board has received the written opinion (or an oral opinion to be confirmed in writing)\nof Citizens JMP Securities, LLC (the “Advisor”)\nto the effect that, as of the date of such opinion, and based upon and subject to the various limitations, matters, qualifications and\nassumptions set forth therein, the Merger Consideration to be paid to the holders (other than Owned Company Shares) of shares of Company\nCommon Stock pursuant to this Agreement is fair from a financial point of view to such holders (it being understood and agreed that such\nwritten opinion is for the benefit of the Company Board and may not be relied upon by Parent or Merger Sub).

(c)Anti-Takeover\nLaws. The Company\nBoard has taken all necessary actions so that the restrictions on business combinations set forth in Section 203 of the DGCL and any other\nsimilar applicable “fair price,” “moratorium,” “control share acquisition,” “business combination”\nor other similar anti-takeover statute, regulation or provision of the Organizational Documents of the Company (collectively, “Takeover\nLaws”) will\nnot be applicable to this Agreement, the Merger or any of the other transactions contemplated hereby. No Takeover Law is applicable to\nthis Agreement, the Merger or any of the other transactions contemplated hereby. Neither the Company nor any of its Subsidiaries is party\nto, nor is any class of Company Capital Stock subject to, any stockholder rights plan, rights agreement, “poison pill” or\nsimilar agreement, arrangement or plan. No action on the part of the holders of any class or series of Company Capital Stock, other than\nthe Requisite Stockholder Approval, is necessary to render inapplicable any Takeover Law to the Merger or the other transactions contemplated\nby this Agreement.

3.4Requisite\nStockholder Approval.\nThe affirmative vote of the holders of a majority of the voting power of the outstanding shares of Company Common Stock entitled to vote\non the Merger (the “Requisite\nStockholder Approval”)\nis the only vote of the holders of any class or series of Company

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Capital\nStock that is necessary pursuant to applicable law, the Charter or the Bylaws to adopt this Agreement and consummate the Merger.

3.5Non-Contravention.\nThe execution and delivery of this Agreement by the Company, the performance by the Company of its covenants and obligations hereunder,\nand the consummation of the Merger do not (a) violate or conflict with any provision of the Charter or the Bylaws; (b) violate, conflict\nwith, result in the breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) pursuant\nto, result in the termination of, accelerate the performance required by, or result in a right of termination or acceleration pursuant\nto any Material Contract; (c) assuming that all Consents described in Section\n3.6 have been obtained\nor made, and any waiting periods thereunder have terminated or expired prior to the Effective Time and, in the case of the consummation\nof the Merger, subject to obtaining the Requisite Stockholder Approval, violate or conflict with any law or order applicable to the Company\nGroup or by which any of their respective properties or assets are bound; or (d) result in the creation of any lien (other than Permitted\nLiens) upon any of the properties or assets of the Company Group, except in the case of each of clauses (b), (c) and (d) for such violations,\nconflicts, breaches, defaults, terminations, accelerations or liens that would not be material to the Company and its Subsidiaries taken\nas a whole.

3.6Requisite\nGovernmental Approvals.\nNo consent, approval, order or authorization of, filing or registration with, or notification to (any of the foregoing, a “Consent”)\nany Governmental Authority, including under any Antitrust Law, is required on the part of the Company in connection with (a) the execution\nand delivery of this Agreement by the Company; (b) the performance by the Company of its covenants and obligations pursuant to this\nAgreement; or (c) the consummation of the Merger, except (i) the filing of the Certificate of Merger with the Secretary of State of\nthe State of Delaware and such filings with Governmental Authorities to satisfy the applicable laws of states in which the Company Group\nis qualified to do business; (ii) such filings and approvals as may be required by any federal or state securities laws, including\ncompliance with any applicable requirements of the Exchange Act; and (iii) such other Consents the failure of which to obtain would\nnot have a Company Material Adverse Effect.

3.7Company\nCapitalization.

(a)Capital\nStock. The authorized\ncapital stock of the Company consists of 25,000,000 shares of Company Common Stock. As of 5:00 p.m., Eastern time, on June 30, 2026\n(such time and date, the “Capitalization\nDate”), (A)\n7,459,177 shares of Company Common Stock were issued and outstanding; (B) 4,606,111 shares of Company Common Stock were held by the\nCompany as treasury shares; and (C) no shares of preferred stock of the Company were authorized, issued or outstanding. All outstanding\nshares of Company Common Stock are validly issued, fully paid, nonassessable and free of any preemptive rights. From the close of business\non the Capitalization Date to the date of this Agreement, the Company has not issued or granted any Company Securities.

(b)Company\nEquity Awards.\nAs of the Capitalization Date, (i) approximately 4,129,321 shares of Company Common Stock were reserved for issuance pursuant to the Company\nEquity Plans and (ii) there were outstanding (A) Company Options to acquire an aggregate of 166,602 shares of Company Common Stock, with\na weighted average exercise price of $6.58 per share; (B) Company RSUs representing the right to receive an aggregate of 281,444 shares\nof Company Common Stock; and (C) Company PSUs representing the right to receive an aggregate of 50,000 shares of Company Common Stock\n(assuming satisfaction of performance conditions at target).

(c)Company\nSecurities. Except\nas set forth in this Section\n3.7, as of the\nCapitalization Date there were (i) other than the Company Capital Stock, no outstanding shares of capital stock of, or other equity or\nvoting interest in, the Company; (ii) no outstanding securities of the Company convertible into or exchangeable or exercisable for\nshares of capital stock of, or other equity or voting interest (including voting debt) in, the Company; (iii) no outstanding options,\nwarrants or other rights or binding arrangements to acquire from the Company, or that obligate the Company to issue, any capital stock\nof, or other equity or voting interest in, or any securities convertible into or exchangeable for shares of capital stock of, or other\nequity or voting interest (including voting debt) in, the Company; (iv) no obligations of the Company to grant, extend or enter into\nany subscription, warrant, right, convertible, exchangeable or exercisable security, or other similar Contract relating to any capital\nstock of, or other equity or voting

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interest\n(including any voting debt) in, the Company; (v) no outstanding shares of restricted stock, restricted stock units, stock appreciation\nrights, performance shares, contingent value rights, “phantom” stock or similar securities or rights that are derivative of,\nor provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other securities or ownership\ninterests in, the Company (the items in clauses (i), (ii), (iii), (iv) and (v), collectively with the Company Capital Stock, the “Company\nSecurities”);\n(vi) no voting trusts, proxies or similar arrangements or understandings to which the Company is a party or by which the Company is bound\nwith respect to the voting of any shares of capital stock of, or other equity or voting interest in, the Company; (vii) except as\nprovided in the Charter or the Bylaws, no obligations or binding commitments of any character restricting the transfer of any shares of\ncapital stock of, or other equity or voting interest in, the Company to which the Company is a party or by which it is bound; and\n(viii) no other obligations by the Company to make any payments based on the price or value of any Company Securities. The Company is\nnot a party to any Contract that obligates it to repurchase, redeem or otherwise acquire any Company Securities. There are no accrued\nand unpaid dividends with respect to any outstanding shares of Company Capital Stock. The Company does not have a stockholder rights plan\nin effect.

(d)Other\nRights. The Company\nis not a party to any Contract relating to the voting of, requiring registration of, or granting any preemptive rights, anti-dilutive\nrights or rights of first refusal or other similar rights with respect to any Company Securities.

3.8Subsidiaries.

(a)Subsidiaries.\nSection\n3.8(a) of the Company\nDisclosure Letter contains a true, correct and complete list of the name, jurisdiction of organization, and schedule of stockholders or\nequity holders (other than any member of the Company Group) of each Subsidiary of the Company. Each Subsidiary of the Company (i) is duly\norganized, validly existing and in good standing pursuant to the laws of its jurisdiction of organization (to the extent that the concept\nof “good standing” is applicable in the case of any jurisdiction outside the United States); (ii) has the requisite corporate\n(or similar) power and authority to carry on its respective business as it is presently being conducted and to own, lease or operate its\nrespective properties and assets; and (iii) is duly qualified to do business and is in good standing in each jurisdiction where the\ncharacter of its properties owned or leased or the nature of its activities make such qualification necessary (to the extent that the\nconcept of “good standing” is applicable in the case of any jurisdiction outside the United States), except where the failure\nto be so qualified or in good standing would not have a Company Material Adverse Effect. The Company has made available to Parent true,\ncorrect and complete copies of the certificates of incorporation, bylaws and other similar organizational documents of each “significant\nsubsidiary” (as defined in Rule 1-02(w) of Regulation S-X promulgated by the SEC) of the Company, each as amended to date. No Subsidiary\nof the Company is in violation of its charter, bylaws or other similar organizational documents, except for such violations that would\nnot have a Company Material Adverse Effect.

(b)Capital\nStock of Subsidiaries.\nAll of the outstanding capital stock of, or other equity or member or voting interest in, each Subsidiary of the Company (i) has been\nduly authorized, validly issued and is fully paid and nonassessable (to the extent such concepts are applicable to such Subsidiary);\nand (ii) except for director’s qualifying or similar shares, is owned, directly or indirectly, by the Company, free and clear of\nall liens (other than Permitted Liens) and any other restriction (including any restriction on the right to vote, sell or otherwise dispose\nof such capital stock or other equity or voting interest) that would prevent such Subsidiary from conducting its business as of the Effective\nTime in substantially the same manner that such business is conducted on the date of this Agreement.

(c)Other\nSecurities of Subsidiaries.\nThere are no outstanding (i) securities convertible into or exchangeable or exercisable for shares of capital stock of, or other equity\nor voting interest in, any Subsidiary of the Company; (ii) options, warrants or other rights or arrangements obligating the Company\nGroup to acquire from any Subsidiary of the Company, or that obligate any Subsidiary of the Company to issue, any capital stock of, or\nother equity or voting interest in, or any securities convertible into or exchangeable for, shares of capital stock of, or other equity\nor voting interest (including any voting debt) in, any Subsidiary of the Company;

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or\n(iii) obligations of any Subsidiary of the Company to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable\nsecurity, or other similar Contract relating to any capital stock of, or other equity or voting interest (including any voting debt) in,\nsuch Subsidiary to any Person other than the Company or one of its Subsidiaries.

(d)Other\nInvestments. Other\nthan equity securities held in the ordinary course of business for cash management purposes, the Company does not own or hold the right\nto acquire any equity securities, ownership interests or voting interests (including voting debt) of, or securities exchangeable or exercisable\ntherefor, or investments in, any other Person.

3.9Company\nSEC Reports. Since\nJanuary 1, 2024, the Company has filed all forms, reports and documents with the SEC that have been required to be filed by it pursuant\nto applicable laws prior to the date of this Agreement (the “Company\nSEC Reports”).\nEach Company SEC Report complied, as of its effective date (in the case of Company SEC Reports that are registration statements filed\npursuant to the requirements of the Securities Act) or filing date (in the case of all other applicable Company SEC Reports) (or, if amended\nor superseded by a filing prior to the date of this Agreement, as of the date of the last such amendment or superseded filing), in all\nmaterial respects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be, each as in effect on\nthe date that such Company SEC Report was filed. True, correct and complete copies of all Company SEC Reports are publicly available in\nthe Electronic Data Gathering, Analysis and Retrieval database of the SEC. As of its filing date (or, if amended or superseded by a filing\nprior to the date of this Agreement, on the date of such amended or superseded filing), each Company SEC Report did not contain any untrue\nstatement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of\nthe circumstances under which they were made, not misleading. As of the date of this Agreement, there are no outstanding or unresolved\ncomments in comment letters received from the SEC with respect to the Company SEC Reports.

3.10Company\nFinancial Statements; Internal Controls; Indebtedness.

(a)Company\nFinancial Statements.\nThe consolidated financial statements (including any related notes and schedules) of the Company Group filed with the Company SEC Reports\n(i) were prepared in accordance with GAAP (except as may be indicated in the notes thereto or as otherwise permitted by Form 10-Q with\nrespect to any financial statements filed on Form 10-Q); and (ii) fairly present (except as may be indicated in the notes thereto\nand subject in the case of unaudited statements to normal, year-end audit adjustments), in all material respects, the consolidated financial\nposition of the Company Group as of the dates thereof and the consolidated results of operations and cash flows for the periods then ended.\nThere are no unconsolidated Subsidiaries of the Company or any off-balance sheet arrangements of the type required to be disclosed pursuant\nto Item 303(a)(4) of Regulation S-K promulgated by the SEC that have not been so disclosed in the Company SEC Reports.

(b)Disclosure\nControls and Procedures.\nThe Company has established and maintains “disclosure controls and procedures” (as defined pursuant to Rule 13a-15(e) and\nRule 15d-15(e) promulgated under the Exchange Act). The Company’s disclosure controls and procedures are reasonably designed to\nensure that all (i) material information required to be disclosed by the Company in the reports and other documents that it files or furnishes\npursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms\nof the SEC; and (ii) such material information is accumulated and communicated to the Company’s management as appropriate to\nallow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley\nAct.

(c)Internal\nControls. The Company\nhas established and maintains a system of “internal control over financial reporting” (as defined pursuant to Rule 13a-15(f)\nand Rule 15d-15(f) promulgated under the Exchange Act) sufficient to provide reasonable assurance (i) that transactions are recorded as\nnecessary to permit preparation of financial statements in accordance with GAAP, including policies and procedures that require the maintenance\nof records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company Group;\n(ii) that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts\nand expenditures

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of\nthe Company and its Subsidiaries are being made only in accordance with appropriate authorizations of the Company’s management and\nthe Company Board (or a committee thereof); and (iii) regarding prevention or timely detection of unauthorized acquisition, use or\ndisposition of the assets of the Company Group. The Company’s management has completed an assessment of the effectiveness of the\nCompany’s internal control over financial reporting in compliance with the requirements of Section 404(a) of the Sarbanes-Oxley\nAct for the fiscal year ended December 31, 2025, and such assessment concluded that such system was effective. Since January 1, 2024,\nthe principal executive officer and principal financial officer of the Company have made all certifications required by the Sarbanes-Oxley\nAct. Neither the Company nor its principal executive officer or principal financial officer has received notice from any Governmental\nAuthority challenging or questioning the accuracy, completeness, form or manner of filing of such certifications. Neither the Company\nnor, to the Knowledge of the Company, the Company’s independent registered public accounting firm has identified or been made aware\nof (A) any “significant deficiency” or “material weakness” (each as defined in Rule 13a-15(f) of the Exchange\nAct) in the system of internal control over financial reporting utilized by the Company Group that has not been subsequently remediated;\nor (B) any fraud that involves the Company’s management or other employees who have a role in the preparation of financial statements\nor the internal control over financial reporting utilized by the Company Group.

(d)Indebtedness.\nSection\n3.10(d) of the\nCompany Disclosure Letter contains a true, correct and complete list of all Indebtedness of the Company Group as of the date of this Agreement,\nother than Indebtedness reflected in the Audited Company Balance Sheet or otherwise included in the Company SEC Reports filed between\nJanuary 1, 2026 and the date of this Agreement.

3.11No\nUndisclosed Liabilities.\nNeither the Company nor any of its Subsidiaries has any liabilities of a nature required to be reflected or reserved against on a balance\nsheet (or the notes thereto) prepared in accordance with GAAP, other than liabilities (a) reflected or otherwise reserved against in the\nAudited Company Balance Sheet or in the consolidated financial statements of the Company Group (including the notes thereto) included\nin the Company SEC Reports filed prior to the date of this Agreement; (b) arising pursuant to or incurred as expressly permitted or\nexpressly contemplated by this Agreement or incurred in connection with the Transactions; (c) incurred in the ordinary course of business\nsince June 30, 2026; or (d) that do not exceed $250,000 individually or $500,000 in the aggregate.

3.12Absence\nof Certain Changes.

(a)No\nCompany Material Adverse Effect.\nExcept as otherwise contemplated, required or permitted by this Agreement, since December 31, 2025 through the date of this Agreement,\n(i) the business of the Company Group has been conducted, in all material respects, in the ordinary course of business (except with respect\nto this Agreement and discussions, negotiations and transactions related hereto) and (ii) there has not occurred a Company Material Adverse\nEffect.

(b)Forbearance.\nSince March 31, 2026 through the date of this Agreement, the Company has not taken any action that would be prohibited by Section\n5.2, if taken or\nproposed to be taken after the date of this Agreement.

3.13Material\nContracts.

(a)List\nof Material Contracts.\nSection\n3.13(a) of the\nCompany Disclosure Letter contains a true, correct and complete list of all Material Contracts to or by which the Company Group is a party\nor is bound as of the date hereof (other than any Material Contracts contemplated by clause (i) of the definition of Material Contract\nand any Material Contracts listed in Section\n3.14(b), Section\n3.14(c) or Section\n3.18(a) of the\nCompany Disclosure Letter), and a true, correct and complete copy of each Material Contract has been made available to Parent prior to\nthe date of this Agreement.

(b)Validity.\nEach Material Contract is, subject to the Enforceability Limitations, valid and binding on the Company or each such Subsidiary of the\nCompany party thereto, enforceable in accordance with its terms, and is in full force and effect, and none of the Company,

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any\nof its Subsidiaries party thereto or, to the Knowledge of the Company, any other party thereto is or is alleged to be in breach of or\ndefault pursuant to any such Material Contract, except in each case for such failures to be in full force and effect that would not have\na Company Material Adverse Effect. No event has occurred that, with notice or lapse of time or both, would constitute a breach or default\npursuant to any Material Contract by the Company Group, or, to the Knowledge of the Company, any other party thereto, except in each case\nfor such breaches and defaults that would not have a Company Material Adverse Effect.

(c)Notices\nfrom Material Customers.\nSince the date of the Audited Company Balance Sheet to the date of this Agreement, the Company has not received any written or, to the\nKnowledge of the Company, oral notice, and to the Knowledge of the Company, (i) no party to a Material Contract or Material Customer intends,\nto terminate, not renew, materially reduce volumes under, materially reduce purchases under, or renegotiate the terms of any Material\nContract or its relationship with the Company Group, and (ii) the Company has not received any material notice from a Material Customer\nthat the Company has failed to meet the defined performance criteria agreed to by Company and such customer.

3.14Real\nProperty.

(a)Owned\nReal Property.\nThe Company Group does not own any real property.

(b)Leased\nReal Property.\nSection\n3.14(b) of the\nCompany Disclosure Letter contains a true, correct and complete list, as of the date of this Agreement, of all existing leases, subleases,\nlicenses or other written agreements and all material modifications, amendments and supplements thereto, pursuant to which the Company\nGroup uses or occupies, or has the right to use or occupy, now or in the future, any real property (such property, the “Leased\nReal Property,”\nand each such lease, sublease, license or other agreement, together with all amendments, modifications, and supplements thereto, a “Lease”)\nwhere the terms of such Lease, as of the date of this Agreement, provide for annual lease payments in excess of $500,000. The Company\nhas made available to Parent true, correct and complete (in all material respects) copies of all Leases set forth in Section\n3.14(b) of the\nCompany Disclosure Letter. With respect to each such Lease and except as would not have a Company Material Adverse Effect, (i) each Lease\nis legal, valid and binding, subject to the Enforceability Limitations, and in full force and effect; (ii) neither the Company nor\nany of its Subsidiaries is in receipt of any written notice of default pursuant to such Lease, no rent is past due and, to the Knowledge\nof the Company, no fact, circumstance or condition exists that is or would reasonably be expected to become a default by any party under\nsuch Lease or permit the termination, modification or acceleration of rent under such Lease, and no security deposit or portion thereof\ndeposited with respect to such Lease has been applied in respect of a breach or default under such Lease which has not been redeposited\nin full; (iii) neither the Company nor any Subsidiary has collaterally assigned or granted any other security interest in such Lease\nor any interest therein (except for assignments or grants in favor of the counterparty to such Lease or pursuant to the ABL Loan Agreement);\nand (iv) there are no liens (other than Permitted Liens) on the estate or interest created by such Lease. The Company or one of its Subsidiaries\nhas valid leasehold estates in the Leased Real Property binding and enforceable upon the Company or its Subsidiaries, as applicable, free\nand clear of all liens other than Permitted Liens. Except as set forth in Section\n3.14(b) of the\nCompany Disclosure Letter, there are no Legal Proceedings pending or, to the Knowledge of the Company, threatened against any Leased Real\nProperty that could reasonably be expected to materially affect the continued use of such property. There are no pending or, to the Knowledge\nof the Company, threatened Legal Proceedings to (i) condemn, take or demolish any Leased Real Property or any portion thereof, (ii) declare\nany Leased Real Property or any portion thereof a nuisance, (iii) exercise the power of eminent domain or any similar governmental power\nwith respect to any Leased Real Property or any portion thereof, or (iv) effect any sale or disposition in lieu of condemnation. There\nare no pending or, to the Knowledge of the Company, threatened material special assessments affecting any Leased Real Property. Except\nas would not reasonably be expected to have a Company Material Adverse Effect or is otherwise disclosed on Section\n3.14(b) of the\nCompany Disclosure Letter, (i) there are no leasing costs, leasing commissions, or finder fees or the like which are due or payable, which\nhave not been paid, with respect to the Leases (including with respect to

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current\nor future renewals and expansions thereof), and (ii) there are no exclusive or continuing brokerage agreements as to any of the space\nleased under the Leases.

(c)Subleases.\nAs of the date of this Agreement, there are no existing subleases, licenses or similar agreements in which the Company or any of its Subsidiaries\nhas granted to any Person, other than the Company Group, any right to use or occupy, now or in the future, the Leased Real Property set\nforth in Section\n3.14(b) of the\nCompany Disclosure Letter.

(d)Operational\nCondition. Except\nas would not reasonably be expected to be material to the Company Group, taken as a whole, all buildings, structures, improvements, fixtures,\nbuilding systems, equipment and all components thereof included in the Leased Real Property (collectively, the “Improvements”)\nare in good condition and repair and are adequate and sufficient for the operation of the business of the Company Group as currently conducted.\nThere are no structural deficiencies or, to the Knowledge of the Company, latent defects affecting any of the Improvements that would\nreasonably be expected to be material to the Company Group, taken as a whole. To the Knowledge of the Company, there are no material capital\nexpenditures with respect to the Improvements that are required to be made during the twelve (12) months following the date of this Agreement.\nTo the Knowledge of the Company, there are no facts or conditions affecting any of the Improvements which would, individually or in the\naggregate, interfere in any material respect with the use or occupancy of the Improvements or any portion thereof in the ordinary course\nof business. The Leased Real Property constitute all real property used in, and necessary for, the conduct of the business of the Company\nGroup as currently conducted. All material buildings, fixtures, tangible personal property and leasehold improvements primarily used in\nthe business of the Company Group are located on the Leased Real Property, other than tangible personal property in the possession of\nemployees in connection with their employment (including remote work equipment) and tangible personal property in transit or at customer\nor vendor locations in the ordinary course of business.

(e)Personal\nProperty. Except\nas would not reasonably be expected to have a Company Material Adverse Effect, the Company and each of its Subsidiaries has good title\nto, or a valid and binding leasehold interest in, all material tangible assets, personal property, machinery and equipment owned or leased\nby it (the “Tangible\nAssets”),\nfree and clear of all liens, other than Permitted Liens. Except as would not reasonably be expected to have a Company Material Adverse\nEffect, to the Knowledge of the Company, all of such Tangible Assets are in good operating condition (ordinary wear and tear excepted),\nand have been and are being used in material compliance with applicable law and are capable of being used for the purposes for which such\nassets are now used by the Company or its Subsidiaries.

(f)Sufficiency\nof Assets. Except\nas would not reasonably be expected to have a Company Material Adverse Effect, the Tangible Assets are sufficient for the Company and\neach of its Subsidiaries to continue to operate the business following the Closing in the same manner as it is conducted as of the date\nof this Agreement.

3.15Environmental\nMatters. Since\nJanuary 1, 2023, and except as set forth in Schedule 3.15 of the Company Disclosure Letter or as would not reasonably be expected to have\na Company Material Adverse Effect, none of the Company Group (a) has received any notice alleging that the Company or any of its Subsidiaries\nhas violated, or has any liability under, any applicable Environmental Law; (b) has Knowledge of Hazardous Substances present at,\naffecting, or having emanated or continuing to emanate from any of the Leased Real Property in amounts or circumstances that would reasonably\nbe expected to require the Company or any of its Subsidiaries to undertake any investigation or corrective or remedial action under any\nLease or any applicable Environmental Law or any third-party agreement, or to give rise to any claim against or interfere with the operations\nof the Company or any of its Subsidiaries, (c) is a party to or is the subject of any pending or, to the Knowledge of the Company or its\nSubsidiaries, threatened Legal Proceeding or third-party claim under Environmental Laws, (d) has treated, stored, disposed of, arranged\nfor or permitted the disposal of, transported, handled, released or exposed any Person to any Hazardous Substance, or owned or operated\nany property or facility contaminated by any Hazardous Substance, in each case as would reasonably be expected to give rise to continuing\nliability post-closing under any Environmental Law, third-party agreement, or any lease, sublease, license or other

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occupancy\nagreement for the operation thereof, or (e) has failed to comply with applicable Environmental Laws, including possessing and complying\nwith any permits required for the Company or its Subsidiaries to conduct then current operations. The Company makes no representation\nor warranty to the Parent or Merger Sub relating to Environmental Laws or the effect thereof on the business of the Company or its Subsidiaries\n(including the existence or absence of any liabilities related thereto) other than pursuant to this Section\n3.15, which is\nintended to contain the sole and exclusive representations and warranties of the Company relating to such matters.

3.16Intellectual\nProperty.

(a)Registered\nIntellectual Property; Proceedings.\nSection\n3.16(a) of the\nCompany Disclosure Letter sets forth a true, correct and complete list as of the date of this Agreement of all (i) Company Registered\nIntellectual Property and specifies, where applicable, the jurisdictions in which each such item of Company Registered Intellectual Property\nhas been issued or registered and corresponding bibliographic details; and (ii) Legal Proceedings currently pending before any Governmental\nAuthority (other than actions related to the ordinary course prosecution of Company Registered Intellectual Property before the United\nStates Patent and Trademark Office or the equivalent authority anywhere in the world) related to any material Company Registered Intellectual\nProperty.

(b)Full\nForce and Effect.\nTo the Knowledge of the Company, (i) all material Company Registered Intellectual Property is subsisting, valid, enforceable, and in full\nforce and effect, (ii) all required maintenance, renewal and filing fees with respect thereto have been timely paid and (iii) all necessary\ndocuments and certificates with respect thereto have been timely filed.

(c)Conduct\nof the Business.\nThe Company Group owns or has rights to use all material Intellectual Property necessary and sufficient to enable the Company Group to\nconduct the business of the Company and its Subsidiaries in the manner in which such business is currently being conducted.

(d)No\nOrder. To the Knowledge\nof the Company, no material Company Intellectual Property is subject to any outstanding Legal Proceeding or order with respect to the\nCompany Group restricting in any material manner the use, transfer or licensing by the Company Group of any such material Company Intellectual\nProperty.

(e)Absence\nof Liens. The Company\nor one of its Subsidiaries owns and has good and valid legal and equitable title to each item of material Company Intellectual Property\nfree and clear of any liens (other than Permitted Liens).

(f)IP\nContracts. Section\n3.16(f) of the\nCompany Disclosure Letter sets forth a true, correct and complete list of all Contracts to which the Company Group is a party (i) with\nrespect to material Company Intellectual Property licensing or transferring any right therein to any third Person other than any non-disclosure\nagreements entered into in the ordinary course of business; and (ii) pursuant to which a third Person has licensed or transferred\nany Intellectual Property to the Company Group, other than any (A) non-disclosure agreements or other Contracts entered into in the ordinary\ncourse of business and (B) non-exclusive licenses of commercially available software used solely for the Company Group’s internal\nuse (all such Contracts, the “IP\nContracts”).

(g)Changes.\nExcept as would not have a Company Material Adverse Effect, the consummation of the Merger will not under any IP Contract result in:\n(i) the termination of any material license of Intellectual Property to the Company by a third Person; or (ii) the granting by the\nCompany of any license or rights to any Company Intellectual Property.

(h)No\nGovernment or Institutional Funding.\nThe Company is not under any obligation, present or contingent, to license or grant any material Company Intellectual Property to any\nGovernmental Authority, educational institution, or research center because it has received funding to develop such Company Intellectual\nProperty.

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(i)No\nInfringement. To\nthe Knowledge of the Company, the operation of the business of the Company Group (including the manufacture and sale of the Company Group’s\nproducts) as of the date of this Agreement and as conducted since January 1, 2023 does not infringe, misappropriate, dilute, or otherwise\nviolate, and has not infringed, misappropriated, diluted, or otherwise violated, the Intellectual Property of any third Person in a manner\nthat has or could reasonably be expected to result in a material liability to the Company Group, taken as a whole.

(j)No\nNotice of Infringement.\nSince January 1, 2023, the Company Group has not received written notice from any third Person, or been involved in any Legal Proceeding,\nalleging that the operation of the business of the Company Group or that any of the Company Group’s products infringes, misappropriates,\nor otherwise violates the Intellectual Property of any third Person in a manner that has or could reasonably be expected to result in\na Company Material Adverse Effect.

(k)No\nThird Person Infringement.\nSince January 1, 2024, the Company Group has not provided any third Person with written notice claiming that such third Person is infringing,\nmisappropriating, or otherwise violating any material Company Intellectual Property, and, except as would not have a Company Material\nAdverse Effect, to the Knowledge of the Company, no such activity is occurring that has resulted in a material liability or loss to the\nCompany Group, taken as a whole.

(l)Proprietary\nInformation. The\nCompany Group has taken reasonable steps to protect the Company Group’s rights in its confidential information and trade secrets\nthat it wishes to protect, or any trade secrets or confidential information of third Persons provided to the Company Group. Without limiting\nthe foregoing, the Company Group has and uses commercially reasonable efforts to enforce a policy requiring each officer and employee\nengaged in the development of any material Intellectual Property for the Company Group to execute a proprietary information and confidentiality\nagreement obliging non-disclosure of Company Group confidential information and trade secrets.

(m)Employee\nand Contractor Assignment.\nTo the Knowledge of the Company, all current and former employees, consultants, contractors, service providers and other Persons who contributed\nto the conception, development, authorship, creation, modification or improvement of any material Company Intellectual Property have executed\nvalid and enforceable written agreements including assignment to the Company or one of its Subsidiaries all rights of such Persons in\nsuch Intellectual Property.

(n)Artificial\nIntelligence Use. To\nthe Knowledge of the Company, the Company Group possesses rights that the Company Group believes in good faith are sufficient for the\nCompany Group’s use in the ordinary course of the components, inputs, and outputs of artificial intelligence tools used in the ordinary\ncourse or provided or offered to any customer of the Company Group, including training data, except as would not be reasonably expected\nto be material to the Company Group. To the Knowledge of Company, (a) none of the Company, its Subsidiaries, or employees, consultants,\nor contractors of the Company Group, have used artificial intelligence tools to develop material Company Intellectual Property, and (b)\nnone of the Company Group have provided any confidential information or trade secrets of the Company Group to any artificial intelligence\nplatform in a manner that has resulted in a written claim against the Company Group.

(o)Proprietary\nSoftware. Section\n3.16(o) of the\nCompany Disclosure Letter sets forth a true, correct and complete list of all software used in the ordinary course developed or customized\nby or for the Company or its Subsidiaries.

(p)Data\nSecurity and Privacy.\nExcept as would not have a Company Material Adverse Effect, the Company Group and its collection, access, storage, use, and/or disclosure\n(“Processing”)\nof information that constitutes “personal information” or “personal data” as defined by applicable law (“Personal\nInformation”)\nare in compliance with: (i) applicable law

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pertaining\nto privacy, data protection and security, consumer protection, advertising, marketing, communications, recording, wiretapping, biometrics,\nand telemarketing; (ii) the Company Group’s privacy policies and public statements; (iii) industry standards (including\nthe Payment Card Industry Data Security Standard (PCI-DSS); and (iv) Contracts pertaining to the Processing of Personal Information\nand security requirements ((i) through (iv) collectively, “Privacy\nLaw”). The\nCompany Group (A) maintains commercially reasonable policies and procedures designed to protect systems and information processed by or\non behalf of the Company Group from and against unlawful, accidental, or unauthorized Processing, destruction, loss, modification, and/or\nunavailability (“Security\nIncidents”);\nand (B) is in compliance with such policies, procedures, and Privacy Law, except as would not have a Company Material Adverse Effect.\nExcept as would not have a Company Material Adverse Effect, to the Knowledge of the Company, since January 1, 2023, there have been no\nSecurity Incidents. Except as would not have a Company Material Adverse Effect, to the Knowledge of the Company, since January 1, 2023,\nthe Company Group has not notified, and has not been required to notify, any Governmental Authority or Person of any Security Incidents.\nTo the Knowledge of the Company, there are no pending complaints, investigations, claims, damages, or lawsuits related to Privacy Law\nor Security Incidents, except as would not have a Company Material Adverse Effect.

3.17Tax\nMatters.

(a)Tax\nReturns and Taxes Paid.\nThe Company Group has (i) timely filed (taking into account valid extensions) all material United States federal, state, local and non-United\nStates tax returns, information statements and reports (including amendments thereto) required to be filed with any Governmental Authority\nwith respect to Taxes (“Tax\nReturns”)\nrequired to be filed by the Company Group; and (ii) paid, or has adequately reserved in the Audited Company Balance Sheet in accordance\nwith GAAP for the payment of, all material Taxes that are required to be paid by the Company Group through the date of the Audited Company\nBalance Sheet. Except as obtained in the ordinary course, none of the Company Group has executed any waiver, except in connection with\nany ongoing Tax examination, of any statute of limitations on, or extended the period for the assessment or collection of, any material\nTax, in each case that has not since expired. There are no liens for Taxes upon any of the material assets or properties of the Company\nGroup, other than Permitted Liens. The Company Group has not received any written notice from any Governmental Authority of any proposed,\nasserted or assessed deficiency for material Taxes that remains unresolved.

(b)Taxes\nWithheld. The Company\nGroup has timely paid or withheld with respect to their employees and other third Persons (and paid over any amounts withheld to the appropriate\nTax authority) all material United States federal, state, and local income taxes, Federal Insurance Contribution Act, Federal Unemployment\nTax Act and other similar Taxes required to be paid or withheld.

(c)No\nAudits. No audits\nor other examinations with respect to any material amounts of Taxes of the Company Group are presently in progress or, to the Knowledge\nof the Company, have, since January 1, 2023, been asserted or proposed in writing. No written claim has been made by a Governmental Authority\nin the past three years in a jurisdiction where the Company Group does not file Tax Returns that the Company Group is or may be subject\nto tax in that jurisdiction.

(d)Affiliated\nGroups. The Company\nGroup (i) is not and has never been a member of an affiliated group of corporations filing a consolidated United States federal income\nTax Return (other than a group the common parent of which is the Company), or (ii) has any material liability for Taxes of any Person\n(other than the Company Group) as a transferee or successor, by contract (other than a contract the primary purpose of which is unrelated\nto Taxes or that is solely among the Company Group), operation of law, or otherwise.

(e)Spin-offs.\nThe Company Group has not constituted either a “distributing corporation” or a “controlled corporation” in a distribution\nof stock intended to qualify for tax-free treatment pursuant to Section 355 of the Code within the past two years.

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(f)No\nListed Transaction.\nThe Company Group has not engaged in a “listed transaction” as set forth in Treasury Regulation § 1.6011-4(b)(2).

(g)Tax\nAgreements. The\nCompany Group is not a party to nor bound by, nor currently has any obligations or material liability pursuant to, any material Tax sharing,\nallocation, indemnification or similar agreement or obligation, other than any such agreement or obligation the primary purpose of which\nis unrelated to Taxes or that is solely among the Company Group.

(h)Transfer\nPricing. The Company\nGroup is in compliance with applicable United States and foreign transfer pricing laws and regulations, including conducting intercompany\ntransactions at arm’s length and the execution and maintenance of contemporaneous documentation substantiating the transfer pricing\npractices and methodology of the Company Group, except where the failure to be, or to have been, in compliance with such laws and regulations\nwould not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(i) Other\nIncome Inclusions or Exclusions.\nThe Company Group will not be required to include any material item of income in, or exclude any material item of deduction from, taxable\nincome for any taxable period (or portion thereof) beginning after the Closing Date as a result of any (i) change in method of accounting\nmade on or prior to the Closing Date for a taxable period ending on or prior to the Closing Date; (ii) “closing agreement”\nas described in Section 7121 of the Code (or any corresponding or similar provision of law) executed on or prior to the Closing Date;\n(iii) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding\nor similar provision of law) with respect to a transaction or event occurring on or prior to the Closing Date; (iv) installment sale\nor open transaction disposition made on or prior to the Closing Date; or (v) prepaid amount received or paid outside the ordinary\ncourse of business on or prior to the Closing Date.

3.18Employee\nPlans.

(a)Employee\nPlans. Section\n3.18(a) of the\nCompany Disclosure Letter sets forth a list, as of the date of this Agreement, of all (i) “employee benefit plans” (as defined\nin Section 3(3) of ERISA), whether or not subject to ERISA, and (ii) other employment, bonus, severance, termination, pension, stock option,\nstock purchase or other material equity-based, benefit, incentive compensation, profit sharing, savings, retirement, qualified or non-qualified\npension plan, disability, insurance, vacation, deferred compensation, severance, termination, retention, change of control and other similar\nmaterial fringe, welfare or other employee benefit plans, programs, agreements, policies or binding arrangements maintained or contributed\nto by the Company Group for the benefit of any current employee or director of the Company Group (collectively, the “Employee\nPlans”).\nWith respect to each Employee Plan, to the extent applicable, the Company has made available to Parent copies of (A) the plan document\nand all amendments thereto; (B) the current summary plan description; (C) the most recent determination or opinion letter from\nthe IRS; (D) all non-routine correspondence with any Governmental Authority regarding such plan in the past three years; (E) a\nwritten summary of the material terms of any Employee Plan that is not set forth in a written document; (F) the three most recently\nfiled annual reports (Form 5500 series or other similar reports) and all schedules and financial statements attached thereto; (G)\nall applicable coverage and nondiscrimination tests for the three most recently completed plan years; (H) a copy of each trust agreement\nor other funding arrangement, custodial agreement, insurance policy or contract, administration agreement or similar agreement, and each\ninvestment management or investment advisory agreement, and (I) all Forms 1094-C and 1095-C filed with respect to any Employee Plan since\n2020.

(b)Title\nIV Plans. Except\nas otherwise set forth in Section\n3.18(b) of the\nCompany Disclosure Letter, neither the Company nor any other trade or business (whether or not incorporated) that would be treated as\na single employer with the Company pursuant to Section

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414\nof the Code has, in the past six years, maintained, sponsored, contributed to, or has any liability under (i) any plan subject to Title\nIV of ERISA or Section 412 of the Code; (ii) any “multiemployer plan” within the meaning of Section 3(37) of ERISA;\n(iii) any “multiple employer plan” within the meaning of Section 4063 or 4064 of ERISA; or (iv) any “multiple employer\nwelfare arrangement” within the meaning of Section 3(40) of ERISA.

(c)Employee\nPlan Compliance and Legal Proceedings.\nExcept as otherwise set forth in Section\n3.18(c) of the\nCompany Disclosure Letter or as would not have a Company Material Adverse Effect, (i) each Employee Plan has been operated in accordance\nwith its terms and applicable law, including ERISA, Pension Benefit Guaranty Corp rules, and the Code; (ii) all required contributions\nto the Employee Plans have been properly and timely made; (iii) no Employee Plan has any unfunded liabilities that have not been properly\naccrued; and (iv) there are no Legal Proceedings pending or, to the Knowledge of the Company, threatened on behalf of or against any\nEmployee Plan, other than routine claims for benefits. Each Employee Plan intended to be qualified under Section 401(a) of the Code has\nreceived a favorable determination or opinion letter from the IRS or is entitled to rely on a prototype or volume submitter opinion letter.\nTo the Knowledge of the Company, no event has occurred that would reasonably be expected to cause the loss of such qualification. Each\nEmployee Plan that is a “non-qualified deferred compensation plan” (within the meaning of Section 409A(d)(1) of the Code)\nhas been operated and administered in compliance with Section 409A of the Code in all material respects. No payment made or to be made\nunder any “non-qualified deferred compensation plan” has been subject to taxation pursuant to, or any Taxes, interest, or\npenalties imposed by, Sections 409A or 457A of the Code.

(d)Transaction\nPayments. Except\nas otherwise set forth in Section\n3.18(d) of the\nCompany Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation of the Merger will, either alone\nor in conjunction with any other event, (i) result in, or accelerate the time of payment or vesting of, any payment or benefit becoming\ndue under any Employee Plan; (ii) materially increase any compensation or benefits payable under any Employee Plan; (iii) trigger\nany obligation to fund any Employee Plan; (iv) limit or restrict the right of Parent to merge, amend or terminate any Employee Plan\nafter the Effective Time; or (v) give rise to any “excess parachute payment” within the meaning of Section 280G of the\nCode.

(e)Group\nHealth Plan Matters.\nNo Employee Plan provides material post-termination or post-retirement health, life insurance, or other material welfare benefits, except\nas required under Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code (or similar state law) for which the individual\npays the full cost of coverage. Except as would not have a Company Material Adverse Effect, (i) each Employee Plan that is a “group\nhealth plan” as defined in Section 5000(b)(1) of the Code complies in all respects with the applicable provisions of the Patient\nProtection and Affordable Care Act of 2010, the Health Care and Education Reconciliation Act of 2010, and all regulations issued thereunder,\n(ii) neither the Company nor any other trade or business (whether or not incorporated) that would be treated as a single employer with\nthe Company pursuant to Section 414 of the Code has incurred, and no event has occurred and no condition or circumstance exists that would\nreasonably be expected to subject the Company or any such affiliate thereof to, any penalty or excise Tax under Sections 4980D or 4980H\nof the Code, and (iii) the Company has complied with the applicable reporting requirements under Sections 6055 and 6056 of the Code.

(f)Non-U.S.\nPlans. Without\nlimiting the generality of the foregoing, with respect to each Employee Plan that is maintained for current or former employees or other\nservice providers who reside or work primarily outside of the United States (each, a “Non-U.S.\nPlan”):\n(i) each Non-U.S. Plan required to be registered has been registered and has been maintained in good standing in all material respects\nwith any applicable Governmental Authority; (ii) no Non-U.S. Plan is a defined benefit plan (as defined in ERISA, whether or not subject\nto ERISA); and (iii) no material unfunded or underfunded liabilities exist with respect to any Non-U.S. Plan. The Company Group has\ntimely made all payments required to have been made by them in all material respects with respect to any plan or arrangement sponsored\nor maintained by a Governmental Authority.

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3.19Labor\nMatters.

(a)Union\nActivities. The\nCompany Group is not a party to or bound by any collective bargaining agreement or other Contract with any labor union (each, a “Collective\nBargaining Agreement”),\nand no Collective Bargaining Agreement is being negotiated by the Company Group. Except as would not have a Company Material Adverse Effect,\nas of the date hereof, there is no strike, lockout, slowdown, work stoppage or other labor dispute against or affecting the Company Group\npending, or to the Knowledge of the Company, threatened.

(b)Employment\nLaw Compliance.\nExcept as would not have a Company Material Adverse Effect, the Company Group is, and for the past three years has been, in compliance\nwith applicable laws with respect to employment, including employment practices, wage and hour, immigration, discrimination, retaliation,\nlabor relations, worker classification, and employee health and safety. In the past three years, the Company Group has not implemented\nany “plant closing” or “mass layoff” (each, as defined in WARN).

3.20Permits;\nCompliance with Laws.

(a)(i)\nThe Company Group holds, to the extent legally required, all material permits, licenses, variances, clearances, consents, commissions,\nfranchises, exemptions, orders and approvals from Governmental Authorities (“Permits”)\nthat are required for the operation of the business of the Company Group as currently conducted; (ii) the Company Group complies in\nall material respects with the terms of all such Permits; and (iii) as of the date of this Agreement, no suspension or cancellation\nof any such Permit is pending or, to the Knowledge of the Company, threatened.

(b)The\nCompany Group is, and has been since January 1, 2023, in compliance in all material respects with all laws and orders that are applicable\nto the Company Group or to the conduct of the business or operations of the Company Group.

(c)Without\nlimiting the generality of Section\n3.20(b), the Company\nGroup is, and has been since January 1, 2019, in compliance in all material respects with all applicable Health Laws, including HIPAA.\nIn furtherance of the foregoing:

(i)the\nCompany has designated privacy and security officials responsible for the development and implementation of its privacy and security compliance\nprogram;

(ii)when\nrequired by HIPAA, the Company Group has entered into and complies in all material respects with all required business associate agreements;

(iii)the\nCompany Group has provided training required under HIPAA to applicable members of its workforce;

(iv)the\nCompany Group has adopted and maintained privacy and security policies and procedures designed to comply with HIPAA;

(v)the\nCompany Group has conducted periodic security risk assessments and security risk analyses as required under applicable Health Laws and\nhas addressed and remediated all material deficiencies identified through such assessments;

(vi)except\nas set forth in the Company Disclosure Letter, the Company Group has not received any written notice from any Governmental Authority alleging\nany violation of HIPAA or other applicable Health Laws; and

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(vii)the\nCompany Group has not experienced any Breach of Protected Health Information (as such terms are defined under HIPAA) that required notification\nunder 45 C.F.R. § 164.410.

(d)No\nrepresentation is made under this Section\n3.20 with respect\nto environmental, intellectual property, Tax, employee benefits, labor, trade controls and anti-corruption matters, which matters are\naddressed exclusively in Sections\n3.15, 3.16,\n3.17,\n3.18,\n3.19\nand 3.25.

