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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As filed with the Securities and Exchange Commission
on December 30, 2021</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Registration No.&nbsp;333- </B>&nbsp;</P>

<!-- Field: Rule-Page --><DIV STYLE="margin-top: 1pt; margin-bottom: 1pt; width: 100%"><DIV STYLE="font-size: 1pt; border-top: Black 3.5pt solid; border-bottom: Black 1pt solid">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM S-1</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REGISTRATION STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>under the Securities Act of 1933</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>



<P STYLE="font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Star Equity Holdings, Inc.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact Name of Registrant as Specified in its Charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font-size: 10pt; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 34%; padding-left: 10pt; font-size: 10pt; text-align: center; text-indent: -10pt"><FONT STYLE="font-size: 10pt"><B>Delaware</B><BR>
(State or Other Jurisdiction of<BR>
Incorporation or Organization)</FONT></TD>
    <TD STYLE="width: 33%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>3845</B><BR>
    (Primary Standard Industrial<BR>
    Classification Number)</P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD STYLE="width: 33%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>33-0145723</B><BR>
(I.R.S. Employer<BR>
Identification No.)</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Star Equity Holdings, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>53 Forest Avenue, Suite 101</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Old Greenwich, Connecticut 06870</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Tel: (203) 489-9500</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address, including zip code, and telephone number,
including area code, of Registrant&rsquo;s principal executive offices)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Jeffrey E. Eberwein</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Executive Chairman</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Star Equity Holdings, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>53 Forest Avenue, Suite 101</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Old Greenwich, Connecticut 06870</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Tel: (203) 489-9500</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name, address, including zip code, and telephone
number, including area code, of agent for service)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Copies to:</B>&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font-size: 10pt; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-align: center; text-indent: -10pt"><B>Spencer G.
Feldman, Esq.</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-align: center; text-indent: -10pt"><B>Kenneth A.
Schlesinger, Esq.</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-align: center; text-indent: -10pt"><B>Olshan Frome
Wolosky&nbsp;LLP<BR>
1325 Avenue of the Americas, 15<SUP>th</SUP>&nbsp;Floor<BR>
New York, New York 10019<BR>
(212)&nbsp;451-2300</B></P></TD>
    <TD STYLE="width: 50%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Mitchell Nussbaum, Esq.</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Angela Dowd, Esq.</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Loeb &amp; Loeb LLP</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>345 Park Avenue</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>New York, New York 10154</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(212) 407-4000</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>Approximate date of commencement of proposed
sale to the public: As soon as practicable after the effective date of this Registration Statement.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act of 1933, check the following
box. &#9746;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If this Form is filed to register additional securities
for an offering pursuant to Rule&nbsp;462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. &#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(c) under the Securities Act, check the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering. &#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(d) under the Securities Act, check the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering. &#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Indicate by check mark whether the registrant is
a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of &ldquo;large accelerated filer,&rdquo; &ldquo;accelerated filer,&rdquo; &ldquo;smaller reporting company&rdquo;
and &ldquo;emerging growth company&rdquo; in Rule&nbsp;12b-2 of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font-size: 10pt; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%; padding-left: 10pt; font-size: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 10pt">Large&nbsp;Accelerated&nbsp;Filer &#9744;</FONT></TD>
    <TD STYLE="width: 21%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">Accelerated&nbsp;Filer &#9744;</FONT></TD>
    <TD STYLE="width: 25%; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">Non-Accelerated&nbsp;Filer &#9746;</FONT></TD>
    <TD STYLE="width: 29%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Smaller&nbsp;Reporting&nbsp;Company &#9746;</P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Emerging Growth Company &#9744;</P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"></P></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section&nbsp;7(a)(2)(B) of the Securities Act. &#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CALCULATION OF REGISTRATION FEE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 72%; border-top: Black 1.5pt double; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Title of Each Class of Securities<BR>
to be Registered</B></FONT></TD>
    <TD STYLE="width: 14%; border-top: Black 1.5pt double; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Proposed Maximum<BR>
Aggregate Offering Price(1)(2)</B></FONT></TD>
    <TD STYLE="width: 14%; border-top: Black 1.5pt double; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amount of<BR>
Registration Fee(3)</B></FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Common stock, par value $0.0001 per share<SUP>(1) (5)</SUP></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">$17,250,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">$1,599.08</FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Pre-funded warrants, each warrant exercisable for one share of common stock<SUP>(4) (5)</SUP></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Shares of common stock issuable upon exercise of the pre-funded warrants to purchase shares of common stock<SUP>(5) (7)</SUP></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Common stock purchase warrants to purchase shares of common stock<SUP>(8)</SUP></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Common stock underlying common stock purchase warrants<SUP>(7) (8)</SUP></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">10,781,250</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">999.42</FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Underwriter&rsquo;s warrant to purchase shares of common stock<SUP>(6)</SUP></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">Common stock issuable upon exercise of the underwriter&rsquo;s warrant<SUP>(7)</SUP></FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">474,375</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">43.97</FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1.5pt double"><FONT STYLE="font-size: 10pt">Total</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1.5pt double; text-align: center"><FONT STYLE="font-size: 10pt">$28,505,625</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; text-align: center"><FONT STYLE="font-size: 10pt">$2,642.47</FONT></TD></TR>
  </TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">Includes shares to cover the exercise of the over-allotment option granted to the underwriter.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">Estimated solely for the purpose of calculating the amount of the registration fee in accordance with
Rule 457(o) under the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;). Includes the offering price of any additional
securities that the underwriter has the option to purchase. In accordance with Rule 457(o) under the Securities Act, the number of securities
being registered and the proposed maximum offering price per pre-funded warrant and per common stock purchase warrant are not included
in this table.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(4)</TD><TD STYLE="text-align: justify">No separate fee is required pursuant to Rule 457(i) of the Securities Act.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(5)</TD><TD STYLE="text-align: justify">The proposed maximum aggregate offering price of the common stock proposed to be sold in the offering
will be reduced on a dollar-for-dollar basis based on the aggregate offering price of any pre-funded warrants offered and sold in the
offering, and the proposed maximum aggregate offering price of the pre-funded warrants to be sold in the offering will be reduced on a
dollar-for-dollar basis based on the aggregate offering price of any shares of common stock sold in the offering. Accordingly, the proposed
maximum aggregate offering price of the common stock and the pre-funded warrants (including the common stock issuable upon exercise of
the pre-funded warrants and the underwriter&rsquo;s over-allotment option), if any, is $17,250,000.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(6)</TD><TD STYLE="text-align: justify">Represents a warrant issuable to the underwriter (the &ldquo;Underwriter&rsquo;s Warrant&rdquo;) to purchase
a number of shares of common stock equal to 2.5% of the number of shares of common stock (including the shares of common stock issued
pursuant to the underwriter&rsquo;s exercise of its over-allotment option and upon exercise of the pre-funded warrants) being offered
at an exercise price equal to 110% of the public offering price of the common stock. See the &ldquo;Underwriting&rdquo; section of the
prospectus included in this registration statement. In accordance with Rule 457(g) under the Securities Act, because the common stock
of the registrant underlying the Underwriter&rsquo;s Warrant is registered hereby, no separate registration fee is required with respect
to the Underwriter&rsquo;s Warrant registered hereby.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(7)</TD><TD STYLE="text-align: justify">Pursuant to Rule 416 under the Securities Act, the securities being registered hereunder include such
indeterminate number of additional securities as may be issued after the date hereof as a result of stock splits, stock dividends or similar
transactions.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(8)</TD><TD STYLE="text-align: justify">Each share of common stock and pre-funded warrant is being sold together with an accompanying warrant
to purchase 0.5 of a share of our common stock. Two common stock purchase warrants will be exercisable for one share of common at a per
share exercise price of up to 125% of the public offering price of one share of common stock. The proposed maximum aggregate public offering
price of the shares of common stock issuable upon exercise of the common warrants was calculated to be $10,781,250, which is equal to
125% of one-half of the proposed maximum aggregate public offering price of the shares of common stock in this offering. In accordance
with Rule 457(g) under the Securities Act, because the common stock of the registrant underlying the common stock purchase warrants is
registered hereby, no separate registration fee is required with respect to the common stock purchase warrants registered hereby.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</P>


<HR NOSHADE ALIGN="CENTER" STYLE="width: 38%; color: black">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>The Registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file&nbsp;a further amendment
which specifically states that this registration statement shall thereafter become effective in accordance with Section&nbsp;8(a) of the
Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section&nbsp;8(a), may determine.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red">The information in this preliminary
prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these
securities in any state or jurisdiction where the offer or sale is not permitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom; text-align: center">
  <TH STYLE="text-align: left"><FONT STYLE="color: Red">PRELIMINARY PROSPECTUS</FONT></TH>
  <TH STYLE="text-align: right"><FONT STYLE="color: Red">SUBJECT TO COMPLETION, DATED DECEMBER 30, 2021</FONT></TH></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="image_001.jpg" ALT="digirad-20210930_g1.jpg" STYLE="height: 43px; width: 119px"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Star Equity Holdings, Inc.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[&bull;] Shares of Common Stock</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[&bull;] Pre-funded Warrants (each Pre-funded
Warrant to purchase one Share of Common Stock)</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[&bull;] Shares of Common Stock underlying
the Pre-funded Warrants</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Warrants to Purchase up to [&bull;] Shares
of Common Stock</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[&bull;] Shares of Common Stock underlying
the Common Warrants</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This is an offering of [&bull;]
shares of our common stock, par value of $0.0001 per share, together with common stock purchase warrants to purchase up to an aggregate
of [&bull;] shares of our common stock (and the shares of common stock that are issuable from time to time upon exercise of the warrants).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are also offering to each
purchaser whose purchase of shares in this offering would otherwise result in the purchaser, together with its affiliates and certain
related parties, beneficially owning more than 4.99% of the outstanding shares of our common stock immediately following the consummation
of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded warrants, in lieu of shares that would otherwise
result in such purchaser&rsquo;s beneficial ownership exceeding 4.99% of the outstanding shares of our common stock. Each pre-funded warrant
will be exercisable for one share of common stock. The purchase price of each pre-funded warrant will be equal to the price per share
being sold to the public in this offering, minus $0.01, and the exercise price of each pre-funded warrant will be $0.01 per share. The
pre-funded warrants will be certificated and will be immediately exercisable and may be exercised at any time until all of the pre-funded
warrants are exercised in full. Any exercise of the pre-funded warrants which would result in a holder beneficially owning more than 4.99%
of the outstanding shares of our common stock will be subject to our consent. We may, in our sole discretion, waive the 4.99% ownership
limitation in connection with this offering with respect to one or more potential purchasers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For each pre-funded warrant
we sell, the number of shares we are offering will be decreased on a one-for-one basis. Each share of common stock and pre-funded warrant
is being sold together with an accompanying warrant to purchase 0.5 of a share of our common stock, at an exercise price of $[&bull;]
per whole share (at least 100%, and up to 125%, of the public offering price of one share of common stock). Because we will issue a warrant
for each share of our common stock and for each pre-funded warrant sold in this offering, the number of warrants sold in this offering
will not change as a result of a change in the mix of the shares of our common stock and pre-funded warrants sold.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The warrants will be exercisable
immediately and will expire five years after the date of issuance. The warrants will only be exercisable for whole shares of common stock.
The shares of common stock or pre-funded warrants can be purchased only with the accompanying warrants (other than the over-allotment
option), but will be issued separately and will be immediately separable upon issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our common stock is listed
for trading on The Nasdaq Global Market under the symbol &ldquo;STRR.&rdquo; On December 30, 2021, the last reported sale price
of our common stock on The Nasdaq Global Market was $3.04 per share, and this preliminary prospectus assumes a public offering price
of $[&bull;] per share or pre-funded warrant. The actual public offering price per share of common stock or pre-funded warrant, as the
case may be, will be determined between us and the investors in the offering and may be at a discount to the current market price. Therefore,
the assumed public offering price used throughout this prospectus may not be indicative of the final offering price. There is no established
public trading market for the warrants or the pre-funded warrants, and we do not expect a market to develop. In addition, we do not intend
to apply for a listing of the warrants or pre-funded warrants on any national securities exchange or other nationally recognized trading
system. Without an active trading market, the liquidity of the warrants and the pre-funded warrants will be limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Investing in our securities
involves a high degree of risk. See the section entitled &ldquo;Risk Factors&rdquo; beginning on page [&bull;] of this prospectus and
in the documents incorporated by reference into this prospectus for a discussion of risks that should be considered in connection with
an investment in our securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>NEITHER THE SECURITIES
AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR>
    <TD STYLE="vertical-align: bottom; width: 58%; border-top: Black 1.5pt double; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-top: Black 1.5pt double; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Per Share and Accompanying Warrant</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 16%; border-top: Black 1.5pt double; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Per Pre-funded Warrant and Accompanying Warrant</B></FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; border-top: Black 1.5pt double; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 10pt">Public offering price (1)&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 10pt">Underwriting discounts and commissions (2)&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
  <TR>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1.5pt double; padding-left: 10pt; text-indent: -10pt"><FONT STYLE="font-size: 10pt">Proceeds to us, before expenses (3)&#9;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1.5pt double; text-align: center"><FONT STYLE="font-size: 10pt">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1.5pt double; text-align: center"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1.5pt double; text-align: center"><FONT STYLE="font-size: 10pt">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD></TR>
  </TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">The public offering price is $[&bull;] per share of common stock and $0.01 per accompanying warrant and
$[&bull;] per pre-funded warrant and $0.01 per accompanying warrant.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">See &ldquo;Underwriting&rdquo; for a description of the compensation payable to the underwriter, including
a warrant to purchase shares of our common stock, which represents 2.5% of the number of shares of common stock and/or pre-funded warrants
sold in this offering, and reimbursable expenses in connection with the offering.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">The above summary of the offering proceeds does not give effect to any proceeds from the exercise of the
pre-funded warrants, accompanying warrants or underwriter&rsquo;s warrant being issued in this offering, or the exercise of the underwriter&rsquo;s
over-allotment option.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The underwriter has the option
to purchase up to an additional [&bull;] shares of common stock and/or warrants to purchase up to an additional
[&bull;] shares of common stock from us at the public offering price, less the underwriting discounts and commissions, within 45 days
after the date of this prospectus to cover over-allotments, if any.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Jeffrey E. Eberwein, our
Executive Chairman, has indicated to us his intention to purchase up to $[&bull;] of our common stock and warrants in this offering.
Several other officers and board members of our company may also purchase shares of our common stock and warrants in this offering.
However, because indications of interest are not binding agreements or commitments to purchase, there can be no assurance that the
underwriter will determine to sell our shares and warrants in this offering to any of these persons, or that any of these persons
will determine to purchase these securities in this offering. Any securities sold to our officers and board members will be at the
public offering same price and on the same terms as the securities sold to other investors in this offering. The underwriter will
receive the same underwriting discount on any securities purchased by these persons as it will on any other securities sold to the
public in this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The underwriter expects to
deliver the shares, warrants and pre-funded warrants against payment in New York, New York on or about [&bull;], 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Sole Book-Running Manager</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Maxim Group LLC</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The date of this prospectus is [&bull;], 2022</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">TABLE OF CONTENTS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><U>Page</U></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
  <TD STYLE="width: 80%">PROSPECTUS SUMMARY</TD>
  <TD STYLE="text-align: right; width: 20%; vertical-align: bottom">1</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD></TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>THE OFFERING</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">9</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>SUMMARY CONSOLIDATED FINANCIAL DATA</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">11</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>RISK FACTORS</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">15</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>USE OF PROCEEDS</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">34</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>DIVIDEND POLICY</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">35</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>CAPITALIZATION</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">36</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>DILUTION</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">38</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>DESCRIPTION OF OUR CAPITAL STOCK AND SECURITIES WE ARE OFFERING</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">40</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS
OF COMMON STOCK, PRE-FUNDED WARRANTS AND WARRANTS</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">54</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>UNDERWRITING</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">62</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>LEGAL MATTERS</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">66</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>EXPERTS</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">66</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>WHERE YOU CAN FIND MORE INFORMATION</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">66</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>INCORPORATION OF INFORMATION BY REFERENCE</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">66</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES</TD>
  <TD STYLE="text-align: right; vertical-align: bottom">67</TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">___________________________</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You should rely only on the
information contained or incorporated into this prospectus. Neither we nor the underwriter has authorized anyone to provide any information
or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We
take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This
prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful
to do so. The information contained in this prospectus is current only as of its date regardless of the time of delivery of this prospectus
or any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date.
