Star Equity (STRR) - 2024 Q4 - Annual Results

Transaction Structure - The aggregate consideration for the transfer of Membership Interests includes $4,900,000 in cash and 775,000 shares of Series A Preferred Stock[15]. - The restructuring involved the formation of a Parent Company and the contribution of 100$1,000,000 in Cash Escrow and 100,000 shares of Escrow Stock for indemnification obligations[18]. - The Working Capital Escrow Amount is set at $250,000, which will also be held in a segregated account[18]. - The Estimated Closing Debt, Estimated Closing Cash on Hand, and Estimated Closing Transaction Expenses must be prepared and delivered by the Seller Representative at least three business days prior to the Closing Date[19]. - The Purchaser is required to deliver a Closing Balance Sheet and Purchaser Closing Statement within 120 calendar days of the Closing Date[20]. - If the Seller Representative disputes the Purchaser Closing Statement, they must provide a Dispute Notice within 30 calendar days[23]. - The final Purchase Price will be determined based on the Final Net Working Capital, Final Cash on Hand, Final Debt, and Final Transaction Expenses[26]. - If the Adjustment Amount is positive, the Purchaser will pay each Seller their Pro Rata Percentage of the Adjustment Amount within five calendar days[27]. - In the case of a negative Adjustment Amount, the Purchaser will disburse from the Working Capital Escrow Funds to cover the amount owed[28]. - Interest will accrue on any unpaid amounts at a rate of 8$25,000[166]. - No Material Customers or Suppliers have terminated or materially modified their relationships with the Company since December 31, 2023[172]. - The Company is in compliance with all applicable laws and has not received any notices of violations in the past three years[173]. - The Company has not engaged in any Affiliate Transactions that deviate from standard arms-length terms[178]. - The Company has implemented reasonable steps to safeguard the integrity and security of its Information Systems[180]. - The Company has not made claims in excess of current insurance coverage[164]. - The Company has not received any written notice of default under any insurance policy[164]. Seller and Purchaser Representations - Each Seller has the requisite power and authority to enter into the Agreement and consummate the transactions without the consent of any other person[183]. - The Membership Interests owned by each Seller are free from any encumbrances, except for restrictions under federal or state securities laws[186]. - There are no pending or threatened litigations against the Sellers related to their ownership of Membership Interests or the transactions contemplated by the Agreement[187]. - Each Seller does not have any claims against the Company arising from facts existing prior to the Closing, excluding vested benefits under employee benefits[188]. - Each Seller is an accredited investor and is acquiring Series A Preferred Stock for its own account, not for distribution or resale[191]. - The Purchaser has all requisite power and authority to execute and deliver the Agreement and consummate the transactions[195]. - No consent or approval from any governmental entity is required for the execution and delivery of the Agreement by the Purchaser[198]. - There are no pending or threatened proceedings against the Purchaser that would impair its ability to consummate the purchase of Membership Interests[199]. - No broker or finder is entitled to any commission or finder's fee in connection with the Agreement or the transactions as a result of Purchaser's actions[200].