3.21Legal\nProceedings; Orders.

(a)No\nLegal Proceedings.\nAs of the date hereof, there are no Legal Proceedings pending or, to the Knowledge of the Company, threatened against the Company Group,\nexcept as listed on Section\n3.21 of the Company\nDisclosure Letter and for those that would not, individually or in the aggregate, reasonably be expected to be material to the Company\nGroup.

(b)No\nOrders. As of the\ndate hereof, the Company Group is not subject to any order of any kind or nature issued by any Governmental Authority that would reasonably\nbe expected to prevent or delay the consummation of the Merger or the ability of the Company to fully perform its covenants and obligations\npursuant to this Agreement.

3.22Insurance.\nSection\n3.22 of the Company\nDisclosure Letter sets forth a true, correct and complete list, as of the date of this Agreement, of all material insurance policies maintained\nby or for the benefit of the Company Group (the “Company\nInsurance Policies”).\nThe Company Group maintains insurance coverage with reputable insurers in such amounts and covering such risks as the Company reasonably\nbelieves, based on past experience, is customarily carried by Persons conducting business similar to that of the Company Group. Except\nas would not have a Company Material Adverse Effect, as of the date of this Agreement:

(i)each\nCompany Insurance Policy is valid and binding and in full force and effect;

(ii)all\npremiums due and payable under the Company Insurance Policies have been paid when due and no premium is past due;

(iii)the\nCompany Group is in compliance in all material respects with the terms and conditions of the Company Insurance Policies; and

(iv)neither\nthe Company nor any of its Subsidiaries is in breach or default under any Company Insurance Policy and, to the Knowledge of the Company,\nno event has occurred that, with notice or lapse of time or both, would constitute such a breach or default or permit termination, cancellation,\nrescission or modification of coverage thereunder;

(v)neither\nthe Company nor any of its Subsidiaries has received any written notice of cancellation, termination, non-renewal, invalidation or material\npremium increase with respect to any Company Insurance Policy;

(vi)all\npending claims in excess of $100,000 have been properly reported to the applicable insurer in accordance with the terms of the applicable\nCompany Insurance Policy and no insurer has denied coverage with respect to any such claim; and

(vii)since\nJanuary 1, 2023, neither the Company nor any of its Subsidiaries has received any written notice regarding any non-renewal, termination,\ninvalidation or cancellation of any Company Insurance Policy.

3.23Related\nPerson Transactions.\nExcept for indemnification, compensation or other employment arrangements in the ordinary course of business, there are no Contracts or\ntransactions between the Company Group, on the one hand, and any Affiliate (including any director or officer) thereof, but not including\nany Subsidiary of the Company, on the other hand, that would be required to be

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disclosed\npursuant to Item 404 of Regulation S-K promulgated by the SEC in the Company’s Form 10-K or proxy statement pertaining to an annual\nmeeting of stockholders that has not been so disclosed.

3.24Brokers.\nExcept for the Advisor, Citizens Capital Markets & Advisory and Oaklins DeSilva +Phillips, there is no financial advisor, investment\nbanker, broker, finder, agent or other Person that is entitled to any financial advisor’s, investment banking, brokerage, finder’s\nor other fee or commission in connection with the Merger based upon arrangements made by or on behalf of the Company Group.

3.25Trade\nControls; Anti-Corruption Laws.

(a)Trade\nControls.

(i)Since\nJanuary 1, 2023, the Company Group has conducted its transactions in material accordance with all applicable export and re-export control\nlaws, trade and economic sanctions laws, and all other applicable export control and sanctions laws in other countries in which the Company\nGroup conducts business (collectively, “Trade\nControl Laws”).

(ii)To\nthe Knowledge of the Company, as of the date of this Agreement, there are no pending or threatened Legal Proceedings against the Company\nGroup alleging a violation of any sanctions and export control laws or anti-corruption laws that are applicable to the Company Group.

(iii)No\nlicenses or approvals pursuant to the Trade Control Laws are necessary for the transfer of any export licenses or other export approvals\nto Parent or the Surviving Corporation in connection with the consummation of the Merger, except for any such licenses or approvals the\nfailure of which to obtain would not have a Company Material Adverse Effect.

(iv)Since\nJanuary 1, 2023, (i) neither the Company nor any of its Subsidiaries has been a Sanctioned Person; (ii) neither the Company nor any\nof its Subsidiaries has been organized, resident or located in a Sanctioned Country; (iii) neither the Company nor any of its Subsidiaries\nhas knowingly conducted any business with any Sanctioned Person or in any Sanctioned Country in violation of applicable trade control\nlaws; and (iv) the Company Group has been in compliance in all material respects with all applicable sanctions, export control, import\ncontrol and anti-boycott laws.

(v)For\npurposes of this Section, “Sanctioned\nCountry”\nmeans any country or territory that is, or whose government is, the subject or target of comprehensive Sanctions administered or enforced\nby a Sanctions Authority. “Sanctioned\nPerson” means\nany Person that is: (a) the subject or target of Sanctions, including by reason of being listed on any sanctions- or restricted-party\nlist maintained by a Sanctions Authority; (b) organized, resident or located in a Sanctioned Country; or (c) owned or controlled,\ndirectly or indirectly, 50% or more, individually or in the aggregate, by one or more Persons described in clause (a) or clause (b). “Sanctions”\nmeans economic or financial sanctions, trade embargoes, asset-freeze measures and related restricted-party measures administered, enacted\nor enforced by a Sanctions Authority. “Sanctions\nAuthority”\nmeans the United States government, including the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department\nof State and the U.S. Department of Commerce; the United Nations Security Council; the European Union; His Majesty’s\nTreasury of the United Kingdom; and any other applicable Governmental Authority that administers or enforces Sanctions.

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(b)Anti-Corruption\nlaws. Except as\nwould not be material to the Company Group, taken as a whole, since January 1, 2023, none of the Company Group, or to the Knowledge of\nthe Company, any officer, director, agent, employee or other Person acting on its behalf, has, directly or indirectly, (i) violated any\nanti-corruption laws; (ii) directly or indirectly made, offered, authorized, promised, solicited or received any unlawful bribe, kickback,\npayoff, influence payment or other unlawful payment in violation of the FCPA or any anti-corruption laws; (iii) taken or failed to\ntake any action that would cause the Company or any of its Subsidiaries to be in violation of any provision of the Foreign Corrupt Practices\nAct of 1977 (the “FCPA”)\nor other applicable anti-corruption laws in other countries in which the Company Group conducts business; or (iv) used any corporate\nfunds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity.

3.26 No\nReliance. The Company,\non behalf of itself and its Subsidiaries, acknowledges and agrees that, except for the representations and warranties expressly set forth\nin Article\nIV, it is not acting\n(including, as applicable, by entering into this Agreement or consummating the Merger) in reliance on:

(a) any\nrepresentation or warranty, express or implied;

(b) any\nestimate, projection, prediction, data, financial information, memorandum, presentation or other materials or information provided or\naddressed to the Company or any of its Affiliates, in connection with presentations by or discussions with Parent’s management whether\nprior to or after the date of this Agreement or in any other forum or setting; or

(c) the\naccuracy or completeness of any other representation, warranty, estimate, projection, forecast, prediction, data, financial information,\nforward-looking statement, memorandum, presentation or other materials or information.

3.27 Information\nSupplied. None\nof the information supplied or to be supplied by or on behalf of the Company specifically for inclusion or incorporation by reference\nin the Form S-4 (including the Proxy Statement contained therein) will, at the time the Form S-4 is declared effective under the Securities\nAct, and none of such information supplied by or on behalf of the Company specifically for inclusion or incorporation by reference in\nthe Proxy Statement contained in the Form S-4 will, at the date such Proxy Statement is first mailed to the Company’s stockholders\nor at the time of the Company Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact\nrequired to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not\nmisleading. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any information supplied by\nor on behalf of Parent or Merger Sub for inclusion or incorporation by reference in the Form S-4 or Proxy Statement.

3.28 Transaction\nExpenses. Section\n3.28 of the Company Disclosure Letter sets forth the Company’s good faith estimate, as of the date of this Agreement, of the aggregate\nCompany Transaction Expenses expected to be incurred in connection with the Transactions (the “Transaction\nExpense Estimate”).\nThe Transaction Expense Estimate has been prepared in good faith based on information available to the Company as of the date of this\nAgreement and reflects the Company’s reasonable expectations as of such date. The Company makes no representation or warranty that\nactual Company Transaction Expenses will not exceed the Transaction Expense Estimate, and the Transaction Expense Estimate shall not constitute\na cap, ceiling or limitation on the Company Transaction Expenses that may be incurred by the Company in connection with the Transactions.

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Article\nIV
REPRESENTATIONS\nAND WARRANTIES OF PARENT AND MERGER SUB

With\nrespect to any Section of this Article\nIV, except (a)\nas disclosed in the reports, statements and other documents filed by Parent with the SEC or furnished by Parent to the SEC, in each case\npursuant to the Exchange Act on or after January 1, 2024, and prior to the date of this Agreement (other than any disclosures contained\nor referenced therein under the captions “Risk Factors,” “Forward- Looking Statements,” “Quantitative and\nQualitative Disclosures About Market Risk” and any other disclosures contained or referenced therein of information, factors or\nrisks that are predictive, cautionary or forward-looking in nature) (the “Parent\nRecent SEC Reports”)\n(it being understood that (i) any matter disclosed in any Parent Recent SEC Report will be deemed disclosed only with respect to the particular\nrepresentation or warranty to which such disclosure is specifically applicable and only to the extent the applicability of such disclosure\nto such representation or warranty is reasonably apparent on the face of such disclosure, and (ii) this clause (a) shall not apply to\nSection\n4.1, Section\n4.2, Section\n4.3, Section\n4.4, Section\n4.5, Section 4.10(b),\nSection\n4.14 and Section\n4.21(b)), Parent\nand Merger Sub hereby represent and warrant to the Company as follows:

4.1Organization;\nGood Standing.

(a)Parent.\nParent (a) is a corporation duly organized, validly existing and in good standing pursuant to the DGCL; and (b) has the requisite\ncorporate power and authority to conduct its business as it is presently being conducted and to own, lease or operate its properties and\nassets. Parent is duly qualified to do business and is in good standing in each jurisdiction where the character of its properties owned\nor leased or the nature of its activities make such qualification necessary (to the extent that the concept of “good standing”\nis applicable in the case of any jurisdiction outside the United States), except where the failure to be so qualified or in good standing\nwould not have a material adverse effect. Parent has made available to the Company true, correct and complete copies of its certificate\nof incorporation, bylaws and other similar organizational documents, each as amended to date, and Parent is not in violation of such organizational\ndocuments.

(b)Merger\nSub. Merger Sub\n(a) is a corporation duly organized, validly existing and in good standing pursuant to the DGCL; and (b) has the requisite corporate\npower and authority to conduct its business as it is presently being conducted and to own, lease or operate its properties and assets.\nMerger Sub is duly qualified to do business and is in good standing in each jurisdiction where the character of its properties owned or\nleased or the nature of its activities make such qualification necessary (to the extent that the concept of “good standing”\nis applicable in the case of any jurisdiction outside the United States), except where the failure to be so qualified or in good standing\nwould not have a material adverse effect. Merger Sub has made available to the Company true, correct and complete copies of its certificate\nof incorporation, bylaws and other similar organizational documents, each as amended to date, and Merger Sub is not in violation of such\norganizational documents.

4.2Power;\nEnforceability.\nEach of Parent and Merger Sub has the requisite power and authority to (a) execute and deliver this Agreement; (b) perform its covenants\nand obligations hereunder; and (c) consummate the Transactions. The execution and delivery of this Agreement by each of Parent and\nMerger Sub, the performance by each of Parent and Merger Sub of its respective covenants and obligations hereunder and the consummation\nof the Transactions have been duly authorized by all necessary action on the part of each of Parent and Merger Sub and no additional actions\non the part of Parent or Merger Sub are necessary to authorize (i) the execution and delivery of this Agreement by each of Parent and\nMerger Sub; (ii) the performance by each of Parent and Merger Sub of its respective covenants and obligations hereunder; or (iii)\nassuming the truth of the following sentence, the consummation of the Merger (other than the filing with the Secretary of State of the\nState of Delaware of the Certificate of Merger as required by the DGCL). Effective immediately following the execution and delivery of\nthis Agreement, Parent, in its capacity as the sole stockholder of Merger Sub, will execute and deliver to Merger Sub (with a copy also\nsent to the Company) a written consent adopting this Agreement and approving the Merger in accordance with the DGCL. This Agreement has\nbeen duly executed and

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delivered\nby each of Parent and Merger Sub and, assuming the due authorization, execution and delivery by the Company, constitutes a legal, valid\nand binding obligation of each of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms\nexcept as such enforceability (A) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws\naffecting or relating to creditors’ rights generally; and (B) is subject to general principles of equity.

4.3Non-Contravention.\nThe execution and delivery of this Agreement by each of Parent and Merger Sub, the performance by each of Parent and Merger Sub of their\nrespective covenants and obligations hereunder, and the consummation of the Transactions do not (a) violate or conflict with any provision\nof the certificate of incorporation, bylaws or other similar organizational documents of Parent or Merger Sub; (b) violate, conflict\nwith, result in the breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) pursuant\nto, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration pursuant\nto any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument\nor obligation to which Parent or Merger Sub is a party or by which Parent, Merger Sub or any of their properties or assets may be bound;\n(c) assuming that all Consents described in Section\n4.4 have been obtained\nor made, and any waiting periods thereunder have terminated or expired prior to the Effective Time, violate or conflict with any law or\norder applicable to Parent or Merger Sub or by which any of their properties or assets are bound; or (d) result in the creation of\nany lien (other than Permitted Liens) upon any of the properties or assets of Parent or Merger Sub, except in the case of each of clauses\n(b), (c) and (d) for such violations, conflicts, breaches, defaults, terminations, accelerations or liens that would not have a Parent\nMaterial Adverse Effect.

4.4Requisite\nGovernmental Approvals.\nNo Consent of any Governmental Authority, including under any Antitrust Law, is required on the part of Parent, Merger Sub or any of their\nAffiliates (a) in connection with the execution and delivery of this Agreement by each of Parent and Merger Sub; (b) the performance\nby each of Parent and Merger Sub of their respective covenants and obligations pursuant to this Agreement; or (c) the consummation\nof the Transactions, except (i) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and such\nfilings with Governmental Authorities to satisfy the applicable laws of states in which the Company Group is qualified to do business;\n(ii) such filings and approvals as may be required by any federal or state securities laws, including compliance with any applicable requirements\nof the Exchange Act; (iii) the rules of NASDAQ, and (iv) such other Consents the failure of which to obtain would not have a Parent\nMaterial Adverse Effect.

4.5Parent\nCapitalization.

(a)Capital\nStock. The authorized\ncapital stock of Parent consists of 20,000,000 shares of Parent Common Stock and 10,000,000 shares of Parent Preferred Stock (collectively,\nthe “Parent\nCapital Stock”).\nAs of the Capitalization Date, (i) 5,400,386 shares of Parent Common Stock were issued and outstanding; (ii) 3,686,711 shares of Parent\nCommon Stock were outstanding; (ii) 1,713,675 shares of Parent Common Stock were held by Parent as treasury shares; and (iii)\n2,775,741 shares of Parent Preferred Stock were issued and 2,454,886 shares of Parent Preferred Stock were outstanding. All outstanding\nshares of Parent Common Stock and Parent Preferred Stock have been validly issued, fully paid, nonassessable and free of any preemptive\nrights. From the close of business on the Capitalization Date to the date of this Agreement, other than the issuance and/or vesting\nof restricted stock units or restricted stock, Parent has not issued or granted any Parent Securities.

(b)Parent\nPreferred Stock.\nThe Parent Preferred Stock to be issued as Preferred Stock Consideration has been duly authorized and, when issued and delivered in accordance\nwith the terms of this Agreement and the Certificate of Designations, will be validly issued, fully paid and nonassessable, free and clear\nof all liens, other than restrictions on transfer arising under applicable securities laws or the organizational documents of Parent.\n

(c)Authorization\nand Reservation.\nParent has, or prior to the Effective Time will have, authorized and reserved for issuance a sufficient number of shares of Parent Preferred\nStock to pay the Preferred Stock Consideration in accordance with Article\nII. The issuance\nof the Parent Preferred Stock as Preferred Stock Consideration has been duly authorized by all necessary corporate action on the part\nof Parent.

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(d)Other\nRights. Parent\nis not a party to any Contract relating to the voting of, requiring registration of, or granting any preemptive rights, anti-dilutive\nrights or rights of first refusal or other similar rights with respect to any Parent Securities.

4.6Subsidiaries.

(a)Capital\nStock of Subsidiaries.\nAll of the outstanding capital stock of, or other equity or member or voting interest in, each Subsidiary of Parent (i) has been duly\nauthorized, validly issued and is fully paid and nonassessable (to the extent such concepts are applicable to such Subsidiary); and\n(ii) except for director’s qualifying or similar shares, is owned, directly or indirectly, by Parent, free and clear of all liens\n(other than Permitted Liens) and any other restriction (including any restriction on the right to vote, sell or otherwise dispose of such\ncapital stock or other equity or voting interest) that would prevent such Subsidiary from conducting its business as of the Effective\nTime in substantially the same manner that such business is conducted on the date of this Agreement.

(b)Other\nSecurities of Subsidiaries.\nThere are no outstanding (i) securities convertible into or exchangeable or exercisable for shares of capital stock of, or other equity\nor voting interest in, any Subsidiary of Parent; (ii) options, warrants or other rights or arrangements obligating Parent or its Affiliates\nto acquire from any Subsidiary of Parent, or that obligate any Subsidiary of Parent to issue, any capital stock of, or other equity or\nvoting interest in, or any securities convertible into or exchangeable for, shares of capital stock of, or other equity or voting interest\n(including any voting debt) in, any Subsidiary of Parent; or (iii) obligations of any Subsidiary of Parent to grant, extend or enter\ninto any subscription, warrant, right, convertible or exchangeable security, or other similar Contract relating to any capital stock of,\nor other equity or voting interest (including any voting debt) in, such Subsidiary to any Person other than Parent or one of its Subsidiaries.

(c)Other\nInvestments. Other\nthan equity securities held in the ordinary course of business for cash management purposes, Parent does not own or hold the right to\nacquire any equity securities, ownership interests or voting interests (including voting debt) of, or securities exchangeable or exercisable\ntherefor, or investments in, any other Person.

4.7Parent\nSEC Reports. Since\nJanuary 1, 2024, Parent has filed all forms, reports and documents with the SEC that have been required to be filed by it pursuant to\napplicable laws prior to the date of this Agreement (the “Parent\nSEC Reports”).\nEach Parent SEC Report complied, as of its effective date (in the case of Parent SEC Reports that are registration statements filed pursuant\nto the requirements of the Securities Act) or filing date (in the case of all other applicable Parent SEC Reports) (or, if amended or\nsuperseded by a filing prior to the date of this Agreement, as of the date of the last such amendment or superseded filing), in all material\nrespects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be, each as in effect on the date\nthat such Parent SEC Report was filed. True, correct and complete copies of all Parent SEC Reports are publicly available in the Electronic\nData Gathering, Analysis and Retrieval database of the SEC. As of its filing date (or, if amended or superseded by a filing prior to the\ndate of this Agreement, on the date of such amended or superseded filing), each Parent SEC Report did not contain any untrue statement\nof a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances\nunder which they were made, not misleading. As of the date of this Agreement, there are no outstanding or unresolved comments in comment\nletters received from the SEC with respect to the Parent SEC Reports.

4.8Parent\nFinancial Statements; Internal Controls; Indebtedness.

(a)Parent\nFinancial Statements.\nThe consolidated financial statements (including any related notes and schedules) of the Parent Group filed with the Parent SEC Reports\n(i) were prepared in accordance with GAAP (except as may be indicated in the notes thereto or as otherwise permitted by Form 10-Q with\nrespect to any financial statements filed on Form 10-Q); and (ii) fairly present (except as may be indicated in the notes thereto\nand subject in the case of unaudited statements to normal, year-end audit adjustments), in all material respects, the consolidated financial\nposition of the Parent Group as of the dates thereof and the consolidated results of operations and cash flows for the periods then ended.\nThere are no unconsolidated Subsidiaries of the Parent or any off-balance sheet arrangements of the type required to be

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disclosed\npursuant to Item 303(a)(4) of Regulation S-K promulgated by the SEC that have not been so disclosed in the Parent SEC Reports.

(b)Disclosure\nControls and Procedures.\nParent has established and maintains “disclosure controls and procedures” (as defined pursuant to Rule 13a-15(e) and Rule\n15d-15(e) promulgated under the Exchange Act). Parent’s disclosure controls and procedures are reasonably designed to ensure that\nall (i) material information required to be disclosed by the Parent in the reports and other documents that it files or furnishes pursuant\nto the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC;\nand (ii) such material information is accumulated and communicated to the Parent’s management as appropriate to allow timely decisions\nregarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act.

(c)Internal\nControls. Parent\nhas established and maintains a system of “internal control over financial reporting” (as defined pursuant to Rule 13a-15(f)\nand Rule 15d-15(f) promulgated under the Exchange Act) sufficient to provide reasonable assurance (i) that transactions are recorded as\nnecessary to permit preparation of financial statements in accordance with GAAP, including policies and procedures that require the maintenance\nof records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Parent Group;\n(ii) that transactions are made only in accordance with appropriate authorizations of the Parent’s management and the Parent board\nof directors (or a committee thereof); and (iii) regarding prevention or timely detection of unauthorized acquisition, use or disposition\nof the assets of the Parent Group. Parent’s management has completed an assessment of the effectiveness of the Parent’s internal\ncontrol over financial reporting in compliance with the requirements of Section 404(a) of the Sarbanes-Oxley Act for the fiscal year ended\nDecember 31, 2025, and such assessment concluded that such system was effective. Since January 1, 2024, the principal executive officer\nand principal financial officer of the Parent have made all certifications required by the Sarbanes-Oxley Act. Neither the Parent nor\nits principal executive officer or principal financial officer has received notice from any Governmental Authority challenging or questioning\nthe accuracy, completeness, form or manner of filing of such certifications. Neither the Parent nor, to the Knowledge of the Parent, the\nParent’s independent registered public accounting firm has identified or been made aware of (A) any significant deficiency or material\nweakness in the system of internal control over financial reporting utilized by the Parent Group that has not been subsequently remediated;\nor (B) any fraud that involves the Parent’s management or other employees who have a role in the preparation of financial statements\nor the internal control over financial reporting utilized by the Parent Group.

4.9No\nUndisclosed Liabilities.\nNeither the Parent nor any of its Subsidiaries has any liabilities of a nature required to be reflected or reserved against on a balance\nsheet (or the notes thereto) prepared in accordance with GAAP, other than liabilities (a) reflected or otherwise reserved against in the\naudited balance sheet of Parent dated as of December 31, 2025 contained in the Parent SEC Documents filed prior to the date hereof or\nin the consolidated financial statements of the Parent Group (including the notes thereto) included in the Parent SEC Reports filed prior\nto the date of this Agreement; (b) arising pursuant to or incurred as expressly permitted or expressly contemplated by this Agreement\nor incurred in connection with the Transactions; (c) incurred in the ordinary course of business since March 31, 2026; or (d)\nthat would not have a Parent Material Adverse Effect.

4.10Absence\nof Certain Changes.\nExcept as otherwise contemplated, required or permitted by this Agreement, since December 31, 2025 through the date of this Agreement,\n(a) the business of the Parent Group has been conducted, in all material respects, in the ordinary course of business (except with respect\nto this Agreement and discussions, negotiations and transactions related hereto) and (b) there has not occurred a Parent Material Adverse\nEffect.

4.11Permits;\nCompliance with Laws.

(a)Except\nas would not have a Parent Material Adverse Effect, (i) the Parent Group holds, to the extent legally required, all permits, licenses,\nvariances, clearances, consents, commissions, franchises, exemptions, orders and approvals from Governmental Authorities (“Parent\nPermits”)\nthat are required for the operation of the business of the Parent Group as currently conducted; (ii) the Parent Group complies with\nthe terms of all such Parent Permits; and

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(iii)\nas of the date of this Agreement, no suspension or cancellation of any such Parent Permit is pending or, to the Knowledge of the Parent,\nthreatened.

(b)The\nParent Group is, and since January 1, 2024 has been, in compliance in all material respects with all laws and orders that are applicable\nto the Parent Group or to the conduct of the business or operations of the Parent Group, except for noncompliance that has not had and\nwould not have a Parent Material Adverse Effect.

4.12Legal\nProceedings; Orders.

(a)No\nLegal Proceedings.\nAs of the date hereof, there are no Legal Proceedings pending or, to the Knowledge of the Parent, threatened against the Parent Group,\nexcept for those that are not, individually or in the aggregate, reasonably likely to have a Parent Material Adverse Effect.

(b)No\nOrders. As of the\ndate hereof, the Parent Group is not subject to any material order of any kind or nature issued by any Governmental Authority that would\nreasonably be expected to prevent or materially delay the consummation of the Transactions or the ability of the Parent to fully perform\nits covenants and obligations pursuant to this Agreement.

4.13Ownership\nof Company Capital Stock.\nNone of Parent, Merger Sub or any of their respective directors, officers, general partners, managers or, to the knowledge of Parent,\nany employees of Parent or Merger Sub (a) has owned any shares of Company Capital Stock during the two years prior to the date of this\nAgreement; or (b) is or has been at any time during the past three years an “interested stockholder” (as defined in Section\n203 of the DGCL) of the Company.

4.14Brokers.\nThere is no financial advisor, investment banker, broker, finder, agent or other Person who is entitled to any financial advisor’s,\ninvestment banking, brokerage, finder’s or other fee or commission in connection with the Transactions based upon arrangements made\nby or on behalf of Parent, Merger Sub or any of their Affiliates.

4.15Operations\nof Parent and Merger Sub.\nMerger Sub has been formed solely for the purpose of engaging in the Transactions, and, prior to the Effective Time, Merger Sub will not\nhave engaged in any other business activities and will have incurred no liabilities or obligations other than as contemplated by any agreements\nor arrangements entered into in connection with this Agreement. Parent owns beneficially and of record all of the outstanding capital\nstock of, and other equity and voting interest in, Merger Sub free and clear of all liens.

4.16No\nParent Vote or Approval Required.\nNo vote or consent of the members or holders of any capital stock of, or other equity or voting interest in, Parent is necessary to adopt\nthis Agreement and consummate the Merger. The vote or consent of Parent, as the sole stockholder of Merger Sub, is the only vote or consent\nof the holders of any capital stock of, or other equity interest in, Merger Sub necessary to adopt this Agreement and consummate the Merger.

4.17Stockholder\nand Management Arrangements.\nAs of the date of this Agreement, neither Parent nor Merger Sub nor any of their respective Affiliates is a party to any Contract, or\nhas authorized, made or entered into or committed or agreed to enter into any formal or informal arrangements or other understandings\n(whether or not binding) with any stockholder, director, officer, employee or other Affiliate of the Company Group (a) relating to (i)\nthis Agreement or the Transactions; or (ii) the Surviving Corporation or any of its Subsidiaries, businesses or operations (including\nas to continuing employment) from and after the Effective Time; or (b) pursuant to which any (i) such holder of Company Common Stock\nwould be entitled to receive consideration of a different amount or nature than the Merger Consideration in respect of such holder’s\nshares of Company Common Stock; (ii) such holder of Company Common Stock has agreed to approve this Agreement or vote against any\nSuperior Proposal except for the Voting and Support Agreements; or (iii) such stockholder, director, officer, employee or other Affiliate\nof the Company has agreed to provide, directly or indirectly, equity investment to Parent, Merger Sub or the Company to finance any portion\nof the Merger.

4.18Financing.\n

(a)Sufficiency\nof Financing. Parent\nand Merger Sub have, and at the Closing will have (assuming that (i) the Debt Financing has been provided and the proceeds thereof made\navailable to Parent prior to (or at) the Closing, or (ii) Alternative Debt Financing has been secured by Parent), sufficient cash on hand\nand/or other immediately available funds to (a) pay all

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amounts\nrequired to be paid by Parent or Merger Sub pursuant to Article II, (b) repay, prepay, discharge or otherwise satisfy all Indebtedness\nof the Company and its Subsidiaries required to be repaid, prepaid, discharged or satisfied at the Closing, (c) pay all fees and expenses\nrequired to be paid by Parent or Merger Sub in connection with the Transactions, and (d) consummate the Transactions.

(b)No\nExclusive Arrangements.\nAs of the date of this Agreement, none of Parent, Merger Sub or any of their respective Affiliates has entered into any Contract, arrangement\nor understanding (i) awarding any agent, broker, investment banker or financial advisor any financial advisory role on an exclusive basis\nin connection with the Transactions; or (ii) expressly prohibiting any bank, investment bank or other potential provider of debt financing\nfrom providing or seeking to provide debt financing or financial advisory services to any Person in connection with a transaction relating\nto the Company Group in connection with the Transactions.

4.19Solvency.\nNeither Parent nor Merger Sub is entering into this Agreement with the actual intent to hinder, delay or defraud either present or future\ncreditors of the Company or any of its Subsidiaries. As of the Effective Time and immediately after giving effect to the Transactions\n(including the payment of all amounts payable pursuant to Article\nII in connection\nwith or as a result of the Merger and all related fees and expenses of Parent, Merger Sub, the Company and their respective Subsidiaries\nin connection therewith), (a) the amount of the “fair saleable value” of the assets of each of Parent and the Surviving Corporation\nand its Subsidiaries will exceed (i) the value of all liabilities of Parent or the Surviving Corporation and such Subsidiaries, as applicable,\nincluding contingent and other liabilities; and (ii) the amount that will be required to pay the probable liabilities of each of Parent\nor the Surviving Corporation and its Subsidiaries, as applicable, on their existing debts (including contingent liabilities) as such debts\nbecome absolute and matured; (b) each of Parent or the Surviving Corporation and its Subsidiaries, as applicable, will not have an\nunreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged; and (c)\neach of Parent or the Surviving Corporation and its Subsidiaries, as applicable, will be able to pay its liabilities, including contingent\nand other liabilities, as they mature. For purposes of the foregoing, “not have an unreasonably small amount of capital for the\noperation of the businesses in which it is engaged or proposed to be engaged” and “able to pay its liabilities, including\ncontingent and other liabilities, as they mature” means that such Person will be able to generate enough cash from operations, asset\ndispositions or refinancing, or a combination thereof, to meet its obligations as they become due.

4.20Information\nSupplied. None\nof the information supplied or to be supplied by or on behalf of Parent or Merger Sub specifically for inclusion or incorporation by reference\nin the Form S-4 (including the Proxy Statement contained therein) will, at the time the Form S-4 is declared effective under the Securities\nAct, and none of such information supplied by or on behalf of Parent or Merger Sub specifically for inclusion or incorporation by reference\nin the Proxy Statement contained in the Form S-4 will, at the date such Proxy Statement is first mailed to the Company’s stockholders\nor at the time of the Company Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact\nrequired to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not\nmisleading. Notwithstanding the foregoing, neither Parent nor Merger Sub makes any representation or warranty with respect to any information\nsupplied by or on behalf of the Company for inclusion or incorporation by reference in the Form S-4 or proxy statement/prospectus.

4.21Exclusivity\nof Representations and Warranties.

(a)No\nOther Representations and Warranties.\nEach of Parent and Merger Sub, on behalf of itself and its Subsidiaries, acknowledges and agrees that, except for the representations\nand warranties expressly set forth in Article\nIII:

(i)the\nCompany Group has not made any representation or warranty relating to the Company Group or its businesses, operations or otherwise in\nconnection with this Agreement or the Transactions;

(ii)no\nPerson has been authorized by the Company Group or any of its Affiliates or Representatives to make any representation or warranty relating\nto the Company Group or its businesses or operations or otherwise in connection with this Agreement or the Transactions, and if

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made,\nsuch representation or warranty must not be relied upon by Parent, Merger Sub or any of their respective Affiliates or Representatives\nas having been authorized by the Company Group or any of its Affiliates or Representatives (or any other Person); and

(iii)the\nrepresentations and warranties made by the Company in this Agreement are in lieu of and are exclusive of all other representations and\nwarranties, including any express or implied or as to merchantability or fitness for a particular purpose, and the Company hereby disclaims\nany other or implied representations or warranties, notwithstanding the delivery or disclosure to Parent, Merger Sub or any of their respective\nAffiliates or Representatives of any documentation or other information (including any financial information, supplemental data or financial\nprojections or other forward-looking statements).

(b)No\nReliance. Each\nof Parent and Merger Sub, on behalf of itself and its Subsidiaries, acknowledges and agrees that, except for the representations and warranties\nexpressly set forth in Article\nIII, it is not\nacting (including, as applicable, by entering into this Agreement or consummating any of the Transactions) in reliance on:

(i)any\nrepresentation or warranty, express or implied;

(ii)any\nestimate, projection, forecast, prediction, forward-looking statement, financial information, memorandum, presentation or other materials\nor information provided or addressed to Parent, Merger Sub or any of their respective Affiliates or Representatives, including any materials\nor information made available in the electronic data room hosted by or on behalf of the Company in connection with the Transactions, in\nconnection with presentations by or discussions with the Company’s management or in any other forum or setting; or

(iii)the\naccuracy or completeness of any other representation, warranty, estimate, projection, forecast, prediction, forward-looking statement,\nfinancial information, memorandum, presentation or other materials or information.

(c)Investigation.\nEach of Parent and Merger Sub acknowledges that it has had the opportunity to conduct an independent investigation regarding the Company.\nNothing in this subsection (c) is intended to modify or limit in any respect any of the representations or warranties of the Company in\nArticle\nIII.

Article\nV
INTERIM\nOPERATIONS OF THE COMPANY

5.1Affirmative\nObligations. Except\n(a) as expressly contemplated or expressly permitted by this Agreement; (b) as set forth in Section\n5.1 or Section\n5.2 of the Company\nDisclosure Letter; (c) as required by applicable law or any binding order issued by a Governmental Authority of competent jurisdiction;\nor (d) as approved by Parent in writing (which approval will not be unreasonably withheld, conditioned or delayed), at all times during\nthe period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of\nthis Agreement pursuant to Article\nVIII and the Effective\nTime, the Company will, and will cause each of its Subsidiaries to (i) maintain its existence in good standing under the laws of its incorporation\nor formation; (ii) subject to the restrictions and exceptions set forth in Section\n5.2 or elsewhere\nin this Agreement, conduct its business and operations in the ordinary course of business; and (iii) (A) preserve intact its assets,\nproperties, Contracts or other legally binding understandings, licenses and business organizations; (B) keep available the services\nof its current officers and key employees; and (C) preserve the current relationships with material customers, suppliers, distributors,\nlessors, licensors, licensees, creditors, contractors and other Persons with which the Company Group has business relations.

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5.2Forbearance\nCovenants. Except\n(i) as expressly contemplated or permitted by this Agreement; (ii) as set forth in Section\n5.2 of the Company\nDisclosure Letter; (iii) as required by applicable law or any binding order issued by a Governmental Authority of competent jurisdiction;\nor (iv) as approved by Parent (which approval will not be unreasonably withheld, conditioned or delayed), at all times during the period\ncommencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement\npursuant to Article\nVIII and the Effective\nTime, the Company will not, and will not permit any of its Subsidiaries, to:

(a)amend\nthe Charter, the Bylaws or any other similar organizational document;

(b)propose\nor adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

(c)except\nfor (A) grants of Company Equity Awards permitted pursuant to Section\n5.2(i) below or\n(B) issuances of Company Securities on exercise or settlement of Company Equity Awards pursuant to the terms and conditions of Company\nEquity Awards, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options,\nwarrants, commitments, subscriptions, rights to purchase or otherwise) any Company Securities;

(d)directly\nor indirectly acquire, repurchase or redeem any securities, except for (A) repurchases of Company Securities pursuant to the terms and\nconditions of Company Equity Awards, or (B) transactions between the Company and any of its direct or indirect Subsidiaries;

(e)(A)\nadjust, split, combine or reclassify any shares of capital stock, or issue or authorize or propose the issuance of any other Company Securities\nin respect of, in lieu of or in substitution for, shares of its capital stock or other equity or voting interest; (B) declare, set\naside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares\nof capital stock or other equity or voting interest, or make any other actual, constructive or deemed distribution in respect of the shares\nof capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned Subsidiary\nof the Company to the Company or one of its other wholly owned Subsidiaries; (C) pledge or encumber any shares of its capital stock\nor other equity or voting interest; or (D) modify the terms of any shares of its capital stock or other equity or voting interest;

(f)(A)\nincur, assume or suffer any Indebtedness for borrowed money (including any long-term or short-term debt) or issue any debt securities,\nexcept (1) for trade payables incurred in the ordinary course of business by the Company Group; (2) for loans or advances to direct\nor indirect wholly owned Subsidiaries of the Company; (3) letters of credit, bank guarantees, security or performance bonds or similar\ncredit support instruments, overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary\ncourse of business by the Company Group; (4) Indebtedness incurred under the ABL Loan Agreement (as the same may be amended by ABL\nLoan Agreement Amendment) or other existing arrangements (including in respect of letters of credit) in respect of the Debt Financing\nor in the ordinary course of business to support ordinary course working capital needs of the Company Group or capital expenditures to\nthe extent permitted by Section\n5.2(m); provided\nthat in no event shall any such Indebtedness or arrangement, together with all amounts outstanding under the ABL Loan Agreement, exceed\nthe aggregate amount specified on Section\n5.2(f) of the Company\nDisclosure Letter; and (5) other Indebtedness in an aggregate principal amount not to exceed $750,000; (B) assume, guarantee,\nendorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person,\nexcept with respect to obligations of direct or indirect wholly owned Subsidiaries of the Company and except for any indemnification and\nadvancement obligations under the Charter, Bylaws, comparable organizational document of any Subsidiary of the Company or indemnification\nagreements with the Company Group;

(g)make\nany loans, advances or capital contributions to, or investments in, any other Person, except for (A) extensions of credit to customers\nin the ordinary course of business; (B) advances to directors, officers and other employees for travel and other business-related\nexpenses,

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in\neach case in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto;\n(C) advancement obligations under the Charter, Bylaws, comparable organizational document of any Subsidiary of the Company or indemnification\nagreements with the Company Group; and (D) loans, advances or capital contributions to, or investments in, direct or indirect wholly\nowned Subsidiaries of the Company;

(h)acquire,\nlease, license (other than non-exclusive licenses in the ordinary course of business), sell, abandon (except in the ordinary course of\nbusiness), transfer, assign, guarantee, exchange, mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create\nany lien thereupon, in each case in excess of $250,000 individually, or $500,000 in the aggregate in the case of acquisitions and $250,000\nin the aggregate in the case of dispositions, other than: (A) the sale, lease or licensing of equipment, products or services of the\nCompany Group in the ordinary course of business; (B) the acquisition of inventory (including, for avoidance of doubt, any raw materials,\ningredients, components, packaging materials, labels and all other materials and supplies), in the ordinary course of business; (C)\nany capital expenditures permitted (or consented to by Parent) under Section\n5.2(m); (D)\nin connection with financing transactions permitted (or consented to by Parent) under Section\n5.2(f); (E)\ndispositions of obsolete or worthless personal property in the ordinary course of business which have no fair market value in the good\nfaith determination of the Company; or (F) Permitted Liens;

(i)except\nas required by the terms of an Employee Plan: (A) enter into, adopt, amend, terminate or materially increase the coverage or benefits\navailable under any Employee Plan or any compensation or benefit plan, program, arrangement or agreement that would constitute an Employee\nPlan if in effect on the date of this Agreement (other than changes made in the ordinary course of business in connection with annual\nrenewals of group welfare benefits); (B) increase the compensation or other benefits payable or provided to any current or former\ndirector, officer, employee or independent contractor of the Company Group, pay any special bonus or other non-ordinary-course compensation\nor benefit, or grant any new pension, severance, retention, transaction, change in control or similar benefit; (C) enter into, amend\nor waive any employment, consulting, independent contractor, severance, retention, transaction bonus, change in control or similar compensatory\nagreement with any current or former employee, officer, director or independent contractor, other than (x) at-will offer letters entered\ninto with newly hired employees in the ordinary course of business consistent with this Agreement or (y) consulting agreements that are\nterminable without liability upon not more than thirty (30) days’ notice; (D) accelerate, or commit to accelerate, the funding,\nvesting or payment of any compensation, benefits or Company Equity Awards; (E) grant any Company Equity Awards or any other equity-based\ncompensation; (F) hire or engage any employee or independent contractor with annual compensation in excess of $150,000 except that,\nin the event the Company proposes to hire any such individual to replace an employee whose employment has terminated following the date\nof this Agreement, the Company shall consult with Parent in advance regarding such hiring; (G) promote, terminate without cause, furlough\nor temporarily lay off any employee whose annual compensation exceeds $150,000 or any officer of the Company Group; provided that,\nif any such employee or officer ceases to be employed by the Company Group following the date of this Agreement, the Company shall consult\nwith Parent regarding any proposed replacement for such employee or officer prior to hiring or engaging such replacement; or (H) enter\ninto any agreement to employ or engage contingent workers outside of the ordinary course of business;

(j)settle,\nrelease, waive or compromise any pending or threatened Legal Proceeding or other claim, except for the settlement of any Legal Proceedings\nor other claim that is (A) reflected or reserved against in the most recent consolidated balance sheet of the Company Group included in\nthe Company SEC Reports filed prior to the date hereof; (B) for solely monetary payments of no more than $100,000 individually and\n$250,000 in the aggregate; (C) settled in compliance with Section\n5.2(l) or Section\n6.12; (D) in\nfavor of the Company Group in the ordinary course of business; or (E) for solely monetary payments for any Legal Proceeding that is\ncovered by insurance (exclusive of any amounts payable in respect of any insurance deductible);

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(k)except\nas required by applicable law, any Governmental Authority (including the Financial Accounting Standards Board or any similar organization),\nGAAP (or any interpretation thereof), or any rule or policy of the SEC, make any material change in any accounting principles, practices,\npolicies or procedures of the Company Group or any of its methods of reporting income, deductions or other material items for financial\naccounting purposes;

(l)(A)\nmake, other than in the ordinary course of business, or change any material Tax election; (B) settle or compromise any material Tax\nclaim or assessment; (C) file any material amended Tax Return; or (D) enter into a closing agreement with any Governmental Authority\nregarding any material Tax, in each case, that would reasonably be expected to materially increase the Taxes payable by the Company Group;

(m)incur\nor commit to incur any capital expenditure(s), other than (A) consistent with the capital expenditure budget set forth in Section\n5.2(m) of the Company\nDisclosure Letter, (B) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged after the\ndate hereof due to casualty or accident that are covered by insurance (exclusive of any amounts payable in respect of any insurance deductible)\nor (C) otherwise in an aggregate amount for all such capital expenditures made pursuant to this clause (C) not to exceed $250,000 in the\naggregate during the period from the date hereof through the Closing;

(n)enter\ninto, modify, amend, waive any material right under, consent to any assignment of, or terminate any (A) Contract (other than a Material\nContract) that, if so entered into, modified, amended or terminated, would reasonably be expected to have a Company Material Adverse Effect;\n(B) Material Contract; or (C) Contract that, if entered into prior to the date of this Agreement, would have constituted a Material\nContract;

(o)engage\nin any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person\ncovered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;

(p)announce\nor implement any employee layoffs, facility closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work\nschedule changes or similar actions that would reasonably be expected to trigger any notice, consultation, bargaining, consent or other\nrequirements pursuant to the WARN Act or any similar applicable law in any jurisdiction, including the European Collective Redundancies\nDirective (Directive 98/59/EC), any national laws promulgated pursuant thereto, Article 298 of the Labor Code of the Philippines,\nthe Trade Union and Labour Relations (Consolidation) Act 1992 of the United Kingdom, or any law governing collective dismissals, workplace\nclosures, temporary layoffs or similar employment actions in Spain or any other applicable jurisdiction;

(q)waive,\nrelease, amend or otherwise modify in any material respect any noncompetition, nonsolicitation, nondisclosure, confidentiality, invention\nassignment or other restrictive covenant obligation owed to the Company Group by any current or former employee, independent contractor,\nconsultant, officer or director;

(r)adopt,\namend, modify or waive in any material respect any policy, program, procedure or practice relating to privacy obligations or any administrative,\ntechnical or physical safeguards relating to data privacy, cybersecurity, information security, data protection or the collection, storage,\nprocessing, use, transfer or disclosure of personal information;

(s)grant\nany material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than\nin the ordinary course of business;

(t)acquire\n(by merger, consolidation or acquisition of stock or assets) any other Person or any material equity interest therein or enter into any\njoint venture, legal partnership (excluding, for avoidance of doubt, strategic relationships, alliances, reseller agreements and

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similar\ncommercial relationships), limited liability company or similar arrangement with any third Person;

(u)enter\ninto any Collective Bargaining Agreement;

(v)adopt\nor implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated\npursuant to Parent’s rights under Section\n5.3(e)(i)(2) or\nSection\n5.3(e)(ii)(3);\nor

(w)enter\ninto, authorize any of, or agree or commit to enter into a Contract to take any of the actions prohibited by this Section\n5.2.

5.3No\nSolicitation.