You should also read this prospectus together with the additional information described under &ldquo;Where You Can Find More Information&rdquo;
and &ldquo;Incorporation of Information by Reference.&rdquo;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No action is being taken in
any jurisdiction outside the U.S. to permit a public offering of our securities or possession or distribution of this prospectus in any
such jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the U.S. are required to inform themselves
about and to observe any restrictions about this offering and the distribution of this prospectus applicable to those jurisdictions.</P>

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    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD></TR>
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    <TD STYLE="font-weight: bold; text-align: center; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-size: 10pt">PROSPECTUS SUMMARY</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><I>The following summary highlights selected information contained in other parts of this prospectus or incorporated by reference into this prospectus from our filings with the Securities and Exchange Commission, or &ldquo;SEC,&rdquo; listed in the section of the prospectus entitled &ldquo;Incorporation of Information by Reference.&rdquo; Because it is only a summary, it does not contain all of the information that you should consider before purchasing our securities in this offering and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere or incorporated by reference into this prospectus. You should read the entire prospectus, the registration statement of which this prospectus is a part, and the information incorporated by reference herein in their entirety, including our financial statements and the related notes incorporated by reference into this prospectus, before making an investment decision. Some of the statements in this prospectus and the documents incorporated by reference herein constitute forward-looking statements that involve risks and uncertainties. See information set forth under the section &ldquo;Special Note Regarding Forward-Looking Statements.&rdquo;</I></FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><I>Unless the context otherwise requires or indicates, all references in this prospectus to &ldquo;we,&rdquo; &ldquo;our,&rdquo; &ldquo;us,&rdquo; &ldquo;Star Equity&rdquo; and the &ldquo;Company&rdquo; each mean Star Equity Holdings, Inc., a Delaware corporation, and its consolidated subsidiaries.</I></FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Our Company</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 10pt">Overview of Our Business</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Star Equity Holdings, Inc. is a diversified multi-industry holding company that currently operates primarily in the healthcare and construction business sectors. These businesses, which are 100% controlled by us through our healthcare subsidiary Digirad Health, Inc. and our construction subsidiaries KBS Builders, Inc. and EdgeBuilder, Inc. have their own experienced, specialized management teams. We are presently focused on investing in additional operating businesses and potentially entering additional industry sectors. We also maintain a third internally-focused business which holds our corporate real estate and investments and is directly managed at the holding company level.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">We report our continuing operations through our Healthcare, Construction and Investments segments, as described below.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-size: 10pt"><B>Healthcare.</B> Through Digirad Health, Inc. (&ldquo;Digirad Health&rdquo;), we provide mobile medical imaging services and design, manufacture, service and distribute diagnostic medical imaging equipment. Our direct and indirect subsidiaries included in this division are referred to as our &ldquo;Healthcare Subsidiaries.&rdquo; Our Diagnostic Services division offers imaging services to healthcare providers, primarily cardiology practices, as an alternative to purchasing and operating the equipment or outsourcing the procedures. Our Diagnostic Imaging division develops, sells and services solid-state mobile gamma imaging cameras to hospitals and physicians.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-size: 10pt"><B>Construction. </B>We design, manufacture and distribute wood-based products used in residential and commercial construction projects through this segment. KBS Builders, Inc. (&ldquo;KBS&rdquo;), EdgeBuilder, Inc. (&ldquo;EdgeBuilder&rdquo;) and Glenbrook Building Supply, Inc. (&ldquo;Glenbrook&rdquo;) are our wholly owned subsidiaries and are referred to as our &ldquo;Construction Subsidiaries&rdquo; and our &ldquo;Construction businesses.&rdquo; Our KBS business primarily manufactures modular housing units, mainly for the New England market, at our production facility in South Paris, Maine. We are continually evaluating the possibility of opening a second modular line at the Oxford facility as demand for our product increases. Opening and operating a second modular manufacturing facility may become necessary as we continue pursuing larger commercial-scale multi-family projects, in addition to producing single-family homes. Our EdgeBuilder and Glenbrook businesses, which operate as a single business unit called &ldquo;EBGL,&rdquo; are located in the Minneapolis-St. Paul, Minnesota metropolitan area. EBGL manufactures structural wall panels, permanent wood foundation systems and other engineered wood products, and supply general contractors with building materials.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-size: 10pt"><B>Investments. </B>Our investments division is an internally-focused unit that is directly supervised by our holding company management and is primarily responsible for the management of our real estate and investments. Currently, our main revenue-generating activity in this segment is the intercompany monthly rent from KBS, which leases three modular factories from Star Real Estate Holdings USA, Inc. (&ldquo;SRE&rdquo;). Our direct and indirect subsidiaries included in this segment are SRE, 947 Waterford Road, LLC, 300 Park Street, LLC, 56 Mechanic Falls Road, LLC, Star Value, LLC, and Star Equity Fund, LLC. These entities are referred to as our &ldquo;Investments Subsidiaries.&rdquo;</FONT></TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
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    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 10pt">Our Growth Strategy</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">We believe our diversified multi-industry holding company structure will allow our management to better focus on specialized capital allocation, strategic leadership, mergers and acquisitions, capital markets transactions, investor relations, management of our real estate and investments, and other public company activities. Our structure will free up our operating chief executive officers to manage their respective businesses, improve operations and look for organic and bolt-on growth opportunities, with fewer distractions and less administrative burden.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">We continue to explore strategic alternatives to improve the market position and profitability of our product offerings in niche marketplaces, generate additional liquidity and enhance our valuation. We may pursue our goals through organic growth or through strategic transactions. Some of these strategic transactions have included, and could continue to include, selective acquisitions of business segments or entire businesses, divestitures of assets or divisions, and internal restructurings of our company.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">We believe that both of our primary businesses are well positioned for growth in large addressable markets. The key elements of our growth strategy include the following:</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-size: 10pt"><B>Organic growth from our core businesses</B>. We believe that we operate in markets and geographies that will allow us to continue to grow our core businesses, allowing us to benefit from our scale and strengths. We plan to focus our efforts on markets in which we already have a presence to take advantage of the personnel, infrastructure and brand recognition we have in these areas.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-size: 10pt"><B>Introduction
    of new services</B>. In our Healthcare division, we plan to continue to focus on providing healthcare solutions that deliver
    necessary assets, services and logistics directly to the customer site. We believe that over time we can either purchase or develop
    new and complementary businesses and take advantage of our customer loyalty and distribution channels. Additionally, we are looking
    into new imaging technologies through the recent establishment of a joint venture that is presently conducting research and
    development in the area of heart imaging. In our Construction division, we will consider opportunities to augment our service offering to better serve our
    customer base. We have recently accomplished this at KBS for the New England market by re-entering the multi-family housing segment.
    At EBGL, we are piloting a program to act as an outsourced supplier of components to a large-scale homebuilder.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT STYLE="font-size: 10pt"><B>Acquisition of complementary businesses</B>. We regularly search for and review complementary businesses that meet our internally developed financially disciplined approach for acquisitions to grow our company. We believe there are many potential small targets that can be acquired over time and integrated into our platform. We will also look at larger, more transformational acquisitions (public or private) if we believe the appropriate mix of value, risk and return is present for our stockholders. The timing of these potential acquisitions will always depend on market conditions, available capital and the value for each transaction. In general, we want to be &ldquo;value&rdquo; buyers, and will not pursue any transaction unless we believe the post-transaction potential value is high for stockholders.</FONT></TD>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 10pt">Healthcare Operations and Industry</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Our Healthcare division designs, manufactures and distributes diagnostic medical imaging products. The division operates in two businesses: Diagnostic Services and Diagnostic Imaging. Our Diagnostic Services business offers imaging and monitoring services to healthcare providers as an alternative to purchasing the equipment or outsourcing the procedure. Our Diagnostic Imaging business develops, sells and maintains solid-state gamma cameras for use in nuclear cardiology and general nuclear medicine.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Diagnostic imaging depictions of the internal anatomy or physiology are generated primarily through non-invasive means. Diagnostic imaging facilitates the early diagnosis of diseases and disorders, often minimizing the scope, cost and amount of care required and reducing the need for more invasive procedures. Currently, the major types of non-invasive diagnostic imaging technologies available are x-ray, MRI, CT, ultrasound, PET and nuclear imaging. The most widely used imaging acquisition technology utilizing gamma cameras is single photon emission computed tomography, or SPECT. Our current internally-developed cardiac gamma cameras employ SPECT technology. Our Healthcare division is comprised of two segments that specialize in delivering SPECT in a unique and effective manner in order to deliver convenient healthcare solutions on an as needed, when needed and where needed basis.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD STYLE="text-align: justify; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; text-align: justify; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Diagnostic Services. </B>Through Diagnostic Services, we offer a convenient and economically efficient imaging services program as an alternative to purchasing equipment or outsourcing the procedures to another physician or imaging center. For physicians who wish to perform nuclear imaging, echocardiography, vascular or general ultrasound tests, we provide imaging systems, qualified personnel, radiopharmaceuticals, licensing services and the logistics required to perform imaging in their own offices, and thereby the ability to bill Medicare, Medicaid or one of the third-party healthcare insurers directly for those services, which are primarily cardiac in nature. We provide imaging services primarily to cardiologists, internal medicine physicians and family practice doctors who typically enter into annual contracts for a set number of days ranging from once per month to five times per week. Many of our physician customers are reliant on reimbursements from Medicare, Medicaid and third-party insurers. Although reimbursement for procedures provided by our services have been stable during the last several years, any future changes to underlying reimbursements may require modifications to our current business model in order for us to maintain a viable economic model.</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Our portable nuclear and ultrasound imaging operations utilize a &ldquo;hub and spoke&rdquo; model in which centrally located regional hubs anchor multiple van routes in the surrounding metropolitan areas. At these hubs, clinical personnel load the equipment, radiopharmaceuticals and other supplies onto specially equipped vans for transport to customer locations, where they set up the equipment for the day. After quality assurance testing, a technologist under the physician&rsquo;s supervision will gather patient information, inject the patient with a radiopharmaceutical and then acquire images for interpretation by the physician. At the conclusion of the day of service, all equipment and supplies are removed from the customer location and transported back to the central hub location. Our model relies on density and customer concentration to allow for efficiencies and maximum profitability, and therefore we are only located in geographies where there is a high concentration of people, cardiac disease and associated likely customer locations.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">For our nuclear imaging services, we have obtained Radsite Intersocietal Accreditation Commission (&ldquo;IAC&rdquo;) and Intersocietal Commission for Echocardiography Laboratories (&ldquo;ICAEL&rdquo;) accreditation for our services. Our licensing infrastructure provides radioactive materials licensing, radiation safety officer services, radiation safety training, monitoring and compliance policies and procedures, and quality assurance functions, to ensure adherence to applicable state and federal nuclear regulations.</FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Diagnostic Imaging. </B>Through Diagnostic Imaging, we sell our internally developed solid-state gamma cameras, imaging systems and camera maintenance contracts. Our imaging systems include nuclear cardiac imaging systems, as well as general purpose nuclear imaging systems. We sell our imaging systems to physician offices and hospitals primarily in the United States, although we have sold a small number of imaging systems internationally. Our imaging systems are sold in both portable and fixed configurations, provide enhanced operability and improved patient comfort, fit easily into floor spaces as small as seven feet by eight feet, and facilitate the delivery of nuclear medicine procedures in a physician&rsquo;s office, an outpatient hospital setting, or within multiple departments of a hospital (e.g., emergency and operating rooms). Our Diagnostic Imaging segment revenues derive primarily from selling solid-state gamma cameras and post-warranty camera maintenance contracts.</FONT></TD>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">The central component of a nuclear camera is the detector, which ultimately determines the overall clinical quality of images a camera produces. Our nuclear cameras feature detectors with advanced proprietary solid-state technology developed by us. Solid-state systems have a number of benefits over conventional photomultiplier tube-based camera designs typically offered by our competitors. Our solid-state technology systems are typically 2 to 5 times lighter and considerably more compact than most traditional nuclear systems, making them far easier and less costly to build, very reliable, and able to be utilized for mobile applications. We believe we are one of the market leaders in the mobile solid-state nuclear camera segment.</FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">We believe our current imaging systems, with their state-of-the-art technology and robust underlying patents, will continue to be relevant for the foreseeable future. We will continue to enhance and adjust our existing systems for the changing nuclear imaging market, including software upgrades and smaller enhancements. However, to accomplish any significant changes and enhancements, we will utilize what we believe is a deep available pool of contract engineers on a flexible, as needed basis and do not maintain a fully staffed research and development department.</FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">For the nine months ended September 30, 2021 and the years ended December 31, 2020 and 2019, our Healthcare operations accounted for 55.8%, 63.0% and 84.5%, respectively, of our consolidated revenues.</FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Construction Operations and Industry</B></FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Our Construction division designs and manufactures residential and commercial modular units and structural wall panels for the New England and Midwest markets, respectively. Our subsidiaries include KBS, which primarily manufactures modular housing units, and EBGL, which manufactures structural wall panels, permanent wood foundation systems and other engineered wood products, and supplies general contractors with building materials.</FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">The building and construction industries lag behind many other manufacturing industry sectors with respect to offsite production. Both modular and prefabricated structural wall panels, produced offsite, are gaining market share in a sector once dominated by more traditional onsite or &ldquo;stick built&rdquo; construction.</FONT></TD>
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    <TD>&nbsp;</TD></TR>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">KBS has been in the modular business since 2001 and primarily services the New England market, including Cape Cod and the islands of Martha&rsquo;s Vineyard and Nantucket, as it is typically not cost-effective to ship modules beyond 300 miles from where they are produced due to their size and weight. We believe the market opportunity for single-family modular homes across our target geography is strong. The opportunity in commercial-scale multi-family modular projects is focused in and around the Boston metropolitan area, although we believe there will be increasing interest in other secondary cities and more densely settled areas. The shortage of affordable housing is a nation-wide problem and we believe modular construction methods offer a compelling option to help address upfront construction costs, ongoing domestic energy costs and time-to-market concerns associated with solving this challenge.</FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">EdgeBuilder benefits from the same macro drivers towards more factory-built construction. The target market for the structural wall panels it produces is the Minneapolis-St. Paul, Minnesota area where the need for housing has been growing. EdgeBuilder&rsquo;s panels are sold to builders constructing multi-story, multi-unit structures, including senior living facilities and apartment buildings. Our wood foundations are sold primarily to builders of single-family home developments. On the building products distribution side, our showroom and lumber yard focuses on professional builder sales, while also providing loose lumber and materials that are bundled with our structural wall panel contracts to streamline the procurement process for these commercial customers. We also supply windows, doors, roofing, decking, drywall, hardware and other value-added products.</FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">EdgeBuilder markets its engineered structural wall panels and permanent wood foundation systems through direct sales-people and a network of builders, general contractors and developers in and around Minneapolis and St. Paul areas. EdgeBuilder&rsquo;s direct sales organization is responsible for both residential and commercial projects and it works with general contractors, developers and builders to provide bids and quotes for specific projects. Our marketing efforts include participation in industry trade shows, production of product literature and sales support tools. These efforts are designed to generate sales leads for our independent builders and dealers, and direct salespeople.</FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">For the nine months ended September 30, 2021 and the years ended December 31, 2020 and 2019, our Construction operations accounted for 44.2%, 36.9% and 15.4%, respectively, of our consolidated revenues.</FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">For further information about our business segments and operations, you should refer to the information included under the heading &ldquo;Business&rdquo; in our Annual Report on Form 10-K for the year ended December 31, 2020, as well as our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, which are incorporated herein by reference, as updated by other reports and documents we file with the SEC.</FONT></TD>
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    <TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 10pt">Our Competitive Strengths</FONT></TD>
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    <TD STYLE="text-indent: 0.5in; font-size: 10pt; font-weight: bold; font-style: italic"><FONT STYLE="font-size: 10pt">Healthcare Services and Products</FONT></TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Our Healthcare division delivers convenient, effective and efficient healthcare solutions on an as needed, when needed and where needed basis through our mobile products and services. Our Healthcare division&rsquo;s diverse portfolio of mobile healthcare solutions and diagnostic imaging equipment and services provides hospitals, physician practices and imaging centers throughout the United States access to technology and services necessary to provide patient care in the rapidly changing healthcare environment.</FONT></TD>
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    <TD>&nbsp;</TD>
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    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">We believe that our competitive strengths are centered around our streamlined and cost-efficient approach to providing healthcare solutions to our customers at the point of need, while providing an array of industry-leading, technologically-enabled healthcare imaging and monitoring services, as described below:</FONT></TD>
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    <TD>&nbsp;</TD>
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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B>Broad Array of Diagnostic Imaging Services</B>. Approximately 42.9% of our consolidated revenues for
the nine months ended September 30, 2021 were derived from our diagnostic imaging business. We have developed and continue to refine an
industry-leading, customer-service focused approach to our customers. We have found our focus in this area is a key factor in acquiring
and retaining our service-based customers. We also recruit and maintain highly trained staff for our clinical and repair services, which
allows us to provide superior and more efficient services.</TD>
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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B>Unique Dual Sales and Service Offerings</B>. For the majority of our business, we offer a service-based
model to our customers, allowing them to avoid making costly capital and logistical investments required to offer these services internally.
Further, for a smaller portion of our business, we have the ability to sell the underlying capital equipment directly to our customers
should their needs change and they desire to provide services on their own with the required capital equipment. This ability to serve
our customers in a variety of capacities from selling equipment directly, or providing more flexibility through a service-based model,
allows us to serve our customers according to their exact needs, as well as the ability to capture both ends of the revenue spectrum.</TD>
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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B>Leading
                                            Solid-State Technology</B>. Our solid-state gamma cameras utilize proprietary photo detector
                                            modules that enable us to build smaller and lighter cameras that are portable with a degree
                                            of ruggedness that can withstand the vibration associated with transportation. Our dedicated
                                            cardiac imagers require a floor space as little as seven feet by eight feet, can generally
                                            be installed without facility renovations, and use standard power. Our portable cameras are
                                            ideal for mobile operators or practices desiring to service multiple office locations or
                                            imaging facilities.</TD>
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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><B>Addressable
                                            Markets and Revenue Opportunities</B>. Bolstered by advances in medical imaging technology,
                                            large and growing global healthcare expenditures, an increasing demand for early disease
                                            detection and diagnosis, an aging population and the anticipated end of the COVID-19 pandemic,
                                            we believe the vast size of the addressable market and the multitude of imaging procedures
                                            and applications in the diagnostic imaging market position us to experience revenue growth
                                            and market share in the coming years.</TD>
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    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
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    <TD STYLE="font-size: 10pt; font-weight: bold; font-style: italic"><FONT STYLE="font-size: 10pt">Construction Services and Products</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Our competitive strengths at KBS include our strategic location in the Greater Boston and broader New England market, the largest manufacturing capacity in the New England region, and an ability to provide high quality wood-based volumetric modules for both single and commercial scale multi-family residential buildings. We also provide significant value through our longstanding engineering and design expertise, with a focus on customization to suit the specific project requirements. We continue to develop our expertise and specialized knowledge in highly energy-efficient passive homes, which includes the delivery of our first zero energy modular homes to address the need for affordable housing during 2020. Additionally, we believe there is a large opportunity in the commercial-scale multi-family modular segment and we have continued to pursue more of these projects since 2020.</FONT></TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
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    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">At EdgeBuilder, we also offer a superior product for commercial scale multi-family projects, focusing on structural wall panels. Our engineering and design capabilities allow us to create a product that is unique to the specific project&rsquo;s requirements. We also provide value with our vertically integrated in-house delivery capability, helping us to be cost-competitive. Our production strategy is to utilize automation and the most efficient methods of manufacturing and high-quality materials in all EdgeBuilder projects. Through our building products distribution business, we operate a professional lumber yard and showroom and deliver highly personalized service, knowledgeable salespeople, and attention to detail that the larger, big-box chain home stores do not provide.</FONT></TD>
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    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">We expect the modular construction industry to achieve revenue growth over the next several years due to the rising demand for modular engineering in several sectors, such as healthcare, education and multi-family housing, given the comparatively low cost and availability of fully-equipped manufactured housing versus site-built construction housing. We believe our construction business is well positioned to capitalize on the growing popularity of modular and panelized housing in our key markets in the United States.</FONT></TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD></TR>
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    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt"><B>Recent Developments</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: 0.5in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B>December 2021 Private Placement</B>. On December 10, 2021, we entered into a securities purchase agreement (the &ldquo;Purchase Agreement&rdquo;) with Jeffrey E. Eberwein, our Executive Chairman, relating to the issuance and sale of 650,000 shares of our common stock at a purchase price of $3.25 per share pursuant to a private placement. The transaction was approved by a Special Committee of our board of directors made up of independent directors and by the Audit Committee of our board of directors. The gross proceeds to us from the transaction, before deducting transaction fees and other estimated transaction expenses, were $2.1 million. </FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">Pursuant to the Purchase Agreement, we agreed to use commercially reasonable efforts to file a resale registration statement to register under the Securities Act the resale by Mr. Eberwein of the shares as soon as practicable following the issuance and filing with the SEC of our audited financial statements for the year ending December 31, 2021 in connection with the filing of our Annual Report on Form 10-K. In connection with the Purchase Agreement, Mr. Eberwein agreed to enter into a lock-up agreement whereby he agreed not to offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of or enter into any transaction which is designed to result in the disposition of the shares, subject to certain exceptions, until the date that is six months following the closing date of the transaction.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B>&#9;NOL Rights Agreement and Protective Amendment</B>. On June 2, 2021, our board of directors adopted, and we entered into, a Rights Agreement (the &ldquo;Rights Agreement&rdquo;) with American Stock Transfer &amp; Trust Company, LLC, as rights agent, designed to preserve the value of our significant U.S. net operating loss carryforwards (&ldquo;NOLs&rdquo;) and other tax benefits by deterring transfers of our common stock that could result in an &ldquo;ownership change&rdquo; under Section 382. In connection with the Rights Agreement, our board of directors declared a dividend to our stockholders of record as of the close of business on June 14, 2021, for each outstanding share of our common stock, of one right to purchase one one-thousandth of a share of a new series of participating preferred stock of our company at a specified exercise price.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">&#9;Pursuant to the Rights
    Agreement, if any person or group acquires 4.99% or more of the outstanding shares of our common stock without our board of
    directors&rsquo; permission, or if a person or group that already owns 4.99% or more of our common stock acquires additional shares
    without our board of directors&rsquo; permission, then, subject to certain exceptions, there would be a triggering event under the
    Rights Agreement. The Rights would then become exercisable and entitle stockholders (other than the acquiring person or group) to
    purchase additional shares at a significant discount and result in significant dilution in the economic interest and voting power of
    the acquiring person or group. In its discretion, our board of directors may exempt certain transactions from the provisions of the
    Rights Agreement, including if our board of directors determines that the transaction will not jeopardize our tax benefits, or the
    transaction will otherwise serve our best interests. Any stockholder desiring to own 5% or more of our shares, or increase an
    existing ownership position that is already at or above 5%, can request an exemption from our board of directors by submitting
    certain basic information to us and following the other instructions included in the Rights Agreement. If an investor needs an
    exemption to participate in this offering or otherwise exercise any pre-funded warrants that it purchases in the offering, it is the
    intention of our board of directors to grant any such investor an exemption from the ownership limitations characterized in the Rights Agreement.
    The Rights Agreement and the rights issued under the Rights Agreement will expire on June 2, 2024, or on an earlier date if certain
    events occur, as described more fully in the Rights Agreement.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;&#9;</FONT></TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD></TR>
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    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">At our Annual Meeting of Stockholders held on October 21, 2021, our stockholders ratified and approved the Rights Agreement and a protective amendment to our Restated Certificate of Incorporation designed to protect the tax benefits of our NOLs. See &ldquo;Description of Our Capital Stock and Securities We Are Offering&mdash;Certain Anti-Takeover Provisions of Our Restated Certificate of Incorporation and Bylaws; Protective Amendment.&rdquo; Additional information regarding the Rights Agreement is contained in our Definitive Proxy Statement filed with the SEC on September 22, 2021.</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">&#9;<B>New Chief Operating Officer</B>. Beginning January 1, 2022, we appointed Richard K. Coleman, Jr. as our new Chief Operating Officer. Mr. Coleman&rsquo;s addition increases the capacity of our senior leadership team. In this role, he will oversee our operations, assist our business leaders in achieving their growth and profitability goals and launch new business initiatives, as well as help analyze and integrate future acquisitions. Mr. Coleman brings more than 30 years of executive leadership experience with extensive expertise in business development, operational excellence and acquisitions. He has served in a variety of senior executive roles, including President, CEO and director of Command Center Inc., a provider of flexible on-demand employment solutions; President, CEO and director of Crossroads Systems, Inc., a global provider of data archive solutions; CEO of Vroom Technologies Inc.; Chief Operating Officer of MetroNet Communications; and President of US West Long Distance. He also has held significant officer-level positions with Frontier Communications, Centex Telemanagement and Sprint Communications.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt"><B><BR>
Risks Affecting Our Business</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-indent: 0.5in; font-size: 10pt; text-align: justify"><FONT STYLE="font-size: 10pt">&#9;Our business is subject to numerous risks and uncertainties that you should consider before investing in our company. These risks are described more fully in the section titled &ldquo;Risk Factors&rdquo; in this prospectus. Below are the principal factors that make an investment in our company speculative or risky:</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Even if this offering is successful, we may need to raise additional capital in the future to continue
operations, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital if needed may have an
adverse impact on our business and operations.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">We have a history of annual net losses attributable to common shareholders which may continue and which
may negatively impact our ability to achieve our growth initiatives.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">We rely on information technology in our operations, and any material failure, inadequacy, interruption
or security failure of that technology could materially harm our business.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">We may not be able to achieve the anticipated synergies and benefits from business acquisitions.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">We face risks related to health pandemics and other widespread outbreaks of contagious disease, including
COVID-19 and its variants, which could significantly disrupt our operations (particularly in our healthcare business) and impact our financial
results.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                  </TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Operating results may be adversely affected by changes in the costs and availability of supplies and materials.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                                                                                                                                                                                                                                                       </TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Our quarterly and annual financial results are difficult to predict and are likely to fluctuate from period
to period.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                    </TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">We spend considerable time and money complying with federal and state laws, regulations, and other rules
which may fluctuate based on healthcare policy, and if we are unable to fully comply with such laws, regulations, and other rules, we
could face substantial penalties.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The medical device industry is litigious, which could result in the diversion of our management&rsquo;s
time and efforts, and require us to incur expenses and pay damages that may not be covered by our insurance.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Our long-term results depend upon our ability to improve existing products and services and develop, introduce,
and market new products and services successfully.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Our ability to protect our intellectual property and proprietary technology through patents and other
means is uncertain.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; border-left: Black 1pt solid">&nbsp;</TD>
<TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; border-right: Black 1pt solid">&nbsp;</TD></TR>
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<TD STYLE="border-top: Black 1pt solid">&nbsp;</TD><TD STYLE="border-top: Black 1pt solid">&nbsp;</TD><TD STYLE="border-top: Black 1pt solid; text-align: justify">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-right: Black 1pt solid">&nbsp;</TD></TR>
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    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">We may make financial investments in other businesses that may lose value.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Our goodwill and other long-lived assets are subject to potential impairment that could negatively impact
our earnings.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Our indebtedness could restrict our operations and make us more vulnerable to adverse economic conditions.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The inability of our company, KBS, EdgeBuilder or any of our other subsidiaries to comply with applicable
financial covenants under the Company Loan Agreements could have a material adverse effect on our financial condition.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                          </TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The market price of our common stock may be volatile, and the value of your investment could decline significantly.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                          </TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Payment of dividends on our common stock is prohibited unless we have declared and paid (or set apart
for payment) full accumulated dividends on the Series A Preferred Stock, which also has a significant liquidation value.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                          </TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">If we fail to pay dividends on our Series A Preferred Stock for six or more consecutive quarters, holders
of our Series A Preferred Stock will be entitled to elect two additional directors to our board of directors.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                          </TABLE>

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    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">The protective amendment contained in our Restated Certificate of Incorporation, which is intended to
help preserve the value of certain income tax assets, primarily tax net operating loss carryforwards, may have unintended negative effects.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                          </TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Material weakness in our internal control over financial reporting could have a significant adverse effect
on our business and the price of our common stock.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="border-bottom: Black 1pt solid; border-left: Black 1pt solid; width: 100%; font-size: 10pt; border-collapse: collapse; border-right: Black 1pt solid">
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold"><FONT STYLE="font-size: 10pt">Corporate Information</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">We are a diversified holding company with three divisions: Healthcare, Construction and Investments. We were incorporated in the State of Delaware in 1997. Our principal executive offices are located at 53 Forest Avenue, Suite 101, Old Greenwich, Connecticut 06870, and our telephone number is (203) 489-9500. Our website is www.starequity.com. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our securities.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="border: Black 1pt solid; width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; text-indent: 0in"><FONT STYLE="font-size: 10pt">The Offering</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">The following summary contains basic
    terms about this offering and the securities in this offering and is not intended to be complete. It may not contain all of the
    information that is important to you. You should read the more detailed information contained in this prospectus, including but not
    limited to, the Risk Factors section beginning on page 15 of this prospectus. For a more complete description of the terms of the
    common stock, accompanying warrants and pre-funded warrants, see the section of this prospectus entitled &ldquo;Description of Our
    Capital Stock and Securities We Are Offering.&rdquo;</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 20%"><FONT STYLE="font-size: 10pt">Common stock offered by us:</FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">[&bull;] shares of common stock.</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Offering price:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">This preliminary prospectus assumes an offering price of $[&bull;] per share of common stock or pre-funded warrant.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Over-allotment option:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">We have granted the underwriters an option to purchase up to [&bull;] additional shares of common stock and/or up to [&bull;] additional warrants (for the purchase of up to an additional [&bull;] shares of common stock), in each case, solely to cover over-allotments, if any.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Pre-funded warrants offered by us:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">We are also offering to each purchaser whose purchase of shares in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the outstanding shares of our common stock immediately following the consummation of this offering, the opportunity to purchase, if such purchasers so choose, pre-funded warrants, in lieu of shares of common stock that would otherwise result in any such purchaser&rsquo;s beneficial ownership exceeding 4.99% of the outstanding shares of our common stock. Each pre-funded warrant will be exercisable for one share of common stock. The purchase price of each pre-funded warrant will equal the public offering price at which shares are being sold to the public in this offering, minus $0.01, and the exercise price of each pre-funded warrant included will be $0.01 per share. The pre-funded warrants will be exercisable immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full. Any exercise of the pre-funded warrants which would result in a holder beneficially owning more than 4.99% of the outstanding shares of our common stock will be subject to our consent. For each pre-funded warrant we sell, the number of shares we are offering will be decreased on a one-for-one basis. We may, in our sole discretion, waive the 4.99% ownership limitation in connection with this offering with respect to one or more potential purchasers.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Warrants offered by us:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">We are also offering warrants to purchase up to an aggregate of [&bull;] shares of common stock. Each share of common stock (other than those sold pursuant to the over-allotment option) is being sold together with a warrant to purchase 0.5 of a share of common stock. The warrants will only be exercisable for whole shares of common stock, and will have an exercise price of $[&bull;] per share, and will be immediately exercisable and will expire on the fifth anniversary of the original issuance date. This offering also relates to the shares of common stock issuable upon exercise of the warrants.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Common stock to be outstanding after this offering:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">[&bull;] shares, assuming all shares offered by this prospectus are sold and assuming no exercise of the accompanying warrants or the underwriter&rsquo;s warrant (or [&bull;] shares if the over-allotment option is exercised in full and no exercise of the accompanying warrants or the underwriter&rsquo;s warrant).</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Use of proceeds:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">We estimate that our net proceeds from the offering will be approximately $[&bull;] million (approximately $[&bull;] million if the underwriter&rsquo;s over-allotment option is exercised in full) before deducting estimated offering expenses of approximately $[&bull;] million. We intend to use the net proceeds of this offering to pursue organic growth initiatives and fund potential acquisitions, and for working capital and other general corporate purposes.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="border-top: Black 1pt solid; width: 100%; border-collapse: collapse; font-size: 10pt; border-right: Black 1pt solid; border-left: Black 1pt solid">
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 20%">Risk factors:</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0">You should read the &ldquo;Risk Factors&rdquo; section of this prospectus as well as all other information included in this prospectus, including the information in the documents incorporated by reference into this prospectus, for a discussion of certain of the factors to consider carefully before deciding to purchase any securities in this offering.</P>
                                                <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Lock-up:</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0">We and each of our officers and directors have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable for shares of our common stock for a period of 90 days after this offering is completed without the prior written consent of Maxim.</P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Transfer agent:</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0">The registrar and transfer agent for our common stock and the warrant agent for our warrants is American Stock Transfer &amp; Trust Company.</P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Nasdaq Global Markets Listing:</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">Our common stock is listed for trading on The Nasdaq Global Market under the symbol &ldquo;STRR.&rdquo; There is no established trading market for the pre-funded warrants or the warrants and we do not expect a market for such securities to develop. We do not intend to list the warrants or pre-funded warrants on any securities exchange or nationally recognized trading system. Without an active trading market, the liquidity of the pre-funded warrants and the warrants will be limited.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-indent: 0.5in"><P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Jeffrey E. Eberwein, our
                                               Executive Chairman, has indicated to us his intention to purchase up to $[&bull;] of our common stock and warrants in this offering.
                                               Several other officers and board members of our company may also purchase shares of our common stock and warrants in this offering.
                                               However, because indications of interest are not binding agreements or commitments to purchase, there can be no assurance that the
                                               underwriter will determine to sell our shares and warrants in this offering to any of these persons, or that any of these persons
                                               will determine to purchase these securities in this offering. Any securities sold to our officers and board members will be at the
                                               same public offering price and on the same terms as the securities sold to other investors in this offering. The underwriter will
                                               receive the same underwriting discount on any securities purchased by these persons as it will on any other securities sold to the
                                               public in this offering. The shares being purchased by our officers and board members will be restricted from sale for a limited
                                               period of time under the terms of lock-up agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>
                                               <P STYLE="text-align: justify; text-indent: 0.5in; margin-top: 0; margin-bottom: 0">The number of shares of our common stock to outstanding before and after this offering is based on 5,805,916 shares of common stock outstanding as of the date of this prospectus and excludes, as of such date:</P></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">26,517 shares of common stock reserved for issuance pursuant to grants outstanding under our 2011 Inducement
Award Plan;</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                     </TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">40,620 shares of common stock reserved for issuance pursuant to grants outstanding under our 2014 Equity
Incentive Award Plan;</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                               </TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid; width: 3%">&nbsp;</TD>
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">23,662 shares of common stock reserved for future issuance under our 2018 Equity Incentive Award Plan;</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                                                                                                                                                                                                                                              </TABLE>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">702,270 shares of common stock issuable upon the exercise of the warrants (including the underwriter&rsquo;s
warrants) issued in connection with the public offering that we completed in May 2020; </TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
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                                                                         <TR STYLE="vertical-align: top">
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<TD>&nbsp;</TD><TD><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">[&bull;] shares of common stock issuable upon the exercise of the warrants offered hereby; and</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                                                         <TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
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<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">[&bull;] shares of common stock issuable upon the exercise of the warrant we expect to grant to the underwriter
in connection with this offering.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
    <TD STYLE="border-left: Black 1pt solid">&nbsp;</TD>
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                           </TABLE>

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  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Except as otherwise noted, all information in this prospectus reflects and assumes (i) no sale of pre-funded warrants in this offering, which, if sold, would reduce the number of shares that we are offering on a one-for-one basis (and the shares of common stock issuable upon exercise of the pre-funded warrants would be at an exercise price of $0.01 per share), (ii) no exercise of outstanding options issued under our equity incentive plans and (iii) no exercise of the accompanying warrants or the underwriter&rsquo;s warrant listed above. Additionally, this prospectus assumes that the underwriter will not exercise its over-allotment option. </FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>

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    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD></TR>
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    <TD STYLE="font-weight: bold; text-align: center; text-indent: 0in; font-size: 10pt"><FONT STYLE="font-size: 10pt">Summary Consolidated Financial Data</FONT></TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
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    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt"><FONT STYLE="font-size: 10pt">The following tables set forth a summary of our financial data. The summary consolidated statements of operations data for the years ended December 31, 2020 and 2019 are derived from our audited financial statements which are incorporated herein by reference from our Annual Report on Form 10-K for the year ended December 31, 2020. The summary statements of operations data for the nine months ended September 30, 2021 and 2020 and the summary consolidated balance sheet data as of September 30, 2021 are derived from our unaudited interim condensed financial statements incorporated herein by reference from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. Our unaudited interim condensed financial statements have been prepared on a basis consistent with our audited financial statements and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of the financial information in those statements. Our historical results are not necessarily indicative of our future results, and the results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year ending December 31, 2021, or any other period. When you read this summary financial data, it is important that you read it together with &ldquo;Capitalization&rdquo; and &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo; and in conjunction with the financial statements, related notes and other financial information incorporated in this prospectus by reference.</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>

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    <TD STYLE="font-size: 10pt; font-weight: bold">Consolidated Statements of Operations Data</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">Nine Months<BR> ended<BR> September 30,</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">Year ended<BR> December 31,</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">2021</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">2020</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">2020</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">2019</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="text-align: center; font-size: 10pt; vertical-align: top">(unaudited)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">(in thousands, except per share data)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White; width: 3%">&nbsp;</TD>
    <TD STYLE="width: 39%; font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Total revenues</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">77,019</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">55,018</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">78,163</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 8%; font-size: 10pt; text-align: right">72,934</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White; width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Total cost of revenues</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">68,691</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">44,921</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">64,176</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">55,774</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Gross profit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,328</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">10,097</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">13,987</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">17,160</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Operating expenses:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Selling, general &amp; administrative expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">15,839</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">13,061</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,635</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">15,898</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Amortization of intangible expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,298</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,696</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,124</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">829</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Gain on sale of MD Office Solutions</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(847</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Merger and finance costs</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,342</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Goodwill impairment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">436</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Total operating expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">16,290</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">14,757</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">21,195</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">19,069</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Loss from operations:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,962</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,660</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,208</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,909</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Other income (expense), net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,208</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">967</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,344</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(133</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Interest expense, net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(732</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,008</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,292</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(746</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt">Loss on extinguishment of debt</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(151</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Total other income (expense)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,476</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(41</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">2,052</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,030</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Loss from continuing operations before income taxes</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,486</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,701</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,156</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(2,939</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Income tax (provision) benefit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(34</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(72</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(129</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">199</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Loss from continuing operations, net of income taxes</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,520</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,773</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5,285</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(2,740</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Income (loss) from discontinued operations, net of income taxes</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">5,955</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,227</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,172</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,887</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Net income (loss)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,435</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(6,000</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(6,457</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,627</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Deemed dividend on Series A perpetual preferred stock</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,437</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,442</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,916</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(596</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">Net loss attributable to common stockholders</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(2</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(7,442</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(8,373</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(5,223</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">Basic and diluted net loss per common share attributable to common stockholders</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(2.27</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(2.29</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(2.56</TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-bottom: Black 1pt solid; border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: White; font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; background-color: White; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; background-color: White; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: White; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: White; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; background-color: White; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; background-color: White; padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
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<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-top: Black 1pt solid; border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="border-top: Black 1pt solid; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="border-top: Black 1pt solid; font-size: 10pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">Consolidated Balance Sheet Data</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: center"><B>As of September 30, 2021</B></TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Actual</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Pro Forma<SUP>(1)</SUP></B></TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Pro Forma, As Adjusted<SUP>(2)</SUP></B></TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White; width: 13%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">5,572</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[&bull;]</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White; width: 13%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Working capital (net) <SUP>(3)</SUP></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,744</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Total current assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">34,343</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Total assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">74,887</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Total current liabilities, including current portion of long term debt</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">29,599</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Total long-term liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,970</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Total liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">33,569</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Total liabilities, mezzanine equity and stockholders&rsquo; equity</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">74,887</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  </TABLE>


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<TD STYLE="border-left: Black 1pt solid; width: 3%"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">The pro forma balance sheet data gives effect to the December 2021 Private Placement, as described under
&ldquo;Our Company &ndash; Recent Developments&rdquo; above.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
<TD STYLE="border-left: Black 1pt solid">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                                                      </TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<TD STYLE="border-left: Black 1pt solid; width: 3%"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">The pro forma, as adjusted balance sheet data gives effect to the December 2021 Private Placement and
our issuance and sale of [&bull;] shares of common stock in this offering based on an assumed offering price of $[&bull;] per share, assuming
net proceeds of approximately $[&bull;] million, after deducting the underwriter&rsquo;s fees and estimated offering expenses payable
by us, and assuming no sale of any pre-funded warrants in this offering and no exercise of any accompanying warrants or the underwriter&rsquo;s
warrant.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
<TD STYLE="border-left: Black 1pt solid">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                  </TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<TD STYLE="border-left: Black 1pt solid; width: 3%"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">Working capital is defined as current assets less current liabilities.</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR><TR STYLE="vertical-align: top">
<TD STYLE="border-left: Black 1pt solid">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid">&nbsp;</TD></TR>
                                                                                                                                                                           </TABLE>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="border-bottom: Black 1pt solid; width: 100%; font-size: 10pt; border-collapse: collapse; border-left: Black 1pt solid; border-right: Black 1pt solid">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">Use of Non-GAAP Financial Measurements</TD>
    <TD STYLE="border-right: Black 1pt solid; width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt">The following non-GAAP (defined below) financial measures are intended to supplement the GAAP financial information by providing additional insight regarding our results of operations. The non-GAAP EBITDA and adjusted EBITDA financial measures used by us are intended to provide an enhanced understanding of our underlying operational measures to manage our business, to evaluate performance compared to prior periods and the marketplace, and to establish operational goals. Certain items are excluded from these non-GAAP financial measures to provide additional comparability measures from period to period. Specifically, the table below presents the non-GAAP financial measure &ldquo;EBITDA&rdquo; (defined as earnings before interest, taxes, depreciation, amortization) and &ldquo;Adjusted EBITDA&rdquo; (defined as earnings before interest, taxes, depreciation, amortization adjusted for stock-based compensation and other one-time transaction costs such as mergers and acquisitions, financings and other extraordinary items), respectively. The most directly comparable measures for these non-GAAP financial measure are net income and diluted net income per share. EBITDA and Adjusted EBITDA are intended as supplemental measures of our performance that are not required by or presented in accordance with accounting principles generally accepted in the United States of America (&ldquo;GAAP&rdquo;). We believe that EBITDA and Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; font-size: 10pt">We believe that the use of EBITDA and Adjusted EBITDA provide additional tools for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other businesses which may present similar non-GAAP financial measures to investors. We believe that EBITDA and Adjusted EBITDA are useful measures because they normalize operating results by excluding non-recurring gains, losses and other items and help to demonstrate how much cash we are able to generate annually. In addition, you should be aware when evaluating EBITDA and Adjusted EBITDA that in the future we may incur expenses similar to those excluded when calculating these measures. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate EBITDA and Adjusted EBITDA in the same fashion.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in; font-size: 10pt">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="border: Black 1pt solid; width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify; text-indent: 0.5in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify; text-indent: 0.5in">Our management does not consider EBITDA and Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitations of EBITDA and Adjusted EBITDA are that they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. Some of these limitations are:</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in; width: 13%">a.</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in">b.</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in">c.</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in">d.</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in">e.</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">EBITDA and Adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0.5in">f.</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify; text-indent: 0.5in">Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA only as supplements. You should review the reconciliation of net income to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify; text-indent: 0.5in">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-top: Black 1pt solid; border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; font-size: 10pt">&nbsp;</TD><TD STYLE="border-top: Black 1pt solid; font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="border-top: Black 1pt solid; font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD COLSPAN="9" STYLE="text-align: center; font-size: 10pt"><B>Reconciliation of Non-GAAP Financial Measures<BR> (unaudited)<BR> (in thousands)</B></TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Nine Months Ended</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2021</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2020</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White; width: 3%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Net loss from continuing operations</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 11%; font-size: 10pt; text-align: right">(4,520</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 2%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 11%; font-size: 10pt; text-align: right">(4,773</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White; width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Depreciation and amortization</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2624</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,025</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Interest expense</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">732</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,008</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Income tax expense</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">34</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">72</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">EBITDA from continuing operations</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,130</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(668</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Unrealized loss (gain) on equity securities (1)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">381</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(33</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Litigation costs (2)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">213</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">244</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Stock-based compensation</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">389</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">371</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">MDOS gain (3)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(847</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Tenant receivable (4)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">323</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Write off of software costs (5)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">70</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">Financing cost (7)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">231</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">COVID-19 Protection Equipment (8)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">82</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">46</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">SBA PPP Loan forgiveness (9)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(4,179</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Transaction costs (6)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">115</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-left: Black 1pt solid; background-color: White">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Adjusted EBITDA from continuing operations</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">(4,467</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">75</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: Black 1pt solid; background-color: White">&nbsp;</TD></TR>
  </TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="border-bottom: Black 1pt solid; width: 100%; border-collapse: collapse; font-size: 10pt; border-left: Black 1pt solid; border-right: Black 1pt solid">
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 10pt"><SUP>(1)</SUP></FONT></TD>
    <TD>Reflects change in fair value of investments in equity securities.</TD>
    <TD STYLE="width: 3%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><SUP>(2)</SUP></FONT></TD>
    <TD>Reflects one time litigation costs.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><SUP>(3)</SUP></FONT></TD>
    <TD>Reflects the gain from the sale of MD Office Solutions by a healthcare subsidiary.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><SUP>(4)</SUP></FONT></TD>
    <TD>Reflects one time write off in uncollectible tenant receivable.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><SUP>(5)</SUP></FONT></TD>
    <TD>Reflects one time write off in software costs.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><SUP>(6)</SUP></FONT></TD>
    <TD>Reflects legal and other costs related to the  merger of our construction businesses and holding company conversion.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><SUP>(7)</SUP></FONT></TD>
    <TD>Reflects financing costs from our credit facilities.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><SUP>(8) </SUP></FONT></TD>
    <TD>Reflects purchases related to COVID-19 Protection Equipment.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt"><SUP>(9)</SUP></FONT></TD>
    <TD>Reflects the forgiveness of the Paycheck Protection Program loan.</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">RISK FACTORS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Investing in our securities
involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained
in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus, before making your
decision to invest in our securities. We cannot assure you that any of the events discussed in the risk factors below will not occur.