(a)Go-Shop\nPeriod. Notwithstanding\nanything to the contrary set forth in this Agreement, during the period (the “Go-Shop\nPeriod”)\nbeginning on the date of this Agreement and continuing until 11:59 p.m., Eastern time on the date that is thirty (30) days after the\ndate of this Agreement (the “No-Shop\nPeriod Start Date”),\nthe Company and its Affiliates, directors, officers, employees, investment bankers, attorneys, accountants and other advisors or representatives\n(collectively, “Representatives”)\nshall have the right to: (i) solicit, initiate, propose or induce the making, submission or announcement of, or knowingly encourage,\nfacilitate or assist, any proposal or inquiry that constitutes, or is reasonably expected to lead to, an Acquisition Proposal; (ii)\nsubject to the entry into, and in accordance with, an Acceptable Confidentiality Agreement, furnish to any Person any non-public information\nrelating to the Company Group or afford to any Person access to the business, properties, assets, books, records or other non-public information,\nor to any personnel, of the Company Group, in any such case with the intent to induce the making, submission or announcement of, or to\nknowingly encourage, facilitate or assist, any proposal or inquiry that constitutes, or is reasonably expected to lead to, an Acquisition\nProposal or any inquiries or the making of any proposal that would reasonably be expected to lead to an Acquisition Proposal, provided,\nhowever, that the\nCompany will promptly (and in any event within 48 hours) provide to Parent, or provide Parent access to, any such non-public information\nconcerning the Company Group that is provided to any such Person or its Representatives that was not previously provided to Parent or\nits Representatives; and (iii) participate or engage in discussions or negotiations with any Person with respect to an Acquisition\nProposal. On the No-Shop Period Start Date, the Company shall notify Parent in writing of (A) the identity of each Exempted Party, (B)\nthe number and identity of any parties with which the Company entered into an Acceptable Confidentiality Agreement and (C) the number\nand identity of any parties that submitted an Acquisition Proposal after the date of this Agreement and prior to the No-Shop Period Start\nDate, each of which notices shall include the documents and information contemplated by Section\n5.3(f)(ii), Section\n5.3(f)(iii) and\nSection\n5.3(f)(iv) to the\nextent not previously provided to Parent.

(b)No\nSolicitation or Negotiation.\nExcept as expressly permitted by this Section\n5.3 and except\nin respect of an Exempted Party (but only for so long as such Person or group of Persons is an Exempted Party), from and after the No-Shop\nPeriod Start Date until the earlier to occur of the termination of this Agreement pursuant to Article\nVIII and the Effective\nTime, the Company will and will cause each of its Subsidiaries and its and their officers and directors to, and will instruct and use\nits commercially reasonable efforts to cause its other Representatives to, (i) cease any solicitations, discussions or negotiations with\nany Person that would be prohibited by this Section\n5.3(b), request\nthe prompt return or destruction of all non-public information concerning the Company Group theretofore furnished to any such Person with\nwhom a confidentiality agreement was entered into within the six month period immediately preceding the No-Shop Period Start Date and\nterminate all access granted to any such Person and its Representatives to any physical or electronic data room; and (ii) until the\nearlier to occur of the termination of this Agreement pursuant to Article\nVIII and the Effective\nTime, not, directly or indirectly, (A) solicit, initiate, propose or knowingly induce the making, submission or announcement of, or knowingly\nencourage, facilitate or assist the making, submission or announcement of any proposal, inquiry or offer that constitutes, or is reasonably\nexpected to lead to, an Acquisition Proposal; (B) furnish to any Person (other than to Parent, Merger Sub or any

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designees\nof Parent or Merger Sub) or its Representatives (in their capacity as such) any non-public information relating to the Company Group or\nany Acquisition Proposal or afford to any Person or its Representatives (in their capacity as such) access to the business, properties,\nassets, books, records or other non-public information, or to any personnel, of the Company Group (other than Parent, Merger Sub or any\ndesignees of Parent or Merger Sub), in any such case with the intent to induce the making, submission or announcement of an Acquisition\nProposal; (C) participate or engage in discussions or negotiations with any Person with respect to an Acquisition Proposal (other\nthan informing such Persons of the provisions contained in this Section\n5.3); or (D)\nenter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement or other Contract relating to an\nAcquisition Transaction, other than an Acceptable Confidentiality Agreement (any such letter of intent, memorandum of understanding, merger\nagreement, acquisition agreement or other Contract relating to an Acquisition Transaction, an “Alternative\nAcquisition Agreement”).\nFrom the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article\nVIII and the Effective\nTime, the Company will not be required to enforce, and will be permitted to waive or release, any provision of any standstill or confidentiality\nagreement solely to the extent that such provision has the effect of prohibiting or purports to prohibit making a confidential Acquisition\nProposal to the Company Board (or any committee thereof). For avoidance of doubt, notwithstanding the expiration of the Go-Shop Period,\nthe Company and its Representatives may continue to engage in the activities described in this Section\n5.3(b) with respect\nto Persons who are Exempted Parties (but only if and for so long as such Person or group is an Exempted Party) and their Representatives,\nonly if and for so long as the Company Board (or a committee thereof) has determined in good faith, after consultation with its financial\nadvisor and outside legal counsel, that the failure to continue such discussions or negotiations would be inconsistent with the directors’\nfiduciary duties under applicable law. In such event, the Company shall promptly (and in any event within 48 hours) provide to Parent\nany non-public information concerning the Company Group that is provided to any such Exempted Party or its or their Representatives that\nwas not previously provided to Parent, and the Company shall promptly, and in any event within 48 hours, provide Parent with copies of\nall written proposals, indications of interest, term sheets, draft agreements, financing commitments and other material written materials\nprovided by or on behalf of any such Exempted Party or any inquiry, proposal or offer from such Exempted Party that would reasonably be\nexpected to lead to an Acquisition Proposal. The Company shall keep Parent reasonably informed, on a current basis and in any event within\n48 hours, of any material developments, discussions or negotiations regarding any Acquisition Proposal with such Exempted Party, including\nany change to the financial or other material terms thereof. The provisions of Section\n5.3(e) shall apply\nto an Acquisition Proposal of any Exempted Party.

(c)Conduct\nFollowing No-Shop Period Start Date.\nNotwithstanding anything set forth in this Agreement to the contrary, if, at any time following the No-Shop Period Start Date but prior\nto obtaining the Requisite Stockholder Approval, the Company or any of its Representatives receives an Acquisition Proposal that did not\nresult from any material breach of this Section\n5.3, (i) the Company\nand its Representatives may contact the Person or group of Persons making the Acquisition Proposal solely to clarify the terms and conditions\nthereof or to request that any Acquisition Proposal made orally be made in writing; and (ii) if the Company Board (or a committee\nthereof) has determined in good faith (after consultation with its independent financial advisor and outside legal counsel) that such\nAcquisition Proposal either constitutes a Superior Proposal or would reasonably be expected to result in a Superior Proposal, then the\nCompany and the Company Board (or a committee thereof) may, directly or indirectly through one or more of their Representatives (including\nthe Advisor), (A) participate or engage in discussions or negotiations with the Person or group of Persons making the Acquisition Proposal\nand its or their Representatives regarding such Acquisition Proposal and (B) enter into an Acceptable Confidentiality Agreement with the\nPerson or group of Persons making such Acquisition Proposal and furnish, or provide access to, pursuant to such Acceptable Confidentiality\nAgreement any non-public information relating to the Company Group or its businesses, properties, assets, books, records or other non-public\ninformation, or provide access to any personnel of the Company Group; provided,\nhowever,\nthat the Company will promptly (and in any event within 48 hours) provide to Parent any non-public information concerning the Company\nGroup that is provided to any such Person or group of Persons or its or their

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Representatives\nthat was not previously provided to Parent. Following the No-Shop Period Start Date, the Company shall promptly, and in any event within\n48 hours, provide Parent with copies of all written proposals, indications of interest, term sheets, draft agreements, financing commitments\nand other material written materials provided by or on behalf of any Person making an Acquisition Proposal or any inquiry, proposal or\noffer that would reasonably be expected to lead to an Acquisition Proposal. Following the No-Shop Period Start Date, the Company shall\nkeep Parent reasonably informed, on a current basis and in any event within 48 hours of any material developments, discussions or negotiations\nregarding any Acquisition Proposal, including any change to the financial or other material terms thereof.

(d)No\nChange in Company Board Recommendation or Entry into an Alternative Acquisition Agreement.\nExcept as provided by Section\n5.3(e), at no time\nafter the date of this Agreement may the Company Board (or a committee thereof):

(i)(A)\nwithhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, qualify or modify, the Company Board Recommendation\nin a manner adverse to Parent in any material respect; (B) adopt, approve, endorse, recommend or otherwise declare advisable an Acquisition\nProposal; (C) fail to publicly reaffirm the Company Board Recommendation within ten Business Days after Parent so requests in writing,\nwhich request is transmitted after any public disclosure of an Acquisition Proposal (provided\nthat the Company will have no obligation to make such reaffirmation on more than two separate occasions); (D) take or fail to take\nany formal action or make or fail to make any recommendation or public statement in connection with a tender or exchange offer, other\nthan a recommendation against such offer or a “stop, look and listen” communication by the Company Board (or a committee thereof)\nto the Company Stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any substantially similar communication)\n(it being understood that the Company Board (or a committee thereof) may refrain from taking a position with respect to an Acquisition\nProposal until the close of business on the tenth Business Day after the commencement of a tender or exchange offer in connection with\nsuch Acquisition Proposal without such action being considered a violation of this Section\n5.3); or (E)\nfail to include the Company Board Recommendation in the Proxy Statement (any action described in clauses (A) through (E), a “Company\nBoard Recommendation Change”);\nprovided,\nhowever,\nthat, for the avoidance of doubt, none of (1) the determination by the Company Board (or a committee thereof) that an Acquisition Proposal\nconstitutes a Superior Proposal; or (2) the delivery by the Company to Parent of any notice contemplated by Section\n5.3(e) will constitute\na Company Board Recommendation Change; or

(ii)cause\nor permit the Company Group to enter into an Alternative Acquisition Agreement.

(e)Company\nBoard Recommendation Change; Entry into Alternative Acquisition Agreement.\nNotwithstanding anything to the contrary set forth in this Agreement, at any time prior to obtaining the Requisite Stockholder Approval:

(i)the\nCompany Board (or a committee thereof) may effect a Company Board Recommendation Change in response to any material event, development,\ndiscovery, change or circumstance with respect to the Company that (A) was not known to, or reasonably expected by, the Company Board\nas of the date of this Agreement; and (B) does not relate to (x) any Acquisition Proposal; or (y) the mere fact, in and of itself,\nthat the Company meets or exceeds any internal or published projections, forecasts, estimates or predictions of revenue, earnings or other\nfinancial

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or\noperating metrics for any period ending on or after the date of this Agreement, or changes after the date of this Agreement in the market\nprice or trading volume of the Company Common Stock or the credit rating of the Company (an “Intervening\nEvent”) (it\nbeing understood that the foregoing clause (y) will not prevent or otherwise affect a determination that any event, development, discovery,\nchange or circumstance underlying such fact or changes referred to in clause (y) has resulted in or contributed to an Intervening Event),\nif the Company Board (or a committee thereof) determines in good faith (after consultation with its outside legal counsel) that the failure\nto do so would be inconsistent with the directors’ fiduciary duties pursuant to applicable law and if and only if:

(1)the\nCompany has provided prior written notice to Parent at least three Business Days in advance to the effect that the Company Board (or a\ncommittee thereof) has (A) so determined; and (B) intends to effect a Company Board Recommendation Change pursuant to this Section\n5.3(e)(i), which\nnotice will specify the applicable Intervening Event in reasonable detail; and

(2)prior\nto effecting such Company Board Recommendation Change, the Company and its Representatives, during such three Business Day period, must\nhave negotiated with Parent and its Representatives in good faith (to the extent that Parent desires to so negotiate) to make such adjustments\nto the terms and conditions of this Agreement so that the Company Board (or a committee thereof) would no longer determine that the failure\nto make a Company Board Recommendation Change in response to such Intervening Event would be inconsistent with the directors’ fiduciary\nduties pursuant to applicable law; or

(ii)if\nthe Company has received a bona fide Acquisition Proposal, whether during the Go-Shop Period or after the No-Shop Period Start Date, that\nthe Company Board (or a committee thereof) has concluded in good faith (after consultation with its financial advisor and outside legal\ncounsel) constitutes a Superior Proposal, then the Company Board may (A) effect a Company Board Recommendation Change with respect to\nsuch Acquisition Proposal; or (B) authorize the Company to terminate this Agreement to enter into an Alternative Acquisition Agreement\nwith respect to such Acquisition Proposal, in each case if and only if:

(1)the\nCompany Board (or a committee thereof) determines in good faith (after consultation with its financial advisor and outside legal counsel)\nthat the failure to do so would be inconsistent with its fiduciary obligations pursuant to applicable law;

(2)the\nCompany has complied in all material respects with its obligations pursuant to this Section\n5.3 with respect\nto such Acquisition Proposal;

(3)(i)\nthe Company has provided prior written notice to Parent at least three Business Days in advance (the “Notice\nPeriod”),\nwhich notice shall state (A) that the Company has received a bona fide Acquisition Proposal that has not been withdrawn and that the Company\nBoard (or a committee thereof) has concluded in good faith (after consultation with its financial advisor and outside legal counsel) constitutes\na Superior Proposal; (B) to the extent not previously provided to Parent pursuant to Section\n

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5.3(f),\nthe material terms of such Acquisition Proposal, the identity of the Person or group of Persons making such Acquisition Proposal and copies\nof all material documents relating to such Acquisition Proposal; and (C) that the Company Board (or a committee thereof) intends to\neffect a Company Board Recommendation Change or to terminate this Agreement pursuant to this Section\n5.3 absent revisions\nto the terms and conditions of this Agreement, which notice will specify the basis for such Company Board Recommendation Change or termination;\nand (ii) prior to effecting such Company Board Recommendation Change or termination, the Company and its Representatives, during the Notice\nPeriod, must have negotiated with Parent and its Representatives in good faith (to the extent that Parent desires to so negotiate) to\nmake such adjustments to the terms and conditions of this Agreement so that such Acquisition Proposal would cease to constitute a Superior\nProposal; provided,\nhowever,\nthat, in the event of any revisions to the financial terms or any other material term or condition of such Acquisition Proposal, the Company\nwill be required to deliver a new written notice to Parent and to comply with the requirements of this Section\n5.3(e)(ii)(3) with\nrespect to such new written notice (except that the Notice Period in respect of such new written notice shall be two Business Days);\nand

(4)in\nthe event of any termination of this Agreement in order to cause or permit the Company to enter into an Alternative Acquisition Agreement\nwith respect to such Acquisition Proposal, the Company will have validly terminated this Agreement in accordance with Section\n8.1(h), including\npaying (or causing to be paid) the Company Termination Fee in accordance with Section\n8.3(b)(iii).

(f)Notice.\nFrom the No-Shop Period Start Date until the earlier to occur of the termination of this Agreement pursuant to Article\nVIII and the Effective\nTime, the Company will promptly (and, in any event, within 48 hours thereafter) notify Parent in writing of (i) the receipt by the Company\nor, to the Knowledge of the Company, its Representatives of any Acquisition Proposal; (ii) the identity of the Person or group of\nPersons making such Acquisition Proposal; (iii) a copy of any such Acquisition Proposal made in writing and any other written terms\nand proposals provided (including financing commitments) to the Company or its Representatives; and (iv) a written summary of material\nterms and conditions of any such Acquisition Proposal not made in writing. Thereafter, the Company must keep Parent reasonably informed,\non a reasonably prompt basis, of the status of any such Acquisition Proposals (including as required by clauses (i) through (iv) above\nand any amendments thereto) and the status of any such discussions or negotiations.

(g)Certain\nDisclosures. Nothing\nin this Agreement will prohibit the Company or the Company Board (or a committee thereof) from (i) taking and disclosing to the Company\nStockholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or complying with Rule 14d-9 promulgated under\nthe Exchange Act, including a “stop, look and listen” communication by the Company Board (or a committee thereof) to the Company\nStockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any substantially similar communication); (ii) complying\nwith Item 1012(a) of Regulation M-A promulgated under the Exchange Act; (iii) informing any Person of the existence of the provisions\ncontained in this Section\n5.3; or (iv)\nmaking any disclosure to the Company Stockholders (including regarding the business, financial condition or results of operations of the\nCompany Group) that the Company Board (or a committee thereof) has determined to make in good faith in order to comply with applicable\nlaw, regulation or stock exchange rule or listing agreement, it being understood that any such statement or disclosure made by the Company\nBoard (or a committee thereof) pursuant

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to\nthis Section\n5.3(g) must be\nsubject to the terms and conditions of this Agreement and will not limit or otherwise affect the obligations of the Company or the Company\nBoard (or any committee thereof) and the rights of Parent under this Section\n5.3, it being understood\nthat nothing in the foregoing will be deemed to permit the Company or the Company Board (or a committee thereof) to effect a Company Board\nRecommendation Change other than in accordance with Section\n5.3(e). In addition,\nit is understood and agreed that, for purposes of this Agreement, a factually accurate public statement by the Company or the Company\nBoard (or a committee thereof) that describes the Company’s receipt of an Acquisition Proposal, the identity of the Person making\nsuch Acquisition Proposal, the material terms of such Acquisition Proposal and the operation of this Agreement with respect thereto will\nnot be deemed to be (A) a withholding, withdrawal, amendment, or modification, or proposal by the Company Board (or a committee thereof)\nto withhold, withdraw, amend or modify, the Company Board Recommendation; (B) an adoption, approval or recommendation with respect\nto such Acquisition Proposal; or (C) a Company Board Recommendation Change.

(h)Breach\nby Representatives.\nThe Company agrees that any breach of this Section\n5.3 by any of its\nRepresentatives, to the extent acting at the Company’s direction that, if taken by the Company, would be a breach of this Section\n5.3, will be deemed\nto be a breach of this Section\n5.3 by the Company.

Article\nVI
ADDITIONAL\nCOVENANTS

6.1Required\nAction and Forbearance; Efforts.

(a)Reasonable\nEfforts. Upon the\nterms and subject to the conditions set forth in this Agreement, Parent and Merger Sub, on the one hand, and the Company, on the other\nhand, will, and will cause their respective Affiliates to, use their respective commercially reasonable efforts to (A) take (or cause\nto be taken) all actions; (B) do (or cause to be done) all things; and (C) assist and cooperate with the other Parties in doing\n(or causing to be done) all things, in each case as are necessary, proper or advisable pursuant to applicable law or otherwise to consummate\nand make effective, in the most expeditious manner practicable, the Transactions, including by:

(i)causing\nthe conditions to the Merger set forth in Article\nVII to be satisfied;

(ii)(1)\nobtaining all consents, waivers, approvals, orders and authorizations from Governmental Authorities; and (2) making all registrations,\ndeclarations and filings with Governmental Authorities, in each case that are necessary or advisable to consummate the Transactions;\nand

(iii)obtaining\nall consents, waivers and approvals and delivering all notifications pursuant to any Material Contracts in connection with this Agreement\nand the consummation of the Transactions so as to maintain and preserve the benefits to the Surviving Corporation of such Material Contracts\nas of and following the consummation of the Transactions; and

(iv)executing\nand delivering any Contracts and other instruments that are reasonably necessary to consummate the Transactions.

(b)No\nFailure to Take Necessary Action.\nIn addition to the foregoing, subject to the terms and conditions of this Agreement, neither Parent nor Merger Sub, on the one hand, nor\nthe Company, on the other hand, will take any action, or fail to take any action, that is intended to or has (or would reasonably be expected\nto have) the effect of (i) preventing, impairing, delaying or otherwise adversely affecting the consummation of the Transactions;\nor (ii) the ability of such Party to fully perform its obligations pursuant to this Agreement. For the avoidance of doubt, no action by\nthe Company taken in compliance with Section\n5.3 or Section\n6.18 will be considered\na violation of this Section\n6.1.

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(c)No\nConsent Fee. Notwithstanding\nanything to the contrary set forth in this Section\n6.1 or elsewhere\nin this Agreement, the Company Group will not be required to agree to the payment of a consent fee, “profit sharing” payment\nor other consideration (including increased or accelerated payments), or the provision of additional security (including a guaranty),\nin connection with the Transactions, including in connection with obtaining any consent pursuant to any Material Contract.

6.2Form\nS-4; Proxy Statement; Other Required SEC Filings.

(a)Preparation\nand Filing of Form S-4 and Proxy Statement.\nPromptly following the date of this Agreement, Parent and the Company shall cooperate in preparing, and Parent shall file with the SEC,\na registration statement on Form S-4 in connection with the issuance of the Parent Preferred Stock in the Merger (as amended or supplemented\nfrom time to time, the “Form\nS-4”). The\nForm S-4 shall include a Proxy Statement to be sent to the stockholders of the Company in connection with the Company Stockholder Meeting\n(as amended or supplemented from time to time, the “Proxy\nStatement”).\nEach of Parent and the Company shall use its reasonable best efforts to cause the Form S-4 and the Proxy Statement to comply as to form\nin all material respects with the applicable requirements of the Securities Act, the Exchange Act, the rules and regulations of the SEC\nthereunder and the rules of NASDAQ. Subject to Section\n6.3, the Company\nshall include the Company Board Recommendation in the Proxy Statement.

(b)Cooperation;\nReview and Comment.\nParent and the Company shall cooperate with each other in connection with the preparation and filing of the Form S-4, the Proxy Statement\nand any Other Required Filing. Without limiting the foregoing, each of Parent and the Company shall furnish to the other Party all information\nconcerning itself, its Affiliates, directors, officers and stockholders and such other matters as may be reasonably requested by the other\nParty in connection with the preparation, filing and distribution of the Form S-4, the Proxy Statement and any Other Required Filing.\nParent shall provide the Company and its counsel a reasonable opportunity to review and comment on the Form S-4 and the Proxy Statement,\nincluding any amendments or supplements thereto, prior to filing with the SEC, and Parent shall give due consideration to all reasonable\nadditions, deletions or changes suggested by the Company or its counsel. The Company shall provide Parent and its counsel a reasonable\nopportunity to review and comment on any Other Required Company Filing, including any amendments or supplements thereto, prior to filing\nwith the SEC, and the Company shall give due consideration to all reasonable additions, deletions or changes suggested by Parent or its\ncounsel. Parent shall provide the Company and its counsel a reasonable opportunity to review and comment on any Other Required Parent\nFiling, including any amendments or supplements thereto, prior to filing with the SEC, and Parent shall give due consideration to all\nreasonable additions, deletions or changes suggested by the Company or its counsel.

(c)SEC\nReview; Effectiveness.\nParent and the Company shall use their respective reasonable best efforts to have the Form S-4 declared effective under the Securities\nAct as promptly as reasonably practicable after filing and to keep the Form S-4 effective for so long as is necessary to consummate the\nMerger and the other Transactions. Parent and the Company shall promptly notify each other of the receipt of any oral or written comments\nfrom the SEC or its staff with respect to the Form S-4, the Proxy Statement or any Other Required Filing, any request by the SEC or its\nstaff for amendments or supplements thereto or for additional information, and any notice from the SEC or its staff relating to the effectiveness\nof the Form S-4 or the issuance of any stop order or suspension of the qualification of the Parent Preferred Stock for offering or sale\nin any jurisdiction. Parent and the Company shall cooperate in preparing responses to any comments or requests from the SEC or its staff\nand shall use reasonable best efforts to resolve all SEC comments with respect to the Form S-4 and the Proxy Statement as promptly as\nreasonably practicable. Parent shall advise the Company promptly after the Form S-4 has been declared effective.

(d)Accuracy\nof Disclosure.\nParent, Merger Sub and the Company shall cause the information supplied by such Party for inclusion or incorporation by reference in the\nForm S-4, the Proxy Statement or any Other Required Filing not to, at the time the Form S-4 is declared effective, at the time the Proxy\nStatement is first mailed to Company Stockholders, at the time of

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the\nCompany Stockholder Meeting and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact\nrequired to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were\nmade, not misleading. Notwithstanding the foregoing, no Party makes any covenant with respect to information supplied by or on behalf\nof another Party for inclusion or incorporation by reference in the Form S-4, the Proxy Statement or any Other Required Filing.

(e)Amendments\nand Supplements.\nIf, at any time prior to the Effective Time, any information relating to Parent, Merger Sub, the Company or any of their respective Affiliates,\ndirectors or officers should be discovered by Parent or the Company that should be set forth in an amendment or supplement to the Form\nS-4, the Proxy Statement or any Other Required Filing so that such document would not contain any untrue statement of a material fact\nor omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the\ncircumstances under which they were made, not misleading, the Party that discovers such information shall promptly notify the other Party,\nand Parent and the Company shall cooperate in preparing and filing with the SEC, to the extent required by applicable law, an appropriate\namendment or supplement describing such information and, to the extent required by applicable law, disseminating such amendment or supplement\nto Company Stockholders.

(f)Communications\nwith the SEC. Neither\nParent nor the Company shall, and each shall cause its respective Affiliates not to, communicate in writing with the SEC or its staff\nwith respect to the Form S-4, the Proxy Statement or any Other Required Filing without first providing the other Party and its counsel\na reasonable opportunity to review and comment on such written communication, and each Party shall give due consideration to all reasonable\nadditions, deletions or changes suggested by the other Party or its counsel.

(g)Dissemination\nof Proxy Statement.\nSubject to applicable law, Parent and the Company shall use their respective reasonable best efforts to cause the Proxy Statement to be\nmailed to Company Stockholders as promptly as reasonably practicable after the Form S-4 is declared effective under the Securities Act\nand the SEC has confirmed that it has no further comments on the Proxy Statement or has otherwise completed its review thereof.

(h)Other\nRequired Filings.\nIf Parent, Merger Sub, the Company or any of their respective Affiliates determines that it is required to file any document, other than\nthe Form S-4 or the Proxy Statement, with the SEC in connection with the Transactions pursuant to applicable law, the filing Party shall\npromptly prepare and file such document with the SEC (each such filing by Parent, Merger Sub or any of their respective Affiliates, an\n“Other Required\nParent Filing,”\nand each such filing by the Company or any of its Affiliates, an “Other\nRequired Company Filing,”\nand collectively, the “Other\nRequired Filings”).\nEach Party shall use its reasonable best efforts to cause any Other Required Filing made by it or its Affiliates to comply as to form\nin all material respects with the applicable requirements of the Exchange Act, the Securities Act, the rules and regulations of the SEC\nthereunder and the rules of NASDAQ.

6.3Stockholder\nMeeting.

(a)Company\nStockholder Meeting.\nSubject to the provisions of this Agreement, the Company shall take all action necessary in accordance with the DGCL, the Exchange Act,\nthe Charter, the Bylaws and the rules of NASDAQ to establish a record date for, duly call, give notice of, convene and hold a meeting\nof its stockholders (the “Company\nStockholder Meeting”)\nas promptly as reasonably practicable following the mailing of the Proxy Statement to the Company Stockholders for the purpose of obtaining\nthe Requisite Stockholder Approval. The Company shall not change the record date for the Company Stockholder Meeting without the prior\nwritten consent of Parent, such consent not to be unreasonably withheld, conditioned or delayed. Subject to Section\n5.3 and unless\nthere has been a Company Board Recommendation Change, the Company shall use its reasonable best efforts to solicit from the Company Stockholders\nproxies in favor of the adoption of this Agreement and the approval of the Merger and to obtain the Requisite Stockholder Approval.

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(b)Adjournment\nof Company Stockholder Meeting.\nNotwithstanding anything to the contrary in this Agreement, the Company may postpone or adjourn the Company Stockholder Meeting, provided\nthat the Company Stockholder Meeting may not be postponed or adjourned more than two times or for more than 30 days in the aggregate without\nParent’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), if (i) there are holders\nof an insufficient number of shares of Company Common Stock present or represented by proxy at the Company Stockholder Meeting to constitute\na quorum; (ii) the Company has not received proxies representing a sufficient number of shares of Company Common Stock to obtain the\nRequisite Stockholder Approval; (iii) the Company is required to postpone or adjourn the Company Stockholder Meeting by applicable\nlaw, order or a request from the SEC or its staff; (iv) the Company has notified Parent pursuant to Section\n5.3(e) that the\nCompany Board or a committee thereof intends to effect a Company Board Recommendation Change or to terminate this Agreement pursuant to\nSection\n5.3(e)(ii), and\nthe applicable notice period thereunder will not have expired prior to the then-scheduled date and time of the Company Stockholder Meeting;\nor (v) the Company Board or a committee thereof has determined in good faith, after consultation with outside legal counsel, that such\npostponement or adjournment is required by applicable law in order to give Company Stockholders sufficient time to evaluate any information\nor disclosure that the Company has sent to Company Stockholders or otherwise made available to Company Stockholders by issuing a press\nrelease, filing materials with the SEC or otherwise.

(c)Submission\nto Stockholders.\nUnless this Agreement is validly terminated in accordance with Section\n8.1, the Company\nshall submit this Agreement and the Merger to the Company Stockholders at the Company Stockholder Meeting for the purpose of obtaining\nthe Requisite Stockholder Approval, even if the Company Board or a committee thereof has effected a Company Board Recommendation Change.

6.4Anti-Takeover\nLaws. The Company\nand the Company Board (and any committee empowered to take such action, if applicable) will (a) take all actions within their power to\nensure that no “anti-takeover” statute or similar statute or regulation (or, in the case of Section 203 of the DGCL, the restrictions\non “business combinations” contained therein) is or becomes applicable to the Merger; and (b) if any “anti-takeover”\nstatute or similar statute or regulation (or, in the case of Section 203 of the DGCL, the restrictions on “business combinations”\ncontained therein) becomes applicable to the Merger, take all action within their power to ensure that the Merger may be consummated as\npromptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or regulation\non the Merger.

6.5Access.\nAt all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur\nof the termination of this Agreement pursuant to Article\nVIII and the Effective\nTime, the Company will afford Parent and its Representatives reasonable access (under Company supervision) during normal business hours,\nupon reasonable advance notice, to the properties, books and records and personnel of the Company, except that the Company may restrict\nor otherwise prohibit access to any documents or information to the extent that (a) any applicable law or regulation requires the Company\nto restrict or otherwise prohibit access to such documents or information; (b) access to such documents or information would give\nrise to a material risk of waiving any attorney-client privilege, work product doctrine or other privilege applicable to such documents\nor information; (c) access to a Contract to which the Company Group is a party or otherwise bound would violate or cause a default\npursuant to, or give a third Person the right to terminate or accelerate the rights pursuant to, such Contract; (d) access would result\nin the disclosure of any trade secrets of third Persons; or (e) such documents or information relate to the negotiation and execution\nof this Agreement, reasonably pertinent to any adverse Legal Proceeding between the Company and its Affiliates, on the one hand, and Parent\nand its Affiliates, on the other hand; or relate to, subject to Section\n5.3, an Acquisition\nProposal. Nothing in this Section\n6.5 will be construed\nto require the Company Group or any of its Representatives to prepare any reports, analyses, appraisals, opinions or other information.\nAny investigation conducted pursuant to the access contemplated by this Section\n6.5 will be conducted\nin a manner that does not unreasonably interfere with the conduct of the business of the Company Group or create a risk of damage or destruction\nto any property or assets of the Company Group. Any access to the properties of the Company Group will be subject to the Company’s\nreasonable security measures and insurance requirements and will not include the right to perform invasive testing or sampling of environmental\nmedia. The terms and conditions of the Confidentiality Agreement will apply to any

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information\nobtained by Parent or any of its Representatives in connection with any investigation conducted pursuant to the access contemplated by\nthis Section\n6.5. All requests\nfor access pursuant to this Section\n6.5 must be directed\nto the General Counsel of the Company, or another person designated in writing by the Company.

6.6Section\n16(b) Exemption.\nThe Company will take all actions reasonably necessary to cause any dispositions of equity securities of the Company (including derivative\nsecurities) in connection with the Merger by each director or executive officer of the Company to be exempt pursuant to Rule 16b-3 promulgated\nunder the Exchange Act.

6.7Directors’\nand Officers’ Exculpation, Indemnification and Insurance.

(a)Indemnified\nPersons. The Surviving\nCorporation and its Subsidiaries will (and Parent will cause the Surviving Corporation and its Subsidiaries to) honor and fulfill, in\nall respects, the obligations of the Company Group pursuant to any indemnification agreements (including any indemnification provisions\nincluded in any employment agreement) between a member of the Company Group and any of their respective current or former directors or\nofficers (and any person who becomes a director or officer of the Company Group prior to the Effective Time) (collectively, the “Indemnified\nPersons”)\nor employees for any acts or omissions by such Indemnified Persons or employees occurring prior to the Effective Time. In addition, during\nthe period commencing at the Effective Time and ending on the sixth anniversary of the Effective Time, the Surviving Corporation and its\nSubsidiaries will (and Parent will cause the Surviving Corporation and its Subsidiaries to) cause the certificates of incorporation, bylaws\nand other similar organizational documents of the Surviving Corporation and its Subsidiaries to contain provisions with respect to indemnification,\nexculpation and the advancement of expenses that are at least as favorable as the indemnification, exculpation and advancement of expenses\nprovisions set forth in the Charter, the Bylaws and the other similar organizational documents of the Subsidiaries of the Company, as\napplicable, as of the date of this Agreement. During such six-year period, such provisions may not be repealed, amended or otherwise modified\nin any manner except as required by applicable law.

(b)Indemnification\nObligation. Without\nlimiting the generality of the provisions of Section 6.7(a), during the period commencing at the Effective Time and ending on the sixth\nanniversary of the Effective Time, the Surviving Corporation will (and Parent will cause the Surviving Corporation to) indemnify and hold\nharmless, to the fullest extent provided for pursuant to any indemnification agreements with, and the certificates of incorporation, bylaws\nand other similar organizational documents of, the Company Group in effect on the date of this Agreement, each Indemnified Person from\nand against any costs, fees and expenses (including attorneys’ fees and investigation expenses), judgments, fines, losses, claims,\ndamages, liabilities and amounts paid in settlement or compromise in connection with any Legal Proceeding, whether civil, criminal, administrative\nor investigative, to the extent that such Legal Proceeding arises, directly or indirectly, out of or pertains, directly or indirectly,\nto any action or omission, or alleged action or omission, in such Indemnified Person’s capacity as a director, officer, employee\nor agent of the Company Group or other Affiliates to the extent that such action or omission, or alleged action or omission, occurred\nprior to or at the Effective Time, including in connection with this Agreement or the Transactions, except that if, at any time prior\nto the sixth anniversary of the Effective Time, any Indemnified Person delivers to Parent a written notice asserting a claim for indemnification\npursuant to this Section\n6.7(b), then the\nclaim asserted in such notice will survive the sixth anniversary of the Effective Time until such claim is fully and finally resolved.

(c)D&O\nInsurance. During\nthe period commencing at the Effective Time and ending on the sixth (6th) anniversary of the Effective Time, the Surviving Corporation\nwill (and Parent will cause the Surviving Corporation to) maintain in effect the Company’s current directors’ and officers’\nliability insurance (“D&O\nInsurance”)\nin respect of acts or omissions occurring at or prior to the Effective Time on terms (including with respect to coverage, conditions,\nretentions, limits and amounts) that are equivalent to those of the D&O Insurance. In satisfying its obligations pursuant to this\nSection\n6.7(c), the Surviving\nCorporation will not be obligated to pay annual premiums in excess of 300% of the amount paid by the Company for coverage for its last\nfull fiscal year (such 300% amount, the “Maximum\nAnnual Premium”).\nIf the annual premiums of such insurance coverage exceed the Maximum Annual Premium, then the

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Surviving\nCorporation will be obligated to obtain a policy with the greatest coverage available for a cost not exceeding the Maximum Annual Premium\nfrom an insurance carrier with the same or better credit rating as the Company’s current directors’ and officers’ liability\ninsurance carrier. Prior to the Effective Time, the Company may (or if Parent requests, shall) purchase a prepaid “tail” policy\nwith respect to the D&O Insurance from an insurance carrier with the same or better credit rating as the Company’s current directors’\nand officers’ liability insurance carrier so long as the annual cost for such “tail” policy does not exceed the Maximum\nAnnual Premium. If the Company purchases such a “tail” policy prior to the Effective Time, (i) the Surviving Corporation will\n(and Parent will cause the Surviving Corporation to) maintain such “tail” policy in full force and effect and continue to\nhonor its obligations thereunder for so long as such “tail” policy is in full force and effect and (ii) the obligations in\nthe first sentence hereof shall cease to apply.

(d)Successors\nand Assigns. If\nParent, the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other Person\nand is not the continuing or surviving corporation or entity in such consolidation or merger; (ii) transfers all or substantially\nall of its properties and assets to any Person; or (iii) dissolves, then proper provisions will be made so that the successors and\nassigns of Parent, the Surviving Corporation or any of their respective successors or assigns will assume all of the obligations of Parent\nand the Surviving Corporation set forth in this Section\n6.7.

(e)No\nImpairment. The\nobligations set forth in this Section\n6.7 may not be\nterminated, amended or otherwise modified in any manner that adversely affects any Indemnified Person (or any other person who is a beneficiary\npursuant to the D&O Insurance or the “tail” policy referred to in Section\n6.7(c) (and their\nheirs and representatives)) without the prior written consent of such affected Indemnified Person or other person. Each of the Indemnified\nPersons or other persons who are beneficiaries pursuant to the D&O Insurance or the “tail” policy referred to in Section\n6.7(c) (and their\nheirs and representatives) are intended to be third party beneficiaries of this Section\n6.7, with full\nrights of enforcement as if a Party. The rights of the Indemnified Persons (and other persons who are beneficiaries pursuant to the D&O\nInsurance or the “tail” policy referred to in Section\n6.7(c) (and their\nheirs and representatives)) pursuant to this Section\n6.7 will be in\naddition to, and not in substitution for, any other rights that such persons may have pursuant to (i) the Charter and Bylaws; (ii)\nthe similar organizational documents of the Subsidiaries of the Company; or (iii) applicable law (whether at law or in equity).

(f)Joint\nand Several Obligations.\nThe obligations of the Surviving Corporation, Parent and their respective Subsidiaries pursuant to this Section\n6.7 will be joint\nand several.

(g)Other\nClaims. Nothing\nin this Agreement is intended to, or will be construed to, release, waive or impair any rights to directors’ and officers’\ninsurance claims pursuant to any applicable insurance policy, indemnification agreement, certificate of incorporation, bylaws or similar\norganizational document that is or has been in existence with respect to the Company Group for any of its directors, officers or other\nemployees.

6.8Employee\nMatters.

(a)Severance\nBenefits. Following\nthe Effective Time, the Surviving Corporation and its Subsidiaries will (and Parent will cause the Surviving Corporation and its Subsidiaries\nto) provide each Continuing Employee severance benefits in accordance with the Company’s employees’ written employment agreements\nas in effect at the Effective Time, and set forth in Section\n3.13(a) of the\nCompany Disclosure Letter.

(b)Change\nin Control. For\npurposes of any Employee Plan containing a definition of “change in control,” “change of control” or a similar\nterm, the Closing shall be deemed to constitute a “change in control,” “change of control” or such similar term.\nThe Surviving Corporation and its Subsidiaries will (and Parent will cause the Surviving Corporation and its Subsidiaries to) honor each\nEmployee Plan in accordance with its terms as in effect immediately prior to the Effective Time, subject to any amendment or termination\nthereof that may be permitted by such Employee Plan.

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(c)Annual\nBonuses. With respect\nto annual cash bonuses for the fiscal year in which the Effective Time occurs (the “Closing\nYear”), as\nsoon as practicable following the end of the Closing Year, but in no event later than May 1 of the fiscal year immediately following the\nClosing Year, Parent shall consider, in its sole discretion, or shall cause the Surviving Corporation to, pay after Parent’s determination\neach Continuing Employee an annual cash bonus for the Closing Year in an amount determined by the Parent.

(d)New\nPlans. If a new\nemployee benefit plan is made available to any Continuing Employee at or after the Effective Time (each a “New\nPlan”), the\nSurviving Corporation and its Subsidiaries will (and Parent will cause the Surviving Corporation and its Subsidiaries to) cause to be\ngranted to such Continuing Employee credit for all service with the Company Group prior to the Effective Time for purposes of eligibility\nto participate, vesting and entitlement to benefits where length of service is relevant (including for purposes of vacation accrual and\nseverance pay entitlement), except that such service need not be credited to the extent that it would result in duplication of coverage\nor benefits. In addition, where applicable, and without limiting the generality of the foregoing, the Surviving Corporation and its Subsidiaries\nwill (and Parent will cause the Surviving Corporation and its Subsidiaries to) ensure that at the Effective Time: (i) each Continuing\nEmployee shall be immediately eligible to participate, without any waiting time, in each New Plan to the extent that such waiting time\nwas satisfied under a comparable Employee Plan in which such Continuing Employee participated immediately before the Effective Time (each\nsuch plan, an “Old\nPlan”), (ii)\nall pre-existing condition exclusions or limitations and actively-at-work requirements of each New Plan that is a health plan are waived\nor satisfied for such Continuing Employee and his or her covered dependents to the extent waived or satisfied under the comparable Old\nPlan, and (iii) all eligible expenses incurred by each Continuing Employee and his or her covered dependents during the portion of the\nplan year of the Old Plan ending on the date such Continuing Employee’s participation in the corresponding New Plan begins are taken\ninto account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable\nto such Continuing Employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance\nwith such New Plan.

(e)No\nThird Party Beneficiary Rights.\nNotwithstanding anything to the contrary set forth in this Agreement, this Section\n6.8 will not be\ndeemed to (i) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of\ntheir respective Subsidiaries from terminating the employment of any Continuing Employee for any reason; (ii) require Parent, the\nSurviving Corporation or any of their respective Subsidiaries to continue any Employee Plan or prevent the amendment, modification or\ntermination thereof after the Effective Time; (iii) create any third party beneficiary rights in any Person; or (iv) establish,\namend or modify any benefit plan, program, agreement or arrangement.

(f)401(k)\nPlan. If requested\nby Parent at least 10 Business Days prior to the Closing Date, the Company shall take all actions reasonably necessary to terminate, effective\nas of not later than the day immediately preceding the Closing Date, any Employee Plan that includes a cash or deferred arrangement intended\nto qualify under Section 401(k) of the Code (the “Company\n401(k) Plan”),\nincluding adopting resolutions of the Company Board and taking such other actions as are reasonably necessary to effect such termination.\nPrior to taking any such actions, the Company shall provide Parent with drafts of all resolutions, notices, amendments and other documents\nrelating thereto. If the Company 401(k) Plan is terminated pursuant to the preceding sentence, Parent shall take all actions reasonably\nnecessary to (i) permit each Continuing Employee to participate in plan maintained by Parent or its Affiliate that includes a cash or\ndeferred arrangement intended to qualify under Section 401(k) of the Code (the “Parent\n401(k) Plan”)\non or as soon as reasonably practicable after the Closing Date and (ii) cause the Parent 401(k) Plan to accept eligible rollover distributions\n(as defined in Section 402(c)(4) of the Code) from each Continuing Employee with respect to such Continuing Employee’s account balances\n(including loans) under the Company 401(k) Plan, if elected by such Continuing Employee. If applicable, the Company and Parent shall cooperate\nin good faith with respect to the timing and implementation of the actions relating to the Company 401(k) Plan and the Parent 401(k) Plan\nset forth in this Section\n6.8(f).

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6.9Obligations\nof Merger Sub.\nParent will take all action necessary to cause Merger Sub and the Surviving Corporation to perform their respective obligations pursuant\nto this Agreement and to consummate the Merger upon the terms and subject to the conditions set forth in this Agreement. Parent and Merger\nSub will be jointly and severally liable for the failure by either of them to perform and discharge any of their respective covenants,\nagreements and obligations pursuant to this Agreement.

6.10Notification\nof Certain Matters.

(a)Notification\nby the Company.\nAt all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur\nof the termination of this Agreement pursuant to Article\nVIII and the Effective\nTime, the Company will give prompt notice to Parent upon becoming aware that any representation or warranty made by it in this Agreement\nhas become untrue or inaccurate in any material respect, or of any failure by the Company to comply with or satisfy in any material respect\nany covenant, condition or agreement to be complied with or satisfied by it pursuant to this Agreement, in each case if and only to the\nextent that such untruth, inaccuracy, or failure would reasonably be expected to cause any of the conditions to the obligations of Parent\nand Merger Sub to consummate the Merger set forth in Section\n7.2(a) or Section\n7.2(b) to fail\nto be satisfied at the Closing, except that no such notification will affect or be deemed to modify any representation or warranty of\nthe Company set forth in this Agreement or the conditions to the obligations of Parent and Merger Sub to consummate the Merger or the\nremedies available to the Parties under this Agreement. The terms and conditions of the Confidentiality Agreement apply to any information\nprovided to Parent pursuant to this Section\n6.10(a).

(b)Notification\nby Parent. At all\ntimes during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the\ntermination of this Agreement pursuant to Article\nVIII and the Effective\nTime, Parent will give prompt notice to the Company upon becoming aware that any representation or warranty made by Parent or Merger Sub\nin this Agreement has become untrue or inaccurate in any material respect, or of any failure by Parent or Merger Sub to comply with or\nsatisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it pursuant to this Agreement,\nin each case if and only to the extent that such untruth, inaccuracy or failure would reasonably be expected to cause any of the conditions\nto the obligations of the Company to consummate the Merger set forth in Section\n7.3(a) or Section\n7.3(b) to fail\nto be satisfied at the Closing, except that no such notification will affect or be deemed to modify any representation or warranty of\nParent or Merger Sub set forth in this Agreement or the conditions to the obligations of the Company to consummate the Merger or the remedies\navailable to the Parties under this Agreement. The terms and conditions of the Confidentiality Agreement apply to any information provided\nto the Company pursuant to this Section\n6.10(b).