These risks could have a material and adverse impact on our business, results of operations, financial condition and cash flows, and our
future prospects would likely be materially and adversely affected. If that were to happen, the trading price of our common stock could
decline, and you could lose all or part of your investment. In addition, you should carefully consider the other risks described under
the heading &ldquo;Risk Factors&rdquo; in our Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, which are incorporated herein by reference, as
updated by annual, quarterly and other reports and documents we file with the Securities and Exchange Commission after the date of this
prospectus and that are incorporated by reference herein.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Risks Related to this Offering</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have significant discretion over
the use of the net proceeds from this offering.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our net proceeds from this
offering are expected to be approximately $[&bull;] million, assuming no exercise of the underwriter&rsquo;s over-allotment option. We
intend to use the net proceeds of this offering to pursue organic growth initiatives and fund potential acquisitions, and for working
capital and other general corporate purposes. Our management will have broad discretion as to the application of such proceeds. As is
the case with any business, it should be expected that certain expenses unforeseeable to management at this juncture will arise in the
future. There can be no assurance that management&rsquo;s use of proceeds generated through this offering will prove optimal or translate
into revenue or profitability for us. Investors are urged to consult with their personal investment advisors, attorneys and accountants
prior to making any decision to invest in us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Even if this offering is successful,
we may need to raise additional capital in the future to continue operations, which may not be available on acceptable terms, or at all.
Failure to obtain this necessary capital if needed may have an adverse impact on our business and operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We had a net loss from continuing
operations for the year ended December 31, 2020 and nine months ended September 30, 2021 of $5.3 million and $4.5 million, respectively.
We may incur additional net losses from operations in the future, and we may experience quarter-to-quarter fluctuations in revenues, expenses
and losses, some of which may be significant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We estimate that we will
receive net proceeds of approximately $[&bull;] million from the sale of common stock, pre-funded warrants and warrants offered by
us in this offering, based on the assumed public offering price of $[&bull;] per share and warrant, and after deducting the underwriting fees
and estimated offering expenses payable by us. In the event of a decrease in the net proceeds to us from this offering as a result
of a decrease in the assumed public offering price per share or the number of shares offered by us, we may need to scale back or
eliminate certain of our business plans or raise additional capital sooner than we anticipate. However, we may not be able to raise
additional funds on acceptable terms, or at all. Conditions in the capital markets may make equity and debt financing more difficult
to obtain, and may negatively impact our ability to complete financing transactions. Any debt financing, if available, may involve
restrictive covenants, such as limitations on our ability to incur additional indebtedness and other operating restrictions that
could adversely impact our ability to conduct our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We expect to be limited in our ability
to utilize net operating loss carryforwards to reduce our future tax liability as a result of this offering.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As disclosed in our Annual
Report on Form 10-K for the year ended December 31, 2020 and quarterly reports on Form 10-Q for the quarters ended March 31, 2021, June
30, 2021 and September 30, 2021, under Section 382 of the Internal Revenue Code, if a corporation undergoes an &ldquo;ownership change,&rdquo;
generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation&rsquo;s ability
to use its pre-change net operating loss (&ldquo;NOL&rdquo;) carryforwards and other pre-change tax attributes (such as research tax credits)
to offset its post-change income may be limited. We expect that this offering, alone or in conjunction with other changes in our stock
ownership that we cannot control, may result in an &ldquo;ownership change.&rdquo; We may also experience ownership changes in the future
as a result of strategic transactions or partnerships, equity offerings and other shifts in our stock ownership. As a result, if we earn
net taxable income, our ability to use our pre-change NOL carryforwards and other deferred tax assets to offset U.S. federal taxable income
may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, similar limitations
may apply at the state level and there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which
could accelerate or permanently increase state taxes owed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An investment in our securities is
speculative and there can be no assurance of any return on any such investment.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">An investment in our securities
is speculative and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial
risks involved in an investment in us, including the risk of losing their entire investment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You may experience dilution if we
issue additional equity or equity-linked securities in the future.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we issue additional shares
of common stock, or securities convertible into or exchangeable or exercisable for shares of common stock, our stockholders, including
investors who purchase shares of common stock and accompanying warrants in this offering, will experience dilution if we issue shares
in the future at a price higher than the net tangible book value per share of our common stock, and any such issuances may result in downward
pressure on the price of our common stock. We also cannot assure you that we will be able to sell shares or other securities in any other
offering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing
shares or other securities in the future could have rights superior to existing stockholders. Furthermore, investors may experience further
dilution to the extent that shares of our common stock are issued upon the exercise of the warrants and pre-funded warrants issued in
this offering. If we issue additional equity securities, employee stock grants vest, or there are any issuances and subsequent exercises
of stock options issued in the future, you will experience additional dilution. See the section entitled &ldquo;Dilution&rdquo; for a
more detailed discussion of the net tangible book value per share of our common stock as impacted by this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Resales of our common stock in the
public market by our stockholders as a result of this offering may cause the market price of our common stock to fall.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Sales of a substantial number
of shares of our common stock in the public market could occur at any time. The issuance of new shares of our common stock could result
in resales of our common stock by our current stockholders concerned about the potential ownership dilution of their holdings. In turn,
these resales could have the effect of depressing the market price for our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There is no public market for the
warrants or pre-funded warrants being offered in this offering.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is no established public
trading market for the warrants or pre-funded warrants being offered in this offering, and we do not expect a market to develop. In addition,
we do not intend to apply to list the warrants or pre-funded warrants on any securities exchange or nationally recognized trading system,
including The Nasdaq Global Market. Without an active market, the liquidity of the warrants and the pre-funded warrants will be limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Holders of warrants and/or pre-funded
warrants purchased in this offering will have no rights as holders of shares of common stock until such holders exercise their warrants
and/or pre-funded warrants and acquire our shares of common stock, except as set forth in the warrants and/or pre-funded warrants.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as set forth in the
warrants and pre-funded warrants, until holders of warrants and/or pre-funded warrants acquire our shares of common stock upon exercise
of the warrants and/or pre-funded warrants, holders of warrants and/or pre-funded warrants have no rights with respect to our shares of
common stock underlying such warrants and pre-funded warrants. Upon exercise of the warrants and/or pre-funded warrants, the holders will
be entitled to exercise the rights of a stockholder of shares of common stock only as to matters for which the record date occurs after
the exercise date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The warrants and pre-funded warrants
are speculative in nature.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The warrants and pre-funded
warrants offered hereby do not confer any rights of share of common stock ownership on their holders, such as voting rights or the right
to receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price. Specifically, commencing
on the date of issuance, (i) holders of the pre-funded warrants may acquire the shares of common stock issuable upon exercise of such
warrants at an exercise price of&thinsp;$0.01 per share of common stock and (ii) holders of the warrants may exercise their right to acquire
the common stock and pay an exercise price of $[&bull;] per share (at least 100%, and up to 125%, of the public offering price per share
of our common stock). Moreover, following this offering, the market value of the warrants and/or pre-funded warrants is uncertain and
there can be no assurance that the market value of the warrants and/or pre-funded warrants will equal or exceed their public offering
price. There can be no assurance that the market price of the shares of common stock will ever equal or exceed the exercise price of the
warrants and/or pre-funded warrants, and consequently, whether it will ever be profitable for holders of the warrants and/or pre-funded
warrants to exercise the warrants and/or pre-funded warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a smaller reporting company, we
are subject to scaled disclosure requirements that may make it more challenging for investors to analyze and compare our results of operations
and financial prospects.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Currently, we are a &ldquo;smaller
reporting company,&rdquo; as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;).
As a &ldquo;smaller reporting company,&rdquo; we are able to provide simplified executive compensation disclosures in our filings and
have certain other decreased disclosure obligations in our filings with the SEC, including being required to provide only two years of
audited financial statements in annual reports. Consequently, it may be more challenging for investors to analyze our results of operations
and financial prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, we are a non-accelerated
filer as defined by Rule 12b-2 of the Exchange Act, and, as such, are not required to provide an auditor attestation of management&rsquo;s
assessment of internal control over financial reporting, which is generally required for SEC reporting companies under Section 404(b)
of the Sarbanes-Oxley Act. Because we are not required to, and have not, had our auditor provide an attestation of our management&rsquo;s
assessment of internal control over financial reporting, a material weakness in internal controls may remain undetected for a longer period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we cannot continue to satisfy The
Nasdaq Global Market continued listing standards and other Nasdaq rules, our common stock could be delisted, which would harm our business,
the trading price of our common stock, our ability to raise additional capital and the liquidity of the market for our common stock.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our common stock is currently
listed for trading on The Nasdaq Global Market. To maintain the listing of our common stock on The Nasdaq Global Market, we are required
to meet certain listing requirements, including, among others, either: (i) a minimum closing bid price of $1.00 per share, a market value
of publicly held shares (excluding shares held by our executive officers, directors and 10% or more stockholders) of at least $5.0 million
and stockholders&rsquo; equity of at least $10 million; or (ii) a minimum closing bid price of $1.00 per share, a market value of publicly
held shares (excluding shares held by our executive officers, directors and 10% or more stockholders) of at least $15.0 million and total
assets of at least $50.0 million and total revenue of at least $50.0 million (in the latest fiscal year or in two of the last three fiscal
years).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is no assurance that
we will be able to maintain compliance with the minimum closing price requirement and other listing requirements. In the event that we
fail to maintain compliance with Nasdaq listing requirements for 30 consecutive trading days, our common stock may be delisted from The
Nasdaq Global Market. If our common stock were to be delisted from Nasdaq and was not eligible for quotation or listing on another market
or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established
for unlisted securities such as the OTC Pink Market. In such event, it could become more difficult to dispose of, or obtain accurate price
quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media,
which could cause the price of our common stock to decline further.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If securities or industry analysts
do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, the price
and trading volume of our securities could decline.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The trading market for our
securities will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do
not currently have and may never obtain research coverage by securities and industry analysts. If no or few securities or industry analysts
commence coverage of us, the trading price for our securities would be negatively impacted. In the event we obtain securities or industry
analyst coverage, if any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual
property or our stock performance, or if our clinical trials and operating results fail to meet the expectations of analysts, the price
of our securities would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly,
we could lose visibility in the financial markets, which in turn could cause the price or trading volume of our securities to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Risks Related to Our Business and Industry</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have a history of annual net losses
attributable to common shareholders which may continue and which may negatively impact our ability to achieve our growth initiatives.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><FONT STYLE="font-style: normal; font-weight: normal">For
the year ended December 31, 2020, we had revenue of $78.2 million and a net loss attributable to common shareholders of $8.4 million.
At December 31, 2020, we had total stockholders&rsquo; equity of $18.4 million, a decrease of $2.7 million from December 31, 2019. Our
total stockholders&rsquo; equity increased to $19.3 million as of September 30, 2021 (and will increase further as a result of our December
2021 Private Placement). For the nine months ended September 30, 2021, we had revenue of $77.0 million, compared to revenue of $55.0 million
for the comparable period in 2020. We had a net loss attributable to common shareholders of $2,000 for the nine months ended September
30, 2021, compared to a net loss attributable to common shareholders of $7.4 million for the comparable 2020 period. There can be no assurance
that, even if our revenue increases, our future operations will result in net income attributable to common stockholders. Our failure
to increase our revenues or improve our gross margins will harm our business. We may not be able to sustain or increase profitability
on a quarterly or annual basis in the future. If our revenues grow more slowly than we anticipate, our gross margins fail to improve or
our operating expenses exceed our expectations, our operating results will suffer. The prices we charge for our products and services
may decrease, which would reduce our revenues and harm our business. If we are unable to sell our products at acceptable prices relative
to our costs, or if we fail to develop and introduce on a timely basis new products from which we can derive additional revenues, our
financial results will suffer.</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We rely on information technology
in our operations, and any material failure, inadequacy, interruption or security failure of that technology could materially harm our
business.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We rely on information technology
and systems, including the Internet, commercially available software, and other applications, to process, transmit, store, and safeguard
information and to manage or support a variety of our business processes, including financial transactions and maintenance of records,
which may include personal identifying information and other valuable or confidential information. If we experience material failures,
inadequacies, or interruptions or security failures of our information technology, we could incur material costs and losses. Further,
third-party vendors could experience similar events with respect to their information technology and systems that impact the products
and services they provide to us or to our customers. We rely on commercially available systems, software, tools, and monitoring, as well
as other applications and internal procedures and personnel, to provide security for processing, transmitting, storing, and safeguarding
confidential information such as personally identifiable information related to our employees and others, information regarding financial
accounts, and information regarding customers and vendors. We take various actions, and we incur significant costs, to maintain and protect
the operation and security of our information technology and systems, including the data maintained in those systems. However, it is possible
that these measures will not prevent the systems&rsquo; improper functioning or a compromise in security, such as in the event of a cyberattack
or the improper disclosure of information. Security breaches, computer viruses, attacks by hackers, online fraud schemes, and similar
breaches can create significant system disruptions, shutdowns, fraudulent transfer of assets, or unauthorized disclosure of confidential
information. For example, in April 2019, we became aware that we had been a victim of criminal fraud commonly referred to as &ldquo;business
email compromise fraud.&rdquo; The incident involved the impersonation of one of our officers and improper access to his email, wherein
the transfer by us of funds to a third-party account almost occurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The operation of our healthcare
business includes use of complex information technology infrastructures, access to the information technology networks of our customers,
as well as the collection of storing of patient information that is subject to HIPAA. In recent years, attacks on corporate information
technology infrastructures have become more common and more sophisticated. Any successful attack on our network could severely impact
our ability to conduct operations and could result in lost customers. Though we carry customary insurance for notification events in the
event of a patient information breach under HIPAA, our coverage may not be sufficient to cover every situation, and any notification could
severely impact our customer confidence and operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Despite any defensive measures
we take to manage threats to our business, our risk and exposure to these matters remain heightened because of, among other things, the
evolving nature of such threats in light of advances in computer capabilities, new discoveries in the field of cryptography, new and sophisticated
methods used by criminals including phishing, social engineering, or other illicit acts, or other events or developments that we may be
unable to anticipate or fail to adequately mitigate. Any failure to maintain the security, proper function and availability of our information
technology and systems, or certain third-party vendors&rsquo; failure to similarly protect their information technology and systems that
are relevant to our operations, or to safeguard our business processes, assets, and information could result in financial losses, interrupt
our operations, damage our reputation, cause us to be in default of material contracts, and subject us to liability claims or regulatory
penalties, any of which could materially and adversely affect us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may not be able to achieve the
anticipated synergies and benefits from business acquisitions.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Part of our business strategy
is to acquire businesses that we believe can complement or expand our current business activities, both financially and strategically.
In September 2019, we acquired ATRM Holdings, Inc. and its subsidiaries, including KBS, EdgeBuilder and Glenbrook with these synergistic
benefits in mind. Acquisitions involve many complexities, including, but not limited to, risks associated with the acquired business&rsquo;
past activities, loss of customers, regulatory changes that are not anticipated, difficulties in integrating personnel and human resource
programs, integrating ERP systems and other infrastructures, general underperformance of the business under our control versus the prior
owners, unanticipated expenses and liabilities, and the impact on its internal controls of compliance with the regulatory requirements
under the Sarbanes-Oxley Act of 2002. As a result, the realization of anticipated synergies or benefits from acquisitions may be delayed
or substantially reduced, and could potentially result in the impairment of our investment in these businesses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We face risks related to health pandemics
and other widespread outbreaks of contagious disease, including COVID-19 and its variants, which could significantly disrupt our operations
(particularly in our healthcare business) and impact our financial results.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business has been disrupted
and could be further materially adversely affected by the ongoing COVID-19 pandemic. The outbreak and government measures taken in response
have also had a significant impact, both direct and indirect, on businesses and commerce. Global health concerns, such as coronavirus,
could also result in social, economic, and labor instability in the countries in which we or the third parties with whom we engage operate.
The future progression of the outbreak and its effects on our business and operations are uncertain. We cannot presently predict the scope
and severity of any potential business shutdowns or disruptions, including downturns in global economies and financial markets that could
affect our future operating results. Any adverse impact on our results and financial condition could have a negative impact on our ability
to comply with certain financial covenants in certain of our loan agreements (as described further below) and on your investment in our
common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are subject to particular risks
associated with real estate ownership, which could result in unanticipated losses or expenses.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following our recent acquisition
of real estate, our business is subject to many risks that are associated with the ownership of real estate. For example, if our tenants
do not renew their leases or default on their leases, we may be unable to re-lease the facilities at favorable rental rates. Other risks
that are associated with real estate acquisition and ownership include, without limitation, the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">general liability, property and casualty losses, some of which may be uninsured;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the inability to purchase or sell our assets rapidly due to the illiquid nature of real estate and the
real estate market;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">leases which are not renewed or are renewed at lower rental amounts at expiration;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the default by a tenant or guarantor under any lease;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">costs relating to maintenance and repair of our facilities and the need to make expenditures due to changes
in governmental regulations, such as the Americans with Disabilities Act or remediation of unknown environmental hazards; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">acts of God and acts of terrorism affecting our properties.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our revenues may decline due to reductions
in Medicare and Medicaid reimbursement rates.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The success of our business
is largely dependent upon our medical professional customers&rsquo; ability to provide diagnostic care to their patients in an economically
sustainable manner, either through the purchase of our imaging systems or using our diagnostic services, or both. Our customers are directly
impacted by changes (decreases and increases) in governmental and private payor reimbursements for diagnostic services. We are directly
and indirectly impacted by changes in reimbursements. In our businesses, where we are indirectly affected by reimbursement changes, we
make every effort to act as business partners with our physician customers. For example, in 2010, we proactively adjusted our diagnostic
imaging services rates down due to the dramatic reimbursement declines that our customers experienced from the Centers for Medicare &amp;
Medicaid Services. Reimbursements remain a source of concern for our customers and downward pressure on reimbursements causes greater
pricing pressure on our services and influences the buying decisions of our customers. Although the gap is closing, hospital reimbursements
remain higher than in-office reimbursements. Our Diagnostic Imaging segment&rsquo;s products are targeted to serve the hospital market.
A smaller portion of our Diagnostic Services business segment operates in the hospital market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Reductions in reimbursements
could significantly impact the viability of in-office imaging performed by independent physicians, as well as the viability of our cardiac
event monitoring services business. The historical decline in reimbursements in diagnostic imaging has resulted in cancellations of imaging
days in our Diagnostic Services business and the delay of purchase and service decisions by our existing and prospective customers in
our Diagnostic Imaging business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Diagnostic Services revenues may
decline due to changes in diagnostic imaging regulations and the use of third party benefit managers by states and private payors to drive
down diagnostic imaging volumes.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Nuclear medicine is a &ldquo;designated
health service&rdquo; under the federal physician self-referral prohibition law known as the &ldquo;Stark Law,&rdquo; which states that
a physician may not refer designated health services to an entity with which the physician or an immediate family member has a financial
relationship, unless a statutory exception applies. Our business model and service agreements are structured to enable our physician customers
to meet the statutory in-office ancillary services (&ldquo;IOAS&rdquo;) exception to the Stark Law, allowing them to perform nuclear diagnostic
imaging services on their patients in the convenience of their own office. From time-to-time, the Centers for Medicare and Medicaid Services
and Congress have proposed to modify the IOAS to further limit or eliminate this exception. Various lobbying organizations, including
the Medicare Payment Advisory Commission (&ldquo;MedPAC&rdquo;), in the past have pushed for, discussed, and recommended that Congress
limit the availability of the IOAS exception in order to reduce federal healthcare costs. Legislation has been introduced in prior Congresses
to modify or eliminate the exception, but has not been enacted. The outcome of these efforts is uncertain at this time; however, the limitation
or elimination of the IOAS exception could significantly impact our Diagnostic Services business segment as currently structured.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our customers who perform
imaging services in their office also experience the continuing efforts by some private insurance companies to reduce healthcare expenditures
by hiring radiology benefit managers to help them manage and limit imaging. The federal government has also set aside monies in the 2009
recession recovery acts to hire radiology benefit managers to provide image management services to Medicare/Medicaid and MedPAC has recommended
and the Centers for Medicare &amp; Medicaid Services has, in the past, proposed legislation requiring Medicare physicians who engage in
a relatively high volume of medical imaging be required to obtain pre-authorization through a radiology benefit manager. A radiology benefit
manager is an unregulated entity that performs various functions for private payors and managed care organizations. Radiology benefit
manager activities can include pre-authorization for imaging procedures, setting and enforcing standards, approving which contracted physicians
can perform the services, such as requiring even the most experienced and highly qualified cardiologists to obtain additional board certifications,
or interfering with the financial decision of the private practitioner by requiring them to own their own imaging system and not allowing
them to lease the system. The radiology benefit managers often do not provide written documentation of their decisions or an appeals process,
leaving leasing physicians unable to challenge their decisions with the carrier or the state insurance department. Unregulated radiology
benefit manager activities have and could continue to adversely affect our physician customers&rsquo; ability to receive reimbursement,
therefore impacting our customers&rsquo; decision to utilize our Diagnostic Services imaging services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Operating results may be adversely
affected by changes in the costs and availability of supplies and materials.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Manufacturing and providing
service for our nuclear imaging cameras is highly dependent upon the availability of certain suppliers; thereby making us vulnerable to
supply problems and price fluctuations that could harm our business. Our manufacturing process within Diagnostic Imaging, and our warranty
and post-warranty camera support business, rely on a limited number of third parties to supply certain key components and manufacture
our products. Alternative sources of production and supply may not be readily available or may take several months to scale-up and develop
effective production processes. If a disruption in the availability of parts or in the operations of our suppliers were to occur, our
ability to have gamma cameras built as well as our ability to provide support could be materially adversely affected. In certain cases,
we have developed backup plans and have alternative procedures should we experience a disruption. However, if these plans are unsuccessful
or if we have a single source, delays in the production and support of our gamma cameras for an extended period of time could cause a
loss of revenue and/or higher production and support costs, which could significantly harm our business and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Diagnostic Services operations
are highly dependent upon the availability of certain radiopharmaceuticals, thereby making us vulnerable to supply problems and price
fluctuations that could harm our business. Our Diagnostic Service business involves the use of radiopharmaceuticals. There is a limited
number of major nuclear reactors supplying medical radiopharmaceuticals worldwide and there is no guarantee that the reactors will remain
in good repair or that our supplier will have continuing access to ample supply of our radiopharmaceutical product. If we are unable to
obtain an adequate supply of the necessary radiopharmaceuticals, we may be unable to utilize our personnel and equipment through our in-office
service operations, or the volume of our services could decline and our business may be adversely affected. Shortages can also cause price
increases that may not be accounted for in third party reimbursement rates, thereby causing us to lose margin or require us to pass increases
on to our physician customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Construction operating
results could be adversely affected by changes in the cost and availability of raw materials. Prices and availability of raw materials
used to manufacture our products can change significantly due to fluctuations in supply and demand. Additionally, availability of the
raw materials used to manufacture our products may be limited at times resulting in higher prices and/or the need to find alternative
suppliers. Both KBS&rsquo;s and EdgeBuilder&rsquo;s major material components are dimensional lumber and wood sheet products, which include
plywood and oriented strand board. Lumber costs are subject to market fluctuations. Furthermore, the cost of raw materials may also be
influenced by transportation costs. It is not certain that any price increases can be passed on to our customers without affecting demand
or that limited availability of materials will not impact our production capabilities. The state of the financial and housing markets
may also impact our suppliers and affect the availability or pricing of materials. The inability of KBS or EdgeBuilder to raise the price
of their products in response to increases in prices of raw materials or to maintain a proper supply of raw materials could have an adverse
effect on their revenue and earnings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our quarterly and annual financial
results are difficult to predict and are likely to fluctuate from period to period.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have historically experienced
seasonality in all of our businesses, volatility due to the changing healthcare environment, the variable supply of radiopharmaceuticals,
and downturns based on the changing U.S. economy. While our customers are typically obligated to pay us for imaging days to which they
have committed, our contracts permit some flexibility in scheduling when services are to be performed. We cannot predict with certainty
the degree to which seasonal circumstances such as the summer slowdown, winter holiday vacations, and weather conditions may affect the
results of our operations. We have also experienced fluctuations in demand of our diagnostic imaging product sales due to economic</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in">conditions,
capital budget availability, and other financial or business reasons, most recently the abrupt increases of quarantine restrictions and
reduced demand due to the COVID-19 pandemic. In addition, due to the way that customers in our target markets acquire our products, a
large percentage of our products are booked during the last month of each quarterly accounting period, and often there can be a large
amount in the last month of the year. As such, a delivery delay of only a few days may significantly impact quarter-to-quarter comparisons
of our results of operations. Moreover, the sales cycle for all of our capital products is typically lengthy, particularly in the hospital
market, which may cause us to experience significant revenue fluctuations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We spend considerable time and money
complying with federal and state laws, regulations, and other rules which may fluctuate based on healthcare policy, and if we are unable
to fully comply with such laws, regulations, and other rules, we could face substantial penalties.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Through our Healthcare businesses
we are directly, or indirectly through our customers, subject to extensive regulation by both the federal government and the states in
which we conduct our business, including: the federal Medicare and Medicaid anti-kickback laws and other Medicare laws, regulations, rules,
manual provisions, and policies that prescribe requirements for coverage and payment for services performed by us and our physician customers;
the federal False Claims statutes; the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended in 2009
under the HITECH Act that places direct legal obligations and higher liability on us with respect to the security and handling of personal
health information; the Stark Law; the federal Food, Drug and Cosmetic Act; federal and state radioactive materials laws; state food and
drug and pharmacy laws and regulations; state laws that prohibit the practice of medicine by non-physicians and fee-splitting arrangements
between physicians and non-physicians; state scope-of-practice laws; and federal rules prohibiting the mark-up of diagnostic tests to
Medicare under certain circumstances. If our customers are unable or unwilling to comply with these statutes, regulations, rules, and
policies, rates of our services and products could decline and our business could be harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Construction businesses
are subject to various federal, state and local laws and regulations. In recent years, a number of new laws and regulations have been
adopted, and there has been expanded enforcement of certain existing laws and regulations by federal, state and local agencies. These
laws and regulations, and related interpretations and enforcement activity, may change as a result of a variety of factors, including
political, economic or social events. Changes in, expanded enforcement of, or adoption of new federal, state or local laws and regulations
governing minimum wage or living wage requirements; the classification of exempt and non-exempt employees; the distinction between employees
and contractors; other wage, labor or workplace regulations; healthcare; data protection and cybersecurity; the sale and pricing of some
of our products; transportation; logistics; supply chain transparency; taxes; unclaimed property; energy costs and consumption; or environmental
matters could increase our costs of doing business or impact our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We maintain a compliance program
to identify and correct any compliance issues and remain in compliance with all applicable laws, to train employees, to audit and monitor
our operations, and to achieve other compliance goals. Like most companies with compliance programs, we occasionally discover compliance
concerns. In such cases, we take responsive action, including corrective measures when necessary. There can be no assurance that our responsive
actions will insulate us from liability associated with any detected compliance concerns.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If our past or present operations
are found to be in violation of any of the laws, regulations, rules, or policies described above or the other laws or regulations to which
we or our customers are subject, we may be subject to civil and criminal penalties, damages, fines, exclusion from federal or state healthcare
programs, or the curtailment or restructuring of our operations. Similarly, if our physician customers are found to be non-compliant with
applicable laws, they may be subject to sanctions that could have a negative impact on us. Any penalties, damages, fines, curtailment,
or restructuring of our operations could adversely affect our ability to operate our business and our financial results. Any action against
us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert
our management&rsquo;s attention from the operation of our business, and damage our reputation. Although compliance programs can mitigate
the risk of investigation and prosecution for violations of these laws, regulations, rules, and policies, the risks cannot be entirely
eliminated. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security, and fraud laws may prove
costly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are subject to risks associated
with self-insurance related to health benefits.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To help control our overall
long-term costs associated with employee health benefits, we are self-insured up to certain limits for our health plans. As such, we are
subject to risks associated with self-insurance of these health plan benefits. To limit our exposure, we have third party stop-loss insurance
coverage for both individual and aggregate claim costs. However, we could still experience unforeseen and potentially significant fluctuations
in our healthcare costs based on a higher than expected volume of claims below these stop-loss levels. These fluctuations could have a
material adverse effect on our financial position and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A portion of our operations are located
in a facility that may be at risk from fire, earthquakes, or other disasters.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Final assembly in our manufacturing
process and significant portions of our inventory are located in a single facility in Poway, California, near known fire areas and earthquake
fault zones. Future natural disasters could cause substantial delays in our operations and cause us to incur additional expenses. Although
we have taken precautions to insure our facilities and continuing operations, as well as provide for offsite back-up of our information
systems, this may not be adequate to cover our losses in any particular case.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The medical device industry is litigious,
which could result in the diversion of our management&rsquo;s time and efforts, and require us to incur expenses and pay damages that
may not be covered by our insurance.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our operations entail risks
of claims or litigation relating to product liability, radioactive contamination, patent infringement, trade secret disclosure, warranty
claims, vendor disputes, product recalls, property damage, misdiagnosis, breach of contract, personal injury, and death. Any litigation
or claims against us, or claims we bring against others, may cause us to incur substantial costs, could place a significant strain on
our financial resources, divert the attention of our management from our core business, and harm our reputation. We may incur significant
liability in the event of any such litigation, regardless of the merit of the action. If we are unable to obtain insurance, or if our
insurance is inadequate to cover claims, our cash reserves and other assets could be negatively impacted. Additionally, costs associated
with maintaining our insurance could become prohibitively expensive, and our ability to become or remain profitable could be diminished.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we cannot provide quality technical
and applications support, we could lose customers and our business and prospects will suffer.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The placement of our products
and the introduction of our technology at new customer sites requires the services of highly trained technical support personnel. Hiring
technical support personnel is very competitive in our industry due to the limited number of people available with the necessary scientific
and technical backgrounds and ability to understand our technology at a technical level. If we are unable to attract, train or retain
the number of highly qualified technical services personnel that our business needs, our business and prospects will suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our long-term results depend upon
our ability to improve existing products and services and develop, introduce, and market new products and services successfully.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business is dependent
on the continued improvement of our existing products and services and our development of new products and services utilizing our current
or other potential future technology. As we introduce new products and services or refine, improve or upgrade versions of existing products
and services, we cannot predict the level of market acceptance or the amount of market share these products and services will achieve,
if any. We cannot assure you that we will not experience material delays in the introduction of new products or services in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We generally sell our products
and services in industries that are characterized by rapid technological changes, frequent new product introductions and changing industry
standards. If we do not develop new products and services and product enhancements based on technological innovation on a timely basis,
our products and services may become obsolete over time and our revenues, cash flow, profitability and competitive position may suffer.