6.11Public\nStatements and Disclosure.\nThe initial press release concerning this Agreement and the Transactions will be reasonably acceptable to the Company and Parent (the\n“Announcement”).\nThereafter, the Company (other than with respect to the portion of any communication relating to a Company Board Recommendation Change),\non the one hand, and Parent and Merger Sub, on the other hand, will use their respective commercially reasonable efforts to consult with\nthe other Parties before (a) participating in any media interviews; (b) engaging in any meetings or calls with analysts, institutional\ninvestors or other similar Persons; or (c) providing any statements that are public or are reasonably likely to become public, in\nany such case to the extent relating to the Transactions, except that the Company will not be obligated to engage in such consultation\nwith respect to communications that are (i) required by applicable law, regulation or stock exchange rule or listing agreement; (ii)\nprincipally directed to employees, suppliers, customers, partners or vendors so long as such communications are consistent with the previous\npress releases, public disclosures or public statements made jointly by the Parties (or individually if approved by the other Party);\nor (iii) principally related to a Superior Proposal or Company Board Recommendation Change. Notwithstanding the foregoing, this Section\n6.11 shall not\napply to any press release or other public statement made by the Company or Parent that is consistent with the Announcement and the terms\nof this Agreement and does not contain any information relating to the Company or Parent that has not been previously announced or made\npublic in accordance with the terms of this Agreement.

6.12Company\nTransaction Litigation.\nPrior to the Effective Time, the Company will provide Parent with prompt notice of all Company Transaction Litigation (including by providing\ncopies of all

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pleadings\nwith respect thereto) and keep Parent reasonably informed with respect to the status thereof. The Company will (a) give Parent the opportunity\nto participate in the defense, settlement or prosecution of any Company Transaction Litigation; and (b) consult with Parent with respect\nto the defense, settlement and prosecution of any Company Transaction Litigation. The Company may not compromise, settle or come to an\narrangement regarding, or agree to compromise, settle or come to an arrangement regarding, any Company Transaction Litigation unless Parent\nhas consented thereto in writing (such consent not to be unreasonably withheld, conditioned or delayed). For purposes of this Section\n6.12, “participate”\nmeans that Parent will be kept apprised of proposed strategy and other significant decisions with respect to the Company Transaction Litigation\nby the Company (to the extent that the attorney-client privilege between the Company and its counsel is not undermined or otherwise affected),\nand Parent may offer comments or suggestions with respect to such Company Transaction Litigation but will not be afforded any decision-making\npower or other authority over such Company Transaction Litigation, prior to the Effective Time, except for the settlement or compromise\nconsent set forth above.

6.13Parent\nTransaction Litigation.\nPrior to the Effective Time, Parent will provide the Company with prompt notice of all Parent Transaction Litigation (including by providing\ncopies of all pleadings with respect thereto) and keep the Company reasonably informed with respect to the status thereof.

6.14Stock\nExchange Delisting; Deregistration.\nPrior to the Effective Time, the Company will cooperate with Parent and use its commercially reasonable efforts to take, or cause to be\ntaken, all actions and do, or cause to be done, all things reasonably necessary, proper or advisable on its part pursuant to applicable\nlaw and the rules and regulations of NASDAQ to cause (a) the delisting of the Company Common Stock from NASDAQ as promptly as practicable\nafter the Effective Time; and (b) the deregistration of the Company Common Stock pursuant to the Exchange Act as promptly as practicable\nafter such delisting.

6.15Additional\nAgreements. If\nat any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement or to vest\nthe Surviving Corporation with full title to all properties, assets, rights, approvals and immunities of either of the Company or Merger\nSub, then the proper officers and directors of each Party will use their commercially reasonable efforts to take such action.

6.16No\nControl of the Other Party’s Business.\nThe Parties acknowledge and agree that the restrictions set forth in this Agreement are not intended to give Parent or Merger Sub, on\nthe one hand, or the Company, on the other hand, directly or indirectly, the right to control or direct the business or operations of\nthe other at any time prior to the Effective Time. Prior to the Effective Time, each of Parent and the Company will exercise, consistent\nwith the terms, conditions and restrictions of this Agreement, complete control and supervision over their own business and operations.

6.17No\nEmployment Discussions.\nExcept as approved by the Company Board, at all times during the period commencing with the execution and delivery of this Agreement and\ncontinuing until the earlier to occur of the termination of this Agreement pursuant to Article\nVIII and the Effective\nTime, Parent and Merger Sub will not, and will not permit any of their Subsidiaries or controlled Affiliates to authorize, make or enter\ninto, or commit or agree to enter into, any formal or informal arrangements or other understandings (whether or not binding) with any\nexecutive officer of the Company (a) regarding any continuing employment or consulting relationship with the Surviving Corporation from\nand after the Effective Time; (b) pursuant to which any such individual would be entitled to receive consideration of a different\namount or nature than the Merger Consideration in respect of such holder’s shares of Company Common Stock; or (c) pursuant to\nwhich such individual would agree to provide, directly or indirectly, equity investment to Parent, Merger Sub or the Company to finance\nany portion of the Merger.

6.18Debt\nFinancing Matters.

(a)Subject\nto the terms and conditions of this Agreement, the Company will not permit any amendment or modification to, any termination of, or any\nwaiver of any provision or remedy pursuant to, the ABL Loan Agreement (including the lender commitments thereunder and any letters of\ncredit issued in connection therewith), any related loan or security documents, or any liens or security interests granted in connection\ntherewith (including pursuant to that certain Pledge and Security Agreement, dated as of December 21, 2021, among the Company, Texas Capital\nBank and the other guarantors party thereto) without the prior written consent of the

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Parent,\nsuch consent not to be unreasonably withheld, conditioned or delayed. For the avoidance of doubt, the Company shall not enter into the\nABL Loan Agreement Amendment until the same is approved in writing by Parent.

(b)Debt\nFinancing. Each\nof Parent and Merger Sub will use its respective commercially reasonable efforts to take, or cause to be taken, all actions and to do,\nor cause to be done, all things necessary or advisable which are in Parent’s or Merger Sub’s control to enable the Company\n(or with respect to Alternative Debt Financing, the Parent and Merger Sub) to arrange the Debt Financing or Alternative Debt Financing,\nas applicable, and consummate the Debt Financing or Alternative Debt Financing, as applicable, on the Closing Date, including using its\ncommercially reasonable efforts to:

(i)negotiate,\nexecute (if applicable) and deliver definitive agreements with respect to the Debt Financing or Alternative Debt Financing, as applicable,\nto which Parent and/or Merger Sub is a party and provide copies of drafts thereof exchanged with the lenders under the ABL Loan Agreement\nor definitive agreements with respect to the Alternative Debt Financing (the “Alternative\nDebt Financing Agreements”)\nto the Company following the Company’s reasonable request therefor (to the extent the Company does not already have copies);

(ii)participate\nin and assist with due diligence conducted in respect of Parent and/or Merger Sub; and

(iii)satisfy\non a timely basis (or obtain a waiver to) all conditions to funding that are applicable to Parent and Merger Sub in the ABL Loan Agreement\nAmendment or any Alternative Debt Financing Agreement.

(c)Debt\nFinancing Cooperation.\nUnless the requirements in Section\n6.19 to seek Alternative\nDebt Financing apply, the Company will use commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause\nto be done, all things necessary or advisable to arrange the Debt Financing (but not to arrange any Alternative Debt Financing) and to\nconsummate the Debt Financing on the Closing Date in accordance with the terms of the ABL Loan Agreement (as the same may be modified\nby the ABL Loan Agreement Amendment), including using its commercially reasonable efforts to:

(i)comply\nwith its obligations under the ABL Loan Agreement (as the same may be modified by the ABL Loan Agreement Amendment);

(ii)not\nreduce the amount available for borrowing under the Company’s existing $25,000,000 credit facility pursuant to the ABL Loan Agreement\nbelow the Maximum Debt Financing Amount;

(iii)negotiate,\nexecute and deliver the ABL Loan Agreement Amendment and such other definitive agreements with respect to the Debt Financing and continued\npost-Closing financing of the business of the Surviving Corporation as Texas Capital Bank may reasonably require (provided, that, Parent’s\nprior written consent shall be required with respect to each such item prior to the Company’s execution and delivery of the same,\nsuch consent not to be unreasonably withheld, conditioned or delayed); in furtherance of the foregoing, the Company shall provide\ncopies of drafts of each such item exchanged with Texas Capital Bank to Parent for Parent’s review and comment;

(iv)satisfy\non a timely basis (or obtain a waiver to) all conditions to funding that are applicable to the Company in the ABL Loan Agreement (as the\nsame may be modified by the ABL Loan Agreement Amendment);

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(v)enforce\nits rights pursuant to the ABL Loan Agreement (as the same may be modified by the ABL Loan Agreement Amendment); and

(vi)consummate\nthe Debt Financing simultaneously with the Closing, including by causing Texas Capital Bank to fund the Debt Financing at the Closing;\nand

(vii)participate\n(and cause senior management and Representatives, with appropriate seniority and expertise, of the Company to participate) in a customary\nand reasonable number of meetings, presentations, road shows, due diligence sessions, drafting sessions and sessions with rating agencies,\nand otherwise cooperate with the marketing efforts for any of the Debt Financing.

(d)Alternative\nDebt Financing Cooperation.\nTo the extent there may be any Alternative Debt Financing, the Company will use commercially reasonable efforts to:

(i)assist\nParent with the preparation of customary rating agency presentations and bank information memoranda required in connection with any Alternative\nDebt Financing;

(ii)participate\n(and cause senior management and Representatives, with appropriate seniority and expertise, of the Company to participate) in a customary\nand reasonable number of meetings, presentations, road shows, due diligence sessions, drafting sessions and sessions with rating agencies,\nand otherwise cooperate with the marketing efforts for any Alternative Debt Financing; and

(iii)assist\nParent in connection with the preparation of (but not executing) any pledge and security documents, indentures and other definitive financing\ndocuments as may be reasonably requested by Parent (including using commercially reasonable efforts to obtain, to the extent applicable,\nconsents of accountants for use of their reports in any materials relating to Alternative Debt Financing as reasonably requested by Parent),\nand otherwise reasonably facilitate the pledging of collateral and the granting of security interests in respect of Alternative Debt Financing,\nit being understood that such documents will not take effect until the Effective Time.

(e)Information.\nThe Company and Parent shall keep the other fully informed on a reasonably current basis of the status of its efforts to arrange the Debt\nFinancing and the ABL Loan Agreement Amendment, as applicable. Without limiting the generality of the foregoing, the Company shall give\nParent prompt notice of (i) any material breach, event of default under, or repudiation by any party to the ABL Loan Agreement of which\nit becomes aware if such breach, event of default, or repudiation could reasonably be expected to result in a delay of the Closing Date,\nor (ii) the receipt of any written notice of default under the ABL Loan Agreement that could reasonably be expected to result in the termination\nof the ABL Loan Agreement or the acceleration of the Company’s outstanding obligations thereunder.

(f)No\nExclusive Arrangements.\nIn no event will the Parent, Merger Sub or any of their respective Affiliates (which for this purpose will be deemed to include each direct\ninvestor in Parent or Merger Sub and the lenders under the ABL Loan Agreement) enter into any Contract, arrangement or understanding (i)\nawarding any agent, broker, investment banker or financial advisor any financial advisory role on an exclusive basis; or (ii) prohibiting\nor seeking to prohibit any bank, investment bank or other potential provider of debt financing from providing or seeking to provide debt\nfinancing or financial advisory services to any Person, in each case in connection with a transaction relating to the Company Group or\nin connection with the Merger.

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6.19Alternative\nDebt Financing.\nIn the event any portion of the Debt Financing becomes unavailable (or is reasonably expected to become unavailable, as determined by\nthe Company in its discretion) on the terms and conditions set forth in this Agreement, the Company shall, as promptly as practicable,\nnotify the Parent in writing of such event and the reasons therefor and Parent shall use commercially reasonable efforts to obtain alternative\ndebt financing on terms substantially similar to those available under the ABL Loan Agreement or otherwise acceptable to Parent in its\nsole discretion (“Alternative\nDebt Financing”)\nin an amount such that the aggregate funds available to Parent at Closing will be sufficient to (a) pay all amounts required to be paid\nby Parent or Merger Sub pursuant to Article II, (b) repay, prepay, discharge or otherwise satisfy all Indebtedness of the Company and\nits Subsidiaries required to be repaid, prepaid, discharged or satisfied at the Closing, (c) pay all fees and expenses required to be\npaid by Parent or Merger Sub in connection with the Transactions, and (d) consummate the Transactions. In the event that Parent is required\nto seek Alternative Debt Financing pursuant to this Section\n6.19, references\nto the “Debt Financing” shall be deemed to be modified to refer to such Alternative Debt Financing, as applicable, and the\nprovisions of Section\n6.18 shall apply\nto an Alternative Debt Financing (unless specifically relating to the ABL Loan Agreement or the ABL Loan Agreement Amendment).

6.20Debt\nFinancing Costs.\n

(a)If\nthis Agreement is terminated pursuant to any of Sections\n8.1(a)-(d), Section\n8.1(g), or Section\n8.1(i) prior to\nthe Effective Time, Parent shall be solely responsible for, and shall promptly reimburse the Company Group for, all out-of-pocket fees,\ncosts and expenses (including reasonable attorneys’ fees of Texas Capital Bank for which the Company Group is responsible, but not\nincluding other attorneys’ fees incurred by the Company Group) incurred by the Company Group in connection with the Debt Financing\nor any Alternative Debt Financing, including any commitment fees, amendment fees, arrangement fees, consent fees, prepayment penalties\nor similar charges relating to the ABL Loan Agreement, the ABL Loan Agreement Amendment, the Debt Financing or the Alternative Debt Financing.\n

(b)If\nthe Closing occurs, all fees, costs and expenses incurred by the Company Group in connection with the Debt Financing or any Alternative\nDebt Financing (including the fees and costs described in clause (a) above and subject to the limitations set forth therein) shall be\nborne by the Surviving Corporation; provided, that such fees, costs and expenses shall not constitute “Company Transaction Expenses”\nand shall not be taken into account for any purpose under Section\n3.28 or Section\n6.21 of this Agreement.

6.21Transaction\nExpense Update.\nFrom and after the date of this Agreement until the earlier of the Closing or the termination of this Agreement, the Company shall provide\nParent with reasonable updates, not less frequently than every 15 days, regarding any material increases in the aggregate Company Transaction\nExpenses relative to the Transaction Expense Estimate. For the avoidance of doubt, (a) this Section\n6.21 is an informational\ncovenant only and shall not be construed as a cap or limitation on Company Transaction Expenses, (b) any increase in Company Transaction\nExpenses shall not constitute a breach of any representation, warranty or covenant under this Agreement, and (c) no failure by the Company\nto provide an update pursuant to this Section\n6.21 shall give\nrise to a right of Parent to terminate this Agreement or to any claim for damages. The Company shall use its commercially reasonable efforts\nto cause the Company Transaction Expenses to not exceed, in the aggregate, the amount set forth in Section\n3.28 of the Company\nDisclosure Letter.

Article\nVII
CONDITIONS\nTO THE MERGER

7.1Conditions\nto Each Party’s Obligations to Effect the Merger.\nThe respective obligations of Parent, Merger Sub and the Company to consummate the Merger are subject to the satisfaction or waiver (where\npermissible pursuant to applicable law) prior to the Effective Time of each of the following conditions:

(a)Requisite\nStockholder Approval.\nThe Company will have received the Requisite Stockholder Approval at the Company Stockholder Meeting.

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(b)Form\nS-4. The Form S-4\nshall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order.

(c)No\nProhibitive Laws or Injunctions.\nNo temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any court of competent jurisdiction\nor other legal or regulatory restraint or prohibition preventing the consummation of the Merger will be in effect, nor will any action\nhave been taken by any Governmental Authority of competent jurisdiction, and no statute, rule, regulation or order will have been enacted,\nentered, enforced or deemed applicable to the Merger, that in each case prohibits, makes illegal, or enjoins the consummation of the Merger.

7.2Conditions\nto the Obligations of Parent and Merger Sub.\nThe obligations of Parent and Merger Sub to consummate the Merger will be subject to the satisfaction or waiver (where permissible pursuant\nto applicable law) prior to the Effective Time of each of the following conditions, any of which may be waived exclusively by Parent:

(a)Representations\nand Warranties.

(i)Other\nthan the representations and warranties listed in Section\n7.2(a)(ii) and\nSection\n7.2(a)(iii), the\nrepresentations and warranties of the Company set forth in this Agreement will be true and correct (without giving effect to any materiality,\nCompany Material Adverse Effect or similar qualifications contained therein) as of the Closing Date as if made at and as of the Closing\nDate (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation\nand warranty will be true and correct as of such earlier date), except for such failures to be true and correct that would not have a\nCompany Material Adverse Effect.

(ii)The\nrepresentations and warranties set forth in Section\n3.1 (Organization;\nGood Standing), Section\n3.2 (Corporate\nPower; Enforceability), Section\n3.7(c) (Company\nSecurities) (other than the first sentence thereof), Section\n3.7(d) (Other Rights)\nand Section\n3.24 (Brokers)\nthat (A) are not qualified by Company Material Adverse Effect or other materiality qualifications will be true and correct in all material\nrespects as of the Closing Date as if made at and as of the Closing Date (except to the extent that any such representation and warranty\nexpressly speaks as of an earlier date, in which case such representation and warranty will be true and correct in all material respects\nas of such earlier date); and (B) that are qualified by Company Material Adverse Effect or other materiality qualifications will be\ntrue and correct in all respects (without disregarding such Company Material Adverse Effect or other materiality qualifications) as of\nthe Closing Date as if made at and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks\nas of an earlier date, in which case such representation and warranty will be true and correct in all respects as of such earlier date).

(iii)The\nrepresentations and warranties set forth in Section\n3.7(a) (Capital\nStock), Section\n3.7(b) (Company\nEquity Awards) and the first sentence of Section\n3.7(c) (Company\nSecurities) will be true and correct as of the Closing Date (except to the extent that any such representation and warranty expressly\nspeaks as of an earlier date, in which case such representation and warranty will be true and correct as of such earlier date), except\nfor de minimis inaccuracies.

(b)Performance\nof Obligations of the Company.\nThe Company will have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement\nrequired to be performed and complied with by it at or prior to the Closing.

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(c)Officer’s\nCertificate. Parent\nand Merger Sub will have received a certificate of the Company, validly executed for and on behalf of the Company and in its name by a\nduly authorized executive officer thereof, certifying that the conditions set forth in Section\n7.2(a) and Section\n7.2(b) have been\nsatisfied.

(d)Company\nMaterial Adverse Effect.\nNo Company Material Adverse Effect will have occurred after the date of this Agreement that is continuing.

(e)ABL\nLoan Agreement Amendment.\nThe Company shall have delivered to Parent the ABL Loan Agreement Amendment, duly executed by each party thereto other than Parent or\nMerger Sub.

(f)Availability\nof Debt Financing. All\nconditions precedent to the making of the Debt Financing or the Alternative Debt Financing, as the case may be, on the Closing Date shall\nhave been satisfied or waived by Texas Capital Bank or the other applicable lender(s), other than conditions that, by their nature, are\nto be satisfied at the Closing, and the Company and its Subsidiaries shall have available for borrowing under the ABL Loan Agreement or\nthe Alternative Debt Financing, as the case may be, on the Closing Date not less than the Maximum Debt Financing Amount.

(g)Required\nConsents. Parent\nshall have received evidence reasonably satisfactory to Parent that all notices, consents, waivers, approvals and notices of assignment\nrequired to be given, obtained or delivered in connection with the consummation of the Merger and the other transactions contemplated\nby this Agreement, including without limitation those set forth on Schedule\n7.2(g), have been\nduly given, obtained or delivered, as applicable, and shall remain in full force and effect, except for such Consents the failure of which\nto obtain would not have a Company Material Adverse Effect.

7.3Conditions\nto the Company’s Obligations to Effect the Merger.\nThe obligations of the Company to consummate the Merger are subject to the satisfaction or waiver (where permissible pursuant to applicable\nlaw) prior to the Effective Time of each of the following conditions, any of which may be waived exclusively by the Company:

(a)Representations\nand Warranties.

(i)Other\nthan the representations and warranties listed in Section\n7.3(a)(ii) and\nSection\n7.3(a)(iii), the\nrepresentations and warranties of Parent set forth in this Agreement will be true and correct (without giving effect to any materiality,\nParent Material Adverse Effect or similar qualifications contained therein) as of the Closing Date as if made at and as of the Closing\nDate (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation\nand warranty will be true and correct as of such earlier date), except for such failures to be true and correct that would not have a\nParent Material Adverse Effect.

(ii)The\nrepresentations and warranties set forth in Section\n4.1 (Organization;\nGood Standing), Section\n4.2 (Power;\nEnforceability), Section\n4.5(e) (Parent\nSecurities) (other than the first sentence thereof), Section\n4.5(f) (Other Rights)\nand Section\n4.14 (Brokers)\nthat (A) are not qualified by Parent Material Adverse Effect or other materiality qualifications will be true and correct in all material\nrespects as of the Closing Date as if made at and as of the Closing Date (except to the extent that any such representation and warranty\nexpressly speaks as of an earlier date, in which case such representation and warranty will be true and correct in all material respects\nas of such earlier date); and (B) that are qualified by Parent Material Adverse Effect or other materiality qualifications will be\ntrue and correct in all respects (without disregarding such Parent Material Adverse Effect or other materiality qualifications) as of\nthe Closing Date

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as\nif made at and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier\ndate, in which case such representation and warranty will be true and correct in all respects as of such earlier date).

(iii)The\nrepresentations and warranties set forth in Section\n4.5(a) (Capital\nStock), Section\n4.5(b) (Parent\nPreferred Stock), Section\n4.5(c) (Authorization\nand Reservation), Section\n4.5(d) (Parent\nEquity Awards) and the first sentence of Section\n4.5(e) (Parent\nSecurities) will be true and correct as of the Closing Date (except to the extent that any such representation and warranty expressly\nspeaks as of an earlier date, in which case such representation and warranty will be true and correct as of such earlier date), except\nfor de minimis inaccuracies.

(b)Performance\nof Obligations of Parent and Merger Sub.\nParent and Merger Sub will have performed and complied in all material respects with all covenants, obligations and conditions of this\nAgreement required to be performed and complied with by Parent and Merger Sub at or prior to the Closing.

(c)Officer’s\nCertificate. The\nCompany will have received a certificate of Parent and Merger Sub, validly executed for and on behalf of Parent and Merger Sub and in\ntheir respective names by a duly authorized officer thereof, certifying that the conditions set forth in Section\n7.3(a) and Section\n7.3(b) have been\nsatisfied.

(d)Parent\nMaterial Adverse Effect.\nNo Parent Material Adverse Effect will have occurred after the date of this Agreement that is continuing.

7.4Frustration\nof Closing Conditions.\nNotwithstanding anything to the contrary set forth in this Agreement, none of the Company, Parent or Merger Sub may rely, either as a\nbasis for not consummating the Transactions or for terminating this Agreement and abandoning the Merger, on the failure of any condition\nset forth in Section\n7.1, Section\n7.2 or Section\n7.3, as the case\nmay be, to be satisfied, if in any such case such Party’s breach of any of its representations, warranties, covenants or agreements\nset forth in this Agreement or failure to perform fully its obligations under this Agreement in any manner has primarily caused or primarily\nresulted in a failure of any such condition to be satisfied or otherwise have given rise to a right of termination of this Agreement.

Article\nVIII
TERMINATION,\nAMENDMENT AND WAIVER

8.1Termination.\nThis Agreement may be validly terminated only as follows (it being understood and agreed that this Agreement may not be terminated for\nany other reason or on any other basis):

(a)at\nany time prior to the Effective Time (whether prior to or after the receipt of the Requisite Stockholder Approval) by mutual written agreement\nof Parent and the Company;

(b)by\neither Parent or the Company, at any time prior to the Effective Time (whether prior to or after the receipt of the Requisite Stockholder\nApproval) if (i) any permanent injunction or other judgment or order issued by any court of competent jurisdiction or other legal or regulatory\nrestraint or prohibition preventing the consummation of the Merger will be in effect, or any action has been taken by any Governmental\nAuthority of competent jurisdiction, that, in each case, prohibits, makes illegal or enjoins the consummation of the Merger and has become\nfinal and non-appealable; or (ii) any statute, rule, regulation or order will have been enacted, entered, enforced or deemed applicable\nto the Merger that prohibits, makes illegal or enjoins the consummation of the Merger, except that the right to terminate this Agreement\npursuant to this Section\n8.1(b) will not\nbe available to any Party (it being agreed that Parent and Merger Sub shall be a single Party for purposes of this clause (b)) that has\nfailed to comply with Section\n6.1 or to use its\ncommercially reasonable efforts to resist, appeal, obtain consent pursuant to, resolve or lift, as applicable, such injunction, action,\nstatute, rule, regulation or order;

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(c)by\neither Parent or the Company, at any time prior to the Effective Time (whether prior to or after the receipt of the Requisite Stockholder\nApproval) if the Effective Time has not occurred by 11:59 p.m., Eastern time, on March 1, 2027 (the “Termination\nDate”), it\nbeing understood that the right to terminate this Agreement pursuant to this Section\n8.1(c) will not\nbe available to (i) (1) Parent if the Company has the valid right to terminate this Agreement pursuant to Section\n8.1(g) or Section\n8.1(i); or\n(2) the Company if Parent has the valid right to terminate this Agreement pursuant to Section\n8.1(e); and\n(ii) any Party whose action or failure to act (which action or failure to act constitutes a breach by such Party of this Agreement) has\nbeen the primary cause of, or primarily resulted in, either (A) the failure to satisfy the conditions to the obligations of the terminating\nParty to consummate the Merger set forth in Article\nVII prior to the\nTermination Date; or (B) the failure of the Effective Time to have occurred prior to the Termination Date (it being agreed that Parent\nand Merger Sub shall be a single Party for purposes of this clause (ii));

(d)by\neither Parent or the Company, at any time prior to the Effective Time if the Company fails to obtain the Requisite Stockholder Approval\nat the Company Stockholder Meeting (or any adjournment or postponement thereof) at which a vote is taken on the adoption of this Agreement;

(e)by\nParent, at any time prior to the Effective Time (whether prior to or after the receipt of the Requisite Stockholder Approval), if any\ncondition set forth in Section\n7.2 has failed\nto be satisfied or has become incapable of being satisfied by the Termination Date, except that if such failure is capable of being cured\nby the Termination Date, Parent shall not be entitled to terminate this Agreement pursuant to this Section\n8.1(e) prior to\nthe earlier of (x) the date that is 30 days following delivery by Parent to the Company of written notice thereof and (y) the Termination\nDate, it being understood that Parent shall not be entitled to terminate this Agreement if such failure has been cured prior to such earlier\ndate;

(f)by\nParent, at any time prior to the receipt of the Requisite Stockholder Approval, if at any time the Company Board (or a committee thereof)\nhas effected a Company Board Recommendation Change;

(g)by\nthe Company, at any time prior to the Effective Time (whether prior to or after the receipt of the Requisite Stockholder Approval), if\nany condition set forth in Section\n7.3 has failed\nto be satisfied or has become incapable of being satisfied by the Termination Date, except that if such failure is capable of being cured\nby the Termination Date, the Company shall not be entitled to terminate this Agreement pursuant to this Section\n8.1(g) prior to\nthe earlier of (x) the date that is 30 days following delivery by the Company to Parent of written notice thereof and (y) the Termination\nDate, it being understood that the Company shall not be entitled to terminate this Agreement if such failure has been cured prior to such\nearlier date;

(h)by\nthe Company, at any time prior to the receipt of the Requisite Stockholder Approval, if (i) the Company has received a Superior Proposal;\n(ii) the Company Board (or a committee thereof) has authorized the Company to enter into, and, substantially concurrently with such termination\nthe Company enters into, a definitive Alternative Acquisition Agreement to consummate the Acquisition Transaction contemplated by that\nSuperior Proposal; (iii) the Company has complied in all material respects with Section\n5.3 with respect\nto such Superior Proposal; and (iv) prior to or concurrently with such termination the Company pays (or causes to be paid) the Company\nTermination Fee due to Parent in accordance with Section\n8.3(b)(iii);\nor

(i)by\nthe Company, at any time prior to the Effective Time, if (i) all of the conditions set forth in Section\n7.1 and Section\n7.2 have been and\ncontinue to be satisfied or waived (other than those conditions that by their terms are to be satisfied at the Closing, each of which\nis capable of being satisfied at the Closing); (ii) Parent and Merger Sub fail to consummate the Merger on the date upon which Parent\nis required to consummate the Merger pursuant to Section\n2.3; (iii)\nthe Company has irrevocably notified Parent in writing that (A) it is ready, willing and able to consummate the Closing; and (B) all\nconditions set forth in Section\n7.3 have been satisfied\n(other than those conditions that by their terms are to be satisfied at the Closing,

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each\nof which is capable of being satisfied at the Closing) or that the Company is willing to waive any unsatisfied conditions set forth in\nSection\n7.3; (iv) the\nCompany has given Parent written notice at least three Business Days prior to such termination stating the Company’s intention to\nterminate this Agreement pursuant to this Section\n8.1(i) if Parent\nand Merger Sub fail to consummate the Merger on the date required pursuant to Section\n2.3; and (v)\nParent and Merger Sub fail to consummate the Merger by the end of the three-Business Day period contemplated by the foregoing clause (iv)\nand the date required pursuant to Section\n2.3.

8.2Manner\nand Notice of Termination; Effect of Termination.

(a)Manner\nof Termination.\nThe Party terminating this Agreement pursuant to Section\n8.1 (other than\npursuant to Section\n8.1(a)) must deliver\nprompt written notice thereof to the other Parties setting forth in reasonable detail the provision of Section\n8.1 pursuant to\nwhich this Agreement is being terminated and the facts and circumstances forming the basis for such termination pursuant to such provision.

(b)Effect\nof Termination.\nAny proper and valid termination of this Agreement pursuant to Section\n8.1 will be effective\nimmediately upon the mutual written agreement of Parent and the Company or the delivery of written notice by the terminating Party to\nthe other Parties. In the event of the termination of this Agreement pursuant to Section\n8.1, this Agreement\nwill be of no further force or effect without liability of any Party (or any partner, member, manager, stockholder, director, officer,\nemployee, Affiliate, agent or other representative of such Party) to the other Parties, as applicable, except that Section\n6.11, this Section\n8.2, Section\n8.3 and Article\nIX will each survive\nthe termination of this Agreement in accordance with their respective terms. Notwithstanding the foregoing but subject to Section\n8.3(g), nothing\nin this Agreement will relieve any Party from any liability for any willful breach of this Agreement. For purposes of this Agreement,\n“willful breach” means a material breach of this Agreement that is the consequence of an act or omission by a Party with the\nactual knowledge or intention that the taking of such act or omission would constitute, or would reasonably be expected to constitute,\na material breach of this Agreement.

8.3Fees\nand Expenses.

(a)General.\nExcept as otherwise set forth herein, all fees and expenses incurred in connection with this Agreement and the Transactions will be paid\nby the Party incurring such fees and expenses whether or not the Merger is consummated. For the avoidance of doubt, Parent or the Surviving\nCorporation will be responsible for all fees and expenses of the Payment Agent. Parent will pay or cause to be paid all (i) transfer,\nstamp and documentary Taxes or fees; and (ii) sales, use, real property transfer and other similar Taxes or fees arising out of or\nin connection with entering into this Agreement and the consummation of the Merger. With respect to the preparation and filing of Tax\nReturns as related to the foregoing Taxes, Parent and the Company Group shall reasonably cooperate with each other and provide such documents\nand assistance as may be reasonably necessary to prepare all such Tax Returns, and Parent shall timely file such Tax Returns.

(b)Company\nPayments.

(i)If\n(A) this Agreement is validly terminated pursuant to Section\n8.1(c), Section\n8.1(d) or Section\n8.1(e); (B)\nfollowing the execution and delivery of this Agreement and prior to the termination of this Agreement pursuant to Section\n8.1(c), Section\n8.1(d) or Section\n8.1(e), an Acquisition\nProposal for an Acquisition Transaction has been publicly announced or disclosed; and (C) within one year following the termination\nof this Agreement pursuant to Section\n8.1(c), Section\n8.1(d) or Section\n8.1(e), as applicable,\neither an Acquisition Transaction is consummated or the Company enters into a definitive agreement providing for the consummation of an\nAcquisition Transaction, then the Company will concurrently with the consummation of such Acquisition Transaction pay (or cause to be\npaid) to Parent an amount equal to $1,152,000 (the “Company\nTermination Fee”).\nFor purposes of this

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Section\n8.3(b)(i), all\nreferences to “25%” in the definition of “Acquisition Transaction” will be deemed to be references to “50%.”

(ii)If\nthis Agreement is validly terminated pursuant to Section\n8.1(f), then the\nCompany must promptly (and in any event within two Business Days) following such termination pay (or cause to be paid) to Parent the Company\nTermination Fee.

(iii)If\nthis Agreement is validly terminated pursuant to Section\n8.1(h), then prior\nto or concurrently with such termination the Company must pay (or cause to be paid) to Parent the Company Termination Fee; provided,\nthat if the Company has entered into a definitive Alternative Acquisition Agreement to consummate an Acquisition Transaction with a Person\nor group of Persons that is an Exempted Party at the time of such termination, and such Alternative Acquisition Agreement is entered into\non or prior to the No-Shop Period Start Date, then the “Company Termination Fee” shall mean an amount equal to $576,000.

(c)Parent\nPayments. If this\nAgreement is validly terminated pursuant to Section\n8.1(g) or Section\n8.1(i), then Parent\nmust promptly (and in any event within two Business Days) following such termination pay to the Company an amount equal to $1,152,000\nin cash (the “Parent\nTermination Fee”).

(d)Single\nPayment Only; Liquidated Damages.\nThe Parties acknowledge and agree that in no event will the Company or Parent be required to pay the Company Termination Fee or Parent\nTermination Fee, as applicable, on more than one occasion, whether or not the Company Termination Fee or Parent Termination Fee, as applicable,\nmay be payable pursuant to more than one provision of this Agreement at the same or at different times and upon the occurrence of different\nevents. The Parties agree that each of the Company Termination Fee and the Parent Termination Fee constitutes liquidated damages and not\na penalty.

(e)No\nCompany\nTermination Fee or Damages Related to Debt Financing or Alternative Debt Financing. Notwithstanding\nanything to the contrary in this Agreement (including anything in this Section\n8.3 or Section\n8.1), in no event\nwill the Company be obligated to pay the Company Termination Fee (to the extent triggered pursuant to Section\n8.3(b)(i)) or any\ndamages (whether direct, indirect, consequential or otherwise) to Parent, Merger Sub or any other Person, in each case, solely as a result\nof or arising out of (i) any failure of the Debt Financing to be consummated or funded by any lender under the ABL Loan Agreement (or\nfailure of any Alternative Debt Financing to be consummated or funded by any lender under any Alternative Debt Financing) on the Closing\nDate or at any other time, (ii) any breach, termination, repudiation, default or failure to perform by any lender under the ABL Loan Agreement\n(or any lender under any Alternative Debt Financing Agreement) or any party (other than the Company or any of its Affiliates) to the ABL\nLoan Agreement Amendment (or any party (other than the Company or any of its Affiliates) to any Alternative Debt Financing Agreement),\n(iii) the failure of any conditions to the Debt Financing or any Alternative Debt Financing to be satisfied, (iv) the unavailability or\ninsufficiency of the Debt Financing or any Alternative Debt Financing for any reason, (v) any breach by the Company of any representation,\nwarranty, covenant or agreement in this Agreement to the extent that such breach relates to, results from, or is asserted in connection\nwith, any of the matters described in clauses (i) through (iv), or (vi) any termination of this Agreement pursuant to any provision hereof\nto the extent the basis for such termination relates to, results from, or is asserted in connection with, any of the matters described\nin clauses (i) through (iv), in each case, unless any of the matters described in clauses (i)-(vi) were materially caused by the Company’s\nfailure to comply with its obligations under Section\n6.18(c) or Section\n6.18(d). For the\navoidance of doubt, nothing in this Section\n8.3(e) shall limit\nor restrict Parent’s entitlement to the Company Termination Fee in the event the Company Termination Fee becomes payable under Section\n8.3(b)(ii) or Section\n8.3(b)(iii).

(f)Sole\nand Exclusive Remedy.

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(i)Under\nno circumstances will the collective monetary damages and any other amounts payable by Parent, Merger Sub or any of their Affiliates arising\nout of or relating to this Agreement, the Transactions, the termination of this Agreement, breaches of this Agreement, or the failure\nto consummate the Transactions exceed an amount in the aggregate (such aggregate amount, the “Parent\nLiability Limitation”)\nequal to $1,152,000 plus any costs and connections in payable pursuant to Section\n6.20. In no event\nwill any of the Company Related Parties seek or obtain, nor will they permit any of their Representatives or any other Person acting on\ntheir behalf to seek or obtain, nor will any Person be entitled to seek or obtain, any monetary recovery or monetary award (A) in\nexcess of the Parent Liability Limitation against Parent or Merger Sub; or (B) against the former, current or future direct or indirect\nholders of any equity, controlling persons, directors, officers, employees, agents, attorneys, Affiliates (other than Parent or Merger\nSub), members, managers, general or limited partners, stockholders and assignees of each of Parent and Merger Sub (the Persons in clauses\n(A) and (B) collectively, the “Parent\nRelated Parties”),\nand in no event will the Company Group be entitled to seek or obtain any monetary damages of any kind, including consequential, special,\nindirect or punitive damages, in excess of the Parent Liability Limitation against Parent or Merger Sub or in any case against the other\nParent Related Parties for, or with respect to, this Agreement or the Transactions (including, any breach by Parent or Merger Sub), the\ntermination of this Agreement, the failure to consummate any of the Transactions or any claims or actions under applicable law arising\nout of any such breach, termination or failure. Other than the obligations of Parent and Merger Sub to the extent expressly provided in\nthis Agreement and other than the obligations of Parent, Merger Sub or any of their respective Affiliates to the extent expressly provided\nin the Confidentiality Agreement, in no event will any Parent Related Party or any other Person other than Parent and Merger Sub have\nany liability for monetary damages to the Company or any other Person relating to or arising out of this Agreement or the Transactions.

(ii)Parent’s\nreceipt of the aggregate amount of the Company Termination Fee, to the extent owed pursuant to Section\n8.3(b), plus, to\nthe extent applicable, any costs and connections in payable pursuant to Section\n6.20, will be the\nmaximum amount of monetary damages that Parent and Merger Sub and each of their respective Affiliates may recover from (A) the Company\nGroup and each of its Affiliates; and (B) the former, current or future direct or indirect holders of any equity, controlling persons,\ndirectors, officers, employees, agents, attorneys, Affiliates, members, managers, general or limited partners, stockholders and assignees\nof the Company Group and its Affiliates (the Persons in clauses (A) and (B) collectively, the “Company\nRelated Parties”)\nin respect of this Agreement, any agreement executed in connection herewith and the transactions contemplated hereby and thereby, the\ntermination of this Agreement, the failure to consummate any of the Transactions or any claims or actions under applicable law arising\nout of any such breach, termination or failure. Upon payment to Parent of the Company Termination Fee plus, to the extent applicable,\nany costs and connections in payable pursuant to Section\n6.20, (1) none\nof the Company Related Parties will have any further liability or obligation to Parent or Merger Sub relating to or arising out of this\nAgreement, any agreement executed in connection herewith or the transactions contemplated hereby and thereby or any matters forming the\nbasis of such termination (except that the Parties (or their Affiliates) will remain

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obligated\nwith respect to, and Parent may be entitled to remedies with respect to, the Confidentiality Agreement, Section\n8.3(a) and Section\n9.4, as applicable);\nand (2) none of Parent, Merger Sub or any other Person will be entitled to bring or maintain any claim, action or proceeding against the\nCompany or any Company Related Party arising out of this Agreement, any agreement executed in connection herewith or the transactions\ncontemplated hereby and thereby or any matters forming the basis for such termination (except that the Parties (or their Affiliates) will\nremain obligated with respect to, and Parent may be entitled to remedies with respect to, the Confidentiality Agreement, Section\n8.3(a) and Section\n9.4, as applicable).

(iii)Under\nno circumstances will the collective monetary damages and any other amounts payable by the Company for breaches under this Agreement exceed\nan amount equal to $1,152,000 (such aggregate amount, the “Company\nLiability Limitation”).\nIn no event will any of the Parent Related Parties seek or obtain, nor will they permit any of their Representatives or any other Person\nacting on their behalf to seek or obtain, nor will any Person be entitled to seek or obtain, any monetary recovery or monetary award in\nexcess of the Company Liability Limitation against any of the Company Related Parties, and in no event will Parent, Merger Sub or the\nParent Related Parties be entitled to seek or obtain any monetary damages of any kind, including consequential, special, indirect or punitive\ndamages, in excess of the Company Liability Limitation against the Company Related Parties for, or with respect to, this Agreement or\nthe Transactions, the termination of this Agreement, the failure to consummate any of the Transactions or any claims or actions under\napplicable law arising out of any such breach, termination or failure. Other than the obligations of the Company to the extent expressly\nprovided in this Agreement and other than the obligations of the Company or any of its Affiliates to the extent expressly provided in\nthe Confidentiality Agreement, in no event will any Company Related Party or any other Person other than the Company have any liability\nfor monetary damages to Parent, Merger Sub or any other Person relating to or arising out of this Agreement or the Transactions.

(iv)The\nCompany’s receipt of the aggregate amount of the Parent Termination Fee, to the extent owed pursuant to Section\n8.3(c), will be\nthe maximum amount of monetary damages that the Company Group and its Affiliates may recover from the Parent Related Parties in respect\nof this Agreement, any agreement executed in connection herewith and the transactions contemplated hereby and thereby, the termination\nof this Agreement, the failure to consummate any of the Transactions or any claims or actions under applicable law arising out of any\nsuch breach, termination or failure. Upon payment to the Company of the Parent Termination Fee, (1) none of the Parent Related Parties\nwill have any further liability or obligation to the Company relating to or arising out of this Agreement, any agreement executed in connection\nherewith or the transactions contemplated hereby and thereby or any matters forming the basis of such termination (except that the Parties\n(or their Affiliates) will remain obligated with respect to, and the Company may be entitled to remedies with respect to, the Confidentiality\nAgreement, Section\n8.3(a) and Section\n9.4); and (2)\nnone of the Company Group or any other Person will be entitled to bring or maintain any claim, action or proceeding against Parent, Merger\nSub or any Parent Related Party arising out of this Agreement, any agreement executed in connection herewith or the transactions contemplated\nhereby and thereby or any matters forming the basis for such termination (except that the Parties (or

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their\nAffiliates) will remain obligated with respect to, and Company may be entitled to remedies with respect to, the Confidentiality Agreement,\nSection\n8.3(a) and Section\n9.4).

(g)Acknowledgment\nRegarding Specific Performance.\nNotwithstanding anything to the contrary in Section\n8.3(g), it is agreed\nthat Parent, Merger Sub and the Company will be entitled to an injunction, specific performance or other equitable relief as provided\nin Section\n9.8(b), except\nthat, although the Company, in its sole discretion, may determine its choice of remedies hereunder, including by pursuing specific performance\nin accordance with, but subject to the terms and limitations of, Section\n9.8(b), under no\ncircumstances will the Company be permitted or entitled to receive both specific performance of the type contemplated by Section\n9.8(b) and any\nmonetary damages.

(h)Non-Recourse\nParent Party. In\nno event will the Company or any Company Related Parties seek or obtain, nor will they permit any of its Representatives to seek or obtain,\nnor will any Person be entitled to seek or obtain, any monetary recovery or monetary award against any Non-Recourse Parent Party (which\nexcludes, for the avoidance of doubt, Parent and Merger Sub) with respect to this Agreement or the transactions contemplated hereby (including\nany breach by Parent or Merger Sub), the termination of this Agreement, the failure to consummate the transactions contemplated hereby\nor any claims or actions under applicable laws arising out of any such breach, termination or failure, other than (i) from Parent or Merger\nSub to the extent expressly provided for in this Agreement; or (ii) from any Person that is party to, and solely pursuant to the terms\nand conditions of, the Confidentiality Agreement.

(i)Non-Recourse\nCompany Party.\nIn no event will Parent or Merger Sub or any Parent Related Parties seek or obtain, nor will they permit any of its Representatives to\nseek or obtain, nor will any Person be entitled to seek or obtain, any monetary recovery or monetary award against any Non-Recourse Company\nParty (other than the Company) with respect to this Agreement or the transactions contemplated hereby (including any breach by the Company),\nthe termination of this Agreement, the failure to consummate the transactions contemplated hereby or any claims or actions under applicable\nlaws arising out of any such breach, termination or failure, other than (i) from the Company to the extent expressly provided for in this\nAgreement; or (ii) from any Person that is party to, and solely pursuant to the terms and conditions of, the Confidentiality Agreement.

8.4Amendment.\nSubject to applicable law and subject to the other provisions of this Agreement, this Agreement may be amended by the Parties at any time\nby execution of an instrument in writing signed on behalf of each of Parent, Merger Sub and the Company (pursuant to authorized action\nby the Company Board (or a committee thereof)), except that in the event that the Company has received the Requisite Stockholder Approval,\nno amendment may be made to this Agreement that requires the approval of the Company Stockholders pursuant to the DGCL without such approval.\n

8.5Extension;\nWaiver. At any\ntime and from time to time prior to the Effective Time, any Party may, to the extent legally allowed and except as otherwise set forth\nherein, (a) extend the time for the performance of any of the obligations or other acts of the other Parties, as applicable; (b) waive\nany inaccuracies in the representations and warranties made to such Party contained herein or in any document delivered pursuant to this\nAgreement; and (c) subject to the requirements of applicable law, waive compliance with any of the agreements or conditions for the\nbenefit of such Party contained herein. Any agreement on the part of a Party to any such extension or waiver will be valid only if set\nforth in an instrument in writing signed by such Party. Any delay in exercising any right pursuant to this Agreement will not constitute\na waiver of such right.