Even if we successfully innovate and develop new products, services and product enhancements, we may incur substantial costs in doing
so, and our profitability may suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may face risks associated
with launching new products and services. If we encounter development or manufacturing challenges or discover errors during our product
development cycle, the product launch dates of new products and services may be delayed. The expenses or losses associated with unsuccessful
product development or launch activities or lack of market acceptance of our new products and services could adversely affect our business
or financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our ability to protect our intellectual
property and proprietary technology through patents and other means is uncertain.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We rely on patent protection
as well as trademark, copyright, trade secret and other intellectual property rights protection and contractual restrictions to protect
our proprietary technologies, all of which provide limited protection and may not adequately protect our rights or permit us to gain or
keep any competitive advantage. Our success depends, in part, on our ability to protect our proprietary rights to the technologies used
in our products. If we fail to protect and/or maintain our intellectual property, third parties may be able to compete more effectively
against us, we may lose our technological or competitive advantage, and/or we may incur substantial litigation costs in our attempts to
recover or restrict use of our intellectual property.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We do not have any pending
patent applications. We cannot assure investors that we will continue to innovate and file new patent applications, or that if filed any
future patent applications will result in granted patents. Further, we cannot predict how long it will take for such patents to issue,
if at all. It is possible that, for any of our patents that have issued or that may issue in the future, our competitors may design their
products around our patented technologies. Further, we cannot assure investors that other parties will not challenge any patents granted
to us, or that courts or regulatory agencies will hold our patents to be valid, enforceable, and/or infringed. We cannot guarantee investors
that we will be successful in defending challenges made against our patents and patent applications. Any successful third-party challenge
or challenges to our patents could result in the unenforceability or invalidity of such patents, or such patents being interpreted narrowly
and/or in a manner adverse to our interests. Our ability to establish or maintain a technological or competitive advantage over our competitors
and/or market entrants may be diminished because of these uncertainties. For these and other reasons, our intellectual property may not
provide us with any competitive advantage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To the extent our intellectual
property offers inadequate protection, or is found to be invalid or unenforceable, we would be exposed to a greater risk of direct or
indirect competition. If our intellectual property does not provide adequate coverage of our competitors&rsquo; products, our competitive
position could be adversely affected, as could our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The measures that we use to protect
the security of our intellectual property and other proprietary rights may not be adequate, which could result in the loss of legal protection
for, and thereby diminish the value of, such intellectual property and other rights or we may need to enter into costly license agreements
in the future.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other than pursuing patents
on our technology, we also rely upon trademarks, trade secrets, copyrights and unfair competition laws, as well as license agreements
and other contractual provisions, to protect our intellectual property and other proprietary rights. Despite these measures, any of our
intellectual property rights could be challenged, invalidated, circumvented or misappropriated. In addition, we take steps to protect
our intellectual property and proprietary technology by entering into confidentiality agreements and intellectual property assignment
agreements with our employees, consultants, corporate partners and, when needed, our advisors. Such agreements may not be enforceable
or may not provide meaningful protection for our trade secrets and/or other proprietary information in the event of unauthorized use or
disclosure or other breaches of the agreements, and we may not be able to prevent such unauthorized disclosure. Moreover, if a party having
an agreement with us has an overlapping or conflicting obligation to a third party, our rights in and to certain intellectual property
could be undermined. Monitoring unauthorized and inadvertent disclosure is difficult, and we do not know whether the steps we have taken
to prevent such disclosure are, or will be, adequate. If we were to enforce a claim that a third party had illegally obtained and was
using our trade secrets, it would be expensive and time consuming, the outcome would be unpredictable, and any remedy may be inadequate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we are sued for infringing intellectual
property rights of third parties, it would be costly and time consuming, and an unfavorable outcome in that litigation could have a material
adverse effect on our business.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our success also depends on
our ability to develop, manufacture, market and sell our products and perform our services without infringing the proprietary rights of
third parties. Numerous U.S. issued patents and pending patent applications owned by third parties exist in the fields in which we are
developing products and services. As part of a business strategy to impede our successful commercialization and entry into new markets,
competitors may allege that our products and/or services infringe their intellectual property rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We could incur substantial
costs and divert the attention of our management and technical personnel in defending ourselves against claims of infringement made by
third parties. Any adverse ruling by a court or administrative body, or perception of an adverse ruling, may have a material adverse impact
on our ability to conduct our business and our finances. Moreover, third parties making claims against us may be able to obtain injunctive
relief against us, which could block our ability to offer one or more products or services and could result in a substantial award of
damages against us. Intellectual property litigation can be very expensive, and we may not have the financial means to defend ourselves.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because patent applications
can take many years to issue, there may be pending applications, some of which are unknown to us, that may result in issued patents upon
which our products or proprietary technologies may infringe. Moreover, we may fail to identify issued patents of relevance or incorrectly
conclude that an issued patent is invalid or not infringed by our technology or any of our products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our issued patents could be found
invalid or unenforceable if challenged in court, at the USPTO or other administrative agency, or in other lawsuits which could have a
material adverse impact on our business.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any patents we have obtained
or do obtain may be challenged by re-examination or otherwise invalidated or eventually found unenforceable. Both the patent application
process and the process of managing patent disputes can be time consuming and expensive. If we were to initiate legal proceedings against
a third party to enforce a patent related to one of our products or services, the defendant in such litigation could counterclaim that
our patent is invalid and/or unenforceable. Third parties may also raise similar claims before the USPTO even outside the context of litigation.
The outcome is unpredictable following legal assertions of invalidity and unenforceability. With respect to the validity question, for
example, we cannot be certain that no invalidating prior art existed of which we and the patent examiner were unaware during prosecution.
These assertions may also be based on information known to us or the USPTO. If a defendant or third party were to prevail on a legal assertion
of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the claims of the challenged patent. Such a loss
of patent protection would or could have a material adverse impact on our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Competitors may attempt to
challenge or invalidate our patents, or may be able to design alternative techniques or devices that avoid infringement of our patents
that have issued or that may issue in the future, or develop products with functionalities that are comparable to ours. In the event a
competitor infringes upon our patent or other intellectual property rights, litigation to enforce our intellectual property rights or
to defend our patents against challenge, even if successful, could be expensive and time consuming and could require significant time
and attention from our management. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents
against challenges from others.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">An adverse result in any such
litigation proceedings could put one or more of our patents at risk of being invalidated, being found to be unenforceable, and/or being
interpreted narrowly and could impact the validity or enforceability positions of our other patents. Furthermore, because of the substantial
amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information
could be compromised by disclosure during this type of litigation. In addition, an adverse outcome in such litigation or proceedings may
expose us to loss of our proprietary position, expose us to significant liabilities, or require us to seek licenses that may not be available
on commercially acceptable terms, if at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may make financial investments
in other businesses that may lose value.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As we look for the best ways
to deploy our capital and maximize our returns for our businesses and stockholders, we may make financial investments in other businesses
or processes for purposes of enhancing our supply chain, creating financial returns, strategic developments, or other purposes. These
investments may be speculative in nature, and there is no guarantee that we will experience a financial return and we may lose our entire
principal balance if not successful.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our goodwill and other long-lived
assets are subject to potential impairment that could negatively impact our earnings.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A significant portion of
our assets consists of goodwill and other long-lived assets, the carrying value of which may be reduced if we determine that those
assets are impaired. At September 30, 2021, goodwill and net intangible assets represented $24.9 million, or 33.3% of our total
assets, and at December 31, 2020, goodwill and net intangible assets represented $26.4 million, or 29.9% of our total assets. In
addition, net property and equipment assets totaled $9.1 million and $9.8 million, or 12.2% and 11.1%, respectively, of our total
assets at those dates. If actual results differ from the assumptions and estimates used in our goodwill and long-lived asset valuation
calculations, we could incur impairment charges, which could negatively impact our earnings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We review our reporting units
for potential goodwill impairment annually or more often if events or circumstances indicate that it is more likely than not that the
fair value of a reporting unit is less than its carrying amount. In addition, we test the recoverability of long-lived assets if events
or circumstances indicate the carrying values may not be recoverable. Recoverability of long-lived assets is measured by comparison of
their carrying amounts to future undiscounted cash flows the assets are expected to generate. We conduct impairment testing based on our
current business strategy in light of present industry and economic conditions, as well as future expectations. There are numerous risks
that may cause the fair value of a reporting unit to fall below its carrying amount and/or the value of long-lived assets to not be recoverable,
which could lead to the measurement and recognition of goodwill and/or long-lived asset impairment. These risks include, but are not limited
to, significant negative variances between actual and expected financial results, lowered expectations of future financial results, failure
to realize anticipated synergies from acquisitions, adverse changes in the business climate, and the loss of key personnel. If we are
not able to achieve projected performance levels, future impairments could be possible, which could negatively impact our earnings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If KBS is unable to maintain or establish
its relationships with independent dealers and contractors who sell its homes, KBS revenue could decline.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">KBS sells residential homes
through a network of independent dealers and contractors. As is common in the modular home industry, KBS&rsquo;s independent dealers may
also sell homes produced by competing manufacturers and can cancel their relationships with KBS on short notice. In addition, these dealers
may not remain financially solvent, as they are subject to industry, economic, demographic and seasonal trends similar to those faced
by KBS. If KBS is not able to maintain good relationships with its dealers and contractors or establish relationships with new solvent
dealers or contractors, KBS&rsquo;s revenue could decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Due to the nature of our business,
many of our expenses are fixed costs and if there are decreases in demand for products, it may adversely affect operating results.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many of our expenses, particularly
those relating to properties, capital equipment, and certain manufacturing overhead items, are fixed in the short term. Reduced demand
for products causes fixed production costs to be allocated across reduced production volumes, which may adversely affect gross margins
and profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Due to the nature of the work we and
our subsidiaries perform, we may be subject to significant liability claims and disputes.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We and our wholly owned subsidiaries
engage in services that can result in substantial injury or damages that may expose us to legal proceedings, investigations and disputes.
For example, in the ordinary course of our business, we may be involved in legal disputes regarding personal injury and wrongful death
claims, employee or labor disputes, professional liability claims, and general commercial disputes, as well as other claims. Lone Star Value Management, LLC, now a liquidated entity, previously was an exempt reporting advisor and subject to certain regulations
which at times may prompt investigations by the SEC or other regulatory bodies into proper compliance therewith. An unfavorable
legal ruling against us or our subsidiaries could result in substantial monetary damages. Although we have adopted a range of insurance,
risk management, safety, and risk avoidance programs designed to reduce potential liabilities, there can be no assurance that such programs
will protect us fully from all risks and liabilities. If we sustain liabilities that exceed our insurance coverage or for which we are
not insured, it could have a material adverse impact on our results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Risks Related to our Indebtedness</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 29, 2019, we
and certain of the Healthcare Subsidiaries entered into a Loan and Security Agreement with Sterling National Bank (the &ldquo;SNB
Loan Agreement&rdquo;). The SNB Loan Agreement is a five-year revolving credit facility (maturing in March 2024), which, as amended,
has a maximum credit amount of $20 million (the &ldquo;SNB Credit Facility&rdquo;). As of December 31, 2020, our floating rate under
this facility was 2.64%. On January 31, 2020, we and certain of our Real Estate and Investments Subsidiaries entered into a Loan and
Security Agreement with Gerber Finance Inc. (as amended, the &ldquo;Star Loan Agreement&rdquo;), which provides for a credit
facility with borrowing availability of up to $2.5 million, bearing interest at the prime rate plus 3.5% per annum, and matures on
January 1, 2025, unless terminated in accordance with the terms therein (the &ldquo;Star Loan&rdquo;). On January 31, 2020, we and
certain of our Construction Subsidiaries entered into a Loan and Security Agreement with Gerber (the &ldquo;EdgeBuilder Loan
Agreement&rdquo;), which provides for a credit facility with borrowing availability of up to $3.0 million, bearing interest at the
prime rate plus 2.75% per annum, and matures on January 1, 2022, subject to annual automatic extensions (the &ldquo;EdgeBuilder
Loan&rdquo;). The credit facility under the Loan and Security Agreement, dated February 23, 2016, by and among us, KBS, ATRM, and
Gerber (as amended, the &ldquo;KBS Loan Agreement&rdquo;) provides for a revolving credit facility of up to $4.0 million, bearing
interest at the prime rate plus 2.75%, that matures on February 22, 2022, subject to automatic extension for an additional year
unless terminated. The SNB Loan Agreement, Star Loan Agreement, EdgeBuilder Loan Agreement and KBS Loan Agreement are collectively
referred to as the &ldquo;Company Loan Agreements.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our indebtedness could restrict our
operations and make us more vulnerable to adverse economic conditions.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our indebtedness could have
important consequences for us and our stockholders. For example, the SNB Loan Agreement requires a balloon payment at the termination
of the facility in March 2024, which payment may require us to dedicate a substantial portion of our cash flow from operations to this
future payment if we feel we cannot be successful in our ability to refinance in the future, thereby reducing the availability of our
cash flow to fund working capital, capital expenditures, and acquisitions, and for other general corporate purposes. In addition, our
indebtedness could:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">increase our vulnerability to adverse economic and competitive pressures in our industry;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">place us at a competitive disadvantage compared to our competitors that have less debt;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">limit our flexibility in planning for, or reacting to, changes in our business and our industry; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">limit our ability to borrow additional funds on terms that are acceptable to us or at all.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company Loan Agreements governing
our indebtedness contain restrictive covenants that restrict our operating flexibility and require that we maintain specified financial
ratios. If we cannot comply with these covenants, we may be in default under one or more of the Company Loan Agreements.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company Loan Agreements
governing our indebtedness contain restrictions and limitations on our ability to engage in activities that may be in our long-term best
interests. The Company Loan Agreements contain affirmative and negative covenants that limit and restrict, among other things, our ability
to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">incur additional debt;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">sell assets;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">incur liens or other encumbrances;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">make certain restricted payments and investments;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">acquire other businesses; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">merge or consolidate.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SNB Loan Agreement limits
our ability to pay dividends and to redeem our equity securities if such dividend or redemption would result in our non-compliance with
the financial covenants in the SNB Loan Agreement, there is insufficient borrowing availability under the SNB Loan Agreement, or if there
is a default or event of default under the SNB Loan Agreement that has occurred and is continuing. In addition, the Company Loan Agreements
include explicit restrictions on the payment of dividends and distributions to us, which could limit our ability to pay dividends. We
may, therefore be required to reduce or eliminate our dividends, if any, including on our preferred stock (if any outstanding), and/or
may be unable to redeem shares of our preferred stock (if any outstanding) until compliance with such financial covenants can be met.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company Loan Agreements
contain various financial covenants that, going forward, we or our subsidiaries may not have the ability to meet. The Company Loan Agreements
also contain various other affirmative and negative covenants regarding, among other things, the performance of our business, capital
allocation decisions made by us and our subsidiaries, or events beyond our control.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our failure to comply with
our covenants and other obligations under the Company Loan Agreements may result in an event of default thereunder. A default, if not
cured or waived, may permit acceleration of our indebtedness. If our indebtedness is accelerated, we cannot be certain that we will have
sufficient funds available to pay the accelerated indebtedness (together with accrued interest and fees), or that we will have the ability
to refinance the accelerated indebtedness on terms favorable to us or at all. This could have serious consequences to our financial condition,
operating results, and business, and could cause us to become insolvent or enter bankruptcy proceedings, and stockholders may lose all
or a portion of their investment because of the priority of the claims of our creditors on our assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Substantially all of our assets (including
the assets of our subsidiaries) have been pledged to lenders as security for our indebtedness under the Company Loan Agreements.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company Loan Agreements
are secured by a first-priority security interest in substantially all of the assets of us and our subsidiaries and a pledge of all shares
and equity interests of our subsidiaries. Upon the occurrence and during the continuation of an event of default under any Company Loan
Agreement, the applicable lender may, among other things, declare the loans and all other obligations thereunder immediately due and payable
and may, in certain instances, increase the interest rate at which loans and obligations bear interest. The exercise by a lender of remedies
provided under the applicable Company Loan Agreement in the event of a default thereunder may have a material adverse effect on the liquidity,
financial condition and results of operations of the applicable borrowers and/or us and could cause such borrowers and/or us to become
bankrupt or insolvent. Our obligations and the obligations of our various subsidiaries under the Company Loan Agreements are guaranteed
by our other subsidiaries and/or us directly. In the event of any bankruptcy, liquidation, dissolution, reorganization, or similar proceeding
against us, the assets that are pledged as collateral securing any unpaid amounts under the applicable Company Loan Agreement must first
be used to pay such amounts, as well as any other obligation secured by the pledged assets, in full, before making any distributions to
our stockholders. In the event of any of the foregoing, our stockholders could lose all or a part of their investment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The inability of our company, KBS,
EdgeBuilder or any of our other subsidiaries to comply with applicable financial covenants under the Company Loan Agreements could have
a material adverse effect on our financial condition.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of June 30, 2021, our last test date, KBS
                                                                                                          and EdgeBuilder were not in compliance with the bi-annual financial covenants under the KBS Loan Agreement and EdgeBuilder Loan
                                                                                                          Agreement, respectively, which required no net annual post-tax loss and certain minimum leverage ratios as of the test date. We
                                                                                                          obtained waivers from Gerber, our lender, for these financial covenant violations. In addition, we anticipate that we will need a
                                                                                                          waiver from Gerber for certain of these financial events for our December 31, 2021 test date. While Gerber has historically provided
                                                                                                          us with timely waivers, there can be no assurance that we will be able to receive waivers for any financial covenant violations for
                                                                                                          the December 31, 2021 test date or in the future, or that we will comply with all financial covenants in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we or any of our subsidiaries
fail to comply with any applicable financial covenants under the Company Loan Agreements to which we are a party, or if there is otherwise
an event of default under the Company Loan Agreements by a borrower, the borrowers&rsquo; obligations thereunder may (subject to any applicable
cure periods) become immediately due and payable and the applicable lender(s) may demand the repayment of the credit facilities amount
outstanding and any unpaid interest thereon.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we are unable to generate or borrow
sufficient cash to make payments on our indebtedness, our financial condition would be materially harmed, our business could fail, and
stockholders may lose all of their investment.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our ability to make scheduled
payments on or to refinance our obligations will depend on our financial and operating performance, which will be affected by economic,
financial, competitive, business, and other factors, some of which are beyond our control. We cannot assure you that our business will
generate sufficient cash flow from operations to service our indebtedness or to fund our other liquidity needs. If we are unable to meet
our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our indebtedness on
or before maturity or sell certain of our assets. We cannot assure you that we will be able to restructure or refinance any of our indebtedness
on commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing
of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict
our business operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Increases in interest rates could
adversely affect our results from operations and financial condition.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SNB Loan Agreement and
Star Loan Agreement allow for amounts borrowed thereunder to be subject to a floating interest rate which may change with market interest
rates. An increase in prevailing interest rates would have an effect on the interest rates charged on our variable rate debt, which rise
and fall upon changes in interest rates. If prevailing interest rates or other factors result in higher interest rates, the increased
interest expense would adversely affect our cash flow and our ability to service our indebtedness.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Risks Related to our Common Stock</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The market price of our common stock
may be volatile, and the value of your investment could decline significantly.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The market price of our common
stock has been, and we expect it to continue to be, volatile. The prices at which our shares of common stock trade depend upon a number
of factors, including our historical and anticipated operating results, our financial situation, announcements of new products by us or
our competitors, history of timely dividend payments, our ability or inability to raise the additional capital we may need and the terms
on which we raise it, and general market and economic conditions. Some of these factors are beyond our control. Broad market fluctuations
may lower the market price of our common stock and affect the volume of trading in our stock, regardless of our financial condition, results
of operations, business, or prospects. It is impossible to assure you that the market price of our shares of common stock will not fall
in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our common stock has a low trading
volume and shares available under our equity compensation plans could affect the trading price of our common stock.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our common stock historically
has had a low trading volume. Any significant sales of our common stock may cause volatility in our stock price. We also have registered
shares of common stock that we may issue under our employee benefit plans or from our treasury stock. Accordingly, these shares can be
freely sold in the public market upon issuance, subject to restrictions under the securities laws. If any of these stockholders, or other
selling stockholders, cause a large number of securities to be sold in the public market without a corresponding demand, the sales could
reduce the trading price of our common stock. One or more stockholders holding a significant amount of our common stock might be able
to significantly influence matters requiring approval by our stockholders, possibly including the election of directors and the approval
of mergers or other business combination transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>A possible &ldquo;short squeeze&rdquo; due to a sudden increase
in demand of our common stock that largely exceeds supply may lead to price volatility in our common stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt">Investors may purchase our common stock to hedge
existing exposure in our common stock or to speculate on the price of our common stock. Speculation on the price of our common stock may
involve long and short exposures. To the extent aggregate short exposure exceeds the number of shares of our common stock available for
purchase in the open market, investors with short exposure may have to pay a premium to repurchase our common stock for delivery to lenders
of our common stock. Those repurchases may in turn, dramatically increase the price of our common stock until investors with short exposure
are able to purchase additional common shares to cover their short position. This is often referred to as a &ldquo;short squeeze.&rdquo;
A short squeeze could lead to volatile price movements in our common stock that are not directly correlated to the performance or prospects
of our company and once investors purchase the shares of common stock necessary to cover their short position the price of our common
stock may decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24pt">&nbsp;&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Payment of dividends on our common
stock is prohibited unless we have declared and paid (or set apart for payment) full accumulated dividends on the Series A Preferred Stock,
which also has a significant liquidation value.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless full cumulative dividends
on our preferred stock have been, or contemporaneously are, declared and paid or declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods, no dividends (other than a dividend in shares of common stock or other shares
of stock ranking junior to the Series A Preferred Stock (as defined herein) as to dividends and upon liquidation) may be declared and
paid or declared and set apart for payment on our common stock, nor may any shares of common stock be redeemed, purchased or otherwise
acquired for any consideration by us. To the extent dividends are not paid on our preferred stock, cumulative dividends accrue as part
of the liquidation value of our preferred stock, which has a liquidation value of $10.00 per share at issuance. Dividends on our preferred
stock are payable out of amounts legally available therefor at a rate equal to 10.0% per annum per $10.00 of stated liquidation preference
per share, or $1.00 per share of our preferred stock per year. Dividends on our preferred stock are only be payable in cash. As of December
29, 2021, there were 1,915,637 shares of our Series A Preferred Stock outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we fail to pay dividends on our
Series A Preferred Stock for six or more consecutive quarters, holders of our Series A Preferred Stock will be entitled to elect two additional
directors to our board of directors.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To the extent dividends are
not paid on the Series A Preferred Stock in accordance with their terms, cumulative dividends will accrue as part of the liquidation value
of the Series A Preferred Stock. Whenever dividends on any shares of Series A Preferred Stock are in arrears for six or more consecutive
quarters, then the holders of those shares together with the holders of all other series of preferred stock equal in rank with the Series
A Preferred Stock upon which like voting rights have been conferred and are exercisable, will be entitled to vote separately as a class
for the election of a total of two additional directors to our board of directors. Holders of our common stock will not be entitled to
vote no such additional directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may not be able to redeem our Series
A Preferred Stock upon a Change of Control Triggering Event.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon the occurrence of a Change
of Control Triggering Event (as such term is defined in the Certificate of Designations of our Series A Preferred Stock), unless we have
exercised our option to redeem our preferred stock after September 10, 2024, each holder of our preferred stock will have the right to
require us to redeem all or any part of such holder&rsquo;s preferred stock at a price equal to the liquidation preference of $10.00 per
share, plus an amount equal to any accumulated and unpaid dividends up to but excluding the date of payment, but without interest. If
we experience a Change of Control Triggering Event, there can be no assurance that we would have sufficient financial resources available
to satisfy our obligations to redeem our preferred stock and any indebtedness that may be required to be repaid or repurchased as a result
of such event. In addition, we may be unable to redeem our preferred stock upon a Change of Control Triggering Event if such redemption
would result in our non-compliance with the financial covenants in the Company Loan Agreements. Our failure to redeem our preferred stock
could have material adverse consequences for us and the holders of our preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The protective amendment contained
in our Restated Certificate of Incorporation, which is intended to help preserve the value of certain income tax assets, primarily tax
net operating loss carryforwards, may have unintended negative effects.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to Internal Revenue
Code Sections 382 and 383, use of our NOLs may be limited by an &ldquo;ownership change&rdquo; as defined under Section 382 of the Internal
Revenue Code and the Treasury Regulations thereunder. In order to protect our significant NOLs, we filed an amendment to our certificate
of incorporation (the &ldquo;Restated Certificate of Incorporation&rdquo;) (as amended and extended, the &ldquo;Protective Amendment&rdquo;)
with the Delaware Secretary of State on May 5, 2015. The Protective Amendment was approved by our stockholders at our 2021 Annual Meeting
of Stockholders held on October 21, 2021.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Protective Amendment is
designed to assist us in protecting the long-term value of our accumulated NOLs by limiting certain transfers of our common stock. The
Protective Amendment&rsquo;s transfer restrictions generally restrict any direct or indirect transfers of the common stock if the effect
would be to increase the direct or indirect ownership of the common stock by any person from less than 4.99% to 4.99% or more of the common
stock, or increase the percentage of the common stock owned directly or indirectly by a person owning or deemed to own 4.99% or more of
the common stock. Any direct or indirect transfer attempted in violation of the Protective Amendment will be void as of the date of the
prohibited transfer as to the purported transferee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Protective Amendment also
requires any person attempting to become a holder of 4.99% or more of our common stock to seek the approval of our board of directors.
This may have an unintended &ldquo;anti-takeover&rdquo; effect because our board of directors may be able to prevent any future takeover.
Similarly, any limits on the amount of stock that a stockholder may own could have the effect of making it more difficult for stockholders
to replace current management. Additionally, because the Protective Amendment may have the effect of restricting a stockholder&rsquo;s
ability to dispose of or acquire our common stock, the liquidity and market value of our common stock might suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Our stockholder
rights plan, or &ldquo;poison pill,&rdquo; includes terms and conditions which could discourage a takeover or other transaction that stockholders
may consider favorable.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; background-color: white"><FONT STYLE="background-color: white">On
June 2, 2021, stockholders of record at the close of business on that date received a dividend of one right (a &ldquo;Right&rdquo;) for
each outstanding share of common stock. Each Right entitles the registered holder to purchase one one-thousandth of a share of our Series
C Participating Preferred Stock (the &ldquo;Series C Preferred Stock&rdquo;), at a price of $12.00 per one-thousandth of a share of Series
C Preferred Stock, subject to adjustment (the &ldquo;Exercise Price&rdquo;). The Rights are not exercisable until the Distribution Date
referred to below. The description and terms of the Rights are set forth in the Rights Agreement between the Company and American Stock
Transfer &amp; Trust Company LLC, dated as of June 2, 2021 (the &ldquo;Rights Agreement&rdquo;), which has previously been filed as an
exhibit to our public reports</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; background-color: white">The
Rights Agreement imposes a significant penalty upon any person or group that acquires 4.99% or more (but less than 50%) of our then-outstanding
common stock without the prior approval of our board of directors. A person or group that acquires shares of our common stock in excess
of the applicable threshold, subject to certain limited exceptions, is called an &ldquo;Acquiring Person.&rdquo; Any rights held by an
Acquiring Person are void and may not be exercised. The Rights will not be exercisable until the earlier of ten days after a public announcement
by us that a person or group has become an Acquiring Person and ten business days (or a later date determined by our board of directors)
after a person or group begins a tender or an exchange offer that, if completed, would result in that person or group becoming an acquiring
person. On the date (if any) that the Rights become exercisable (the &ldquo;Distribution Date&rdquo;), each Right would allow its holder
to purchase one one-thousandth of a share of Preferred Stock for a purchase price of $12.00. In addition, if a person or group becomes
an Acquiring Person after the Distribution Date or already is an Acquiring Person and acquires more shares after the Distribution Date,
all holders of Rights, except the Acquiring Person, may exercise their rights to purchase a number of shares of the common stock (in lieu
of Preferred Stock) with a market value of twice the Exercise Price, upon payment of the purchase price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; background-color: white">The
Rights will expire on the earliest of (i) June 2, 2024, or such earlier date as of which our board of directors determines that the Rights
Agreement is no longer necessary for the preservation of our tax assets, (ii) the time at which the rights are redeemed, (iii) the time
at which the rights are exchanged, (iv) the effective time of the repeal of Section 382 of the Code or any successor statute if our board
of directors determines that the Rights Agreement is no longer necessary for the preservation of our tax assets, and (v) the first day
of our taxable year in which our board determines that no NOLs or other tax assets may be carried forward.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; background-color: white">The
Rights have certain anti-takeover effects, including potentially discouraging a takeover that stockholders may consider favorable. The
Rights will cause substantial dilution to a person or group that attempts to acquire us on terms not approved by the board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; background-color: white">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Anti-takeover provisions in our organizational
documents and Delaware law may prevent or delay removal of current management or a change in control.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Restated Certificate of
Incorporation and Bylaws contain provisions that may delay or prevent a change in control, discourage bids at a premium over the market
price of our common stock, and adversely affect the market price of our common stock and the voting and other rights of the holders of
our common stock. In addition, as a Delaware corporation, we are subject to Delaware corporate law, including Section 203 of the Delaware
General Corporation Law. In general, Section 203 prohibits a Delaware corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that the stockholder became an interested stockholder unless certain specific
requirements are met as set forth in Section 203. These provisions, alone or together, could have the effect of deterring or delaying
changes in incumbent management, proxy contests or changes in control.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Risks Related to Our Material Weakness in
Disclosure Controls</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Material weakness in our internal
control over financial reporting could have a significant adverse effect on our business and the price of our common stock.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a public reporting company,
we are subject to the rules and regulations established from time to time by the SEC. These rules and regulations require, among other
things, that we have, and periodically evaluate, disclosure controls and procedures that are designed to provide reasonable assurance
that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time
periods specified in the SEC&rsquo;s rules, regulations and forms, and that such information is accumulated and communicated to our management,
including our executive chairman and chief financial officer, to allow decisions regarding required disclosure. Reporting obligations
as a public company are likely to continue to burden our financial and management systems, processes and controls, as well as our personnel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a public company, we are
required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that
our management can certify as to the effectiveness of our internal control over financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Due to the existence of a material weakness described below, our executive chairman and chief financial officer concluded that our disclosure controls and procedures
were not effective as of September 30, 2021 and, as previously disclosed in our Annual Report on Form 10-K for the year ended December
31, 2020, management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2020 due
to a material weakness. A &ldquo;material weakness&rdquo; is a deficiency, or combination of deficiencies, in internal control over
financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements
will not be prevented or detected on a timely basis. We identified material errors in the accounting for debt classification which resulted
in the restatement of previously issued consolidated financial statements. These errors resulted from a material weakness related to ineffectively
designed controls over review of contracts for new debt agreements and the proper application of GAAP for such agreements. Although we
have developed and implemented a remediation plan which includes, but is not limited to, a more detailed review over debt contracts and
the proper application of GAAP, no assurance can be given that our disclosure controls and procedures will prevent or detect all errors
and fraud, which could have a significant adverse effect on our business and the price of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This prospectus, including
the sections entitled &ldquo;Prospectus Summary,&rdquo; &ldquo;Risk Factors&rdquo; and &ldquo;Use of Proceeds,&rdquo; as well as the information
we incorporate herein by reference contain forward-looking statements within the meaning of the federal securities laws. Forward-looking
statements include, but are not limited to, statements regarding expectations, intentions and strategies regarding the future. In addition,
any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying
assumptions, are forward-looking statements. The words &ldquo;target,&rdquo; &ldquo;anticipate,&rdquo; &ldquo;believe,&rdquo; &ldquo;continue,&rdquo;
&ldquo;could,&rdquo; &ldquo;estimate,&rdquo; &ldquo;expect,&rdquo; &ldquo;intend,&rdquo; &ldquo;may,&rdquo; &ldquo;might,&rdquo; &ldquo;plan,&rdquo;
&ldquo;possible,&rdquo; &ldquo;potential,&rdquo; &ldquo;predicts,&rdquo; &ldquo;project,&rdquo; &ldquo;should,&rdquo; &ldquo;would,&rdquo;
and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not
forward-looking.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The forward-looking statements
contained in this prospectus are based on current expectations and beliefs concerning future developments and their potential effects
on our company and its subsidiaries. There can be no assurance that future developments will be those that have been anticipated. Factors
that might cause such differences include, but are not limited to, those discussed in the section of this prospectus entitled &ldquo;Risk
Factors.&rdquo; New risks and uncertainties emerge from time to time, and it is not possible for us to predict all the risks and uncertainties
that could have an impact on the forward-looking statements, including without limitation, risks and uncertainties relating to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our financial performance, including our ability to generate revenue;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our recent conversion into a diversified holding company;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">business interruptions resulting from health epidemics or pandemics or other contagious outbreaks, such
as the ongoing COVID-19 pandemic and its variants or geopolitical actions, including war and terrorism, and natural disasters;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">ability of our products and services to achieve and/or maintain market success;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">success in retaining or recruiting, or changes required in, our officers, key employees or directors;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">potential ability to obtain additional financing when and if needed;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our ability to protect our intellectual property;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our ability to complete strategic acquisitions;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our ability to complete strategic divestitures;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our ability to manage growth and integrate acquired operations;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our ability or inability to pay dividends;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our ability to maintain compliance with The Nasdaq Stock Market LLC&rsquo;s listing maintenance standards;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">potential liquidity and trading of our securities;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">regulatory or operational risks;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">downward revisions to, or withdrawals of, our credit ratings, if any, by third-party rating agencies;
and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our estimates regarding expenses, future revenue, capital requirements and needs for additional financing.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot guarantee future
results, levels of activity or performance. You should not place undue reliance on these forward-looking statements, which speak only
as of the date of this prospectus. These cautionary statements should be considered with any written or oral forward-looking statements
that we may issue in the future. Except as required by applicable law, including the securities laws of the U.S., we do not intend to
update any of the forward-looking statements to conform these statements to reflect actual results, later events or circumstances or to
reflect the occurrence of unanticipated events. Our forward-looking statements do not reflect the potential impact of any future acquisitions,
mergers, dispositions, joint ventures or other investments or strategic transactions we may engage in.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">USE OF PROCEEDS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We estimate that the net proceeds
to us from our issuance and sale of the common stock, pre-funded warrants and warrants in this offering will be $[&bull;] million, based
on an assumed public offering price of $[&bull;] per share and accompanying warrant, after deducting underwriting discounts and commissions
and estimated offering expenses. If the over-allotment option granted to the underwriter is exercised in full, we will receive additional
net proceeds of $[&bull;] million, after deducting underwriting discounts and commissions and estimated offering expenses. We will only
receive additional proceeds from the exercise of the pre-funded warrants and/or the warrants issuable in this offering if such pre-funded
warrants and/or warrants are exercised at their respective exercise prices of $0.01 and $[&bull;] per share of common stock and the holders
of such pre-funded warrants and warrants pay the exercise price of such pre-funded warrants and warrants in cash.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We intend to use the net proceeds
from this offering for the following purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 80%; font-size: 10pt">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt"><B>Purpose</B></FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Estimated<BR>
Amount</B></FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0"><B>Estimated<BR>
Percentage of</B></P>
                                                                               <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>Net Proceeds</B></FONT></P></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 68%">Pursue organic growth initiatives</TD>
    <TD STYLE="width: 3%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD>
    <TD STYLE="text-align: right; width: 11%">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right; width: 1%">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right; width: 11%">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right; width: 1%">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Funding of potential acquisitions</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Working capital and general corporate purposes</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double"></TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; white-space: nowrap">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; white-space: nowrap; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; white-space: nowrap; text-align: right">%</TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Total</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double">$</TD>
    <TD STYLE="border-bottom: Black 4px double">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: right">%</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We currently intend to use
a significant portion of the net proceeds from the sale of the shares of our common stock and warrants to&nbsp;increase our balance sheet
liquidity in order to strengthen our direct sales and commercial partnership prospects in our construction operations. Our increased cash
position will provide us with the ability to more effectively compete in client bid proposals where net cash and bond requirements are&nbsp;required
or mandated&nbsp;by clients and commercial partners in order to participate in the bidding process for large, multi-year engagements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We also plan to use a significant
portion of the net proceeds of this offering to finance&nbsp;the costs of acquiring or investing in&nbsp;competitive and complementary
businesses, products and technologies as a part of our growth strategy. We currently intend to focus on opportunities in the construction
business, including through the use of bolt-on acquisitions to expand our existing divisions. We have no commitments or agreements with
respect to any such acquisitions or investments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We also intend to use the
net proceeds for working capital and other&nbsp;general corporate purposes, including continuing product development expenses, salaries,
professional fees, public reporting costs, office-related expenses and other corporate expenses, including interest and overhead.&nbsp;&nbsp;Any
additional net proceeds received from the exercise of the over-allotment option will be used for working capital and general corporate
purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The amount and timing of our
actual expenditures will depend on numerous factors, including the cash used in or generated by our operations, future acquisitions, if
any, the pace of the integration of any acquired businesses, and the level of our sales and marketing activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">DIVIDEND POLICY</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have not declared or paid
any dividends on our common stock since our 2018 fiscal year. We currently intend to retain all available funds and any future earnings
for the operation and expansion of our business and, therefore, we do not anticipate declaring or paying dividends on our common stick
in the foreseeable future. In addition, pursuant to the Certificate of Designations, so long as any of our 10.0% Series A Cumulative Perpetual
Preferred Stock (the &ldquo;Series A Preferred Stock&rdquo;) is outstanding, we are not permitted to directly or indirectly declare or
pay any dividend on our common stock as long as any dividends due on the Series A Preferred Stock remain unpaid. The payment of dividends
on our common stock will be at the discretion of our board of directors and will depend on our results of operations, capital requirements,
financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our future debt agreements,
and other factors that our board of directors may deem relevant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">CAPITALIZATION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table sets forth
our current liabilities and capitalization as of September 30, 2021 as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">on an actual basis;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">on a pro forma basis, giving effect to the December 2021 Private Placement, as described under &ldquo;Prospectus
Summary&mdash;Our Company; Recent Developments;&rdquo; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">on a pro forma, as adjusted basis, reflecting the December 2021 Private Placement and the issuance of
[&bull;] shares of common stock offered by this prospectus, based on an assumed offering price of $[&bull;] per share, assuming net proceeds
of approximately $[&bull;] million, after deducting underwriting discounts and commissions and estimated offering expenses payable by
us, but not giving effect to the exercise of the over-allotment option, and assuming no sale of any pre-funded warrants in this offering
and no exercise of any accompanying warrants or the underwriter&rsquo;s warrant.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The information below should
be read in conjunction with our unaudited condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for
the quarter ended September 30, 2021, which is incorporated in this prospectus by reference. These financial statements should also be
read with the &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations,&rdquo; which is included
in such Form 10-Q and incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: black 1.5pt solid; text-align: center"><B>As of September 30, 2021</B></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><B>Actual</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><B>Pro Forma</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Pro Forma,</B>&nbsp;</P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>as Adjusted</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><B>(unaudited)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><B>(unaudited)</B></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%">Current liabilities</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: black 2.25pt double">$</TD>
    <TD STYLE="width: 12%; border-bottom: black 2.25pt double; text-align: right">29,599</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: black 2.25pt double">$</TD>
    <TD STYLE="width: 12%; border-bottom: black 2.25pt double; text-align: right">[&bull;]</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: black 2.25pt double">$</TD>
    <TD STYLE="width: 12%; border-bottom: black 2.25pt double; text-align: right">[&bull;]</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Long-term debt, net of current portion</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash; &nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Deferred tax liabilities</TD>
    <TD>&nbsp;</TD>
    <TD>$</TD>
    <TD STYLE="text-align: right">85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>$</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>$</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">Operating lease liabilities, net of current portion</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">2,700</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">[&bull;]</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right">[&bull;]</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Other liabilities</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,185&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Total liabilities</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">33,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Total capitalization</TD>
    <TD>&nbsp;</TD>
    <TD>$</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>$</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>$</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Preferred stock, $0.0001 par value: 10,000,000, shares authorized: 10% Series A Cumulative Perpetual Preferred Stock, 8,000,000 shares, liquidation preference ($10.00 per share), 1,915,637 shares issued or outstanding at September 30, 2021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">21,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD><B>Stockholders&rsquo; equity:</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 13.5pt">Preferred stock, $0.0001 par value: 25,000 shares authorized; Series C Participating Preferred stock, no shares issued or outstanding</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 13.5pt">Common stock, $0.0001 par value: 30,000,000 shares authorized; 5,120,978 shares issued and outstanding (net of treasury shares), actual; [&bull;] shares issued and outstanding, pro forma</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 13.5pt">Treasury stock, at cost; 258,849 shares at September 30, 2021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">(5,728)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 13.5pt">Additional paid-in capital</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">148,618</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 13.5pt">Accumulated other comprehensive loss</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 13.5pt">Accumulated deficit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">(123,551)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 13.5pt">Total stockholders&rsquo; equity</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">19,339</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">[&bull;]</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">[&bull;]</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Total liabilities, mezzanine equity and stockholders&rsquo; equity</TD>
    <TD>&nbsp;</TD>
    <TD>$</TD>
    <TD STYLE="text-align: right">74,887</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">The table above is
based on 5,120,978 shares of common stock outstanding as of September 30, 2021, and excludes, as of such date:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">26,517 shares of common stock reserved for issuance pursuant to grants outstanding under our 2011 Inducement
Award Plan;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">40,620 shares of common stock reserved for issuance pursuant to grants outstanding under our 2014 Equity
Incentive Award Plan;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">62,849 shares of common stock reserved for future issuance under our 2018 Equity Incentive Award Plan;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">729,770 shares of common stock issuable upon the exercise of the warrants (including the underwriter&rsquo;s
warrants) issued in connection with the public offering that we completed in May 2020; </TD></TR><TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
                                                                                                    <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">[&bull;] shares of common stock issuable upon the exercise of the warrants offered hereby; and</TD></TR>
                                                                                                    </TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">[&bull;] shares of common stock issuable upon the exercise of the warrant we expect to grant to the underwriter
in connection with this offering.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise noted,
all information in this prospectus reflects and assumes (i) no sale of pre-funded warrants in this offering, which, if sold, would reduce