Article\nIX
GENERAL\nPROVISIONS

9.1Survival\nof Representations, Warranties and Covenants.\nThe representations, warranties and covenants of the Company, Parent and Merger Sub contained in this Agreement will terminate at the\nEffective Time, except that any covenants that by their terms survive the Effective Time will survive the Effective Time in accordance\nwith their respective terms.

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9.2Notices.\nAll notices and other communications hereunder must be in writing and will be deemed to have been duly delivered and received hereunder\n(i) four Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid; (ii) one Business\nDay after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight courier service; (iii) immediately\nupon delivery by hand (with a written or electronic confirmation of delivery) or by email (with electronic confirmation of receipt), in\neach case to the intended recipient as set forth below:

(a)if\nto Parent or Merger Sub to:

Star\nEquity Holdings, Inc.

53\nForest Avenue, Suite 101

Old\nGreenwich, CT 06870

Attn:\nLegal Dept

Email:\nLegal@starequity.com

with\na copy (which will not constitute notice) to:

Baker\n& Hostetler LLP

45\nRockefeller Plaza

New\nYork, NY 10111

Attn:\nAdam Finerman

Email:\nafinerman@bakerlaw.com

(b)if\nto the Company (prior to the Effective Time) to:

Harte\nHanks, Inc.
1 Executive Drive
Chelmsford, MA 01824
Attn: David Garrison
Email: david.garrison@hartehanks.com

with\na copy (which will not constitute notice) to:

Baker\nBotts L.L.P.

910\nLouisiana Street Houston, TX 77002
Attn: Travis Wofford; Carina Antweil
Email: travis.wofford@bakerbotts.com;\ncarina.antweil@bakerbotts.com

Any\nnotice sent by email or otherwise received at the addressee’s location on any Business Day after 5:00 p.m., addressee’s\nlocal time, or on any day that is not a Business Day will be deemed to have been received at 9:00 a.m., addressee’s local time,\non the next Business Day. From time to time, any Party may provide notice to the other Parties of a change in its address or email address\nthrough a notice given in accordance with this Section\n9.2, except that\nnotice of any change to the address or any of the other details specified in or pursuant to this Section\n9.2 will not be\ndeemed to have been received until, and will be deemed to have been received upon, the later of the date (A) specified in such notice;\nor (B) that is five Business Days after such notice would otherwise be deemed to have been received pursuant to this Section\n9.2.

9.3Assignment.\nNo Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval\nof the other Parties, except that Parent and Merger Sub will have the right to assign all or any portion of their respective rights and\nobligations pursuant to this Agreement from and after the Effective Time (a) in connection with a merger or consolidation involving Parent\nor Merger Sub or other disposition of all or substantially all of the assets of Parent, Merger Sub or the Surviving Corporation or (b)\nto any of their respective Affiliates and any Party may assign this Agreement or any of its rights, interests, or obligations hereunder\nwithout the prior written consent of the other Parties to Texas Capital Bank pursuant to the terms of the Debt Financing

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solely\nfor purposes of creating a security interest herein or otherwise assigning as collateral in respect of the Debt Financing, it being understood\nthat, in each case, such assignment will not impede or delay the consummation of the Transactions or otherwise impede the rights of the\nholders of shares of Company Common Stock and Company Equity Awards pursuant to this Agreement. Subject to the preceding sentence, this\nAgreement will be binding upon and will inure to the benefit of the Parties and their respective successors and permitted assigns. No\nassignment by any Party will relieve such Party of any of its obligations hereunder.

9.4Confidentiality.\nParent, Merger Sub and the Company hereby acknowledge that Parent (together with its subsidiaries) and the Company (together with its\nsubsidiaries) have previously executed a Non-Disclosure Agreement, dated January 8, 2026 (the “Confidentiality\nAgreement”),\nthat will continue in full force and effect in accordance with its terms. Each of Parent, Merger Sub and their respective Representatives\nwill hold and treat all documents and information concerning the Company Group furnished or made available to Parent, Merger Sub or their\nrespective Representatives in connection with the Transactions in accordance with the Confidentiality Agreement, and the Company and its\nRepresentatives will hold and treat all documents and information concerning the Parent Group furnished or made available to the Company\nor its Representatives in connection with the Transactions in accordance with the Confidentiality Agreement; provided, however, that\nnothing in this Section\n9.4 or in the Confidentiality\nAgreement will prohibit Parent, Merger Sub or any of their respective Representatives, or the Company or any of its Representatives, from\nmaking any disclosure required by applicable law, the rules or regulations of the SEC, NASDAQ or any other applicable stock exchange,\nany Governmental Authority or law, including in connection with the Form S-4, the Proxy Statement, any Other Required Filing or any disclosure\nmade in compliance with Section\n6.11.

9.5Entire\nAgreement. This\nAgreement and the documents and instruments and other agreements among the Parties as contemplated by or referred to herein, including\nthe Confidentiality Agreement and the Company Disclosure Letter, constitute the entire agreement among the Parties with respect to the\nsubject matter hereof and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to\nthe subject matter hereof. Notwithstanding anything to the contrary in this Agreement, the Confidentiality Agreement will (a) not be superseded;\n(b) survive any termination of this Agreement; and (c) continue in full force and effect until the earlier to occur of the Effective\nTime and the date on which the Confidentiality Agreement expires in accordance with its terms or is validly terminated by the parties\nthereto.

9.6Third\nParty Beneficiaries.\nExcept as set forth in Section\n6.7 and this Section\n9.6, the Parties\nagree that their respective representations, warranties and covenants set forth in this Agreement are solely for the benefit of the other\nParties in accordance with and subject to the terms of this Agreement. This Agreement is not intended to, and will not, confer upon any\nother Person any rights or remedies hereunder, except (a) as set forth in or contemplated by Section\n6.7; and (b)\nfrom and after the Effective Time, the rights of the holders of shares of Company Common Stock and Company Equity Awards to receive the\nMerger Consideration set forth in Article\nII.

9.7Severability.\nIn the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction\nto be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such\nprovision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the Parties. The Parties further\nagree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the\nextent possible, the economic, business and other purposes of such void or unenforceable provision.

9.8Remedies.

(a)Remedies\nCumulative. Except\nas otherwise provided herein, any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive\nof any other remedy conferred hereby or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude\nthe exercise of any other remedy. Although the Company may pursue both a grant of specific performance and monetary damages (including\nthe payment of the Parent Termination Fee), under no circumstances will the Company be permitted or entitled to receive both a grant of\nspecific performance that results in the occurrence of the Closing and monetary damages (including any monetary damages in lieu of specific\nperformance and all or any portion of the Parent Termination Fee).

(b)Specific\nPerformance.

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(i)The\nParties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the\nevent that the Parties do not perform the provisions of this Agreement (including any Party failing to take such actions as are required\nof it hereunder in order to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions. The\nParties acknowledge and agree that, (A) the Parties will be entitled, in addition to any other remedy to which they are entitled at law\nor in equity, to an injunction, specific performance and other equitable relief to prevent breaches (or threatened breaches) of this Agreement\nand to enforce specifically the terms and provisions hereof; (B) the provisions of Section\n8.3 are not intended\nto and do not adequately compensate the Company, on the one hand, or Parent and Merger Sub, on the other hand, for the harm that would\nresult from a breach of this Agreement, and will not be construed to diminish or otherwise impair in any respect any Party’s right\nto an injunction, specific performance and other equitable relief; and (C) the right of specific enforcement is an integral part of\nthe Merger and without that right, neither the Company nor Parent would have entered into this Agreement. It is explicitly agreed that\nthe Company shall have the right to an injunction, specific performance or other equitable remedies in connection with enforcing Parent’s\nand Merger Sub’s obligations to consummate the Merger, provided that (1) all conditions set forth in Section\n7.1 and Section\n7.2 have been satisfied\nor waived, (2) the Debt Financing (or any Alternative Debt Financing) has been funded or will be funded substantially concurrently with\nsuch specific performance, (3) the Company has irrevocably confirmed in writing that if specific performance is granted and the Debt Financing\nor any Alternative Debt Financing) is funded, it will consummate the Closing, and (4) Parent and Merger Sub are otherwise required to\nconsummate the Closing pursuant to Section\n2.3.

(ii)The\nParties agree not to raise any objections to (A) the granting of an injunction, specific performance or other equitable relief to prevent\nor restrain breaches or threatened breaches of this Agreement by the Company, on the one hand, or Parent and Merger Sub, on the other\nhand; and (B) the specific performance of the terms and provisions of this Agreement to prevent breaches or threatened breaches of,\nor to enforce compliance with, the covenants, obligations and agreements of Parent and Merger Sub pursuant to this Agreement. Any Party\nseeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this\nAgreement will not be required to provide any bond or other security in connection with such injunction or enforcement, and each Party\nirrevocably waives any right that it may have to require the obtaining, furnishing or posting of any such bond or other security.

9.9Governing\nLaw. This Agreement\nis governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern\nunder applicable principles of conflicts of laws thereof.

9.10Consent\nto Jurisdiction.

(a)General\nJurisdiction. Each\nof the Parties (i) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the\nterritorial jurisdiction of the Chosen Courts) in any Legal Proceeding relating to the Transactions, for and on behalf of itself or any\nof its properties or assets, in accordance with Section\n9.2 or in such\nother manner as may be permitted by applicable law, and nothing in this Section\n9.10 will affect\nthe right of any Party to serve legal process in any other manner permitted by applicable law; (ii) irrevocably and unconditionally\nconsents and submits itself and its properties and assets in any Legal Proceeding to the exclusive jurisdiction of the Court of Chancery\nof the State of Delaware

220

and\nany state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept\njurisdiction over a particular matter, any federal court within the State of Delaware) (the “Chosen\nCourts”)\nin the event that any dispute or controversy arises out of this Agreement or the transactions contemplated hereby; (iii) agrees that\nit will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (iv) agrees\nthat any Legal Proceeding arising in connection with this Agreement or the transactions contemplated hereby will be brought, tried and\ndetermined only in the Chosen Courts; (v) waives any objection that it may now or hereafter have to the venue of any such Legal Proceeding\nin the Chosen Courts or that such Legal Proceeding was brought in an inconvenient court and agrees not to plead or claim the same;\nand (vi) agrees that it will not bring any Legal Proceeding relating to this Agreement or the transactions contemplated hereby in any\ncourt other than the Chosen Courts. Each of Parent, Merger Sub and the Company agrees that a final judgment in any Legal Proceeding in\nthe Chosen Courts will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided\nby applicable law.

9.11WAIVER\nOF JURY TRIAL.\nEACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE OUT OF OR RELATE TO THIS AGREEMENT, OR THE NEGOTIATION, VALIDITY\nOR PERFORMANCE OF THIS AGREEMENT, OR THE MERGER, IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY\nIRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING (WHETHER\nFOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE MERGER,\nTHE DEBT FINANCING OR ANY ALTERNATIVE DEBT FINANCING. EACH PARTY ACKNOWLEDGES AND AGREES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY\nOF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE\nTHE FOREGOING WAIVER; (b) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (c) IT MAKES THIS WAIVER VOLUNTARILY;\nAND (d) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION\n9.11.

9.12Company\nDisclosure Letter References.\nThe Parties agree that the disclosure set forth in any particular section or subsection of the Company Disclosure Letter will be deemed\nto be an exception to (or, as applicable, a disclosure for purposes of) (a) the representations and warranties (or covenants, as applicable)\nof the Company that are set forth in the corresponding Section or subsection of this Agreement; and (b) any other representations\nand warranties (or covenants, as applicable) of the Company that are set forth in this Agreement, but in the case of this clause (b) only\nif the relevance of that disclosure as an exception to (or a disclosure for purposes of) such other representations and warranties (or\ncovenants, as applicable) is reasonably apparent on the face of such disclosure.

9.13Counterparts.\nThis Agreement and any amendments hereto may be executed in one or more counterparts, all of which will be considered one and the same\nagreement and will become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties,\nit being understood that all Parties need not sign the same counterpart. Any such counterpart, to the extent delivered by .pdf, .tif,\n.gif, .jpg or similar attachment to email (any such delivery, an “Electronic\nDelivery”),\nwill be treated in all manner and respects as an original executed counterpart and will be considered to have the same binding legal effect\nas if it were the original signed version thereof delivered in person. No Party may raise the use of an Electronic Delivery to deliver\na signature, or the fact that any signature or agreement or instrument was transmitted or communicated through the use of an Electronic\nDelivery, as a defense to the formation of a contract, and each Party forever waives any such defense, except to the extent such defense\nrelates to lack of authenticity.

9.14No\nLimitation. It\nis the intention of the Parties that, to the extent possible, unless provisions are mutually exclusive and effect cannot be given to both\nor all such provisions, the representations, warranties, covenants and closing conditions in this Agreement will be construed to be cumulative\nand that each representation, warranty, covenant and closing condition in this Agreement will be given full, separate and independent\neffect and nothing set forth in any provision herein will in any way be deemed to limit the scope, applicability or effect of any other\nprovision hereof.

9.15Performance\nGuarantee. Parent\nhereby guarantees the due, prompt and faithful performance and discharge by, and compliance with, all of the obligations, covenants, terms,\nconditions

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and\nundertakings of Merger Sub under this Agreement in accordance with the terms hereof, including any such obligations, covenants, terms,\nconditions and undertakings that are required to be performed, discharged or complied with following the Effective Time by the Surviving\nCorporation.

[Signature\npages follow.]

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IN\nWITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered by their respective duly authorized officers as of\nthe date first written above.

STAR\nEQUITY HOLDINGS, INC.

By: /s/Jeffrey\nE. Eberwein
Name:\nJeffrey E. Eberwein
Title: CEO

MERGER\nSUB - R, INC.

By: Jeffrey\nE. Eberwein
Name:\nJeffrey E. Eberwein
Title: President

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IN\nWITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered by their respective duly authorized officers as of\nthe date first written above.

HARTE\nHANKS, INC.

By: /s/David\nFisher
Name:\nDavid Fisher
Title: President

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Annex\nB

$\"\"$

August\n12, 2026

PERSONAL\nAND CONFIDENTIAL

The\nBoard of Directors Harte Hanks, Inc.

1\nExecutive Drive

Chelmsford,\nMA 01824

Members\nof the Board of Directors of Harte Hanks, Inc.:

We\nunderstand that Harte Hanks, Inc. (the “Company”), Star Equity Holdings, Inc. (“Parent”) and Merger\nSub – R, Inc. (“Merger Sub”) propose to enter into an Agreement and Plan of Merger (the “Agreement”),\nwhich provides, among other things, for the merger of Merger Sub with and into the Company (the “Merger”), as a result\nof which the Company will become a wholly-owned subsidiary of Parent.

Pursuant\nto the Agreement, each outstanding share of common stock of the Company, par value $1.00 per share (the “Company Common Stock”)\n(other than Owned Company Shares (as defined in the Agreement)) will be converted into the right to receive, at the election of the holder\n(A) cash in an amount equal to $5.00 per share, without interest (the “Cash Consideration”); (B) 0.50 shares of Parent\nPreferred Stock (as defined in the Agreement) (the “Preferred Stock Consideration”, and together with the Cash Consideration,\nand any combination, and any cash in lieu of fractional shares of Parent Preferred Stock, collectively the “Merger Consideration”),\nor (C) the Cash Consideration, the Preferred Stock Consideration or a combination of both, in each case subject to election, proration\nand adjustment pursuant to Sections 2.7 and 2.8 of the Agreement.

The\nterms and conditions of the Merger are more fully set forth in the Agreement. Capitalized terms used herein shall have the meanings used\nin the Agreement, unless otherwise defined herein.

You\nhave asked for our opinion as to whether the Merger Consideration to be received by the holders of the Company Common Stock (other than\nthe Parent and its affiliates) in the Merger is fair, from a financial point of view, to such holders.

For\npurposes of the opinion set forth herein, we have:

(i)

reviewed\n certain publicly available financial statements and certain other business and financial\n information relating to the Company furnished to Citizens JMP Securities, LLC (“Citizens”);

(ii)

reviewed\n certain internal financial statements and other financial and operating data concerning the\n Company prepared by the management of the Company;

(iii)

reviewed\n certain financial forecasts prepared by the management of the Company;

(iv)

compared\n the financial performance of the Company with that of certain other publicly−traded\n companies that we believe are generally comparable to the Company;

(v)

reviewed\n the financial terms, to the extent publicly available, of certain acquisition transactions\n involving companies in lines of business that we believe are generally comparable to the\n Company;

(vi)

participated\n in discussions with members of the senior management of the Company with respect to the business\n prospects and financial outlook of the Company;

(vii)

reviewed\n the Agreement draft dated as of August 10, 2026 and certain related documents; and

(viii)

performed\n such other analysis and considered such other factors as we deemed appropriate.

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In\nconducting our review and arriving at our opinion, we have assumed and relied, without independent verification, upon the accuracy and\ncompleteness of all information and data that was publicly available or furnished to or otherwise reviewed by or discussed with us. We\nhave further relied upon the assurance of the management of the Company that they are not aware of any facts or circumstances that would\nmake such information inaccurate or misleading. With respect to the financial forecasts of the Company, the management of the Company\nhas advised us, and we have assumed, that they have been reasonably prepared on bases reflecting the best currently available estimates\nand good faith judgments of the management of the Company as to the future financial performance of the Company and other matters covered\nthereby. We have not been engaged to assess the reasonableness or achievability of such forecasts or the assumptions on which they were\nbased and express no view as to such forecasts or assumptions.

For\npurposes of rendering our opinion, we have assumed that the representations and warranties of each party contained in the Agreement are\ntrue and correct, that each party will perform all of the covenants and agreements required to be performed by it under the Agreement\nand that all conditions to the consummation of the Merger will be satisfied without waiver thereof. We have assumed that the final form\nof the Agreement will not vary materially from the last draft Agreement reviewed by us and that the Merger will be consummated substantially\non the terms described in such draft, without any amendment or waiver of material terms or conditions. We have also assumed that all\nnecessary governmental, regulatory and other consents and approvals contemplated by the Agreement will be obtained and that in the course\nof obtaining those consents and approvals no costs or restrictions will be imposed or waivers made that would have an adverse effect\non the contemplated benefits of the Merger.

We\nare not legal, tax or regulatory advisors and have relied upon, without independent verification, the assessment of the Company and their\nlegal, tax or regulatory advisors with respect to legal, tax or regulatory matters. We are not in the business of appraising tangible\nassets and have not made any independent valuation or appraisal of any or all of the assets or liabilities (including any contingent,\nderivative or off-balance-sheet assets or liabilities) of the Company, nor have we been furnished with any such valuations or appraisals.\nIn addition, we have not evaluated the solvency of any party to the Agreement under any state or federal laws relating to bankruptcy,\ninsolvency or similar matters. Our opinion is necessarily based on financial, economic, market and other conditions as in effect on,\nand the information made available to us as of, the date hereof. Events occurring after the date hereof may affect this opinion and the\nassumptions used in preparing it, and we do not assume any obligation to update, revise or reaffirm this opinion.

We\nwere not requested to consider, and our opinion does not address, the Company’s underlying business decision to enter into the\nAgreement and pursue the Merger, or the relative merits of the Merger as compared to any alternative business strategies that might exist\nfor the Company or the effect of any other transaction in which the Company might engage. We are not requested to consider, and our opinion\ndoes not address, the non-financial terms of the Agreement or the Merger, nor does it address the terms of any of the related agreements\nto be entered into by the parties. Our opinion addresses only the Merger Consideration to be received by the holders of Company Common\nStock (other than Owned Company Shares) in the Merger. We were not requested to consider, and our opinion does not address, the fairness\nof any consideration to be received in the Merger by the holders of any other class or series of capital stock, creditors or other constituencies\nof the Company, the allocation of the Merger Consideration amongst the holders of any class or series of capital stock, creditors or\nother constituencies of the Company, the conversion ratio pursuant to the Agreement for any class or series of capital stock or any election,\nproration or adjustment of the Merger Consideration. We have assumed that the value of the Parent Preferred Stock is the liquidation\npreference of $10.00 per share, and we express no opinion as to the price at which the Parent Preferred Stock may be sold at in the future.\nFurthermore, we express no opinion with respect to the amount or nature of any compensation to be received by any officers, directors\nor employees of any party to the Merger, or any class of such persons, relative to the Merger Consideration to be paid to the holders\nof the Company Common Stock in the Merger or otherwise, or with respect to the fairness of any such compensation.

We,\nas part of our investment banking business, are customarily engaged in the valuation of businesses and their securities in connection\nwith mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of securities, private placements\nand valuations for estate, corporate and other purposes.

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We\nhave acted as financial advisor to the Company in connection with the Merger and will receive a fee for our services, a portion of which\nis payable for providing this opinion and a significant portion of which will become payable only if the Merger is consummated. In addition,\nthe Company has agreed to indemnify us against certain liabilities arising out of our engagement. We have not otherwise had a material\nrelationship with, nor otherwise received fees from, the Company or any other party to the Merger during the two years preceding the\ndate hereof.

In\nthe ordinary course of our trading, brokerage, investment management and financing activities, we or our affiliates may at any time hold\nlong or short positions, and may trade or otherwise effect transactions, for our own account or the accounts of customers, in debt or\nequity securities of other companies or any currency that may be involved in the Merger. In the future, we may maintain other relationships\nwith, and provide advisory and other services to the Company, Parent and their respective affiliates, and may receive fees for providing\nsuch services.

This\nopinion is given at the request of, and is intended for the benefit and use of, the Board of Directors of the Company in connection with\nits consideration of the Merger, and it is not intended to be and does not constitute a recommendation to any shareholder of the Company\nas to how such shareholder should vote or act on any matter relating to the Merger. This opinion shall not be used for any other purpose,\nand may not be disseminated, reproduced, quoted from or referred to at any time, without our prior written approval; provided that this\nopinion may be included in its entirety in any proxy statement, information statement or solicitation/recommendation statement on Schedule\n14d-9 required to be delivered to the Company’s stockholders in connection with the Merger, and provided further that we shall\nhave a reasonable opportunity to review, comment on and approve any summary of or reference to this opinion contained in such statements\nin advance of any such delivery.

The\nissuance of this opinion was approved by our fairness opinion review committee.

Based\nupon and subject to the foregoing, we are of the opinion on the date hereof that the Merger Consideration to be received by the holders\nof the Company Common Stock (other than Owned Company Shares) in the Merger is fair, from a financial point of view, to such holders.

\n\n\n\n \n\n

	Very\n truly yours,

	/s/\n CITIZENS JMP SECURITIES, LLC

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Annex\nC

Solely\nfor purposes of this Annex C, references to “the Company,” “we,” “us,” and “our” refer\nto Star Equity Holdings, Inc., as defined below.

This\nAnnex C includes disclosure from Star’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on March\n20, 2026, including Star’s audited consolidated financial statements and related notes and Management’s Discussion and Analysis\nof Financial Condition and Results of Operations for the years ended December 31, 2025 and 2024. This Annex C also includes Star’s\nunaudited condensed consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition\nand Results of Operations for the three and six months ended June 30, 2026 and 2025, from Star’s Quarterly Report on Form 10-Q\nfor the fiscal quarter ended June 30, 2026, filed on August 14, 2026.

BUSINESS

General

Star\nEquity Holdings, Inc. (“Star Equity,” “Star,” the “Company,” “we,” or “our,”\nformerly known as Hudson Global, Inc. (“Hudson”)) is a diversified multi-industry holding company operating through four\nreportable segments: Building Solutions, Business Services, Energy Services, and Investments. Our common stock and 10% Series A Cumulative\nPerpetual Preferred Stock are listed on the Nasdaq Global Market under the symbols “STRR” and “STRRP,” respectively.

The\nBuilding Solutions segment operates in the construction industry. The Business Services segment, which consists of Hudson Talent Solutions,\nLLC (“HTS”), delivers customized recruitment and contracting solutions to mid-to-large multinational companies, including\nRecruitment Process Outsourcing (“RPO”), project-based RPO, contingent workforce solutions, recruitment consulting, outsourced\nprofessional contract staffing, and managed service provider (“MSP”) services. The Energy Services segment consists of Alliance\nDrilling Tools, Inc. (“ADT”), which manufactures and supplies specialized drilling tools and downhole equipment used in directional\ndrilling for oil and gas well construction as well as other applications, including mining, geothermal, and water wells. The Investments\nsegment holds and manages certain corporate-owned real estate assets and investments in a limited number of publicly traded and private\ncompanies.

Merger

On\nAugust 22, 2025, Star completed its previously announced acquisition of Star Operating Companies, Inc. (“SOC” or “Star\nOperating Companies”, formerly known as Star Equity Holdings, Inc.) pursuant to the Agreement and Plan of Merger, dated as of May\n21, 2025 (the “Merger Agreement”), by and among Star, SOC and HSON Merger Sub, Inc., a wholly owned subsidiary of Star (“Merger\nSub”). Upon the terms and subject to the conditions of the Merger Agreement, on August 22, 2025, at the effective time (the “Effective\nTime”) of the closing of the transaction pursuant to the Merger Agreement (the “Merger”), Merger Sub merged with and\ninto SOC, with SOC continuing as the surviving corporation of the Merger under the name “Star Operating Companies, Inc.”\nas a wholly owned subsidiary of Star. Capitalized terms used herein but not defined have the meanings set forth in the Merger Agreement.

Pursuant\nto the terms of the Merger Agreement, at the Effective Time, (i) each share of common stock of SOC issued and outstanding immediately\nprior to the Effective Time (other than certain shares as set forth in the Merger Agreement) were automatically converted into the right\nto receive 0.23 shares of Star common stock and (ii) each share of preferred stock of SOC issued and outstanding immediately prior to\nthe Effective Time (other than certain shares set forth in the Merger Agreement) were automatically converted into the right to receive\none (1) share of Star 10% Series A Cumulative Perpetual preferred stock (“Preferred Stock”). As a result of the Merger, former\nSOC common stockholders received approximately 744,291 shares of Star common stock for their SOC common shares and former SOC preferred\nstock stockholders received approximately 2,690,637 shares of Star Preferred Stock. No fractional shares of Star common stock were issued\nin the Merger, and SOC stockholders became entitled to receive cash in lieu of fractional shares in accordance with the Merger Agreement.

In\naddition, pursuant to the terms of the Merger Agreement, at the Effective Time, each award of SOC restricted stock units (“RSUs”)\noutstanding immediately prior to the Effective Time was converted into Star RSUs issued under the Hudson Global, Inc. 2009 Incentive\nStock and Awards Plan, as amended (the “Plan”), in accordance with the Merger Agreement.

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Amendment\nto Certificate of Incorporation

On\nSeptember 4, 2025, Star Equity filed a certificate of amendment (the “Amendment”) to the Company’s Amended and Restated\nCertificate of Incorporation, as Amended (the “Charter”), to change the name of the Company from Hudson Global, Inc. to Star\nEquity Holdings, Inc. (the “Name Change”). The Name Change was approved by the Company’s Board of Directors (the “Board”)\non September 2, 2025, and became effective at 12:01 a.m. (Eastern Time) on September 5, 2025.

Strategy

Star\nEquity Holdings, Inc.

Star\nEquity Holdings, Inc. operates as a diversified holding company. Corporate management focuses on capital allocation, strategic oversight,\nmergers and acquisitions, capital markets activities, investor relations, and oversight of the Investments segment. Operating subsidiaries\nare responsible for day-to-day operations, organic growth initiatives, and operational performance.

The\nCompany periodically evaluates strategic alternatives intended to enhance its market position, improve profitability, generate liquidity,\nand increase shareholder value. Such alternatives may include organic growth initiatives, selective acquisitions, divestitures, business\ncombinations, equity offerings, debt financings, and corporate restructurings. The timing and structure of any such transactions depend\non market conditions, available capital, valuation considerations, and other relevant factors.

Operating\nBusinesses

The\nCompany operates in markets that management believes offer opportunities for growth. The principal elements of the Company’s growth\nstrategy include the following:

●\nOrganic growth from our core businesses. The Company operates in markets and geographies that management believes provide opportunities\nfor growth in its core businesses. The Company’s primary focus is on markets in which it currently maintains a presence, allowing\nit to leverage existing personnel, infrastructure, and brand recognition.

●\nExpansion of service offerings. The Company evaluates opportunities to broaden its service\nofferings to better serve its customer base, including expansion into adjacent market segments and complementary services.

●\nAcquisition of complementary businesses. The Company intends to continue evaluating complementary businesses that meet\nits financial and strategic acquisition criteria. Potential targets may include small public and private companies that can be integrated\ninto the Company’s existing platform, as well as larger, more transformative transactions, subject to assessments of value, risk,\nand expected return. The timing and structure of any such transactions will depend on market conditions, availability of capital, valuation\nconsiderations, and other relevant factors. The Company does not intend to pursue transactions unless management determines that the\nanticipated post-transaction value creation is favorable to stockholders.

Segments

The\nCompany operates four segments: Building Solutions, Business Services, Energy Services, and Investments. Building Solutions includes\nKBS Builders, Inc. (“KBS”), EdgeBuilder, Inc. (“EdgeBuilder”), Glenbrook Building Supply, Inc. (“Glenbrook”)\n(together, “EBGL”), and Timber Technologies Solutions, Inc. (“TT”), which manufacture modular buildings, structural\nwall panels, engineered wood products, and glue-laminated timber for residential, commercial, and industrial markets. The Business Services\nsegment consists of Hudson Talent Solutions (“HTS”) and provides RPO, contingent workforce solutions, recruitment consulting,\noutsourced professional contract staffing, and MSP services across eighteen countries across three geographic regions: the Americas,\nAsia Pacific, and Europe, Middle East, and Africa. The Energy Services segment consists of ADT, a Wyoming- and Texas-based provider of\ndownhole drilling tools and services to the oil and gas, geothermal, mining, and waterwell sectors, with a cost structure that allows\nmost variable costs to be passed through to customers. The Investments segment holds and manages certain corporate-owned real estate\nassets and investments in a limited number of publicly traded and private companies.

Our\nreportable segments are based upon our internal organizational structure, the manner in which our operations are managed, the criteria\nused by our Chief Executive Officer (Chief Operating Decision Maker or “CODM”) to evaluate segment performance, the availability\nof separate financial information, and overall materiality considerations. See Note 17. Segments, within the notes to our accompanying\nconsolidated financial statements.

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We\ncontinue to explore strategic alternatives to maximize value for the Company’s stockholders, including, without limitation, improving\nthe market position and profitability of our services and enhancing our valuation. We may pursue these objectives through organic growth,\nstrategic initiatives, or other alternatives.

In\naddition, we will continue to monitor capital markets for opportunities to repurchase shares and consider other actions designed to enhance\nstockholder value. From time to time, we also review potential acquisition or business combination opportunities and may provide information\nto third parties regarding potential dispositions of assets or business lines.

Clients

The\nCompany serves a diverse client base across multiple industries through its operating segments, including construction, energy, and global\ntalent solutions, with customers that include mid-to-large multinational corporations, commercial contractors, energy companies, and\ngovernment agencies. For the years ended December 31, 2025 and 2024, approximately 73% and 85% of revenue, respectively, was generated\nby its top 25 clients. In 2025, one client accounted for 23% of revenue, while in 2024 three clients accounted for an aggregate of 46%\nof revenue. As of December 31, 2025 and 2024, one client represented approximately 14% and 24% of accounts receivable, respectively.\nOur business is dependent upon the continuation of these business relationships as well as new client development. As part of our client\nretention and renewal strategy, we continue to develop and foster long-term relationships, and have been successful in retaining and\nnegotiating multi-year (three to five year) contracts with most of our key partners.

Competition

The\nmarkets for our Business Services, Energy Services, and Building Solutions segments are highly competitive and, in certain cases, characterized\nby limited barriers to entry and market fragmentation. Competition is based on factors such as industry expertise, product and service\nquality, geographic reach, operational scale, pricing, and the ability to efficiently execute and deliver projects. In our Energy Services\nsegment, demand is closely tied to oil prices, as customer drilling activity and capital spending are influenced by prevailing market\nconditions. In our Building Solutions segment, activity levels are influenced by broader construction trends, interest rates, and access\nto project financing. Companies with greater scale, operational efficiencies, and differentiated capabilities may achieve competitive\nadvantages and improved margins across these markets.

Intellectual\nProperty

Intellectual\nproperty in our businesses primarily consists of trademarks held.

Patents

We\ndo not hold any patents within our businesses.

Raw\nMaterials

Building\nSolutions.

KBS,\nEBGL and TT operate in the wood-based construction market. The primary raw materials used in their production processes include dimensional\nlumber, mainly spruce-pine-fir, and sheathing/sheet goods (OSB and plywood). The majority of underlying raw material for KBS, EBGL, and\nTT are sourced by wholesalers and mills in the United States, though from time to time limited quantities are also sourced from Canada.\nThese businesses depend on the reliability of the lumber supply chain and are sensitive to varying degrees to wood-based commodity price\nfluctuations.

Raw\nmaterials are not material to the operations of the Company’s other business segments.

Manufacturing

Building\nSolutions.

KBS\nbegan manufacturing single family homes in 2001 and commercial modular multi-family housing units in 2008. In subsequent years, KBS expanded\nits product offerings to include a variety of commercial-scale multi-family buildings including apartments, condominiums, townhouses,\nand dormitories. The structures are built inside our climate-controlled factories and are then transported to the site where they are\nset, assembled, and secured to the foundation. Electrical, plumbing, and HVAC systems are inspected and tested in the factory prior to\ntransportation to the site to ensure the modules meet all local building codes and quality requirements.

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Modular\nconstruction has gained acceptance and is a preferred building method by many architects and general contractors. The advantages of modular\nconstruction include: modules are constructed in a climate-controlled environment; weather conditions usually do not interrupt or delay\nconstruction; the building is protected from weather, reducing the risk of mold or other materials damage due to materials absorbing\nmoisture from rain or snow; reduced site work; improved safety and security; reduced vandalism and attrition; and a significant reduction\nin overall project time. Manufacturing is not material to the operations of the Company’s other business segments.

EBGL\nconsists of two separate companies (EdgeBuilder and Glenbrook) operating in tandem with a common management team. EdgeBuilder manufactures\nwall panels and permanent wood foundations in a climate-controlled factory, then transports the panels to the construction site via flat-bed\ntrucks. The panels are typically unloaded by crane and erected, or assembled, on site by professional framing contractors. Panelized\nconstruction, especially in large-scale, multi-unit projects, is becoming increasingly popular due to the heightened demand for construction\nlabor. Additionally, because the wall panels are constructed in a controlled indoor environment, waste, weather-related delays, and mistakes\nare minimized. This shaves weeks off large, multi-unit construction schedules.

Glenbrook,\nas a retailer of professional building products, is not directly involved in manufacturing but does often sell and ship product in tandem\nwith EdgeBuilder wall panel deliveries. As the International Building Code® continues to evolve, KBS and EBGL, along with our professional\npartners in the industry, meet code changes with innovative products and a dedicated staff to ensure adherent builds.

TT\nstarted operations in 2003 and has been manufacturing glue-laminated (glulam) wood columns and beams for post frame builders since that\ntime. Timber Technologies products include treated and untreated columns for sidewalls and end walls in post frame buildings, glue-laminated\nheaders and beams, and architectural grade beams for high-end commercial structures.

Human\nCapital Resources

The\nCompany’s success significantly depends upon its workforce. The Company employs approximately 1,200 people worldwide, of which\napproximately 950 employees are within its Business Services segment, including approximately 110 employees in the United States (“U.S.”)\nand 840 employees internationally. The Company is dedicated to acquiring, investing in, and retaining top talent. Business Services global\nand regional employees have vast training and expertise across human capital solutions. Specifically, of the Company’s Business\nServices employees, approximately 870 are client-facing consultants who sell and deliver talent solutions services to its existing client\nbase. The Company’s consultant population has deep expertise in specific functional areas and industry sectors, and provides broad-based\nrecruitment and solution services based on the needs of each client on a regional and global basis.

The\nCompany has a total of 245 employees in its Building Services and Energy Services segments, of which 162 were employed in manufacturing,\n17 in operational roles, 37 in general and administrative functions, and 29 in marketing and sales. All of our 245 employees are full-time\nemployees. All positions are in the United States. We also utilize varying amounts of temporary workers as necessary to fulfill customer\nrequirements.

Our\nregional well-being programs are rolling out a variety of initiatives aimed at raising awareness and encouraging employees to look after\ntheir health and well-being. Our employee assistance programs offer additional support and information to our staff and a range of additional\ntraining modules were rolled out focusing on topics such as mental health awareness, health and wellness in the workplace, and keeping\nremote teams connected.

Employees\nhave access to a range of training courses, including courses on anti-harassment, discrimination, and unconscious bias. eLearning is\nan integral part of the continuous development journey that we offer. We have access to over 200 hours of learning modules.

All\nour employees play an important part in contributing to and shaping our culture. We have taken actions to enhance our employees’\nexperience working for the Company through the implementation of a continuous performance management framework in order to drive employees’\nperformance, development, and engagement. We have policies to prevent discrimination based on gender, race, disability, ethnicity, nationality,\nreligion, and other classes of persons, recognized within the varied regions we work. We take affirmative action to ensure that applicants\nare employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin.\nWe also take affirmative action to employ and advance veterans in employment. We have not experienced any abnormal work stoppages and\nconsider our employee relations to be good.

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MANAGEMENT’S\nDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2025

This\nManagement’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in\nconjunction with the Consolidated Financial Statements and the notes thereto, included in Item 8 of this Form 10-K. This MD&A contains\nforward-looking statements. Please see “FORWARD-LOOKING STATEMENTS” for a discussion of the uncertainties, risks, and assumptions\nassociated with these statements. This MD&A also uses the non-generally accepted accounting principle measure of earnings before\ninterest, taxes, depreciation and amortization (“EBITDA”). See Note 18 to the Consolidated Financial Statements in Item 8\nfor EBITDA segment reconciliation information. Note that amounts within this Item shown in millions may not recalculate due to rounding.\nAll defined terms included in this MD&A for the year ended December 31, 2025 shall be as defined in this discussion.

This\nMD&A includes the following sections:

●\nExecutive Overview

●\nResults of Operations

●Liquidity\nand Capital Resources

●\nContingencies

●\nCritical Accounting Estimates

●\nRecent Accounting Pronouncements

●\nForward-Looking Statements

Executive\nOverview

Star\nEquity Holdings, Inc. is a diversified multi-industry holding company operating through four\nreportable segments: Building Solutions, Business Services, Energy Services, and Investments. Our common stock and 10% Series A Cumulative\nPerpetual Preferred Stock are listed on the Nasdaq Global Market under the symbols “STRR” and “STRRP,” respectively.

The\nBuilding Solutions segment operates in the construction industry. The Business Services segment, which consists of HTS, delivers customized\nrecruitment and contracting solutions to mid-to-large multinational companies, including Recruitment Process Outsourcing (“RPO”),\nproject-based RPO, contingent workforce solutions, recruitment consulting, outsourced professional contract staffing, and MSP services.\nThe Energy Services segment consists of ADT, which manufactures and supplies specialized drilling tools and downhole equipment used in\ndirectional drilling and other oil and gas well construction applications. The Investments segment holds and manages certain corporate-owned\nreal estate assets and investments in a limited number of publicly traded and private companies.

Merger

On\nAugust 22, 2025, Star completed its previously announced acquisition of Star Operating Companies (formerly known as Star Equity Holdings,\nInc.) pursuant to the Merger Agreement, by and among Star, SOC and Merger Sub. Upon the terms and subject to the conditions of the Merger\nAgreement, on August 22, 2025, at the Effective Time of the Merger, Merger Sub merged with and into SOC, with SOC continuing as the surviving\ncorporation of the Merger under the name “Star Operating Companies, Inc.” as a wholly owned subsidiary of Star. Capitalized\nterms used herein but not defined have the meanings set forth in the Merger Agreement.

Pursuant\nto the terms of the Merger Agreement, at the Effective Time, (i) each share of common stock of SOC issued and outstanding immediately\nprior to the Effective Time (other than certain shares as set forth in the Merger Agreement) were automatically converted into the right\nto receive 0.23 shares of Star common stock and (ii) each share of preferred stock of SOC issued and outstanding immediately prior to\nthe Effective Time (other than certain shares set forth in the Merger Agreement) were automatically converted into the right to receive\none (1) share of Star 10% Series A Cumulative Perpetual Preferred Stock. As a result of the Merger, former SOC common stockholders received\napproximately 744,291 shares of Star common stock for their SOC common shares and former SOC preferred stockholders received approximately\n2,690,637 shares of Star Preferred Stock. No fractional shares of Star common stock were issued in the Merger, and SOC stockholders became\nentitled to receive cash in lieu of fractional shares in accordance with the Merger Agreement.

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In\naddition, pursuant to the terms of the Merger Agreement, at the Effective Time, each award of SOC RSUs outstanding immediately prior\nto the Effective Time was converted into Star RSUs issued under the Hudson Global, Inc. 2009 Incentive Stock and Awards Plan, as amended\n(the “Plan”), in accordance with the Merger Agreement.

Amendment\nto Certificate of Incorporation

On\nSeptember 4, 2025, Star Equity filed an Amendment to the Company’s Charter, to affect the Name Change. The Name Change was approved\nby the Company’s Board on September 2, 2025, and became effective at 12:01 a.m. (Eastern Time) on September 5, 2025.

Segments

The\nCompany’s Building Solutions segment consists of the following operating businesses: KBS; EdgeBuilder; Glenbrook; and TT. KBS,\nbased in Maine, manufactures modular buildings, primarily serving the single-family and multi-family residential markets in New England.\nEBGL, based in the Minneapolis-Saint Paul area, manufactures and delivers structural wall panels and other engineered wood-based products\nand distributes building materials through two lumberyard locations, primarily serving professional builder customers in the Upper Midwest\nregion. TT, located outside the Minneapolis-Saint Paul area, manufactures glulam products for a range of end markets and applications,\nincluding agriculture, industrial, infrastructure, and building construction (commercial and residential).

The\nBusiness Services segment consists of HTS and provides customized recruitment and contracting solutions to mid-to-large multinational\ncompanies. Service offerings include RPO, project-based RPO, contingent workforce solutions, recruitment consulting, outsourced professional\ncontract staffing, and MSP services. HTS operates directly in eighteen countries across three geographic regions: the Americas, Asia\nPacific, and Europe, Middle East, and Africa. HTS delivery teams utilize standardized recruitment methodologies and project management\nexpertise to support clients’ ongoing workforce requirements. HTS leverages its consultants and proprietary processes to identify,\nselect, and engage talent for critical client roles. In addition, clients may receive outsourced professional contract staffing services\nand MSP solutions, offered on a standalone basis or as part of an integrated total talent solution. HTS-employed professionals are placed\nwith client organizations, individually or as teams, for defined periods based on specific business requirements.

The\nBusiness Services segment provides talent and workforce solutions, including Talent Advisory, Executive Search, Talent Technology, and\nRPO. The Business Services segment primarily serves mid-to-large multinational organizations and operates in twenty-one countries across\nthe Americas, Asia Pacific, and Europe, Middle East and Africa (“EMEA”).

The\nBusiness Services segment delivers customized talent solutions that support clients’ workforce planning and hiring needs. Its services\ninclude advisory and consulting services, executive and professional search, and outsourced recruiting programs.

The\nBusiness Services segment’s RPO offering utilizes a proprietary recruiting platform, HudsonFlow, incorporating agentic artificial\nintelligence capabilities designed to support candidate sourcing, screening, and interview coordination. These technology-enabled capabilities\nare combined with recruiting professionals and industry specialists who manage client engagements and candidate evaluation.

The\nBusiness Services segment delivers services through a range of engagement models, including fully outsourced recruitment programs, project-based\nrecruiting engagements, contingent workforce solutions, and targeted search assignments for permanent hires. The Business Services segment\nalso provides outsourced contract staffing and managed service provider solutions under which professionals employed by the Company are\nplaced with client organizations for defined periods based on the clients’ business needs.

The\nCompany’s Energy Services segment consists of ADT, a Wyoming and Texas based provider of drilling tools and services to the energy\nindustry, a key sector of the economy. ADT is a full-service downhole drilling tool company that provides sales and rental tools in the\nOil & Gas, Geothermal, Mining, and Waterwells sectors. ADT is strategically located near premier oilfields in the Rockies, a geothermal\nand mining hub, and in Midland, TX within the Permian Basin. ADT’s business model allows the majority of costs, such as freight,\nrepairs, and damages, to be passed directly to customers.

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The\nInvestments segment holds and manages certain of our corporate-owned real estate, including a manufacturing facility in Maine that is\nleased to KBS and a manufacturing facility in Wisconsin that is leased to TT. The Investments segment holds and manages certain corporate-owned\nreal estate assets and investments in a limited number of publicly traded and private companies. SOC acquired these interests in May\n2023 as a result of the sale of Digirad Health. The Investments segment also holds an investment in Enservco Corporation consisting of\nan investment in Enservco Common Stock, an investment in Enservco Preferred Stock, and an investment in a call option, all of which were\nacquired in the third quarter of 2024 and which currently have a carrying value of zero. See Note 18, Supplementary Balance Sheet\nInformation to the notes to our accompanying consolidated financial statements.

This\nMD&A discusses the results of the Company’s business for the years ended December 31, 2025 and 2024.

Current\nMarket Conditions

The\ntarget customers for our Building Solutions segment include professional home builders, general contractors, project owners, developers,\nand design firms. Despite a higher interest rate environment, we continue to experience meaningful demand for our products; however,\ncertain projects have been delayed as customers secure and finalize financing. We have benefited from implementing both price increases\nand margin protection language in our contracts, and these changes have had a positive effect on our profitability. Although we have\nexperienced slower business activity and lower revenues over the past four quarters, we believe this slowdown is temporary. Our sales\npipelines continue to indicate strong potential demand for our services, but we can give no assurances as to our ability to compete for\nthese opportunities, or the periods during which successfully negotiated projects will be completed.

In\nour Business Services segment, our clients’ demands for RPO and contracting services largely depend on the market conditions and\nthe strength of the labor markets in the countries where we operate. In 2025, the market conditions remained challenging due to persistent\ninflation, market uncertainty related to trade disruptions, and decreased demand for labor in certain markets. We anticipate that these\nchallenging market conditions will continue into 2026.

In\nour Energy Services segment, demand for our products is closely tied to oil prices, as customer drilling activity and capital spending\nare influenced by prevailing market conditions. Higher and stable oil prices generally support increased drilling and tool utilization,\nwhile lower or volatile prices may reduce activity and negatively impact our revenues and operating results. During 2025, improved oil\nprices contributed to increased customer activity, and the segment delivered strong performance.

Economic\nconditions in many of the world’s major markets remained uncertain throughout 2025. While inflationary pressures moderated in certain\nregions, elevated interest rates and tighter credit conditions continued to impact market activity. These conditions contributed to wage\npressures, higher operating costs, staffing challenges, fluctuating consumer confidence, and constrained access to capital markets, each\nof which affected our business. In connection with this environment, some customers reduced demand for our services, and certain others\ntemporarily deferred or permanently discontinued engagements. Ongoing macroeconomic uncertainty, including the potential for renewed\ninflationary pressures or changes in interest rate policy, could have material adverse effects on various aspects of our business in\nfuture periods.

Economic\nuncertainty has also continued to contribute to volatility in global currency markets. Fluctuations in foreign exchange rates relative\nto the U.S. dollar during reporting periods impact the translation of our foreign operations’ results into U.S. dollars and may\naffect comparability of reported results.

We\ncontinue to explore all strategic alternatives to maximize value for the Company’s stockholders, including without limitation,\nimproving the market position and profitability of our services in the marketplace, and enhancing our valuation. We may pursue our goals\nthrough organic growth, strategic initiatives, or other alternatives. Additionally, we will continue to monitor capital markets for opportunities\nto repurchase shares, and consider other actions designed to enhance value to our stockholders, as well as review information regarding\npotential acquisitions or combinations, and provide information to third parties regarding potential dispositions of assets or business\nlines, from time to time.

Summary\nof Financial Performance Highlights For the Year Ended December 31, 2025

\n\n \n \n\n\n \n \n\n \n \n

●	Revenue was $172.2 million\n for the year ended December 31, 2025, compared to $140.1 million for the same period in 2024, an increase of $32.1 million, or 22.9%.\n The increase in revenue was principally driven by the inclusion of revenues from the Star Operating Companies acquisition, which contributed\n 23 percentage points to the revenue growth.

●	Gross profit was $79.9 million\n for the year ended December 31, 2025, compared to $70.2 million for the same period in 2024, an increase of $9.7 million, or 13.9%.\n The increase in gross profit was driven by the acquisition of Star Operating Companies, which increased gross profit growth by 12 percentage\n points.

234

\n\n \n \n\n\n \n \n\n \n \n\n\n \n \n\n \n \n

●	SG&A and Non-Op other\n income (expense) was 82.8 million for the year ended December 31, 2025, compared to $72.6 million for the same period in 2024. The\n acquisition of Star Operating Companies increased SG&A and Non-Op other income (expense) by $7.3 million, which contributed 10\n percentage points to the increase.

●	EBITDA loss was $2.0 million\n for the year ended December 31, 2025, compared to EBITDA loss of $2.5 million for the same period in 2024.

●	Net loss attributable to\n common shareholders was $6.7 million for the year ended December 31, 2025, compared to net loss of $4.8 million for the same period\n in 2024.

Use\nof EBITDA (Non-GAAP Financial Measure)

Management\nbelieves EBITDA is a meaningful indicator of the Company’s performance that provides useful information to investors regarding\nthe Company’s financial condition and results of operations. EBITDA is considered by management as an indicator of operating performance\nand the most comparable measure across the regions in which we operate. Management uses this measurement to evaluate capital needs and\nworking capital requirements. Similar to constant currency, EBITDA should not be considered in isolation or as a substitute for operating\nincome or net income prepared in accordance with U.S. GAAP or as a measure of the Company’s profitability. EBITDA is derived from\nnet income (loss) adjusted for the provision for (benefit from) income taxes, interest expense (income), and depreciation and amortization.

The\nreconciliation of EBITDA to the most directly comparable U.S. GAAP financial measure is provided in the table below:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in thousands	2025			2024
Net loss attributable to common\n shareholders	$	(6,657	)		$	(4,770	)
Dividends on Series A\n perpetual preferred stock		740				-
Net loss		(5,917	)			(4,770	)
Adjustments to\n net (loss) income
Provision for income taxes		2,061				1,300
Interest income, net		(260	)			(360	)
Depreciation and amortization\n expense-within cost of revenues		866				-
Depreciation\n and amortization expense -within selling, general and administrative expense		1,212				1,361
Total\n adjustments from net (loss) income to EBITDA		3,879				2,301
EBITDA loss	$	(2,038	)		$	(2,469	)

Results\nof Operations

Building\nSolutions

Revenue\n- Building Solutions

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025		2024			Change\n in amount		Change\n in %
Building Solutions
Revenue	$	27.6		$	-		$	27.6	N/A

For\nthe year ended December 31, 2025, Building Solutions contributed $27.6 million to the Company’s revenue. Performance during the\nyear reflects a recovery from macroeconomic headwinds and severe Midwest flooding that delayed project starts in the prior year. Activity\nimproved for much of the year, supported by backlog and steady project execution, though residential demand remained somewhat slower\nthan expected. Toward year-end, activity softened due to weather-related site shutdowns, shipment timing delays, and certain projects\nshifting into Q1 2026, with December order activity also lighter due to seasonal factors.

235

Gross\nProfit - Building Solutions

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025		2024			Change\n in amount		Change\n in %
Building Solutions
Gross profit	$	6.3		$	-		$	6.3	N/A

For\nthe year ended December 31, 2025, Building Solutions contributed $6.3 million to the Company’s gross profit. Performance during\nthe period reflects higher activity levels and improved project mix for much of the year, which supported better overhead absorption\nand steady margin performance. This was aided by consistent execution on project scope, scheduling, and cost management, though residential\nactivity remained somewhat softer and moderated margin expansion. Toward year-end, lower revenue levels reduced gross profit dollars,\nand margins were modestly pressured by lower production volumes, higher temporary labor and freight costs, and inefficiencies associated\nwith early-stage production on certain projects.

SG&A\nand Non-Op other income (expense) - Building Solutions

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025			2024			Change\n in amount		Change\n in %
Building Solutions
SG&A and\n Non-Op other income (expense)	$	4.1			$	-		$	4.1	N/A
SG&A and Non-Op other\n income (expense) as a percentage of revenue		15	%			N/A			N/A	N/A

For\nthe year ended December 31, 2025, Building Solutions SG&A and Non-op other income (expense) was 4.1 million or 15% of revenue. Expenses\nwere generally in line with normal operating levels, with lower third-party commission costs contributing to a modest reduction in overall\nSG&A for the period.

Operating\n(Loss) Income and EBITDA - Building Solutions

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025			2024			Change\n in amount		Change\n in %
Building Solutions
Operating income	$	2.0			$	-		$	2.0	N/A
EBITDA	$	2.4			$	-		$	2.4	N/A
EBITDA as a percentage\n of revenue		9	%			N/A			N/A	N/A

For\nthe year ended December 31, 2025, Building Solutions generated operating income of $2.0 million and EBITDA of $2.4 million, or 9% of\nrevenue. Stronger volumes and an improved project mix, together with disciplined execution and controlled SG&A, supported the segment’s\noperating performance during the period. Late in the year, EBITDA was affected by the same factors that pressured gross margins, including\nlower production volumes, higher temporary labor and freight costs, and early-stage production inefficiencies on certain projects.

236

Business\nServices

Revenue\n- Business Services

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025		2024			Change\n in amount		Change\n in %
Business Services
Revenue	$	139.7		$	140.1		$	(0.4	)	-	%

For\nthe year ended December 31, 2025, revenue decreased $0.4 million compared to 2024, driven by a decrease in contracting revenue of $0.8\nmillion, partially offset by an increase in RPO revenue of $0.4 million, as discussed below.

In\nthe Americas, revenue increased $1.5 million, or 5%, for the year ended December 31, 2025, compared to the same period in 2024. The increase\nwas primarily driven by RPO revenue, which increased $1.1 million, or 5%, while contracting revenue increased $0.4 million, or 12%, due\nto higher demand from existing clients as well as new client wins. In Asia Pacific, revenue increased $0.1 million for the year-ended\nDecember 31, 2025, compared to the same period in 2024. RPO revenue increased $2.4 million, or 9%, due to stronger existing client demand,\nwhile contracting revenue decreased $2.3 million, or 4%, due to lower client demand. In EMEA, revenue decreased $2.1 million, or 8%,\nfor the year-ended December 31, 2025, compared to the same period in 2024, driven by a decline in RPO revenue of $3.2 million, or 20%,\npartly offset by an increase in contracting revenue of $1.1 million, or 12%.

Gross\nProfit - Business Services

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025		2024			Change\n in amount		Change\n in %
Business Services
Gross Profit	$	71.8		$	70.2		$	1.6	2	%

For\nthe year ended December 31, 2025, gross profit increased $1.6 million or 2%, driven by an increase in contracting gross profit of $1.0\nmillion and an increase in RPO gross profit of $0.7 million, compared to the same period in 2024.

In\nthe Americas, gross profit increased by $1.1 million, or 4%, for the year ended December 31, 2025, compared to the same period in 2024.\nThe growth reflects a $0.9 million, or 4%, increase in RPO gross profit, along with a $0.2 million, or 24%, increase in contracting gross\nprofit. In Asia Pacific, gross profit increased by $3.4 million, or 12%, for the year ended December 31, 2025, compared to the same period\nin 2024, driven by an increase in RPO gross profit of $2.5 million and an increase in contracting gross profit of $0.9 million, driven\nby higher demand from existing clients. In EMEA, gross profit declined by $2.9 million, or 19%, for the year ended December 31, 2025,\ncompared to the same period in 2024, primarily driven by a decrease in RPO gross profit of $2.8 million, or 18%. The decrease in gross\nprofit was due to lower client demand.

SG&A\nand Non-Op other income (expense) - Business Services

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025			2024			Change\n in amount		Change\n in %
Business Services
SG&A and\n Non-Op other income (expense)	$	70.4			$	69.0		$	1.4	2	%
SG&A and Non-Op other\n income (expense) as a percentage of revenue		50	%			50	%		-	N/A

For\nthe year ended December 31, 2025, SG&A and Non-Op other income (expense) increased $1.4 million, or 2%, compared to the same period\nin 2024, while SG&A and Non-Op other income (expense) as a percentage of revenue remained unchanged at 50%.

237

Operating\nIncome and EBITDA - Business Services

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025			2024			Change\n in amount		Change\n in %
Business Services
Operating income	$	1.9			$	1.0		$	1.0	97	%
EBITDA	$	1.4			$	1.1		$	0.3	24	%
EBITDA as a percentage\n of revenue		1	%			1	%		N/A	N/A

For\nthe year ended December 31, 2025, operating income was $1.9 million, compared to operating income of $1.0 million in 2024, and EBITDA\nwas $1.4 million, or 1% of revenue, compared to EBITDA of $1.1 million, or 1% of revenue, in 2024.

Energy\nServices

Revenue\n- Energy Services

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025		2024			Change\n in amount		Change\n in %
Energy Services
Revenue	$	4.9		$	-		$	4.9	N/A

For\nthe year ended December 31, 2025, Energy Services contributed $4.9 million in revenue, reflecting a gradual recovery in drilling activity\nacross key markets. While market conditions in the sector in the first half of the year was subdued due to lower rig counts, the segment\ncontinued to capture market share through competitive pricing and strong customer relationships. Activity accelerated in the third quarter,\nsupported by growth in non-oil-and-gas demand, and focused sales efforts in high-growth areas such as the Permian Basin.

Gross\nProfit - Energy Services

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025		2024			Change\n in amount		Change\n in %
Energy Services
Gross Profit	$	1.9		$	-		$	1.9	N/A

For\nthe period ended December 2025, the contribution of Energy Services to the Company’s Gross Profit was $1.9 million. Margins were\nmaintained despite trough pricing driven by lower U.S. rig counts in 2025. The segment continued to gain market share through competitive\npricing and strong customer relationships, helping to support gross profit during a period of softer overall pricing in the market.

SG&A\nand Non-Op other income (expense) - Energy Services

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025			2024			Change\n in amount		Change\n in %
Energy Services
SG&A and\n Non-Op other income (expense)	$	1.4			$	-		$	1.4	N/A
SG&A and Non-Op other\n income (expense) as a percentage of revenue		29	%			N/A			N/A	N/A

For\nthe year ended December 31, 2025, Energy Services’ SG&A and non-operating other income (expense) totaled $1.4 million or 29%\nof revenue. Expenses were generally in line with normal operating levels, with a slight increase in sales commissions reflecting efforts\nto expand market share during the period.

238

Operating\nIncome and EBITDA - Energy Services

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025			2024			Change\n in amount		Change\n in %
Energy Services
Operating income	$	0.4			$	-		$	0.4	N/A
EBITDA	$	1.0			$	-		$	1.0	N/A
EBITDA as a percentage\n of revenue		21	%			N/A			N/A	N/A

For\nthe year ended December 31, 2025, Energy Services reported an operating income of $0.4 million and EBITDA of $1.0 million or 21% of revenue.\nDespite trough pricing in a softer rig environment, disciplined execution, competitive pricing, and targeted sales efforts supporting\nmarket-share gains helped the segment achieve positive EBITDA for the period.

Investments

Revenue-Investments

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025		2024			Change\n in amount		Change\n in %
Investments
Revenue	$	0.2		$	-		$	0.2	N/A

For\nthe year ended December 31, 2025, Investments contributed $0.2 million to the Company’s revenue, reflecting rental income from\nowned properties.

Gross\nProfit - Investments

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025		2024			Change\n in amount		Change\n in %
Investments
Gross profit	$	0.1		$	-		$	0.1	N/A

For\nthe year ended December 31, 2025, Investments contributed $0.1 million to the Company’s gross profit, reflecting rental income\nafter accounting for property depreciation.

239

SG&A\nand Non-Op other income (expense) - Investments

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025			2024			Change\n in amount		Change\n in %
Investments
SG&A and\n Non-Op other income (expense)	$	0.2			$	-		$	0.2	N/A
SG&A and Non-Op other\n income (expense) as a percentage of revenue		108	%			N/A			N/A	N/A

For\nthe year ended December 31, 2025, Investments SG&A and Non-Op other income (expense) was $0.2 million.

Operating\n(Loss) Income and EBITDA - Investments

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31,
$ in millions	2025			2024			Change\n in amount		Change\n in %
Investments
Operating loss	$	(0.01	)		$	-		$	(0.01	)	N/A
EBITDA (loss)	$	(0.01	)		$	-		$	(0.01	)	N/A
EBITDA (loss) as a percentage\n of revenue		(8	)	%		N/A			N/A		N/A

For\nthe year ended December 31, 2025, Investments operating loss was $0.01 million, and EBITDA loss was $0.01 million, or 8% of revenue.

Additional\nResults of Operations

Corporate\nexpenses

For\nthe year ended December 31, 2025, corporate expenses were $6.9 million compared to $3.6 million in 2024, an increase of $3.3 million,\nor 92%. The increase was primarily due to professional fees associated with the acquisition of Star Operating Companies.

Total\nDepreciation and Amortization Expense

Depreciation\nand amortization expense, including amounts in Cost of Revenues, was $2.1 million and $1.4 million for the years ended December 31, 2025\nand 2024, respectively.

Interest\nIncome, Net

Net\ninterest income was $0.3 million and $0.4 million for the years ended December 31, 2025 and 2024, respectively.

Other\nIncome (Expense), Net

Net\nother expense was $0.4 million for the year ended December 31, 2025, as opposed to net other expense of $0.0 million for the same period\nin 2024.

Provision\nfor (benefit from) Income Taxes

The\nprovision for income taxes for the year ended December 31, 2025 was $2.1 million, on $3.9 million of pre-tax loss, compared to a provision\nfrom income taxes of $1.3 million on $3.5 million of pre-tax loss for 2024. The effective tax rate (“ETR”) for the year ended\nDecember 31, 2025 was negative 53%, compared to negative 37% for 2024. For the year ended December 31, 2025, the effective tax rates\ndiffered from the U.S. federal statutory rate of 21% primarily due to pre-tax losses for which no tax benefit can be recognized, changes\nin valuation allowances in the U.S., China, and certain foreign jurisdictions that reduce or eliminate the ETR on current year profits\nor losses, foreign tax rate differences, and non-deductible expenses. For the year ended December 31, 2024, the effective tax rates differed\nfrom the U.S. federal statutory rate of 21% primarily due to pre-tax losses for which no tax benefit can be recognized, changes in valuation\nallowances in the U.S., China, and certain foreign jurisdictions that reduce or eliminate the ETR on current year profits or losses,\nforeign tax rate differences, and non-deductible expenses The current year ETR differs significantly from the prior year ETR primarily\ndue to the interaction of similar rate reconciliation items, including change in valuation allowance, combined with a shift in the geographic\nmix of earnings toward higher-tax jurisdictions, including Australia.

240

Net\n(Loss) Income Attributable to Common Shareholders

Net\nloss attributable to common shareholders was $6.7 million for the year ended December 31, 2025, compared to net loss of $4.8 million\nfor 2024, an increase in net loss of $1.9 million. Basic and diluted loss per share was $2.08 for the year ended December 31, 2025, compared\nto basic and diluted loss per share of $1.59 in 2024.

Liquidity\nand Capital Resources

As\nof December 31, 2025, cash and cash equivalents and restricted cash totaled $13.4 million, as compared to $17.7 million as of December\n31, 2024. The following table summarizes the cash flow activities for the years ended December 31, 2025 and 2024:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	For\n The Year Ended December 31,
$ in millions	2025			2024
Net cash used in operating activities	$	(7.3	)		$	(2.8	)
Net cash provided by investing activities		4.6				1.1
Net cash used in financing activities		(2.0	)			(3.1	)
Effect of exchange rates\n on cash, cash equivalents, and restricted cash		0.4				(0.7	)
Net decrease in cash,\n cash equivalents, and restricted cash	$	(4.3	)		$	(5.5	)

Cash\nFlows from Operating Activities

For\nthe year ended December 31, 2025, net cash used in operating activities was $7.3 million, as compared to $2.8 million of net cash used\nin operating activities for the same period in 2024, resulting in an increase in net cash used in operating activities of $4.5 million.\nThe decline in cash was principally from the Company’s lower net income in 2025, partially offset by more favorable working capital\ncomparisons to the prior year.

Cash\nFlows from Investing Activities

For\nthe year ended December 31, 2025, net cash provided by investing activities was $4.6 million, compared to $1.1 million of net cash provided\nby investing activities in 2024. Net cash provided by investing activities in 2025 reflects $7.0 million in cash received in connection\nwith the SOC acquisition, while net cash used in investing activities in 2024 primarily reflects cash received from benefit payouts.

Cash\nFlows from Financing Activities

For\nthe year ended December 31, 2025, net cash used in financing activities was $2.0 million, compared to $3.1 million in 2024. The decrease\nin net cash used was primarily attributed to borrowing under credit facilities. Repurchases of shares of common stock were $2.6 million\nin 2025, including cash paid for tax withholdings, compared to repurchases of $2.8 million in the previous year.

Credit\nFacilities

See\nNote 9, Debt, in the accompanying notes to the consolidated financial statements for further details.

241

Liquidity\nand Capital Resources Outlook

As\nof December 31, 2025, the Company had cash and cash equivalents on hand of $10.3 million, as well as our lines of credit and other debt\ninstruments. Other than as described in Note 9 - Debt in the consolidated financial statements included in Part II, Item 8 of this Form\n10-K, the Company has no financial guarantees, outstanding debt or other lease agreements or arrangements that could trigger a requirement\nfor an early payment or that could change the value of our assets. The Company believes that it has sufficient liquidity to satisfy its\nneeds through at least the next 12 months, based on the Company’s financial position as of December 31, 2025. The Company’s\nnear-term cash requirements during 2025 are primarily related to the funding of the Company’s operations.

As\nof December 31, 2025, $5.2 million of the Company’s cash and cash equivalents noted above were held in the U.S. and the remainder\nwere held outside the U.S., primarily in Singapore ($1.3 million) Philippines ($0.9 million), the U.K. ($0.9 million), Hong Kong ($0.8\nmillion), and India ($0.3 million). The majority of the Company’s offshore cash is available to it as a source of funds, net of\nany tax obligations or assessments.

Off-Balance\nSheet Arrangements

As\nof December 31, 2025, the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current\nor future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity,\ncapital expenditures or capital resources that are material to investors.

Contingencies

From\ntime to time in the ordinary course of business, the Company is subject to compliance audits by U.S. federal, state, local, and foreign\ngovernment regulatory, tax, and other authorities relating to a variety of regulations, including wage and hour laws, unemployment taxes,\nworkers’ compensation, immigration, and income, value-added, and sales taxes. The Company is also subject to, from time to time\nin the ordinary course of business, various claims, lawsuits, and other complaints from, for example, clients, candidates, suppliers,\nlandlords for both leased and subleased properties, former and current employees, and regulators or tax authorities. Periodic events\nand management actions such as business reorganization initiatives can change the number and types of audits, claims, lawsuits, contract\ndisputes, or complaints asserted against the Company. Such events can also change the likelihood of assertion and the behavior of third\nparties to reach resolution regarding such matters.

The\neconomic conditions in the recent past have given rise to many news reports and bulletins from clients, tax authorities and other parties\nabout changes in their procedures for audits, payment, plans to challenge existing contracts and other such matters aimed at being more\naggressive in the resolution of such matters in their own favor. The Company believes that it has appropriate procedures in place for\nidentifying and communicating any matters of this type, whether asserted or likely to be asserted, and it evaluates its liabilities in\nlight of the prevailing circumstances. Changes in the behavior of third parties could cause the Company to change its view of the likelihood\nof a claim and what might constitute a trend. Employment laws vary in the markets in which we operate, and in some cases, employees and\nformer employees have extended periods during which they may bring claims against the Company.

For\nmatters that reach the threshold of probable and estimable, the Company establishes reserves for legal, regulatory, and other contingent\nliabilities. The Company had $0.2 million and $0.0 million of legal reserves as of December 31, 2025 and 2024, respectively. Although\nthe outcome of these matters cannot be determined, the Company believes that none of the currently pending matters, individually or in\nthe aggregate, will have a material adverse effect on the Company’s financial condition, results of operations, or liquidity.

Critical\nAccounting Estimates

Our\ndiscussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which\nhave been prepared in accordance with U.S. GAAP. The preparation of financial statements in accordance with U.S. GAAP requires our management\nto make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure\nof contingent assets and liabilities. U.S. GAAP provides the framework from which to make these estimates, assumptions and disclosures.\nWe choose accounting policies within U.S. GAAP that our management believes are appropriate to accurately and fairly report our operating\nresults and financial position in a consistent manner. Our management regularly assesses these policies in light of current and forecasted\neconomic conditions. Our accounting policies are stated in Note 2 to the Consolidated Financial Statements in Item 8. We believe the\nfollowing accounting policies are critical to understanding our results of operations and affect the more significant judgments and estimates\nused in the preparation of our Consolidated Financial Statements that are inherently uncertain.

242

Revenue\nRecognition

Business\nServices

The\nCompany recognizes revenue for our RPO business over time in an amount that reflects the consideration we expect to be entitled to and\nhave an enforceable right to payment in exchange for our services. The client simultaneously receives and consumes the benefits of the\nservices as they are provided. The transaction prices contain both fixed fee and variable usage-based consideration. Variable usage-based\nconsideration is constrained by candidates accepting offers of permanent employment. We recognize revenue on the fixed fee as the performance\nobligations are satisfied and usage-based fees as the constraint is lifted. We do not incur incremental costs to obtain our RPO contracts.\nThe costs to fulfill these contracts are expensed as incurred.

The\nBusiness Services segment recognizes revenue for our contracting services over time as services are performed in an amount that reflects\nthe consideration we expect to be entitled to and have an enforceable right to payment in exchange for our services, which is generally\ncalculated as hours worked multiplied by the agreed-upon hourly bill rate. The client simultaneously receives and consumes the benefits\nof the services as they are provided. We do not incur incremental costs to obtain our contracting contracts. The costs incurred to fulfill\nthese contracts are expensed as incurred.

Building\nSolutions and Energy Services

We\nrecognize revenue when a customer obtains control of promised goods or services. We record the amount of revenue that reflects the consideration\nthat we expect to receive in exchange for those goods or services. We apply the following five-step model in order to determine this\namount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services\nare performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction\nprice, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and\n(v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Revenue\nrecognition is evaluated on a contract basis. Performance obligations are satisfied over time as work progresses or at a point in time.\nFrom time-to-time we enter into contracts within our building solutions sector that produce assets with no alternative use and contain\nan enforceable right to payment, including a reasonable profit margin. Determining if an enforceable right to payment includes a reasonable\nprofit margin requires judgment and is assessed on a contract by contract basis. For contracts requiring over time revenue recognition,\nthe selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services\nto be provided. We use a cost-based input measurement of progress because it best depicts the transfer of assets to the customer, which\noccurs as costs are incurred during the manufacturing process or as services are rendered. Under the cost-based measure of progress,\nthe extent of progress towards completion is measured based on the costs incurred to date. We had no contracts in place as of December\n31, 2025 that require recognition over time.

As\na practical expedient, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an expected original\nduration of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for\nservices performed.

Income\nTaxes

We\naccount for income taxes using the asset and liability method in accordance with Accounting Standards Codification (“ASC”)\n740, “Income Taxes.” This standard establishes financial accounting and reporting standards for the effects of income\ntaxes that result from an enterprise’s activities. It requires an asset and liability approach for financial accounting and reporting\nof income taxes.

The\ncalculation of net deferred tax assets assumes sufficient future earnings for the realization of such assets as well as the continued\napplication of currently anticipated tax rates. Included in net deferred tax assets is a valuation allowance for deferred tax assets\nwhere management believes it is more likely than not that the deferred tax assets will not be realized in the relevant jurisdiction.\nIf we determine that a deferred tax asset will not be realizable, an adjustment to the deferred tax asset will result in a reduction\nof earnings at that time. Our assessment includes an analysis of whether deferred tax assets will be realized in the ordinary course\nof operations based on the available positive and negative evidence, including the scheduling of deferred tax liabilities and forecasted\nincome from operations. The underlying assumptions we use in forecasting future taxable income require significant judgment. In the event\nthat actual income from operations differs from forecasted amounts, or if we change our estimates of forecasted income from operations,\nwe could record additional charges or reduce allowances in order to adjust the carrying value of deferred tax assets to their realizable\namount. Such adjustments could be material to our Consolidated Financial Statements. See Note 8 to the Consolidated Financial Statements\nin Item 8 for further information regarding deferred tax assets and valuation allowances.

243

The\nCompany’s unrecognized tax benefits, if recognized in the future, would affect the Company’s annual effective income tax\nrate. See Note 8 to the Consolidated Financial Statements in Item 8 for further information regarding unrecognized tax benefits. We elected\nto continue our historical practice of classifying applicable interest and penalties as a component of the provision for income taxes.

We\nprovide tax reserves for federal, state, local and international exposures relating to periods subject to audit. The development of reserves\nfor these exposures requires judgments about tax issues, potential outcomes and timing, and is a subjective critical estimate. We assess\nour tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts,\ncircumstances and information available at the reporting dates. For those tax positions where it is more likely than not that a tax benefit\nwill be sustained, we have recorded the largest amount of tax benefit with greater than 50% likelihood of being realized upon settlement\nwith a tax authority that has full knowledge of all relevant information. For those tax positions where it is not more likely than not\nthat a tax benefit will be sustained, no tax benefit has been recognized in the Consolidated Financial Statements. Where applicable,\nassociated interest and penalties have also been recognized. Although the outcome relating to these exposures are uncertain, we believe\nthat our reserves reflect the probable outcome of known tax contingencies. In certain circumstances, the ultimate outcome of exposures\nand risks involves significant uncertainties which render them inestimable. If actual outcomes differ materially from these estimates,\nincluding those that cannot be quantified, they could have a material impact on our results of operations.

The\nCompany has provided for tax on all unremitted earnings of our foreign subsidiaries taking into consideration all expected future events\nbased on presently existing tax laws and rates.

The\nCompany has elected to recognize the tax on Global Intangible Low Taxed Income (“GILTI”) as a period expense in the year\nthe tax is incurred.

Business\nCombinations and Asset Acquisitions

Business\nCombinations are accounted for under the acquisition method in accordance with ASC 805, “Business Combinations.” The\nacquisition method requires identifiable assets acquired and liabilities assumed and any non-controlling interest in the business acquired\nto be recognized and measured at fair value on the acquisition date, which is the date that the acquirer obtains control of the acquired\nbusiness. The amount by which the fair value of consideration transferred as the purchase price exceeds the net fair value of assets\nacquired and liabilities assumed is recorded as goodwill. Acquisitions that do not meet the definition of a business under the ASC are\naccounted for as asset acquisitions. Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual\nassets acquired and liabilities assumed on a relative fair value basis. Goodwill is not recognized in an asset acquisition with any consideration\nin excess of net assets acquired allocated to acquired assets on a relative fair value basis. Transaction costs are expensed in a business\ncombination and are considered a component of the cost of the acquisition in an asset acquisition.

Recent\nAccounting Pronouncements

See\nNote 3 to our Consolidated Financial Statements in Item 8 regarding the impact or potential impact of recent accounting pronouncements\nupon our financial position and results of operations.

244

Forward-Looking\nStatements

This\nForm 10-K contains statements that the Company believes to be “forward-looking statements” within the meaning of Section\n27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities\nLitigation Reform Act of 1995. All statements other than statements of historical fact included in this Form 10-K, including statements\nregarding the Company’s future financial condition, results of operations, business operations and business prospects, are forward-looking\nstatements. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,”\n“plan,” “predict,” “believe,” and similar words, expressions, and variations of these words and expressions\nare intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties,\nand assumptions, including industry and economic conditions that could cause actual results to differ materially from those described\nin the forward-looking statements. Such factors, risks, uncertainties, and assumptions include, but are not limited to, (1) global economic\nfluctuations, (2) changes in the cost and availability of commodities, materials, and equipment, (3) risks related to providing uninterrupted\nservice to clients, (4) the ability of clients to terminate their relationship with the Company at any time, (5) risks associated with\nreal estate ownership, (6) the Company’s ability to successfully achieve its strategic initiatives, (7) risks related to fluctuations\nin the Company’s operating results from quarter to quarter, (8) risks related to potential acquisitions or dispositions of businesses\nby the Company, (9) our profitability and growth being tied to the success of our operating businesses, (10) risks associated with our\nfinancial investments in other businesses, (11) our ability to improve existing products and services and develop, introduce, and market\nnew products and services successfully, (12) the loss of or material reduction in our business with any of the Company’s largest\ncustomers, (13) competition in the Company’s markets, (14) risks related to potential decreases in demand for products, (15) our\nability to maintain costs at an acceptable level, (16) the negative cash flows and operating losses that may recur in the future, (17)\nrisks related to international operations, including foreign currency fluctuations, political events, trade wars, natural disasters or\nhealth crises, including the Russia-Ukraine war, and potential conflict in the Middle East, (18) risks relating to how future credit\nfacilities may affect or restrict our operating flexibility, (19) our ability to generate or borrow sufficient cash to make payments\non our indebtedness, (20) risks related to indebtedness, (21) risks associated with the Company’s investment strategy, (22) the\nCompany’s dependence on key management personnel, (23) the Company’s ability to attract and retain highly skilled professionals,\nmanagement, and advisors, (24) the Company’s ability to collect accounts receivable, (25) the Company’s exposure to legal\nproceedings, investigations and disputes, and limits on related insurance coverage, (26) the Company’s ability to utilize net operating\nloss carryforwards, (27) the potential for goodwill impairment, (28) volatility of the Company’s stock price, (29) risks related\nto our historically low trading volume, (30) risks related to securities or industry analysts, (31) the Company’s ability to declare\ndividends, (32) risks associated with failure to pay dividends on our Series A Preferred Stock, (33) our history of annual net losses,\n(34) risks related to our international operations, (35) risks related to compliance with federal and state laws, regulations, and other\nrules, (36) our exposure to employment-related claims, legal liability, and costs from clients, employees, and regulatory authorities,\n(37) risks related to the imposition of licensing or tax requirements or new regulations, (38) the effect of Anti-takeover provisions\nin our organizational documents, (39) the effect of the protective amendment contained in our Restated Certificate of Incorporation,\n(40) the impact of our stockholder rights plan, or “poison pill,” on stockholder decision making, (41) risks related to our\nscaled disclosure requirements as a smaller reporting company, (42) risks related to evolving ESG and DEI rules and regulations, (43)\nthe Company’s heavy reliance on information systems and the impact of potentially losing or failing to develop technology, (44)\nthe adverse impacts of cybersecurity threats and attacks, and (45) risks related to the use of new and evolving technologies. The foregoing\nlist should not be construed to be exhaustive. Actual results could differ materially from the forward-looking statements contained in\nthis Form 10-K. In view of these uncertainties, you should not place undue reliance on any forward-looking statements, which are based\non our current expectations. These forward-looking statements speak only as of the date of this Form 10-K. The Company assumes no obligation,\nand expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events\nor otherwise.

245

Star\nEquity Holdings, Inc.

Index\nto Consolidated Financial Statements

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Page
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements (Wolf & Company, P.C., PCAOB ID #392)	247

Consolidated Statements of Operations for the years ended\n December 31, 2025 and 2024	248

Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2025 and 2024	249

Consolidated Balance Sheets as of December 31, 2025\n and 2024	250

Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024	251

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025 and 2024	252

Notes to Consolidated Financial Statements	253

All\nschedules for which provision is made in the applicable rules and regulations of the SEC have been omitted as the schedules are not required\nunder the related instructions, are not applicable, or the information required thereby is set forth in the consolidated financial statements\nor notes thereto.

246

Report\nof Independent Registered Public Accounting Firm

To\nthe Shareholders and the Board of Directors of Star Equity Holdings, Inc.

Opinion\non the Financial Statements

We\nhave audited the accompanying consolidated balance sheets of Star Equity Holdings, Inc. (the Company) as of December 31, 2025 and 2024,\nthe related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows, for the years then\nended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial\nstatements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the\nresults of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in\nthe United States of America.

Basis\nfor Opinion

These\nfinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s\nfinancial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board\n(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We\nconducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain\nreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company\nis not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit\nwe are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion\non the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our\naudits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error\nor fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding\nthe amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant\nestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits\nprovide a reasonable basis for our opinion.

Critical\nAudit Matters

The\ncritical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated\nor required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial\nstatements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters\ndoes not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit\nmatters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Star\nOperating Companies (“SOC”) Acquisition - Refer to Notes 1 and 5 to the financial statements

On\nAugust 22, 2025, the Company completed its acquisition of SOC pursuant to the Agreement and Plan of Merger, dated as of May 21, 2025\n(the “Merger Agreement”). This resulted in a business combination pursuant to ASC 805, Business Combinations. Management\nengaged an independent third-party valuation specialist to assist with the fair value allocation of the purchase price. In accordance\nwith ASC 805, Business Combinations, The Company accounted for this transaction as a business combination and recorded the acquired assets\nof SOC at their estimated fair value. The valuation of assets acquired and liabilities assumed has not yet been finalized as of December\n31, 2025.

We\nidentified the purchase price allocation related to the SOC Acquisition as a critical audit matter because of the estimates and assumptions\nused to determine the fair value of identifiable assets acquired and liabilities assumed. This required an increased extent of audit\neffort and specialized skill, including the need to involve our fair value specialists, when performing audit procedures to evaluate\nthe reasonableness of management’s estimates and assumptions.

How\nthe Critical Audit Matter Was Addressed in the Audit

To\naddress this matter, we performed various procedures, including: (i) understanding management’s process for accounting for the\ntransaction, (ii) testing management’s process for determining opening balance sheet amounts, (iii) testing the processes used\nby management and the third-party experts to develop valuation models, and (iv) evaluating the significant assumptions used in these\nmodels. We considered whether these assumptions were consistent with evidence obtained in other areas of the audit and assessed their\nsensitivity to change.

We\nhave served as the Company’s auditor since 2023.

/s/\nWolf & Company, P.C.

Boston,\nMassachusetts

March\n20, 2026

247

STAR\nEQUITY HOLDINGS, INC.

CONSOLIDATED\nSTATEMENTS OF OPERATIONS

(in\nthousands, except per share amounts)

	2025			2024
	Year\n Ended December 31,
	2025			2024
Revenues:
Building Solutions	$	27,578			$	-
Business Services		139,652				140,056
Energy\n Services		4,929				-
Total revenues		172,159				140,056

Cost of revenues:
Building Solutions		21,303				-
Business Services		67,879				69,904
Energy Services		3,001				-
Investments		107				-
Total\n cost of revenues		92,290				69,904

Gross profit		79,869				70,152

Operating expenses:
Salaries and related		63,545				58,309
Office and general		14,843				10,703
Marketing and promotion		3,957				3,588
Depreciation\n and amortization		1,212				1,361
Total\n operating expenses		83,557				73,961
Operating loss		(3,688	)			(3,809	)
Non-operating income (expense):
Interest income, net		260				360
Other\n income (expense), net		(428	)			(21	)
Loss before income taxes		(3,856	)			(3,470	)
Provision\n for income taxes		2,061				1,300
Net loss		(5,917	)			(4,770	)
Dividends\n on Series A perpetual preferred stock		(740	)			-
Net\n loss attributable to common shareholders	$	(6,657	)		$	(4,770	)
Loss per share:
Basic	$	(1.85	)		$	(1.59	)
Diluted	$	(1.85	)		$	(1.59	)
Loss per share, attributable\n to common shareholders
Basic	$	(2.08	)		$	(1.59	)
Diluted	$	(2.08	)		$	(1.59	)
Weighted-average shares outstanding:
Basic		3,198				3,000
Diluted		3,198				3,000

Dividends declared per\n share of Series A perpetual preferred stock	$	0.275			$	-

See\naccompanying notes to Consolidated Financial Statements.

248

STAR\nEQUITY HOLDINGS, INC.

CONSOLIDATED\nSTATEMENTS OF COMPREHENSIVE LOSS

(in\nthousands)

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2025			2024
	Year\n Ended December 31,
	2025			2024
Comprehensive loss:
Net loss	$	(5,917	)		$	(4,770	)
Other comprehensive income\n (loss):
Foreign\n currency translation adjustment, net of income taxes		1,353				(1,427	)
Total\n other comprehensive income (loss), net of income taxes		1,353				(1,427	)
Comprehensive loss	$	(4,564	)		$	(6,197	)

See\naccompanying notes to Consolidated Financial Statements.

249

STAR\nEQUITY HOLDINGS, INC.

CONSOLIDATED\nBALANCE SHEETS

(in\nthousands, except per share amounts)

	2025			2024
	As of December\n 31,
	2025			2024
ASSETS
Current assets:
Cash and cash\n equivalents	$	10,269			$	17,011
Restricted cash, current		1,819				476
Investments in equity securities		3,767				-
Accounts receivable, less allowance for expected\n credit losses of $275 and $391, respectively		35,220				20,093
Inventories, net		6,988				-
Note receivable, current\n portion		256				-
Prepaid\n and other		4,168				2,560
Total current assets		62,487				40,140
Property and equipment, net of accumulated\n depreciation of $6,367 and $1,668, respectively		18,610				242
Operating lease right-of-use assets		11,675				1,024
Goodwill		5,944				5,703
Intangible assets, net of accumulated amortization\n of $4,795 and $3,897, respectively		1,688				2,491
Long term investments		953				-
Notes receivable, net of current portion		8,629				-
Deferred tax assets		1,911				2,648
Restricted cash, non-current		1,322				180
Other assets		12				155
Total\n assets	$	113,231			$	52,583
LIABILITIES AND STOCKHOLDERS’\n EQUITY
Current liabilities:
Accounts payable	$	4,769			$	1,789
Accrued salaries, commissions,\n and benefits		7,526				4,306
Accrued expenses and other\n current liabilities		6,907				4,375
Short-term debt		8,473				-
Deferred revenue		1,496				129
Operating\n and finance lease obligations, current		655				623
Total current liabilities		29,826				11,222
Income tax payable		99				93
Operating and finance lease obligations		11,235				441
Note payable - long\n term		6,056				-
Other liabilities		308				399
Total\n liabilities		47,524				12,155
Commitments and contingencies		-				-
Stockholders’ equity:
Series A Preferred stock, $0.001 par value,\n 10,000 shares authorized; 2,691 and 0 issued; 2,370 and 0 shares outstanding, respectively		3				-
Common stock, $0.001 par value, 20,000 shares\n authorized; 5,366 and 4,033 shares issued; 3,755 and 2,750 shares outstanding, respectively		5				4
Additional paid-in capital		530,136				494,209
Accumulated deficit		(435,934	)			(430,017	)
Accumulated other comprehensive loss, net of\n applicable tax		(1,364	)			(2,717	)
Treasury stock, 1,611\n and 1,283 common shares; 321 and 0 preferred shares, respectively, at cost		(27,139	)			(21,051	)
Total\n stockholders’ equity		65,707				40,428
Total\n liabilities and stockholders’ equity	$	113,231			$	52,583

See\naccompanying notes to Consolidated Financial Statements.

250

STAR\nEQUITY HOLDINGS, INC.

CONSOLIDATED\nSTATEMENTS OF CASH FLOWS

(in\nthousands)

	2025			2024
	Year\n Ended December 31,
	2025			2024
Cash flows from operating activities:
Net loss	$	(5,917	)		$	(4,770	)
Adjustments to reconcile net loss to net cash\n used by operating activities:
Total depreciation and\n amortization		2,078				1,361
Provision for expected\n credit losses		103				24
Provision for deferred\n income taxes		942				532
Stock-based compensation		1,497				1,280
Non-cash interest income		(305	)			-
Gain on sale-leaseback of real estate
Realized gain on sale of investments
Unrealized net losses on\n equity securities and lumber derivatives		176				-
Gross profit from sale\n of lost-in-hole equipment		(396	)			-
Changes in operating assets and liabilities,\n net of effect of dispositions:
Accounts receivable		(2,588	)			(1,275	)
Inventories		2,113				-
Prepaid and other assets		(175	)			(531	)
Deferred revenue		(2,248	)			36
Accounts\n payable, accrued expenses, and other liabilities		(2,535	)			556
Net\n cash (used in) provided by operating activities		(7,255	)			(2,787	)
Cash flows from investing activities:
Capital expenditures		(1,703	)			(18	)
Proceeds from sale-leaseback of real estate
Proceeds from corporate\n benefit policy		-				1,076
Cash acquired in connection\n with the acquisition of Star Operating Companies		6,967				-
Net cash paid in acquisition\n of Alpha Consulting Group		(132	)			-
Proceeds from sale of lost-in-hole\n equipment		482				-
Proceeds from sale of property\n and equipment		119				-
Purchases of equity securities		(1,540	)			-
Proceeds from sales of\n equity securities		228				-
Repayment\n of note receivable		149				-
Net\n cash (used in) provided by investing activities		4,570				1,058
Cash flows from financing\n activities:
Proceeds from borrowings		11,426				-
Repayment of debt		(10,940	)			-
Net borrowings under invoice\n finance credit facility		1,385				-
Preferred stock dividends\n paid		(740	)			-
Proceeds from issuance of preferred stock
Purchase of treasury stock\n (including payment of tax withholdings)		(2,638	)			(2,775	)
Cash\n paid for net settlement of employee restricted stock units		(451	)			(327	)
Net\n cash used in financing activities		(1,958	)			(3,102	)
Effect of exchange rates\n on cash, cash equivalents, and restricted cash		386				(672	)
Net decrease in cash, cash\n equivalents, and restricted cash		(4,257	)			(5,503	)
Cash,\n cash equivalents, and restricted cash, beginning of the period		17,667				23,170
Cash,\n cash equivalents, and restricted cash, end of the period	$	13,410			$	17,667
Supplemental disclosures of cash flow information:
Cash paid during the period\n for interest	$	383			$	-
Cash received during the\n period for interest	$	299			$	360
Net cash payments during\n the period for income taxes	$	1,895			$	455
Cash paid for amounts included\n in operating lease liabilities	$	1,144			$	809
Supplemental non-cash disclosures:
Right-of-use assets obtained\n in exchange for operating lease liabilities	$	3,112			$	416

See\naccompanying notes to Consolidated Financial Statements.

251

STAR\nEQUITY HOLDINGS, INC.

CONSOLIDATED\nSTATEMENT OF STOCKHOLDERS’ EQUITY

(in\nthousands)

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Shares		Value			Shares	Value	capital		deficit			income (loss)		Shares		Value			Total
								Accumulated
	Preferred stock		Common stock			Additional paid-in	Accumulated	other comprehensive		Treasury stock
	Shares		Value			Shares	Value	capital		deficit			income (loss)		Shares		Value			Total
Balance at December 31, 2023		-		$	-		3,896	$	4		$	493,036		$	(425,247	)	$	(1,290	)		(1,089	)	$	(17,949	)	$	48,554
Net loss		-			-		-		-			-			(4,770	)		-			-			-			(4,770	)
Other comprehensive loss, translation adjustments		-			-		-		-			-			-			(1,427	)		-			-			(1,427	)
Purchase of treasury stock		-			-		-		-			-			-			-			(173	)		(2,775	)		(2,775	)
Purchase of net settled restricted stock		-			-		-		-			-			-			-			(21	)		(327	)		(327	)
Stock-based compensation and vesting of restricted stock units		-			-		137		-			1,173			-			-			-			-			1,173
Balance at December 31, 2024		-		$	-		4,033	$	4		$	494,209		$	(430,017	)	$	(2,717	)		(1,283	)	$	(21,051	)	$	40,428
Balance		-		$	-		4,033	$	4		$	494,209		$	(430,017	)	$	(2,717	)		(1,283	)	$	(21,051	)	$	40,428
Net loss		-			-		-		-			-			(5,917	)		-			-			-			(5,917	)
Dividends to holders of preferred stock		-			-		-		-			(740	)		-			-			-			-			(740	)
Preferred stock issued in connection with acquisition of Star Operating Companies		2,691			3		-		-			25,477			-			-			-			-			25,480
Common stock issued in connection with acquisition of Star Operating Companies		-			-		744		1			6,694			-			-			-			-			6,695
Issuance of common shares in exchange for preferred treasury shares		-			-		288		-			2,999			-			-			-			(2,999	)		-
Other comprehensive income (loss), translation adjustments		-			-		-		-			-			-			1,353			-			-			1,353
Purchase of treasury stock		-			-		-		-			-			-			-			(281	)		(2,638	)		(2,638	)
Purchase of net settled restricted stock		-			-		-		-			-			-			-			(47	)		(451	)		(451	)
Stock-based compensation and vesting of restricted stock units		-			-		301		-			1,497			-			-			-			-			1,497
Balance at December 31, 2025		2,691		$	3		5,366	$	5		$	530,136		$	(435,934	)	$	(1,364	)		(1,611	)	$	(27,139	)	$	65,707
Balance		2,691		$	3		5,366	$	5		$	530,136		$	(435,934	)	$	(1,364	)		(1,611	)	$	(27,139	)	$	65,707

See\naccompanying notes to Consolidated Financial Statements.

252

STAR\nEQUITY HOLDINGS , INC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(in\nthousands, except share and per share amounts)

NOTE\n1 - DESCRIPTION OF BUSINESS

The\nBuilding Solutions segment operates in the construction industry. The Business Services segment, which consists of Hudson Talent Solutions,\nLLC (“HTS”), delivers customized recruitment and contracting solutions to mid-to-large multinational companies, including\nRecruitment Process Outsourcing (“RPO”), project-based RPO, contingent workforce solutions, recruitment consulting, outsourced\nprofessional contract staffing, and managed service provider (“MSP”) services. The Energy Services segment consists of Alliance\nDrilling Tools, Inc. (“ADT”), which manufactures and supplies specialized drilling tools and downhole equipment used in directional\ndrilling and other oil and gas well construction applications. The Investments segment holds and manages certain corporate-owned real\nestate assets and investments in a limited number of publicly traded and private companies.

MERGER

Pursuant\nto the terms of the Merger Agreement, at the Effective Time, (i) each share of common stock of SOC issued and outstanding immediately\nprior to the Effective Time (other than certain shares as set forth in the Merger Agreement) were automatically converted into the right\nto receive 0.23 shares of Star common stock (the “exchange ratio”) and (ii) each share of preferred stock of SOC issued and\noutstanding immediately prior to the Effective Time (other than certain shares set forth in the Merger Agreement) were automatically\nconverted into the right to receive one (1) share of Star 10% Series A Cumulative Perpetual preferred stock (“Preferred Stock”).\nAs a result of the Merger, former SOC common stockholders received approximately 744,291 shares of Star common stock for their SOC common\nshares and former SOC preferred stock stockholders received approximately 2,690,637 shares of Star Preferred Stock. No fractional shares\nof Star common stock were issued in the Merger, and SOC stockholders became entitled to receive cash in lieu of fractional shares in\naccordance with the Merger Agreement.

The\naccompanying consolidated financial statements include the financial results of SOC beginning on August 22, 2025 and reflect the post-merger\nresults of the Building Solutions, Energy Services, and Investments segments for the period from August 22, 2025 through December 31,\n2025. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. All significant\nintercompany accounts and transactions have been eliminated in consolidation.

AMENDMENT\nTO CERTIFICATE OF INCORPORATION

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SEGMENTS

The\nCompany’s Building Solutions segment consists of the following operating businesses: KBS Builders, Inc. (“KBS”); EdgeBuilder,\nInc. (“EdgeBuilder”); Glenbrook Building Supply, Inc. (“Glenbrook”); and Timber Technologies Solutions, Inc.\n(“TT”). EdgeBuilder and Glenbrook are managed together and are referred to collectively as “EBGL.” KBS, based\nin Maine, manufactures modular buildings, primarily serving the single-family and multi-family residential markets in New England. EBGL,\nbased in the Minneapolis-Saint Paul area, manufactures and delivers structural wall panels and other engineered wood-based products and\ndistributes building materials through two lumberyard locations, primarily serving professional builder customers in the Upper Midwest\nregion. TT, located outside the Minneapolis-Saint Paul area, manufactures glue-laminated timber (“glulam”) products for a\nrange of end markets and applications, including agriculture, industrial, infrastructure, and building construction (commercial and residential).

The\nBusiness Services segment consists of HTS and provides customized recruitment and contracting solutions to mid-to-large multinational\ncompanies. Service offerings include Recruitment Process Outsourcing (“RPO”), project-based RPO, contingent workforce solutions,\nrecruitment consulting, outsourced professional contract staffing, and managed service provider (“MSP”) services. HTS operates\ndirectly in eighteen countries across three geographic regions: the Americas, Asia Pacific, and Europe, Middle East, and Africa. HTS\ndelivery teams utilize standardized recruitment methodologies and project management expertise to support clients’ ongoing workforce\nrequirements. HTS leverages its consultants and proprietary processes to identify, select, and engage talent for critical client roles.\nIn addition, clients may receive outsourced professional contract staffing services and MSP solutions, offered on a standalone basis\nor as part of an integrated total talent solution. HTS-employed professionals are placed with client organizations, individually or as\nteams, for defined periods based on specific business requirements.

The\nInvestments segment holds and manages certain of our corporate-owned real estate, including a manufacturing facility in Maine that is\nleased to KBS and a manufacturing facility in Wisconsin that is leased to TT. The Investments segment manages investments in a small\nnumber of public and private companies. SOC acquired these interests in May 2023 as a result of the sale of Digirad Health. The Investments\nsegment also holds an investment in Enservco Corporation consisting of an investment in Enservco Common Stock, an investment in Enservco\nPreferred Stock, and an investment in a call option, all of which were acquired in the third quarter of 2024 and which currently have\na carrying value of zero.

See\nNote 17 to the Consolidated Financial Statements for further details regarding the Company’s reportable segments: Building Solutions,\nBusiness Services, Energy Services and Investments.

NOTE\n2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis\nof Presentation

The\nConsolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”)\nin the United States of America (“U.S.”). Certain prior period amounts have been reclassified to conform to the current year\npresentation with no material impact on the Consolidated Financial Statements. Unless otherwise stated, amounts are presented in U.S.\ndollars and all amounts are in thousands, except for number of shares and per share amounts.

Principles\nof Consolidation

The\nConsolidated Financial Statements include the accounts of the Company and all of its wholly owned and majority-owned subsidiaries. All\nsignificant inter-company accounts and transactions between and among the Company and its subsidiaries have been eliminated in consolidation.

254

Use\nof Estimates

The\npreparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events.\nThese estimates and the underlying assumptions affect the reported amounts of assets and liabilities, the disclosures about contingent\nassets and liabilities, and the reported amounts of revenue and expenses. The critical accounting estimates include revenue recognition,\nincome taxes, and business combinations and asset acquisitions. These estimates and assumptions are based on management’s best\nestimates and judgment. Management evaluates the estimates and assumptions on an ongoing basis using historical experience and other\nfactors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company\nadjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined\nwith precision, actual results could differ significantly from those estimates.

Concentration\nand Credit Risk

Financial\ninstruments, which potentially subject the Company to concentrations of credit risk, are primarily cash and accounts receivable. The\nCompany performs continuing credit evaluations of its customers and does not require collateral. The Company has not experienced significant\nlosses related to receivables in the Consolidated Statements of Operations.

The\nCompany may from time to time maintain cash in banks in excess of Federal Deposit Insurance Corporation insurance limits. However, the\nCompany regularly monitors the financial condition of the institutions in which it has depository accounts and believes the risk of loss\nis minimal as these banks are large financial institutions with strong credit ratings.

Revenue\nRecognition

Revenue\nis measured according to ASC 606, Revenue - “Revenue from Contracts with Customers,” and is recognized based on consideration\nspecified in a contract with a client. We account for a contract when both parties to the contract have approved the contract, the rights\nof the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration\nis probable. Revenues are recognized over time, using an input or output method, as the control of the promised services is transferred\nto the client in an amount that reflects the consideration we expect to be entitled to in exchange for those services. The majority of\nour contracts are short-term in nature as they include termination clauses that allow either party to cancel within a short termination\nperiod, without cause. Revenue includes billable travel and other reimbursable costs and is reported net of value added taxes, sales,\nor use taxes collected from clients and remitted to taxing authorities.

Business\nServices Revenue Recognition

Certain\nclient contracts have variable consideration, including usage-based fees that increase the transaction price and volume rebates or other\nsimilar items that generally reduce the transaction price. We estimate variable consideration using the expected value method based on\nthe terms of the client contract and historical evidence. These amounts may be constrained and are only included in revenue to the extent\nwe do not expect a significant reversal when the uncertainty associated with the variable consideration is resolved. Other than bonuses\nto be paid to contractors, on behalf of our clients, our estimated amounts of variable consideration subject to constraints at period\nend are not material and we do not believe that there will be significant changes to our estimates. Certain contract employees are entitled\nto performance bonuses at the sole discretion of the client and are constrained until approved. Bonuses of $1.1 million were approved\nand paid to our contract employees on behalf of our clients for the year ended December 31, 2025. No bonuses were approved and paid to\nour contract employees on behalf of our clients for year ended December 31, 2024.

We\nrecord accounts receivable when our right to consideration becomes unconditional. The Company’s accounts receivable balances are\ncomposed of trade and unbilled receivables. Unbilled accounts receivable represent revenue recorded in advance of processing formal invoices\npursuant to the completion of contract provisions and, generally, become billable at contractually specified dates. Unbilled amounts\nare expected to be invoiced and collected within one year. Contract assets primarily relate to our rights to consideration for services\nprovided that such rights to consideration are conditional on satisfaction of future performance obligations. A contract liability for\ndeferred revenue is recorded when consideration is received, or is unconditionally due, from a client prior to transferring control of\nservices to the client under the terms of a contract. Deferred revenue balances typically result from advance payments received from\nclients prior to transferring control of services. We do not have any material contract assets or liabilities as of and for the years\nended December 31, 2025 and 2024.

255

Payment\nterms vary by client and the services being provided to the client. We consider payment terms that exceed one year to be extended payment\nterms. Substantially all of the Company’s contracts include payment terms of 90 days or less, and we do not extend payment terms\nbeyond one year.

We\nprimarily record revenue on a gross basis in the Consolidated Statements of Operations based upon the following key factors:

\n\n \n \n\n\n \n \n\n \n \n

●	We maintain the direct contractual\n relationship with the client and are responsible for fulfilling the service promised to the client.

●	We maintain control over\n our contractors while the services to the client are being performed, including our contractors’ billing rates.

RPO.\nWe provide complete recruitment outsourcing, project-based outsourcing, and recruitment consulting services for clients’ permanent\nstaff hires. We recognize revenue for our RPO over time in an amount that reflects the consideration we expect to be entitled to and\nhave an enforceable right to payment in exchange for our services. The client simultaneously receives and consumes the benefits of the\nservices as they are provided. The transaction prices contain both fixed fee and variable usage-based consideration. Variable usage-based\nconsideration is constrained by candidates accepting offers of permanent employment. We recognize revenue on fixed fees as the performance\nobligations are satisfied and on usage-based fees as the constraint is lifted. We do not incur incremental costs to obtain our RPO contracts.\nThe costs to fulfill these contracts are expensed as incurred.

We\nrecognize permanent placement revenue when employment candidates accept offers of permanent employment. We have a substantial history\nof estimating the financial impact of permanent placement candidates who do not remain with our clients through a guarantee period. Fees\nto clients are generally calculated as a percentage of the new employee’s annual compensation. No fees for permanent placement\nservices are charged to employment candidates.

Contracting.\nWe provide clients with a range of outsourced professional contract staffing services and managed service provider services offered sometimes\non a standalone basis and sometimes as part of a blended total talent solution. We recognize revenue for our contracting services over\ntime as services are performed in an amount that reflects the consideration we expect to be entitled to and have an enforceable right\nto payment in exchange for our services, which is generally calculated as hours worked multiplied by the agreed-upon hourly bill rate.\nThe client simultaneously receives and consumes the benefits of the services as they are provided. We do not incur incremental costs\nto obtain our contracts for outsourced professional contract staffing services and managed service provider services. The costs incurred\nto fulfill these contracts are expensed as incurred.

Building\nSolutions Revenue Recognition

We\nrecognize revenue when a customer obtains control of promised goods or services. We record the amount of revenue that reflects the consideration\nthat we expect to receive in exchange for those goods or services. We recognize revenue upon transfer of control of promised products\nor services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.\nTaxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue.

The\nmajority of our contracts have a single performance obligation, including certain instances which we provide a series of distinct goods\nor services that are substantially the same and are transferred with the same pattern to the customer. For contracts with multiple performance\nobligations, we allocate the total transaction price to each performance obligation using our best estimate of the standalone selling\nprice of each distinct good or service in the contract. We use an observable price to determine the stand-alone selling price for separate\nperformance obligations or a cost plus margin approach when one is not available. For bill and hold sales, we determine when the customer\nobtains control of the product on a case-by-case basis to determine the amount of revenue to recognize each period.

Revenue\nrecognition is evaluated on a contract by contract basis. Performance obligations are satisfied over time as work progresses or at a\npoint in time. A performance obligation is satisfied over time when the company creates an asset with no alternative use and we have\nan enforceable right to payment, including a reasonable profit margin. Determining if an enforceable right to payment includes a reasonable\nprofit margin requires judgment and is assessed on a contract by contract basis. For contracts requiring over time revenue recognition,\nthe selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services\nto be provided. We use a cost-based input measurement of progress because it best depicts the transfer of assets to the customer, which\noccurs as costs are incurred during the manufacturing process or as services are rendered. Under the cost-based measure of progress,\nthe extent of progress towards completion is measured based on the costs incurred to date.

256

Our\nproducts are generally not sold with a right of return and the Company does not provide significant credits or incentives, which may\nbe variable consideration when estimating the amount of revenue to be recognized.

Within\nthe Building Solutions segment, we service residential and commercial construction projects by manufacturing modular housing units and\nother products, supplying general contractors with building materials and providing glulam products to distributors and end users. KBS\nmanufactures modular buildings for both single-family residential homes and larger, commercial building projects. EdgeBuilder manufactures\nstructural wall panels, permanent wood foundation systems and other engineered wood products, and Glenbrook is a retail supplier of lumber\nand other building supplies. Retail sales at Glenbrook are recognized at the point of sale. TT manufactures glue-laminated timber products\n(“glulam”) for various end markets and applications, including agriculture, industrial, infrastructure, and building construction\n(commercial and residential). For bill and hold sales, we determine when the customer obtains control of the product on a case-by-case\nbasis to determine the amount of revenue to recognize each period. Revenue is generally recognized at point in time upon delivery of\nproduct or over time by measuring progress towards completion.

Energy\nServices Revenue Recognition

ADT\nis principally engaged in the business of renting drilling tools. We also sell new drilling tools, drilling parts, supplies, and used\nrental tools. In addition, ADT offers repair services to support its customers. Tools purchased for sale are recorded as inventory. Tools\nintended for rental are recorded as part of fixed assets. Equipment rental revenue is recognized on a straight-line basis over the length\nof the rental contract. New tools, parts, and supplies sales are recognized as revenue upon transfer of control, which generally occurs\nwhen products are picked up by or delivered to the customer. Repair services revenues are recognized in the period the services are provided.\nUpon the sale of other rental tools from fixed assets, we recognize a gain or loss on the sale in other income (expense), net.

ADT’s\nequipment rental agreements generally contain provisions whereby should the rented tools or components provided to a customer be deemed\nto be irretrievably lost during drilling operations, commonly referred to as “lost-in-hole,” ADT has the right to receive\nreimbursement for such losses. Amounts billed to customers are at an agreed upon price relative to the specific piece of equipment, the\nrevenue of which is recognized at the time the loss of the equipment is confirmed. The gross profit recognized from lost-in-hold transactions\nis normally calculated as the difference between the amounts billed to the customer and the net book value of the lost equipment. This\ngross profit is presented as a separate line item in the statement of cash flows under operating activities, and the cash received in\nconnection with these activities is presented as an offset to cash purchases of property and equipment in the investing section of the\nstatement of cash flows, to the extent it does not exceed the cash used for the purchases of the replacement equipment.

Unsatisfied\nperformance obligations. As a practical expedient, we do not disclose the value of unsatisfied performance obligations for (i) contracts\nwith an expected original duration of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have\nthe right to invoice for services performed. See Note 4 for information on disaggregated revenue.

Operating\nExpenses

Salaries\nand related expenses include the salaries, commissions, payroll taxes and employee benefits related to recruitment professionals, executive\nlevel employees, administrative staff, and other employees of the Company who are not temporary contractors. Office and general expenses\ninclude occupancy, equipment leasing and maintenance, utilities, travel expenses, professional fees, and provision for expected credit\nlosses. The Company expenses job board and legal costs as incurred.

Stock-Based\nCompensation

The\nCompany applies the fair value recognition provisions of ASC 718, “Compensation - Stock Compensation.” The Company\ndetermines the fair value as of the grant date. For awards with graded vesting conditions, the values of the awards are determined by\nvaluing each tranche separately and expensing each tranche over the required service period. The service period is the period over which\nthe related service is performed, which is generally the same as the vesting period. The Company accounts for forfeitures as they occur.\nDuring the years ended December 31, 2025 and 2024, the Company only granted restricted stock units and restricted shares of common stock.

257

Employee\nBenefit Programs

The\nCompany in the U.S. sponsors a defined contribution plan covering substantially all of its full-time employees (the “401(k) Plan”).\nThe Company recognized expense related to the 401(k) Plan totaling approximately $264 and $216 for the years ended December 31, 2025\nand 2024, respectively.

Income\nTaxes

In\nDecember 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances annual income\ntax disclosures primarily related to the effective tax rate reconciliation and income taxes paid. The standard is effective for the Company\nfor annual periods beginning after January 1, 2025, and has been adopted on a prospective basis, with earlier periods not revised. The\nguidance does not change the recognition or measurement of income taxes under ASC 740; rather, it results in expanded disclosures in\nthe notes to the consolidated financial statements, including additional disaggregation of the rate reconciliation, income taxes paid\nby jurisdiction, and certain information about income (loss) from continuing operations and related income tax expense by jurisdiction.

Earnings\nfrom the Company’s global operations are subject to tax in various jurisdictions both within and outside the United States. The\nCompany accounts for income taxes in accordance with ASC 740, “Income Taxes.” This standard establishes financial\naccounting and reporting standards for the effects of income taxes that result from an enterprise’s activities. It requires an\nasset and liability approach for financial accounting and reporting of income taxes.

ASC\n740-10-55-3, “Recognition and Measurement of Tax Positions - a Two Step Process,” provides implementation guidance\nrelated to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a two-step\nevaluation process for a tax position taken or expected to be taken in a tax return. The first step is recognition and the second is\nmeasurement. ASC 740 also provides guidance on derecognition, measurement, classification, disclosures, transition, and accounting for\ninterim periods. The Company provides tax reserves for U.S. federal, state, local, and international unrecognized tax benefits for all\nperiods subject to audit. The development of reserves for these exposures requires judgments about tax issues, potential outcomes and\ntiming, and is a subjective critical estimate. The Company assesses its tax positions and records tax benefits for all years subject\nto examination based upon management’s evaluation of the facts, circumstances, and information available at the reporting dates.\nFor those tax positions where it is more likely than not that a tax benefit will be sustained, the Company has recorded the largest amount\nof tax benefit with a greater than 50% likelihood of being realized upon settlement with a tax authority that has full knowledge of all\nrelevant information. For those tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit\nhas been recognized in the financial statements. Where applicable, associated interest and penalties have also been recognized as a component\nof income tax expense. Although the outcome related to these exposures is uncertain, in management’s opinion, adequate provisions\nfor income taxes have been made for estimable potential liabilities emanating from these exposures. In certain circumstances, the ultimate\noutcome for exposures and risks involves significant uncertainties which render them inestimable. If actual outcomes differ materially\nfrom these estimates, including those that cannot be quantified, they could have material impact on the Company’s results of operations.

The\nCompany has provided tax on all unremitted earnings of our foreign subsidiaries taking into consideration all expected future events\nbased on presently existing tax laws and rates.

The\nCompany has elected to recognize the tax on Global Intangible Low Taxed Income (“GILTI”) as a period expense in the year\nthe tax is incurred.

(Loss)\nearnings Per Share

Basic\n(loss) earnings per share (“EPS”) is computed by dividing the Company’s net income by the weighted average number\nof shares outstanding during the period. When the effects are not anti-dilutive, diluted (loss) earnings per share is computed by dividing\nthe Company’s net income by the weighted average number of shares outstanding and the impact of all dilutive potential common shares,\nprimarily stock options “in-the-money” and unvested restricted stock. The dilutive impact of stock options and unvested\nrestricted stock is determined by applying the “treasury stock” method. Performance-based restricted stock awards\nare included in the computation of diluted (loss) earnings per share only to the extent that the underlying performance conditions: (i)\nare satisfied prior to the end of the reporting period, or (ii) would be satisfied if the end of the reporting period were the end of\nthe related performance period and the result would be dilutive under the treasury stock method. Stock awards subject to vesting or exercisability\nbased on the achievement of market conditions are included in the computation of diluted (loss) earnings per share only when the market\nconditions are met.

258

Income\n(loss) per share calculations for each quarter include the weighted average effect for the quarter; therefore, the sum of quarterly income\nper share amounts may not equal year-to-date income per share amounts, which reflect the weighted average effect on a year-to-date basis.\nIn addition, the calculation of the impact of dilutive potential common shares might be dilutive on a quarterly basis but anti-dilutive\non a year-to-date basis or vice versa.

Fair\nValue of Financial Instruments

Fair\nvalue is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction\nbetween market participants at the measurement date and is measured using inputs in one of the following three categories:

Level\n1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability\nto access. Valuation of these items does not entail a significant amount of judgment.

Level\n2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar\nassets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.

Level\n3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair\nvalue of the assets or liabilities.

The\ncarrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable and\nshort-term borrowings approximate fair value because of the immediate or short-term maturity of these financial instruments.

The\nCompany occasionally enters into derivative financial instruments to manage certain market risks. These derivative instruments are not\ndesignated as hedging instruments and accordingly, are recorded at fair value in the Consolidated Balance Sheets with the changes in\nfair value recognized in cost of revenue in the Consolidated Statements of Operations.

Cash\nand Cash Equivalents

For\nfinancial statement presentation purposes, the Company considers all highly liquid investments having an original maturity of three months\nor less as cash equivalents.

Restricted\nCash

Restricted\ncash primarily represents amounts required to be held on deposit for a travel and entertainment program in the U.K., a bank guarantee\nfor licensing in Switzerland, and deposits held for office space. Restricted cash also includes cash for letters of credit for our real\nestate leases and certain minimum balance requirements on our banking arrangements.

Equity\nSecurities

Securities\nconsist of investments in equity securities that are publicly traded. These equity securities are measured at fair value on a trade date\nbasis and changes in fair value are recognized in net income in other income (expense). Investments that are strategic in nature, with\nthe intent to hold the investment over a several year period, are classified as long-term investments.

Accounts\nReceivable

The\nCompany’s accounts receivable balances are composed of trade and unbilled receivables. Unbilled accounts receivable represent revenue\nrecorded in advance of processing formal invoices pursuant to the completion of contract provisions and, generally, become billable at\ncontractually specified dates. Unbilled receivables of $6,960 and $5,925 as of December 31, 2025 and 2024, respectively, are expected\nto be invoiced and collected within one year. The Company records accounts receivable when its right to consideration becomes unconditional.\nContract assets primarily relate to our rights to consideration for services provided that they are conditioned on satisfaction of future\nperformance obligations. Accounts receivable, net, are stated at the amount the Company expects to collect, which is net of estimated\nlosses resulting from the inability of its customers to make required payments.

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Allowance\nfor Expected Credit Losses

The\nallowance for expected credit losses is estimated based on the CECL model and takes into account information about past events, current\nconditions, and reasonable and supportable forecasts of future economic conditions. It represents the aggregate amount of credit risk\narising from the inability of specific clients to pay our fees or from disputes that may affect our ability to fully collect billed accounts\nreceivable. In determining the collectability of specific customer accounts, we evaluate a number of factors, including customer creditworthiness,\npast transaction history, changes in financial stability, payment terms and practices, and the effect of market conditions on each customer.\nOther factors considered include, but are not limited to, current economic conditions and forward-looking estimates. Actual results may\ndiffer from our estimates. If the financial condition of our clients deteriorates, resulting in their inability or unwillingness to pay\nour fees, we may be required to record additional provisions for expected credit losses in future periods. Credit risk may be mitigated\nto the extent that we receive retainers from certain clients prior to performing services.

Changes\nin the allowance for expected credit losses are recorded in office and general expenses in the Consolidated Statements of Operations\nand were not material for the year ended December 31, 2025. Accounts receivable, net of the allowance for expected credit losses, represents\nthe amount we expect to collect. At each reporting date, we adjust the allowance to reflect our current estimate. Billed accounts receivable\nare written off when the potential for recovery is considered remote.

The\nCompany generally establishes customer credit limits and estimates the allowance for credit losses on a country or geographic basis.\nCustomer credit limits are based on an initial evaluation of the customer’s credit quality and are adjusted based on ongoing credit\nassessments, including payment history and changes in credit quality. The allowance for expected credit losses is determined based on\nan assessment of past collection experience, as well as consideration of current and future economic conditions and changes in customer\ncollection trends.

Long-Term\nInvestments

As\na part of the sale of Digirad Health, Star Operating Companies received common equity in Insignia TTG Parent LLC (“Catalyst Parent”),\nthe parent entity of Catalyst formerly known as TTG Imaging Solutions, LLC. In accounting for this investment, we have elected the measurement\nalternative under ASC 321 “Accounting for Investments in Equity Securities”. The measurement alternative election allows\nfor equity securities that do not have readily determinable fair values to be recorded at cost, with adjustments for impairment and certain\nobservable price changes reflected in earnings. Such securities are adjusted to fair value when an observable price change occurs or\nimpairment is identified. Each reporting period, we perform a qualitative and quantitative assessment considering impairment indicators\nto evaluate whether the investment is impaired. Impairment indicators include, but are not limited to, significant deterioration in earnings\nperformance, significant adverse changes in the regulatory or economic environment and working capital deficiencies. If an investment\nis determined to be impaired, we include an impairment loss as a component of other income (expense) equal to the difference between\nthe fair value of the investment and its carrying amount. During the period from August 22, 2025 through December 31, 2025 we recognized\nno impairment loss on this investment.

On\nAugust 9, 2024, SOC completed an investment in Enservco Corporation (“Enservco”) (“Investment in Enservco”),\nwhich consisted of Enservco Common Stock, Enservco Preferred Stock, and certain other options reflected in the Share Exchange Agreement,\nand the Enservco Note Receivable (See Note 18, Supplementary Balance Sheet Information). The Investment in Enservco is required\nto be accounted for using the equity method of accounting under ASC 323, “Equity Method Investments and Joint Ventures”,\nas we are deemed to have significant influence over Enservco based upon GAAP rules.

Inventory

Inventories\nare valued using first-in, first-out, or the weighted-average inventory method; stated at the lower of cost or net realizable value.\nFinished goods and work-in-process inventory values include the cost of raw materials, labor, and manufacturing overhead. Inventory,\nwhen written down to net realizable value, establishes a new cost basis and its value is not subsequently increased based upon changes\nin underlying facts and circumstances. We also make adjustments to reduce the carrying amount of inventories for estimated excess or\nobsolete inventories. Factors influencing these adjustments include inventory on-hand compared with historical and estimated future sales\nand usage for new and existing products and assumptions about the likelihood of obsolescence.

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Debt\nIssuance Costs

We\nincur debt issuance costs in connection with debt financings. Debt issuance costs for line of credit are presented in other assets and\nare amortized over the term of the revolving debt agreements using the straight-line method. Debt issuance costs for term debt are netted\nagainst the debt and are amortized over the term of the loan using the effective interest method. Amortization of debt issuance costs\nare included in interest expense. As of December 31, 2025 we have no unamortized debt issuance costs.

Shipping\nand Handling Fees and Costs

We\nrecord all shipping and handling costs billed to customers as revenue earned for the goods provided. Shipping and handling costs related\nto continuing operations are included in cost of revenues and totaled $1,469 for the year ended December 31, 2025. There were no shipping\nand handling fees or costs recorded for the year ended December 31, 2024.

Warranties

Within\nour Building Solutions segment, KBS provides a limited assurance warranty on its residential homes that covers substantial defects in\nmaterials or workmanship for a period of 12 months after delivery to the owner. EBGL provides a limited warranty on the sale of its wood\nfoundation products that covers leaks resulting from defects in workmanship for a period of 25 years. TT provides a limited warranty\non glulam products for a period of 50 years. Estimated warranty costs are accrued in the period that the related revenue is recognized.\nSee Note 18, Supplementary Balance Sheet Information, for further information.

Advertising\nand Marketing Costs

Advertising\nand marketing costs are expensed as incurred and are reported as Marketing and promotion in the Consolidated Income Statements. Total\nadvertising and marketing costs were $3,957 and $3,588 for the years ended December 31, 2025 and 2024, respectively.

Property\nand Equipment

Property\nand equipment are stated at cost. Depreciation is computed using the straight-line method over the following estimated useful lives:

SCHEDULE\nOF PROPERTY, PLANT AND EQUIPMENT

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Years
Buildings\n and improvements		5\n - 20
Furniture,\n machinery, and equipment		3\n - 13
Capitalized\n software costs		3\n - 10
Computer\n equipment		3\n - 5
Leasehold\n improvements		2\n - 5

Leasehold\nimprovements are amortized over the shorter of their estimated useful lives or the lease term. The amortization periods of material leasehold\nimprovements are estimated at the inception of the lease term.

Leases

Lease\nliabilities are recognized at the commencement of a lease based on the sum of lease payments over the term of the lease. Lease liabilities\nare reduced as payments are made. A corresponding right-of-use asset is recognized at the same time as the lease liability based on the\ntotal amount of lease expense to be recognized, which is generally the same amount as the corresponding lease liabilities. Right-of-use\nassets are amortized over the life of the lease on a straight-line basis. The Company’s lease agreements may include options to\nrenew, extend, or terminate the lease. These clauses are included in the measurement of the lease liabilities when the Company is reasonably\ncertain that it will exercise such options.

The\nCompany has elected to exclude short-term leases from the recognition requirements of ASC 842. A lease is short-term if, at the commencement\ndate, it has a term of less than or equal to one year. Lease expense related to short-term leases is recognized on a straight-line basis\nover the lease term.

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Capitalized\nSoftware Costs

Capitalized\nsoftware costs consist of costs to purchase and develop software for internal use. The Company capitalizes certain incurred software\ndevelopment costs in accordance with ASC 350-40, “Intangibles Goodwill and Other: Internal-Use Software.” Costs incurred\nduring the application-development stage for software purchased and further customized by outside vendors for the Company’s use\nand software developed by a vendor for the Company’s proprietary use have been capitalized. Labor costs incurred during the application-development\nstage for the Company’s own personnel which are directly associated with software development are capitalized as appropriate. The\nCompany expenses software and overhead cost incurred during the preliminary and/or post implementation of the project stage such as maintenance,\ntraining and upgrades or enhancements that do not increase functionality. Capitalized software costs are included in property and equipment.

Business\nCombinations and Asset Acquisitions

Intangible\nAssets

Intangible\nassets consist of customer relationships, trade names, non-competition agreements and developed technology. The Company periodically\nevaluates whether events or changes in circumstances have occurred that indicate long-lived assets may not be recoverable. When such\ncircumstances are present, the Company assesses whether the carrying value will be recovered through the expected undiscounted future\ncash flows resulting from the use and eventual disposition of the long-lived asset. In the event the sum of the expected undiscounted\nfuture cash flows is less than the carrying value of the long-lived asset, an impairment loss equal to the excess of the long-lived asset’s\ncarrying value over its fair value is recorded in accordance with ASC 360-10-35. There were no impairment triggers during the year ended\nDecember 31, 2025.

Amortization\nexpense is computed using the straight-line method over the following estimated useful lives:

SCHEDULE\nOF FINITE-LIVED INTANGIBLE ASSETS

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Years
Non-compete\n agreements		2\n - 3
Developed\n Technology		3
Customer\n lists		2\n - 6
Trade\n name		2\n - 10

Goodwill

The\nCompany records the excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities\nassumed in a business combination as goodwill. The Company has allocated goodwill for certain acquisitions to its Americas reportable\nsegment and others to its Asia Pacific reportable segment. Goodwill is not amortized and is tested for impairment on an annual basis\non October 1, or when an event or changes in circumstances indicate that its carrying value may not be recoverable.

Goodwill\nimpairment is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment.\nThe annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount.\nAn impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however,\nthe loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

The\nCompany has the option to perform a qualitative assessment for reporting units to determine whether the existence of events or circumstances\nleads to a determination that it is more likely than not that the fair value of one or more of its reporting units is greater than its\ncarrying amount. If, after assessing the totality of events or circumstances, the Company determines it is more likely than not that\nthe fair value of a reporting unit is greater than its carrying amount, there is no need to perform any further testing. However, if\nthe Company concludes otherwise, then it is required to perform a quantitative impairment test by calculating the fair value of the reporting\nunit and comparing the fair value with the carrying amount of the reporting unit. If the fair value of the reporting unit is less than\nits carrying value, an impairment loss is recorded based on that difference. Alternatively, the Company has the option to bypass the\nqualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test.\nThere were no impairment charges recorded in either fiscal year 2025 or 2024.

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Foreign\nCurrency Translation

The\nfinancial position and results of operations of the Company’s international subsidiaries are determined using local currency as\nthe functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rate in effect at each year-end.\nStatements of Operations accounts are translated at the average rate of exchange prevailing during each period. Translation adjustments\narising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss)\naccount in stockholders’ equity, other than translation adjustments on short-term intercompany balances, which are included in\nother income (expense). Gains and losses resulting from other foreign currency transactions are included in other income (expense). Intercompany\nreceivable balances of a long-term investment nature are considered part of the Company’s permanent investment in a foreign jurisdiction\nand the gains or losses on such balances are reported in other comprehensive income (loss).

Comprehensive\nIncome (Loss)

Comprehensive\nincome (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners.\nThe Company’s other comprehensive income (loss) is primarily comprised of foreign currency translation adjustments, which relate\nto investments that are permanent in nature.

NOTE\n3 - ACCOUNTING PRONOUNCEMENTS

In\nJuly 2025, the FASB issued Accounting Standards Update 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit\nLosses for Accounts Receivable and Contract Assets. The ASU provides a practical expedient for estimating expected credit losses on current\naccounts receivable and contract assets arising from revenue transactions under ASC 606. Under the expedient, entities may assume that\nconditions existing as of the balance-sheet date will remain unchanged over the remaining life of those assets, thereby simplifying the\nestimation process for short-term receivables. The amendments are effective for fiscal years beginning after December 15, 2025, including\ninterim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this ASU\non its consolidated financial statements and related disclosures.

In\nSeptember 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted\nImprovements to the Accounting for Internal-Use Software”, ASU 2025-06 updates the accounting for internal-use software by removing\nthe previous “project stage” model and requiring capitalization only when management authorizes and commits to funding a\nproject that is probable of completion. The ASU also adds guidance on assessing development uncertainty, incorporates website development\ninto Subtopic 350-40, and aligns presentation and disclosure requirements with ASC 360. The amendments are effective for annual periods\nbeginning after December 15, 2027, and interim periods within those years, with early adoption permitted. Entities may apply the standard\nprospectively, modified-prospectively, or retrospectively. The Company is currently evaluating the impact of this guidance and does not\nexpect the adoption to have a material effect on its consolidated financial statements.

Adoption\nof New Accounting Pronouncements

In\nNovember 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures\n(Subtopic 220-40): Disaggregation of Income Statement Expenses.” This update requires public entities to disclose additional information\nabout specific expense categories in the notes to the financial statements on both an interim and annual basis. Subsequently, in January\n2025, the FASB issued ASU 2025-01, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic\n220-40): Clarifying the Effective Date. The new guidance is effective for the Company for fiscal years beginning after December 15, 2026,\nand for interim periods within annual reporting periods beginning after December 15, 2027. It may be applied on a retrospective or prospective\nbasis, with early adoption permitted. The Company evaluated the update to determine the impact on the Company’s disclosures, and\nthe amendments will be applied on a prospective basis.

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In\nNovember 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.”\nThe amendments in this ASU improve segment reporting requirements, primarily through enhanced disclosures on significant segment expenses.\nOther disclosures that the ASU requires public entities to provide include the title and position of the Chief Operating Decision Maker\n(“CODM”) and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance\nand deciding how to allocate resources. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in\nwhich an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with\na single reportable segment, and contain other disclosure requirements. The amendments in this ASU are effective for fiscal years beginning\nafter December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public\nentity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company\nadopted this ASU for the year ended December 31, 2024, and has disclosed significant expenses reviewed by the CODM for each reportable\nsegment, with no additional significant expenses identified beyond those presented. See Note 17, “Segment and Geographic Data”\nto the Consolidated Financial Statements.

NOTE\n4 - REVENUE RECOGNITION

Building\nSolutions Revenue Recognition

Within\nthe Building Solutions segment, we service residential and commercial construction projects by manufacturing modular housing units and\nother products, supplying general contractors with building materials and providing glue-laminated timber products (“glulam”)\nto distributors and end users. KBS manufactures modular buildings for both single-family residential homes and larger, commercial building\nprojects. EdgeBuilder manufactures structural wall panels, permanent wood foundation systems, and other engineered wood products, and\nGlenbrook is a retail supplier of lumber and other building supplies. Retail sales at Glenbrook are recognized at the point of sale.\nTT manufactures glulam for various end markets and applications, including agriculture, industrial, infrastructure, and building construction\n(commercial and residential). For bill and hold sales, we determine when the customer obtains control of the product on a case-by-case\nbasis to determine the amount of revenue to recognize each period. Revenue is generally recognized at point in time upon delivery of\nproduct or over time by measuring progress towards completion. There are no contracts as of December 31, 2025 that are subject to over\ntime recognition.

Business\nServices Revenue Recognition

We\naccount for a contract when both parties to the contract have approved the contract, the rights of the parties are identified, payment\nterms are identified, the contract has commercial substance, and collectability of consideration is probable. Revenues are recognized\nover time or as services are delivered to customers, using an input or output method, as the control of the promised services is transferred\nto the client in an amount that reflects the consideration we expect to be entitled to in exchange for those services. The majority of\nour contracts are short-term in nature as they include termination clauses that allow either party to cancel within a short termination\nperiod, without cause. Revenue includes billable travel and other reimbursable costs and is reported net of sales or use taxes collected\nfrom clients and remitted to taxing authorities.

We\ngenerally determine standalone selling prices based on the prices included in our client contracts, using expected cost plus profit,\nor other observable prices. The price as specified in our client contracts is generally considered the standalone selling price as it\nis an observable input that depicts the price as if sold to a similar client in similar circumstances. Certain client contracts have\nvariable consideration, including usage-based fees that increase the transaction price and volume rebates or other similar items that\ngenerally reduce the transaction price. We estimate variable consideration using the expected value method based on the terms of the\nclient contract and historical evidence. These amounts may be constrained and are only included in revenue to the extent we do not expect\na significant reversal when the uncertainty associated with the variable consideration is resolved. Other than bonuses to be paid to\ncontractors, on behalf of our clients, our estimated amounts of variable consideration subject to constraints are not material, and we\ndo not believe that there will be significant changes to our estimates. Certain contract employees are entitled to performance bonuses\nat the sole discretion of the client and are constrained until approved. $1.1 million in bonuses were approved and paid to our contract\nemployees in year ended December 31, 2025. No bonuses were approved and paid to our contract employees on behalf of our clients for year\nended December 31, 2024.

We\nrecord accounts receivable when our right to consideration becomes unconditional. Contract assets primarily relate to our rights to consideration\nfor services provided that such rights to consideration are conditional on satisfaction of future performance obligations. A contract\nliability for deferred revenue is recorded when consideration is received, or is unconditionally due, from a client prior to transferring\ncontrol of services to the client under the terms of a contract. Deferred revenue balances typically result from advance payments received\nfrom clients prior to transferring control of services. Other than deferred revenue, we do not have any material contract assets or liabilities\nas of and for the year ended December 31, 2025 and 2024.

264

We\nprimarily record revenue on a gross basis in the Consolidated Statements of Operations and Comprehensive Income based upon the following\nkey factors:

●We\nmaintain the direct contractual relationship with the client and are responsible for fulfilling the service promised to the client.

●We\nmaintain control over our contractors while the services to the client are being performed, including our contractors’ billing\nrates, and are ultimately responsible for paying them.

RPO.\nWe provide complete recruitment outsourcing, project-based outsourcing, and recruitment consulting services for clients’ permanent\nstaff hires. We recognize revenue for our RPO over time in an amount that reflects the consideration we expect to be entitled to and\nhave an enforceable right to payment in exchange for our services. The client simultaneously receives and consumes the benefits of the\nservices as they are provided. The transaction prices contain both fixed fees and variable consideration. Variable consideration is constrained\nby candidates accepting offers of permanent employment. We recognize revenue on fixed fees as the performance obligations are satisfied\nand variable fees as the constraint is lifted. We do not incur incremental costs to obtain our RPO contracts. The costs to fulfill these\ncontracts are expensed as incurred.

Contracting.\nWe provide clients with a range of outsourced professional contract staffing services and managed service provider services, sometimes\noffered on a standalone basis and sometimes offered as part of a blended total talent solution. We recognize revenue for our contracting\nservices over time as services are performed in an amount that reflects the consideration we expect to be entitled to and have an enforceable\nright to payment in exchange for our services, which is generally calculated as hours worked multiplied by the agreed-upon hourly bill\nrate. The client simultaneously receives and consumes the benefits of the services as they are provided. We do not incur incremental\ncosts to obtain our contracts for outsourced professional contract staffing services and managed service provider services. The costs\nincurred to fulfill these contracts are expensed as incurred.

Energy\nServices Revenue Recognition

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Billings\nin excess of costs and estimated profit. We recognize billings in excess of costs and estimated profit on uncompleted contracts\nwithin current liabilities. Such amounts relate to fixed-price contracts recognized over time, and represents payments in advance of\nperforming the related contract work. Billings in excess of costs and estimated profit on uncompleted contracts are not considered to\nbe a significant financing component because they are generally used to meet working capital demands that can be higher in the early\nstages of a contract. Contract liabilities are reduced when the associated revenue from the contract is recognized, which is generally\nwithin one year. There are no liabilities associated with billings in excess of costs at December 31, 2025.

Contract\nCosts. We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those\ncosts to be longer than one year. The Company applies a practical expedient to expense costs as incurred for these costs when the amortization\nperiod is one year or less. These costs primarily consist of internal sales commissions; under the terms of these programs these are\ngenerally earned and the costs are recognized at the time the associated revenue is recognized. As of December 31, 2025, there were no\ncontract costs recognized.

Deferred\nRevenue. Deferred revenue represents customer deposits and advanced payments for contracts that are subject to point-in-time\nrecognition, or payments received prior to transferring control of services to customers. We have determined our contracts do not include\na significant financing component.

Changes\nin deferred revenue for the year ended December 31, 2025 are as follows:

SCHEDULE\nOF CHANGES IN DEFERRED REVENUE

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Balance\n at December 31, 2024	$	129
Revenue\n recognized that was included in balance at beginning of the year		(129	)
Deferred\n revenue, net, assumed from the acquisition of Star Operating Companies		3,609
Deferred\n revenue, net, related to contracts entered into during the year		(2,113	)
Balance\n at December 31, 2025	$	1,496

Disaggregation\nof Revenue

The\nfollowing tables present our revenue disaggregated by major source for the years ended December 31, 2025 and 2024, respectively:

SCHEDULE\nOF DISAGGREGATE REVENUE

	Year\n ended December 31, 2025
	Building\n Solutions		Business\n Services			Energy\n Services		Total
Major\n Goods/Service Lines
Revenue\n from RPO Customers	$	-		$	68,379		$	-	$	68,379
Revenue\n from Contracting Customers		-			71,273			-		71,273
Revenue\n from Other Contracts with Customers		27,578			-			4,929		32,507
Total\n Revenues	$	27,578		$	139,652		$	4,929	$	172,159

Timing\n of Revenue Recognition
Services\n and goods transferred over time	$	-		$	99,386		$	3,447	$	102,833
Services\n and goods transferred at a point in time		27,578			40,266			1,482		69,326
Total\n Revenues	$	27,578		$	139,652		$	4,929	$	172,159

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\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n ended December 31, 2024
	Business\n Services
Major\n Goods/Service Lines
Revenue\n from RPO Customers	$	67,993
Revenue\n from Contracting Customers		72,063
Total\n Revenues	$	140,056

Timing\n of Revenue Recognition
Services\n and goods transferred over time	$	103,098
Services\n and goods transferred at a point in time		36,958
Total\n Revenues	$	140,056

NOTE\n5 - ACQUISITIONS

Star\nOperating Companies

On\nAugust 22, 2025, the Company completed its previously announced acquisition of SOC pursuant to the Agreement and Plan of Merger, dated\nas of May 21, 2025 (the “Merger Agreement”). This resulted in a business combination pursuant to ASC 805, Business Combinations.

The\nterms of the Merger Agreement determined consideration for the purchase as follows: at the Effective Time, (i) each share of common stock\nof SOC issued and outstanding immediately prior to the Effective Time (other than certain shares as set forth in the Merger Agreement)\nwere automatically converted into the right to receive 0.23 shares of Company common stock and (ii) each share of preferred stock of\nSOC issued and outstanding immediately prior to the Effective Time (other than certain shares set forth in the Merger Agreement) were\nautomatically converted into the right to receive one (1) share of Star 10% Series A Cumulative Perpetual preferred stock (“Preferred\nStock”). As a result of the Merger, former SOC common stockholders received approximately 744,291 shares of Star common stock for\ntheir SOC common shares and former SOC preferred stockholders received approximately 2,690,637 shares of Preferred Stock. No fractional\nshares of Star common stock were issued in the Merger, and SOC stockholders became entitled to receive cash in lieu of fractional shares\nin accordance with the Merger Agreement. The total consideration paid for SOC, which represents the fair value of the common and preferred\nstock, totaled approximately $32,174. Prior to the completion of the Merger Agreement, the Company determined that the Merger Agreement\nwas in the best interests of the Company and for each of the Star and the SOC stockholders.

In\naccordance with ASC 805, Business Combinations, we accounted for this transaction as a business combination and recorded the acquired\nassets of SOC at their estimated fair value. The valuation of assets acquired and liabilities assumed has not yet been finalized as of\nDecember 31, 2025. The purchase price allocation is preliminary and subject to change, including the valuation of property and equipment,\nintangible assets, inventory, income taxes, and goodwill, among other items. The amounts recognized will be finalized as the information\nnecessary to complete the analysis is obtained, but no later than one year after the acquisition date. Finalization of the valuation\nduring the measurement period could result in a change in the amounts recorded for the acquisition date fair value. The fair values of\nassets acquired and liabilities assumed were determined using valuation techniques consistent with ASC 820, Fair Value Measurement.\nThese fair value measurements are considered nonrecurring and were determined as of the acquisition date. As noted in Note 2, Description\nof Business, SOC is reported as part of our Building Solutions, Energy Services, and Investments segments. The Company incurred transaction\ncosts related to the SOC Acquisition of $1,600 that were expensed as part of “Office and general”.

During\nthe measurement period, the Company recorded adjustments to the preliminary purchase price allocation related to additional information\nobtained about facts and circumstances that existed as of the acquisition date. These adjustments resulted in an increase to Accrued\nexpenses and other current liabilities of $896 and a decrease to Inventory and Accounts receivable, net of $457 and $352, respectively.\nIn addition, Notes receivable, net of current portion increased by $1,705 to reflect updated information obtained during the measurement\nperiod regarding the terms and estimated fair value of the contingent consideration associated with the Catalyst acquisition.

The\nincrease in Accrued expenses and other current liabilities primarily reflects the recognition of pre-acquisition obligations consisting\nof $180 for litigation expenses, $375 of sales tax liabilities, $65 of professional fees, and $428 of current liabilities related to\ninventory management system implementation and benefit cost, partially offset by a $152 state tax refund. The decrease in Accounts receivable,\nnet relates to the write-off of a receivable that was determined not to be collectible as of the acquisition date.

267

In\nconnection with the terms of the acquisition of ADT by Star Operating Companies, Inc. on March 3, 2025, the Company agreed to pay $1.0\nmillion in cash to the former owners of ADT on or before the one-year anniversary of the acquisition date.

Related\nParty Considerations

As\ndisclosed in the Registration Statement on Form S-4, which was declared effective by the SEC on July 22, 2025, and the Joint Proxy Statement/Prospectus\nfiled with the SEC on July 23, 2025 (the “Joint Proxy Statement/Prospectus”), Jeffrey Eberwein, Hudson’s Chief Executive\nOfficer and the holder of approximately 10% of Hudson’s common stock at the time of the Merger, was also a director and substantial\nstockholder of Star Operating Companies. The number of shares of common stock issued in connection with the Merger represented in excess\nof 5% of the shares of Hudson common stock outstanding immediately prior to the Merger, and stockholders of Star Operating Companies\nimmediately prior to the Merger held approximately 21% of the outstanding shares of Hudson common stock following the consummation of\nthe Merger. Mr. Eberwein continues to serve as Chief Executive Officer and remains a significant stockholder of the Company, holding\napproximately 27% of outstanding shares of Star Equity Holdings, Inc. as of December 31, 2025.

The\nfollowing table sets forth the purchase price allocation of SOC to the estimated fair value of assets acquired as of the acquisition\ndate:

SCHEDULE\nOF BUSINESS COMBINATION RECOGNIZED ASSET ACQUIRED AND LIABILITY ASSUMED

	Fair\n Value
Assets\n Acquired:
Cash\n and cash equivalents	$	4,641
Restricted\n cash, current		597
Investments\n in equity securities		2,561
Accounts\n receivable		11,463
Inventories,\n net		9,101
Note\n receivable, current portion		269
Prepaid\n and other		1,246
Property\n and equipment, net		17,959
Operating\n lease right-of-use assets		8,608
Long\n term investments		953
Notes\n receivable, net of current portion		8,473
Restricted\n cash, non-current		1,729
Assets\n Acquired	$	67,600
Liabilities\n Assumed:
Current\n payables	$	3,203
Accrued\n salaries, commissions and benefits		2,165
Accrued\n expenses and other current liabilities		5,162
Short-term\n debt		6,042
Deferred\n revenue		3,609
Operating\n lease liabilities, current portion		228
Long-term\n debt, net of current portion		6,630

Operating\n lease liabilities, net of current portion		8,387
Liabilities\n assumed	$	35,426

Fair\n value of consideration transferred	$	32,174

The\nrevenue and net income of SOC from August 22, 2025 through December 31, 2025 totaled $32,507 and $613, respectively.

268

Unaudited\nPro Forma Financial Information

The\nfollowing unaudited consolidated pro forma information gives effect to the acquisitions of SOC as if the transactions had occurred on\nJanuary 1, 2024.

SCHEDULE OF BUSINESS COMBINATION INTANGIBLE ASSET ACQUIRED FINITE-LIVED

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Pro-forma	2025			2024
	Year\n ended December 31,
Pro-forma	2025			2024
Revenue	$	222,967			$	193,415
Gross\n Profit	$	93,995			$	81,207
Net\n loss attributable to common shareholders	$	(6,589	)		$	(17,248	)

Alpha\nConsulting Group Acquisition

On\nJuly 23, 2025, the Company announced that it had acquired Alpha Consulting Group (“ACG”) (“Seller”), a Japan-based\nprovider of recruitment services. The acquisition of ACG represents the Company’s entry into the Japanese market as part of its\nlocalization strategy for its Business Services segment. In connection with the ACG acquisition, the Seller received total $146 in cash,\nsubject to certain adjustments, at closing. There were no earn-out payment arrangements associated with the transaction. The ACG acquisition\nwas accounted for as a business combination under the acquisition method of accounting. The total purchase price of $146 consisted of\n$200 paid in cash, net of cash acquired of $14, and a working capital adjustment of negative $68. The purchase price was allocated to\nthe net tangible and intangible assets and liabilities based on their estimated fair values as of the acquisition date, with the excess\nrecorded as goodwill. The Company incurred $11 of transaction costs related to the ACG Acquisition, which were expensed as part of “Office\nand general.”

The\nCompany’s Consolidated Statements of Operations for the year ended December 31, 2025, included revenue of $254 and net loss\nof $136 from ACG.

Below\nis a summary of the fair value of the net assets acquired on the acquisition date:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Fair\n Value
Assets\n Acquired:
Cash\n and cash equivalents	$	10
Accounts\n receivable		29
Prepaid\n and other		5
Intangible\n assets		95
Goodwill		242
Restricted\n cash, non-current		4
Assets\n Acquired	$	385
Liabilities\n Assumed:
Current\n payables	$	77
Accrued\n salaries, commissions and benefits		3
Accrued\n expenses and other current liabilities		126
Deferred\n tax Liabilities		33
Liabilities\n Assumed	$	239

Fair\n value of consideration transferred	$	146

NOTE\n6 - STOCK-BASED COMPENSATION

Equity\nCompensation Plans

The\nCompany maintains the Hudson Global, Inc. 2009 Incentive Stock and Awards Plan, as amended and restated on May 24, 2016 and further amended\non September 14, 2020, May 17, 2022 and August 22, 2025 (the “ISAP”), pursuant to which it can issue equity-based compensation\nincentives to eligible participants. The ISAP permits the granting of stock options, restricted stock, restricted stock units, and other\ntypes of equity-based awards. The Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”)\nwill establish such conditions as it deems appropriate for the granting or vesting of stock options, restricted stock, restricted stock\nunits and other types of equity-based awards. As determined by the Compensation Committee, equity awards may also be subject to immediate\nvesting upon the occurrence of certain events including death, disability, retirement or a change in control of the Company. When we\nmake grants of restricted stock or restricted stock units to our executive officers, including the named executive officers, we enter\ninto Restricted Stock Agreements and Restricted Stock Unit Agreements with such executive officers that contain provisions that are triggered\nupon a termination of an executive officer or a change in control of our Company. For awards of restricted stock granted beginning on\nNovember 6, 2015, effective upon a change in control of our Company, if the executive is employed by us or an affiliate of ours immediately\nprior to the date of such change in control and is subsequently terminated within 12 months following the date of such change in control,\nthe shares of restricted stock will fully vest and the restrictions imposed upon the restricted stock will be immediately deemed to have\nlapsed. For awards of restricted stock units granted beginning on March 10, 2016, effective upon a change in control of our Company,\nif the executive is employed by us or an affiliate of ours immediately prior to the date of such change in control and is subsequently\nterminated within 12 months following the date of such change in control, the restricted stock units will fully vest and the restrictions\nimposed upon the restricted stock units will be immediately deemed to have lapsed. The Company primarily grants restricted stock and\nrestricted stock units to its employees. A restricted stock unit is equivalent to one share of the Company’s common stock and is\npayable only in common stock of the Company issued under the ISAP.

269

The\nCompensation Committee administers the ISAP and may designate any of the following as a participant under the ISAP: any officer or other\nemployee of the Company or its affiliates or individuals engaged to become an officer or employee, consultants, or other independent\ncontractors who provide services to the Company or its affiliates, and non-employee directors of the Company. On August 31, 2025, the\nCompany’s stockholders at the 2025 Annual Meeting of Stockholders approved amendments to the ISAP to, among other things, increase\nthe number of shares of the Company’s common stock that are reserved for issuance by 400,000 shares and to permit the issuance\nof 175,000 shares of the Company’s preferred stock. As of December 31, 2025, there were 337,245 shares of the Company’s common\nstock and 170,320 shares of the Company’s preferred stock available for future issuance under the ISAP.

All\nshare issuances related to stock compensation plans are issued from the aforementioned stock available for future issuance under stockholder\napproved compensation plan.

During\nthe year 2025, the Company granted 48,688 restricted stock units subject to performance vesting conditions for the year ended December\n31, 2025. In addition, the Company granted 8,918 time-vested restricted stock units to a certain employee that were not subject to performance\nconditions. The RSUs vest on the first anniversary of the grant date, with each RSU representing the right to receive one share of common\nstock upon settlement. Additionally, 66,171 time-vested restricted stock units were granted to the Global Chief Executive Officer at\nHudson Talent Solutions. During 2024, the Company granted 47,647 restricted stock units subject to performance vesting conditions and\ngranted 12,540 of discretionary time-vested restricted stock units to certain employees that were not subject to performance conditions.\nAdditionally, 70,373 time-vested restricted stock units were granted to the Global Chief Executive Officer at Hudson RPO in 2024. In\nconnection with the merger on August 22, 2025, the Company converted the unvested restricted stock unit awards previously granted under\nSOC’s equity incentive plans at the exchange ratio of 0.23 shares to 1. As of the merger date, these assumed awards consisted of\n22,717 performance-based restricted stock units and 6,046 time-based restricted stock units. The assumed awards continue to be subject\nto their original vesting terms and conditions, and are recognized as part of the Company’s ongoing stock-based compensation expense.

A\nsummary of the quantity and vesting conditions for stock-based units granted to the Company’s employees for the year ended December\n31, 2025 was as follows:

SCHEDULE OF SHARE BASED PAYMENTS ARRANGEMENT, RESTRICTED STOCK AND RESTRICTED UNIT ACTIVITY

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Vesting conditions	Number of Restricted Stock Units Granted
Performance and service conditions - Type 1 ^{(1) (2)}		13,296
Performance and service conditions - Type 2 ^{(1) (2)}		35,392
Service conditions only - Type 1 and Type 3 ^{(2) (3)}		75,089
Total shares of stock award granted		123,777

\n\n

(1)

The performance conditions with respect to restricted stock units may be satisfied as follows:

\n \n

(a) For grants to Corporate office employees subject to 2025 performance conditions, 100% of the restricted stock units may be earned on the basis of performance as measured by a “group adjusted EBITDA”.

\n\n \n \n \n

(2)

To\n the extent restricted stock units are earned, such restricted stock units will vest on the basis of\n service as follows:

\n \n

(a)\n 33% and 66.6% for Type 1 and Type 2, respectively, of the restricted stock units will vest\n on the first anniversary of the grant date;

\n \n

(b)\n 33% and 16.7% for Type 1 and Type 2, respectively, of the restricted stock units will vest\n on the second anniversary of the grant date; and

\n \n

(c)\n 34% and 16.7% for Type 1 and Type 2, respectively, of the restricted stock units will vest\n on the third anniversary of the grant date; provided that, in each case, the employee remains\n employed by the Company from the grant date through the applicable service vesting date.

270

\n\n \n \n \n

(3)

To\n the extent restricted stock units are earned, such restricted stock units will vest on the basis of\n service as follows:

\n \n

(a)\n 100% for Type 3 of the restricted stock units will vest on the first anniversary of the grant date.

The\nCompany also maintains the Director Deferred Share Plan (the “Director Plan”) as part of the ISAP pursuant to which it can\nissue restricted stock units to its non-employee directors. A restricted stock unit is equivalent to one share of the Company’s\ncommon stock, and prior to the acquisition of SOC were payable in common stock issued under the ISAP upon a director ceasing service\nas a member of the Company’s Board. Restricted stock units granted to directors vest over one year. Restricted stock units issued\nunder the Director Plan contain the right to a dividend equivalent award in the form of additional restricted stock units. The dividend\nequivalent award is calculated using the same rate as the cash dividend paid on a share of the Company’s common stock, and then\ndivided by the closing price of the Company’s common stock on the date the dividend is paid to determine the number of additional\nrestricted stock units to grant. Dividend equivalent awards have the same vesting terms as the underlying awards. During the years ended\nDecember 31, 2025 and 2024, the Company granted 54,241 and 20,284 restricted stock units to its non-employee directors pursuant to the\nDirector Plan, respectively.

As\nof December 31, 2025, 12,169 restricted stock units are deferred under the Company’s ISAP.

For\nthe years ended December 31, 2025 and 2024, the Company’s stock-based compensation expense related to restricted stock units and\nrestricted shares of common stock, which are included in the accompanying Consolidated Statements of Operations, were as follows:

SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2025		2024
	For\n The Year Ended December 31,
	2025		2024
Restricted\n stock units	$	1,497		$	1,173
Restricted\n stock units-cash settled liabilities		-			107
Total	$	1,497		$	1,280

As\nof December 31, 2025 and 2024, the Company’s unrecognized compensation expense and the weighted average periods over which the\ncompensation expense is expected to be recognized relating to the unvested portion of the Company’s restricted stock unit awards,\nwere as follows:

SCHEDULE\nOF UNRECOGNIZED COMPENSATION COST, NON VESTED AWARDS

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	As\n of December 31,
	2025		2024
	Unrecognized\n Expense		Weighted\n Average Period in Years		Unrecognized\n Expense		Weighted\n Average Period in Years
Restricted\n stock units	$	1,182		0.9		$	1,445	0.9

271

Restricted\nStock Units

Changes\nin the Company’s restricted stock units arising from grants to certain employees and non-employee directors for the years ended\nDecember 31, 2025 and 2024 were as follows:

SCHEDULE OF CHANGES IN RESTRICTED STOCK UNITS AND SHARES

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31, 2025
	Performance-based			Time-based/Director			Total
	Number\n of Shares of Restricted Stock Units			Weighted\n Average Grant-Date Fair Value			Number\n of Shares of Restricted Stock Units	Weighted\n Average Grant-Date Fair Value		Number\n of Shares of Restricted Stock Units		Weighted\n Average Grant-Date Fair Value
Unvested\n restricted stock units at January 1		55,591			$	17.58		128,474		$	14.96		184,065		$	15.75
Granted		48,688			$	13.15		129,330		$	9.74		178,018		$	10.67
SOC\n Grants assumed		22,717			$	15.17		6,046		$	14.07		28,763		$	14.94

Vested		(16,419	)		$	24.05		(63,101	)	$	13.90		(79,520	)	$	16.00
Forfeited		(48,311	)		$	14.87		(3,264	)	$	20.97		(51,575	)	$	15.26
Unvested\n restricted stock units at December 31		62,266			$	13.64		197,485		$	11.75		259,751		$	12.20

(a)\nThe number of shares earned above target are based on the performance target established by the Compensation Committee at the initial\ngrant date.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Year\n Ended December 31, 2024
	Performance-based			Time-based/Director			Total
	Number\n of Shares of Restricted Stock Units			Weighted\n Average Grant-Date Fair Value			Number\n of Shares of Restricted Stock Units	Weighted\n Average Grant-Date Fair Value		Number\n of Shares of Restricted Stock Units		Weighted\n Average Grant-Date Fair Value
Unvested\n restricted stock units at January 1		95,264			$	23.49		80,422		$	16.50		175,686		$	20.29
Granted		47,647			$	14.51		103,197		$	15.03		150,844		$	14.87

Vested		(58,479	)		$	22.40		(54,465	)	$	17.21		(112,944	)	$	19.90
Forfeited		(28,841	)		$	22.27		(680	)	$	27.16		(29,521	)	$	22.38
Unvested\n restricted stock units at December 31		55,591			$	17.58		128,474		$	14.96		184,065		$	15.75

(a)\nThe number of shares earned above target are based on the performance target established by the Compensation Committee at the initial\ngrant date.

(a)\nThe number of shares earned above target are based on the performance targets established by the Compensation Committee at the initial\ngrant date.

The\ntotal fair value of restricted stock units vested during the years ended December 31, 2025 and 2024 were as follows:

SCHEDULE OF FAIR VALUE OF INSTRUMENT VESTED

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n

		2025		2024
	For\n The Year Ended December 31,
		2025		2024
Fair\n value of restricted stock units vested	$	1,112	$	1,693

272

NOTE\n7 - INCOME TAXES

Income\nTax Provision

The\ndomestic and foreign components of net income before provision for income taxes is as follows:

SCHEDULE OF FOREIGN AND DOMESTIC INCOME BEFORE TAX

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2025			2024
	Year\n ended December 31,
	2025			2024
Domestic	$	(3,725	)		$	(31,531	)
Foreign		(131	)			28,061
(Loss)\n income before provision for income taxes	$	(3,856	)		$	(3,470	)

The\ncomponents of the provision for (benefit from) income taxes are as follows:

SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT)

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2025		2024
	Year ended December 31,
	2025		2024
Current tax provision (benefit):
U.S. Federal	$	-		$	-
State and local		31			(15	)
Foreign		1,088			783
Total current provision for (benefit from) income taxes		1,119			768
Deferred tax provision (benefit):
U.S. Federal		-			-
State and local		-			-
Foreign		942			532
Total deferred provision (benefit) from income taxes		942			532
Total provision for income taxes	$	2,061		$	1,300

SCHEDULE OF CASH FLOW, SUPPLEMENTAL DISCLOSURES

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Other [Member]	Year\n ended December 31,
	2025
Income\n taxes paid:
U.S.\n Federal	$	95
State\n and local		163
Foreign
Australia		1,233
U.K.		233
India		134
Other		37
Total\n Foreign		1,637
Total\n income taxes paid	$	1,895

Tax\nRate Reconciliation

The\neffective tax rate (“ETR”) for the year ended December 31, 2025 was negative 53.4%, compared to negative 37.5% for 2024.\nFor the year ended December 31, 2025, the effective tax rates differed from the U.S. federal statutory rate of 21% primarily due to pre-tax\nlosses for which no tax benefit can be recognized, changes in valuation allowances in the U.S. and certain foreign jurisdictions that\nreduce or eliminate the ETR on current year profits or losses, foreign tax rate differences, and non-deductible expenses. For the year\nended December 31, 2024, the effective tax rates differed from the U.S. federal statutory rate of 21% primarily due to pre-tax losses\nfor which no tax benefit can be recognized, changes in valuation allowances in the U.S., China, and certain foreign jurisdictions that\nreduce or eliminate the ETR on current year profits or losses, foreign tax rate differences, and non-deductible expenses. The current\nyear ETR differs significantly from the prior year ETR primarily due to the interaction of similar rate reconciliation items, including\nchange in valuation allowance, combined with a shift in the geographic mix of earnings toward higher-tax jurisdictions, including Australia.

273

The\nfollowing is a reconciliation of the effective tax rate for the year ended December 31, 2025 to the U.S. federal statutory rate of 21%:

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION


	Year\n ended December 31, 2025
	Amount			Percent
US\n federal statutory income tax rate	$	(810	)		21.0	%
Domestic\n federal
Nontaxable\n and nondeductible items
Nondeductible\n employee compensation		151			(3.9	)%
Nondeductible\n professional fees		471			(12.2	)%
Nondeductible\n share based compensation		376			(9.7	)%
Other		149			(3.9	)%
Changes\n in valuation allowance		(9,188	)		238.2	%
Operating\n losses expired		8,833			(229.0	)%
Domestic\n state and local income taxes, net of federal effect¹		32			(0.8	)%
Foreign\n tax effects
United\n Arab Emirates
Changes\n in valuation allowance		329			(8.5	)%
Australia
Statutory\n income tax rate differential		385			(10.0	)%
Noncreditable\n withholding tax		41			(1.1	)%
United\n Kingdom
Deferred\n investment impairment true-up and NOL carryback		1,111			(28.8	)%
Other		13			(0.3	)%
Other\n foreign jurisdictions		162			(4.2	)%
Statutory\n income tax rate differential / Other\n foreign jurisdictions		162			(4.2	)%
Worldwide\n changes in unrecognized tax benefits		6			(0.2	)%
Uncertain\n tax positions
Prior\n period adjustments
Permanent\n differences and other
Provision\n for income taxes	$	2,061			(53.4	)%

\n\n

State and local\nincome taxes in Pennsylvania and Texas comprise the majority of the domestic state and local income taxes, net of federal effect category.

The\nfollowing is a reconciliation of the effective tax rate for the year ended December 31, 2024 to the U.S. federal statutory rate of 21%:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n

	Year\n ended December 31,
	2024
Provision\n at federal statutory rates	$	(729	)
State\n income taxes, net of federal benefit		1,133
Domestic\n state and local income taxes, net of federal effect		1,133
Change\n in valuation allowance		6,817
Taxes\n related to foreign income		(1,506	)
Statutory income tax rate differential / Other foreign jurisdictions		(1,506	)
Non-deductible\n expenses		(4,943	)
Other / Non-deductible expenses		(4,943	)
Uncertain\n tax positions		6
Prior\n period adjustments		395
Permanent\n differences and other		127
Provision\n for income taxes	$	1,300

274

Deferred\nTaxes Assets (Liabilities)

Deferred\nincome taxes are provided for the tax effect of temporary differences between the financial reporting basis and the tax basis of assets\nand liabilities. Net deferred tax assets have been reported as non-current in the accompanying Consolidated Balance Sheets. Significant\ntemporary differences at December 31, 2025 and 2024 are as follows:

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2025			2024
	As\n of December 31,
	2025			2024
Deferred\n tax assets (liabilities):
Allowance\n for expected credit losses	$	89			$	108
Property\n and equipment		(7,383	)			(170	)
Goodwill\n and intangibles		4,863				714
Accrued\n compensation		1,417				1,786
Accrued\n liabilities and other		4,607				29
Loss\n carryforwards		65,855				73,672
Deferred\n tax assets before valuation allowance		69,448				76,139
Valuation\n allowance		(67,537	)			(73,491	)
Deferred\n tax assets, net of valuation allowance	$	1,911			$	2,648

As\na result of the enactment of the Tax Act, the Company has provided tax on GILTI, and therefore, future repatriations of previously unremitted\nforeign earnings are expected to either be exempt from U.S. taxation or offset by net operating losses (“NOLs”). The Company\nhas not provided any withholding tax with respect to unremitted foreign earnings at December 31, 2025 and December 31, 2024.

On\nJuly 4, 2025, the One Big Beautiful Bill (OBBB) Act, which includes a broad range of tax reform provisions, was signed into law in the\nUnited States. The OBBB Act did not have a material impact on our annual effective tax rate in 2025 and we do not expect it to have a\nmaterial impact in 2026.

Net\nOperating Losses (“NOLs”), Capital Losses, and Valuation Allowance

At\nDecember 31, 2025, the Company had losses for U.S. federal and state tax purposes of approximately $239,961 consisting of U.S. federal\nand state NOLs incurred through December 31, 2025 of $215,405 and U.S. federal and state capital losses of $24,556 as a result of the\nHEBV liquidation. U.S. federal NOLs incurred through December 31, 2017 expire at various dates through 2037 with $22,867 scheduled to\nexpire during 2025. U.S. federal and State NOLs incurred in or after 2018 have an indefinite carryforward period, which can be offset\nby 80% of future taxable income in any given year. U.S. federal and state capital losses incurred in 2024 will expire after five years\nduring 2029.

The\nCompany’s utilization of U.S. NOLs is subject to an annual limitation imposed by Section 382 of the Internal Revenue Code (“IRC”),\nwhich may limit our ability to utilize all the existing NOLs before the expiration dates.

Based\nupon IRC Section 382 studies prepared by the Company, Section 382 ownership changes have occurred that will result in $224,124 of the\nCompany’s federal and state NOLs generated through December 2006 and recognized built-in losses during the 5five-year period after\nDecember 2006 being subject to IRC Section 382 limitations. As a result of IRC Section 382 limitations, $22,131 of the $224,124 NOLs\nthat are limited are expected to expire prior to utilization specifically as a result of the IRC Section 382 cumulative annual limitations.

In\naddition, based upon an IRC Section 382 study prepared by Star Operating Companies Inc (SOC), a Section 382 ownership change occurred\ndue to the merger which will result in $82,338 of SOC’s federal and State NOLs generated through August 2025 and recognized built-in\nlosses during the 5five-year period after August 2025 being subject to IRC Section 382 limitations. As a result of IRC Section 382 limitations,\n$68,350 of the $82,338 that are limited are expected to expire prior to utilization specifically as a result of the IRC Section 382 cumulative\nannual limitations.

Accordingly,\nthe U.S. federal and state NOLs of $239,961, as indicated above, excluded the $90,481 of tax losses expected to expire prior to utilization\ndue to IRC Section 382 cumulative annual limitations and the deferred tax asset for loss carryforwards of $61,759 also excluded $23,428\nof related tax benefits.

As\nof December 31, 2025, certain international subsidiaries had NOLs for local tax purposes of $19,588. With the exception of $14,504 of\nNOLs with an indefinite carry forward period as of December 31, 2025, these losses will expire at various dates through 2026 to 2045,\nwith $4 scheduled to expire during 2026. The deferred tax recognized for NOLs are presented net of unrecognized tax benefits, where applicable.

275

ASC\n740-10-30-5 requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax\nasset will not be realized. In making this assessment, management considers the level of historical taxable income, scheduled reversals\nof deferred tax liabilities, tax planning strategies, and projected future taxable income. As of December 31, 2025, $63,090 of the valuation\nallowance relates to the deferred tax asset was comprised of NOLs for U.S. capital losses of $5,984, U.S. federal and state NOLs of $55,775,\nand foreign NOLs of $1,331, that management has determined will more likely than not expire prior to realization. The remaining valuation\nallowance of $4,447 relates to deferred tax assets on U.S. and foreign temporary differences that management estimates will not be realized\ndue to the Company’s U.S. and foreign tax losses.

Uncertain\nTax Positions

A\nreconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties is as follows:

SCHEDULE OF INCOME TAX CONTINGENCIES

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2025		2024
Balance,\n beginning of year	$	60		$	60
Additions\n for tax positions of current years		-			-
Additions\n for tax positions of prior years		-			-
Reductions\n for tax positions of prior years		-			-
Expiration\n of applicable statutes of limitations		-			-
Balance,\n end of year	$	60		$	60

The\ntotal amount of state and local and foreign unrecognized tax benefits that, if recognized, would affect the effective tax rate was $60\nas of both December 31, 2025 and December 31, 2024, exclusive of interest and penalties.

The\nCompany recognizes accrued interest and penalties related to unrecognized tax benefits as part of the provision for income taxes. As\nof December 31, 2025 and December 31, 2024, the Company had $39 and $33, respectively, of accrued interest and penalties associated with\nunrecognized tax benefits.

In\nmany cases, the Company’s unrecognized tax benefits are related to tax years that remain subject to examination by the relevant\ntax authorities. Tax years with NOLs remain open until such losses expire or the statutes of limitations for those years when the NOLs\nare used or expire. As of December 31, 2025, the Company’s open tax years which remain subject to examination by the relevant tax\nauthorities, are between 2015 and 2025, depending on the jurisdiction.

The\nCompany believes that its unrecognized tax benefits as of December 31, 2025 are appropriately recorded for all years subject to examination\nabove.

NOTE\n8 - ACCOUNTS RECEIVABLE, NET

Accounts\nreceivable balances are composed of trade and unbilled receivables. Unbilled accounts receivable represent revenue recorded in advance\nof processing formal invoices pursuant to the completion of contract provisions and, generally, become billable at contractually specified\ndates. Unbilled receivables of $6,960 and $5,925 as of December 31, 2025 and 2024, respectively, are expected to be invoiced and collected\nwithin one year. The Company records accounts receivable when its right to consideration becomes unconditional. Contract assets primarily\nrelate to our rights to consideration for services provided that they are conditioned on satisfaction of future performance obligations.\nAccounts receivable, net, are stated at the amount the Company expects to collect, which is net of estimated losses resulting from the\ninability of its customers to make required payments.

The\nCompany generally establishes customer credit limits and estimates the allowance for credit losses on a country or geographic basis.\nCustomer credit limits are based upon an initial evaluation of the customer’s credit quality, and we adjust that limit accordingly\nbased upon ongoing credit assessments of the customer, including payment history and changes in credit quality. Consistent with our adoption\nof ASU 2016-13, effective January 1, 2023 (refer to Note 2 - Summary of Significant Accounting Policies), the allowance for expected\ncredit losses is determined based on an assessment of past collection experience as well as consideration of current and future economic\nconditions and changes in our customer collection trends.

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The\nfollowing table summarizes the components of “Accounts receivable, net” as presented on the Consolidated Balance Sheets:

SCHEDULE OF ACCOUNTS RECEIVABLE, NET AND TOTAL PROVISION FOR EXPECTED CREDIT LOSSES AND WRITE-OFFS

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n


	As\n of December 31,
Accounts\n Receivable:	2025			2024
Billed\n receivables	$	28,535			$	14,559
Unbilled\n receivables		6,960				5,925
Accounts\n Receivable, Gross	$	35,495			$	20,484
Allowance\n for expected credit losses		(275	)			(391	)
Accounts\n Receivable, Net	$	35,220			$	20,093

The\nfollowing table summarizes the total provision for expected credit losses and write-offs:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n


	For\n The Year Ended December 31,
	2025			2024
Beginning\n balance	$	391			$	378
Provision\n for expected credit losses		103				24
Write-offs\n and other		(317	)			(11	)
Allowance\n for expected credit losses, assumed from the acquisition of Star Operating Companies		98				-
Ending\n Balance	$	275			$	391

NOTE\n9 – DEBT

A\nsummary of debt outstanding as of December 31, 2025 is as follows:

SCHEDULE OF DEBT OUTSTANDING


	December\n 31, 2025
	Amount		Weighted-Average\n Interest Rate

Revolving\n Credit Facility - Premier EBGL	$	3,969		7.25	%
Revolving\n Credit Facility - Austin ADT		1,205		9.25	%
Revolving\n Credit Facility - NAB		1,385		7.36	%
Total\n Short-term Revolving Credit Facilities		6,559		7.64	%

Austin\n - ADT Term Loan		160		9.25	%
Term\n Loan Secured by Mortgage		354		7.50	%
Bridgewater\n - TT Term Loan		1,400		7.85	%
Total\n Short-term Debt		8,473		7.70	%

Austin\n - ADT Term Loan, net of current portion		359		9.25	%
Term\n Loan Secured by Mortgage, net of current portion		2,320		7.50	%
Bridgewater\n - TT Term Loan, net of current portion		3,377		7.85	%
Long\n Term Debt, net of current portion		6,056		7.80	%

Total\n Debt	$	14,529		7.74	%

Austin\nLoan Agreement

On\nMarch 3, 2025, ADT entered into a Loan and Security Agreement (the “Austin Loan Agreement”) with Austin Financial Services,\nInc. (“Austin” or “AFS”) providing ADT with a working capital line of credit of up to $3,000 and a term loan\noriginally proposed of up to $800, subject to the conditions and procedures set forth in the Austin Loan Agreement. Availability under\nthe Austin Loan Agreement is based on a formula tied to ADT’s eligible accounts receivable, inventory, and equipment, and borrowings\nbear interest at the prime rate plus 1.75%, with interest payable monthly and the outstanding principal balance payable March 3, 2028\n(the “Maturity Date”). Based on AFS’s appraisal of ADT’s machinery and equipment, AFS reduced the term loan commitment\nto $638. The Austin Loan Agreement also provides for certain fees payable to Austin during its term. The term loan payment is approximately\n$13 per month. The loan is secured by substantially all of the assets of ADT and is subject to certain covenants. Under the terms of\nthe AFS loan agreement, ADT is required to provide various financial and collateral reports to the lender on a regular basis. These reports\ninclude weekly availability and cash activity summaries, monthly accounts receivable and accounts payable aging, inventory reports, balance\nsheets, and income statements, as well as annual financial statements reviewed by an independent CPA, if requested. ADT must also provide\nany additional financial or operational information upon the lender’s request.

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There\nare no specific financial covenants related to ratios, thresholds, or performance metrics under the AFS facility. However, failure to\ntimely submit the required financial reports constitutes an event of default under the loan agreement.

Premier\nFacility

On\nAugust 16, 2023, EdgeBuilder and Glenbrook (referred to herein as the “EBGL Borrowers”), entered into a Revolving Credit\nLoan Agreement with Premier Bank (“Premier”), which was subsequently amended on December 5, 2023 to provide the EBGL Borrowers\nwith a working capital line of credit of up to $6,000 (the “Premier Loan Agreement”). Availability under the Premier Loan\nAgreement is based on a formula tied to the EBGL Borrowers’ eligible accounts receivable, inventory, and equipment. Borrowings\nunder the Premier Loan Agreement bear interest at the Wall Street Journal Prime rate plus 0.50% (and a minimum interest rate of 6.75%),\nwith interest payable monthly and the outstanding principal balance payable upon expiration of the term of the Premier Loan Agreement.\nThe Premier Loan Agreement also provides for certain fees payable to Premier during its term. The initial term of the Premier Loan Agreement\nexpired on December 05, 2024 but may be extended from time to time at the request of the EBGL Borrowers, subject to approval by Premier.\nThe term of the Premier Loan Agreement has been extended to December 05, 2026. The EBGL Borrowers’ obligations under the Premier\nLoan Agreement are guaranteed by the Company and secured by all of their inventory, equipment, accounts receivable, and other intangibles.\nAs of December 31, 2025, availability under the Premier Loan Agreement was approximately $1,813. Premier holds $600 of the Company’s\nrestricted cash associated with the Premier Facility.

Financial\ncovenants associated with the Premier Loan Agreement require that the EBGL Borrowers annually maintain (a) a debt service coverage ratio\nfor any calendar year of greater than 1.25; (b) a debt-to-equity ratio at the end of each calendar year less than 1.65; (c) a fixed charge\ncoverage ratio at the end of each calendar year of greater than 1.10; (d) working capital of at least $2 million; and (e) a current ratio\nof at least 1.50. As of December 31, 2025 the EBGL Borrowers were in compliance with all Premier Loan Agreement covenants except the\ndebt-to-equity covenant, which was impacted by the August 22, 2025 Merger Agreement.

KeyBank\nFacility

On\nApril 24, 2024, KBS entered into a Loan and Security Agreement (the “KeyBank Loan Agreement”) with KeyBank National Association\n(“KeyBank”) providing KBS with a working capital line of credit of up to $4.0 million, subject to the conditions and procedures\nset forth in the KeyBank Loan Agreement. All borrowings under the KeyBank Loan Agreement bear interest at the Adjusted Daily SOFR Rate\n(as defined in the KeyBank Loan Agreement) plus 3%, with interest payable monthly and the outstanding principal balance payable on April\n30, 2025 (the “Maturity Date”). The KeyBank Loan Agreement expires on the Maturity Date but may be extended from time to\ntime at the request of KBS, subject to approval by KeyBank. SOC signed an extension on July 29, 2025 extending the Maturity Date to July\n29, 2026. The KeyBank Loan Agreement also provides for certain fees payable to KeyBank. KBS’ obligations under the KeyBank Loan\nAgreement are guaranteed by SOC and secured by all of KBS’ inventory, equipment, accounts and other intangibles, if applicable,\nand all proceeds of the foregoing. Simultaneous with the execution of the KeyBank Loan Agreement, SOC entered into that certain Guaranty,\ndated April 24, 2024 (the “Guaranty”), pursuant to which SOC agreed to guarantee all amounts borrowed by KBS under the KeyBank\nLoan Agreement.

A\nfinancial covenant associated with KeyBank Loan Agreement requires that KBS maintains a ratio of its Operating Cash Flow to its Total\nFixed Charges of at least 1.25 to 1.00 measured quarterly (the “FCCR Covenant”). As of December 31, 2025, KBS was in compliance\nwith the FCCR covenant. The balance outstanding under the line was $0 as of December 31, 2025.

Term\nLoan Secured by Mortgage

On\nJune 28, 2024, in connection with SOC’s acquisition of substantially all of the assets used in the business of Timber Technologies,\nInc. which closed on May 17, 2024, Timber Properties, LLC (“Timber Properties”), an affiliate of the Seller, sold to 106\nBremer, LLC, a wholly owned subsidiary of the Company (“106 Bremer”), all of Timber Properties’ Owned Real Property\npursuant to a Real Estate Sales Agreement for $3,000 plus closing costs.

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In\nconnection with the purchase of the Owned Real Property, on June 28, 2024, 106 Bremer issued a Promissory Note in the principal amount\nof $3,000 (the “TT Property Note”) secured by a Mortgage (the “TT Property Mortgage”) on the Owned Real Property\nto Timber Properties. All borrowings under the TT Property Note bear interest at 7.50%, with interest payable quarterly and the outstanding\nprincipal balance payable on June 29, 2034.

Bridgewater\nFacility

In\nconnection with the completion of the TT Acquisition, on May 17, 2024, Timber Technologies Solutions, Inc., a wholly owned subsidiary\nof SOC, (the “Borrower”), entered into a Loan Agreement (the “Bridgewater Loan Agreement”) with Bridgewater Bank\n(“Bridgewater”) and issued a Term Promissory Note to Bridgewater in the amount of $7,000 thereunder (the “Facility”).\nAll borrowings under the Facility bear interest at 7.85%, with interest payable monthly and the outstanding principal balance payable\non May 20, 2029 (the “Maturity Date”). The Bridgewater Loan Agreement also provides for certain fees payable to Bridgewater\nduring its term. The Borrower’s obligations under the Facility are guaranteed by the Company and secured by all of the Borrower’s\ninventory, equipment, accounts receivable, and other intangibles.

In\nconnection with the Bridgewater Loan agreement, an amount of $1,000 was required to be deposited with Bridgewater and be under the sole\ndominion and control of Bridgewater, and SOC shall not have any control over the use of, or any right to withdraw any amount of the restricted\ndeposit. In the event that SOC maintains compliance with all of the financial covenants set forth in the Bridgewater Loan Agreement for\nfour consecutive measurement dates, Bridgewater shall release a portion of the deposit. As of December 31, 2025 Bridgewater released\n$500. The remaining $500 deposit is recorded in Restricted cash-non current in the Consolidated Balance Sheets.

Financial\ncovenants require that TT maintain (i) a ratio of Cash Flow to Total Fixed Charges of not less than 1.30 to 1.00 as measured on each\napplicable Measurement Date on a trailing twelve (12) month basis; (ii) maintain a ratio of Senior Funded Debt to trailing twelve (12)\nmonth Adjusted EBITDA not to exceed 3.00 to 1.00 as measured on each applicable Measurement Date for a Measurement Period; (iii) maintain\na ratio of Total Funded Debt to trailing twelve (12) month adjusted EBITDA not to exceed 4.00 to 1.00 as measured on each applicable\nMeasurement Date for a Measurement Period. TT was in compliance with its covenants as of December 31, 2025.

Invoice\nFinance Credit Facility

On\nApril 8, 2019, the Business Services segment’s Australian subsidiary (“Australian Borrower”) entered into an invoice\nfinance credit facility agreement (the “NAB Facility Agreement”) with National Australia Bank Limited (“NAB”).\nThe NAB Facility Agreement provides the Australian Borrower with the ability to borrow funds based on a percentage of eligible trade\nreceivables up to a maximum of 4 million Australian dollars. No receivables have terms greater than 90 days, and any risk of loss is\nretained by the Australian Borrower. The interest rate is calculated as the variable receivable finance indicator rate, plus a margin\nof 1.60% per annum. Borrowings under this facility are secured by substantially all of the assets of the Australian Borrower. The NAB\nFacility Agreement does not have a stated maturity date and can be terminated by either the Australian Borrower or NAB upon 90 days written\nnotice. As of December 31, 2025, there were no amounts outstanding under the NAB Facility Agreement. Interest expense and fees incurred\non the NAB Facility Agreement were $32 and $17 for the years ended December 31, 2025 and 2024, respectively.

The\nNAB Facility Agreement contains various restrictions and covenants for the Australian Borrower including (1) that EBITDA must be at least\ntwo times total interest paid on debt on a 12-month rolling basis; (2) minimum tangible net worth must be at least 2.5 million Australian\ndollars and be equal to at least 25% of total tangible assets on June 30 and December 31 (as defined in the NAB Facility Agreement);\nand (3) additional periodic reporting requirements to NAB. The Australian Borrower was in compliance with all financial covenants under\nthe NAB Facility Agreement as of December 31, 2025.

Amounts\nborrowed from the NAB Facility may be large, contain short maturities and have quick turnovers. Amounts borrowed and repaid are presented\non a net basis on the Consolidated Statements of Cash Flows.

On\nMay 25, 2022, Hudson Global Resources (Singapore) Pte. Ltd. (“Singapore Borrower”), which the Company acquired on October\n31, 2023, and the Hong Kong and Shanghai Banking Corporation Limited (“HSBC”), entered into an invoice finance credit facility\nagreement (the “HSBC Facility Agreement”). The HSBC Facility Agreement allows the Singapore Borrower to borrow funds up to\na maximum of 1 million Singapore dollars, based on a percentage of eligible trade receivables. All receivables have a term of no more\nthan 60 days, and any risk of loss is borne by the Singapore Borrower. The interest rate is calculated as the bank’s external cost\nof capital, plus a margin of 3.5% per annum. The Company ended the HSBC Facility Agreement in May 2024. As a result, no interest expense\nor fees were incurred during the year ended December 31, 2025. Interest expense and fees incurred on the HSBC Facility Agreement were\n$6 for the year ended December 31, 2024.

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NOTE\n10- GOODWILL AND INTANGIBLE ASSETS

Goodwill

For\nthe years ended December 31, 2025 and 2024, the changes in carrying amount of goodwill were as follows:

SCHEDULE OF GOODWILL

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Carrying\n Value
	2025			2024
Goodwill,\n January 1	$	5,703			$	5,749
Acquisition		242				-
Currency\n translation		(1	)			(46	)
Goodwill,\n December 31	$	5,944			$	5,703

On\nOctober 1, 2025, the Company applied ASC 350, and performed quantitative assessments to determine whether it was more likely than\nnot that the fair value of its reporting units was less than their carrying values. To estimate the fair value of these reporting units,\nthe Company used both an income approach and a market approach. The income approach required management to make significant estimates\nand judgments regarding future cash flows that were based on a number of factors including actual operating results, forecasted revenue\nand expenses, discount rate assumptions, and long-term growth rate assumptions. The market approach required the use of multiples based\non financial metrics for both acquisitions and peer group companies. The Company did not recognize any impairment of goodwill related\nto these acquisitions. At the conclusion of its assessment, the Company determined the fair value of the reporting units exceeded their\ncarrying values. As such, the Company determined that no impairm