the number of shares that we are offering on a one-for-one basis, (ii) no exercise of outstanding options issued under our equity incentive
plans and (iii) no exercise of the accompanying warrants and the underwriter&rsquo;s warrant described above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">DILUTION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you purchase our common
stock and/or pre-funded warrants in this offering, you may experience dilution to the extent of the difference between the public offering
price per share or pre-funded warrant, as applicable in this offering and our as adjusted net tangible book value per share immediately
after this offering. Net tangible book value per share is equal to the amount of our total tangible assets, less total liabilities, divided
by the number of outstanding shares of our common stock. As of September 30, 2021, our net tangible book value was approximately $[&bull;]
million, or approximately $[&bull;] per share and our pro forma tangible net book value was approximately $[&bull;] million, or approximately
$[&bull;] per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">After giving effect to the
assumed sale by us of [&bull;] shares of our common stock in this offering at an assumed  public offering price of $[&bull;] per
share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us and assuming
no sale of any pre-funded warrants in this offering and no exercise of the accompanying warrants or the underwriter&rsquo;s warrant),
our pro forma, as adjusted net tangible book value as of September 30, 2021 would have been approximately $[&bull;] million, or approximately
$[&bull;] per share. This represents an immediate decrease in net tangible book value of $[&bull;] per share to existing stockholders
and an immediate increase in net tangible book value of $[&bull;] per share to new investors purchasing shares of our common stock in
this offering. The following table illustrates this per share dilution:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><B>Amount</B></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>Public offering price per share of common stock</TD>
    <TD>&nbsp;</TD>
    <TD>$</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>Pro forma net tangible book value (deficit) before offering</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>Increase in pro forma net tangible book value attributable to new investors</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>Pro forma as adjusted net tangible book value after offering</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: white">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD>Dilution in pro forma net tangible book value to new investors</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 2.25pt double">$</TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right">[&bull;]</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The discussion and table
above (i) assumes no exercise of the underwriters&rsquo; option to purchase up to an additional [&bull;] shares of common stock,
(ii) assumes no exercise of the warrant to be issued to the underwriter in connection with this offering, and (iii) assumes no sale
of any pre-funded warrants in this offering and no exercise of the accompanying warrants or the underwriter&rsquo;s warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing discussion and
table do not take into account further dilution to new investors that could occur upon the exercise of outstanding options or warrants
having a per share exercise price less than the public offering price per share of common stock sold in this offering. In addition, we
may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds
for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt
securities, the issuance of these securities could result in further dilution to our stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The table above is based on
5,120,978 shares of common stock outstanding as of September 30, 2021, and excludes, as of such date:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">26,517 shares of common stock reserved for issuance pursuant to grants outstanding under our 2011 Inducement
Award Plan;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">40,620 shares of common stock reserved for issuance pursuant to grants outstanding under our 2014 Equity
Incentive Award Plan;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">62,849 shares of common stock reserved for future issuance under our 2018 Equity Incentive Award Plan;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">729,770 shares of common stock issuable upon the exercise of the warrants (including the underwriter&rsquo;s
warrants) issued in connection with the public offering that we completed in May 2020; and</TD></TR><TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
                                                                                                    <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">[&bull;] shares of common stock issuable upon the exercise of the warrants offered hereby; and</TD></TR>
                                                                                                    </TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">[&bull;] shares of common stock issuable upon the exercise of the warrant we expect to grant to the underwriter
in connection with this offering.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise noted,
all information in this prospectus reflects and assumes (i) no sale of pre-funded warrants in this offering, which, if sold, would reduce
the number of shares that we are offering on a one-for-one basis, (ii) no exercise of outstanding options issued under our equity incentive
plans and (iii) no exercise of the accompanying warrants or underwriter&rsquo;s warrant described above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">DESCRIPTION OF OUR CAPITAL
STOCK AND SECURITIES WE ARE OFFERING</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following description
summarizes important terms of our capital stock. For a complete description, you should refer to our Restated Certificate of Incorporation
and Bylaws, as amended, copies of which are incorporated by reference to the exhibits to the registration statement of which this prospectus
is a part, as well as the relevant portions of the Delaware corporate law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are offering (i) up
to [&bull;] shares of common stock, (ii) up to [&bull;] pre-funded warrants, each exercisable for one share of common stock, and
(iii) warrants to purchase common stock accompanying each share of common stock and pre-funded warrant, with each accompanying
warrant exercisable for 0.5 of a share of common stock. For each pre-funded warrant we sell, the number of shares of common stock we
are offering will be decreased on a one-for-one basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following description
summarizes certain terms of our capital stock, the warrants and pre-funded warrants we are offering and certain provisions of our Restated
Certificate of Incorporation and Bylaws. This summary does not purport to be complete and is qualified in its entirety by the form of
the warrant, the form of the pre-funded warrant and the provisions of our Restated Certificate of Incorporation and Bylaws and to the
applicable provisions of Delaware corporate law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Authorized and Outstanding Capital Stock</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Restated Certificate of
Incorporation authorizes the issuance of 40,000,000 shares of capital stock, consisting of 30,000,000 shares of common stock and 10,000,000
shares of preferred stock, each with a par value of $0.0001 per share. Of our authorized preferred stock, 8,000,000 shares are designated
as Series A Preferred Stock and 25,000 shares are designated as Series C Preferred Stock. 500,000 shares of preferred stock were previously
designated as Series B Participating Preferred Stock. As of December 29, 2021, there were 5,805,916 shares of our common stock
outstanding, held of record by 159 holders, and 1,915,637 shares of our Series A Preferred Stock outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Common Stock</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Voting Rights</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of our common stock
are entitled to one vote per share on all matters to be voted upon by our stockholders. The holders of our common stock are not entitled
to cumulate voting rights with respect to the election of directors, which means that the holders of a majority of the shares voted can
elect all of the directors then standing for election.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Dividends</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subject to limitations under
Delaware corporate law and preferences that may apply to any outstanding shares of our preferred stock, holders of our common stock are
entitled to receive ratably such dividends or other distribution, if any, as may be declared by our board of directors out of funds legally
available therefor. Pursuant to the terms of the Series A Preferred Stock (as described below), until we pay all dividends that are due
and payable on the Series A Preferred Stock, we will be unable to pay dividends on our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Liquidation</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event of our liquidation,
dissolution or winding up, holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities,
subject to the liquidation preference of any of our outstanding shares of preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Rights and Preferences</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our common stock has no preemptive,
conversion or other rights to subscribe for additional securities. There are no redemption or sinking fund provisions applicable to our
common stock. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by,
the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Fully Paid and Nonassessable</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All outstanding shares of
our common stock are validly issued, fully paid and nonassessable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Nasdaq Global Market Listing</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our common stock is listed
for trading on The Nasdaq Global Market under the symbol &ldquo;STRR.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>Transfer Agent</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The transfer agent for our
common stock is American Stock Transfer &amp; Trust Company. Its address is 6201 15th Avenue, Brooklyn, New York 11219, and its telephone
number is (718) 921-8200.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Series A Preferred Stock</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our board of directors is
authorized, subject to limitations prescribed by Delaware corporate law, to issue preferred stock in one or more series, to establish
from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the
shares and any of its qualifications, limitations or restrictions, in each case without further vote or action by our stockholders. Our
board of directors can also increase (but not above the total number of authorized shares of the class) or decrease (but not below the
number of shares then outstanding) the number of shares of any series of preferred stock, without any further vote or action by our stockholders.
Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the
voting power or other rights of the holders of our common stock or other series of preferred stock. The issuance of preferred stock, while
providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, have
the effect of delaying, deferring or preventing a change in control of our company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following summary of the
terms and provisions of the Series A Preferred Stock does not purport to be complete and is qualified in its entirety by reference to
the pertinent sections of our Restated Certificate of Incorporation including the Certificate of Designations for the Series A Preferred
Stock, which supplements our Restated Certificate of Incorporation by classifying the Series A Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have authorized 8,000,000
shares of Series A Preferred Stock, of which 1,915,637 shares are currently outstanding. Our board of directors may, without the approval of holders of the Series A Preferred
Stock or common stock, designate additional series of authorized preferred stock ranking junior to the Series A Preferred Stock or designate
additional shares of the Series A Preferred Stock and authorize the issuance of such shares. Designation of preferred stock ranking senior
to the Series A Preferred Stock requires approval of the holders of Series A Preferred Stock, as described below in &ldquo;Voting Rights.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">No Sinking Fund</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Series A Preferred Stock
is not subject to any sinking fund.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Dividends</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of shares of the Series
A Preferred Stock are entitled to receive, when, as and if, authorized by our board of directors (or a duly authorized committee of our
board of directors) and declared by us, out of funds legally available for the payment of dividends, preferential cumulative cash dividends
at the rate of 10.0% per annum of the liquidation preference of $10.00 per share (equivalent to a fixed annual amount of $1.00 per share).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Dividends are payable quarterly,
in arrears, on the last calendar day of March, June, September and December (each a &ldquo;dividend payment date&rdquo;); provided that
if any dividend payment date is not a business day, then the dividend that would otherwise have been payable on that dividend payment
date may be paid on the next succeeding business day and no interest, additional dividends or other sums will accrue on the amount so
payable for the period from and after that dividend payment date to that next succeeding business day. To the extent that dividends are
not paid on the Series A Preferred Stock, cumulative dividends will accrue as part of the liquidation value of the Series A Preferred
Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Dividends are payable to holders
of record as they appear in our stock records for the Series A Preferred Stock at the close of business on the corresponding record date,
which is the first day of each month in which a quarterly dividend is to be paid, whether or not a business day (each, a &ldquo;dividend
record date&rdquo;). As a result, holders of shares of Series A Preferred Stock are not entitled to receive dividends on a dividend payment
date if such shares were not issued and outstanding on the applicable dividend record date. Our board of directors may not authorize,
declare, pay or set apart for payment any dividends on shares of Series A Preferred Stock at any time that the terms and provisions of
any of our agreements, including any agreement relating to our indebtedness, prohibits that action or provides that the authorization,
declaration, payment or setting apart for payment of those dividends would constitute a breach of or a default under any such agreement,
or if such action is restricted or prohibited by law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notwithstanding the foregoing,
dividends on the Series A Preferred Stock accumulate whether or not restrictions exist in respect thereof, whether or not we have earnings,
whether or not there are funds legally available for the payment of such dividends and whether or not we declare such dividends. Accumulated
but unpaid dividends on the Series A Preferred Stock do not bear interest, and holders of the Series A Preferred Stock are not entitled
to any distributions in excess of full cumulative dividends described above. Except as stated in the two paragraphs below, no dividends
may be declared and paid or set apart for payment on any common stock or any series or class of equity securities ranking junior to the
Series A Preferred Stock (other than a dividend in shares of common stock or in shares of any other class of stock ranking junior to the
Series A Preferred Stock as to dividends and upon liquidation) for any period unless full cumulative dividends have been or contemporaneously
are declared and paid (or declared and a sum sufficient for the payment of those dividends is set apart for such payment) on the Series
A Preferred Stock for all past dividend periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we do not declare and either
pay or set apart for payment the full cumulative dividends on the Series A Preferred Stock and all shares of capital stock that are equal
in rank with Series A Preferred Stock, the amount which we have declared will be allocated ratably to the Series A Preferred Stock and
to each series of shares of capital stock equal in rank so that the amount declared for each share of Series A Preferred Stock and for
each share of each series of capital stock equal in rank is proportionate to the accrued and unpaid dividends on those shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as provided in the
immediately preceding paragraph, unless full cumulative dividends on the Series A Preferred Stock have been or contemporaneously are declared
and paid (or declared and a sum sufficient for the payment is set apart for payment) for all past dividend periods, no dividends (other
than in shares of common stock or other shares of capital stock ranking junior to the Series A Preferred Stock as to dividends and upon
liquidation) may be declared and paid or declared and set apart for payment nor may any other distribution be declared and made upon our
common stock, or any of our other capital stock ranking junior to or equal with the Series A Preferred Stock as to dividends or upon liquidation,
nor may we redeem, purchase or otherwise acquire for any consideration (or pay or make any monies available for a sinking fund for the
redemption of any such shares) any shares of common stock, or any other shares of our capital stock ranking junior to or equal with the
Series A Preferred Stock as to dividends or upon liquidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of shares of the Series
A Preferred Stock are not entitled to any distribution, whether payable in cash, property or shares of capital stock, in excess of full
cumulative dividends on the Series A Preferred Stock as described above. Any dividend payment made on the Series A Preferred Stock is
first credited against the earliest accumulated but unpaid dividends on the Series A Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Redemption</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>No Mandatory Redemption</B>.
The Series A Preferred Stock is perpetual preferred stock, and we are not required to provide for the mandatory redemption of the Series
A Preferred Stock at any time, other than upon a Change of Control Triggering Event as described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Optional Redemption</B>.
The Series A Preferred Stock is not redeemable prior to September 10, 2024. On and after September 10, 2024, at our sole option upon not
less than 30 nor more than 60 days&rsquo; written notice, we may redeem shares of the Series A Preferred Stock, in whole or in part, at
any time or from time to time, for cash at a redemption price of $10.00 per share, plus an amount equal to all accumulated and unpaid
dividends thereon to, but excluding, the date fixed for redemption, without interest. Holders of Series A Preferred Stock to be redeemed
must then surrender such Series A Preferred Stock at the place designated in the notice. Upon surrender of the Series A Preferred Stock,
the holders are entitled to the redemption price thereon to, but excluding the date fixed for redemption, without interest. If notice
of redemption of any shares of Series A Preferred Stock has been given and if we have deposited the funds necessary for such redemption
with the paying agent for the benefit of the holders of any of the shares of Series A Preferred Stock to be redeemed, then from and after
the date of such deposit dividends will cease to accumulate on those shares of Series A Preferred Stock, those shares of Series A Preferred
Stock will no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the
redemption price. If less than all of the outstanding Series A Preferred Stock is to be redeemed, the Series A Preferred Stock to be redeemed
will be selected ratably by lot or by any other fair and equitable method that our board of directors may choose.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless full cumulative dividends
for all applicable past dividend periods on all shares of Series A Preferred Stock and any shares of stock that rank on parity with regard
to dividends and upon liquidation have been or contemporaneously are declared and paid (or declared and a sum sufficient for payment set
apart for payment for all past dividend periods), no shares of Series A Preferred Stock may be redeemed. In such event, we also may not
purchase or otherwise acquire directly or indirectly any shares of Series A Preferred Stock (except by exchange for our capital stock
ranking junior to the Series A Preferred Stock as to dividends and upon liquidation). However, the foregoing will not prevent us from
purchasing shares pursuant to our Restated Certificate of Incorporation or from acquiring shares of Series A Preferred Stock pursuant
to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series A Preferred Stock and any shares
of stock that rank on parity with regard to dividends and upon liquidation. So long as no dividends are in arrears, we are entitled at
any time and from time to time to repurchase shares of Series A Preferred Stock in open-market transactions duly authorized by our board
of directors and effected in compliance with applicable laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will deliver a notice of
redemption, by overnight delivery, by first class mail, postage prepaid or electronically to holders thereof, or request our agent, on
behalf of our company, to promptly do so by overnight delivery, by first class mail, postage prepaid or electronically. The notice must
be provided not less than 30 nor more than 60 days prior to the date fixed for redemption in such notice. Each such notice must state:
(A) the date for redemption; (B) the number of Series A Preferred Stock to be redeemed; (C) the CUSIP number for the Series A Preferred
Stock; (D) the applicable redemption price on a per share basis; (E) if applicable, the place or places where the certificate(s) for such
shares are to be surrendered for payment of the price for redemption; (F) that dividends on the Series A Preferred Stock to be redeemed
will cease to accumulate from and after such date of redemption; and (G) the applicable provisions of our charter under which such redemption
is to be made. If fewer than all shares held by any holder are to be redeemed, the notice delivered to such holder must also specify the
number of Series A Preferred Stock to be redeemed from such holder or the method of determining such number. We may provide in any such
notice that such redemption is subject to one or more conditions precedent and that we are not required to effect such redemption unless
each such condition has been satisfied at the time or times and in the manner specified in such notice. No defect in the notice or delivery
thereof shall affect the validity of redemption proceedings, except as required by applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a redemption date falls
after a record date and prior to the corresponding dividend payment date, however, each holder of Series A Preferred Stock at the close
of business on that record date is entitled to the dividend payable on such shares on the corresponding dividend payment date notwithstanding
the redemption of such shares before the dividend payment date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Change of Control</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a Change of Control Triggering
Event occurs with respect to the Series A Preferred Stock, unless we have exercised our option to redeem such Series A Preferred Stock
as described above, holders of our preferred stock have the right to require us to redeem (a &ldquo;Change of Control Redemption&rdquo;)
the Series A Preferred Stock at a price equal to the liquidation preference of $10.00 per share, plus an amount equal to any accumulated
and unpaid dividends up to but excluding the date of payment, but without interest (a &ldquo;Change of Control Payment&rdquo;). Within
30 days following any Change of Control Triggering Event or, at our option, prior to any Change of Control Triggering Event, but after
public announcement of the transaction that constitutes or may constitute the Change of Control Triggering Event, we must mail a notice
to holders of Series A Preferred Stock, describing the transaction that constitutes or may constitute the Change of Control Triggering
Event and offer to redeem such Series A Preferred Stock on the date specified in the applicable notice, which date may be no earlier than
30 days and no later than 60 days from the date such notice is mailed (a &ldquo;Change of Control Payment Date&rdquo;). The notice must,
if mailed prior to the date of consummation of the Change of Control Triggering Event, state that the Change of Control Redemption is
conditioned on the Change of Control Triggering Event occurring on or prior to the applicable Change of Control Payment Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On each Change of Control
Payment Date, we are required to (to the extent lawful):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">redeem all Series A Preferred Stock or portions of Series A Preferred Stock properly tendered pursuant
to the applicable Change of Control Redemption;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">deposit with the paying agent an amount equal to the Change of Control Payment in respect of all our preferred
stock properly tendered; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">deliver or cause to be delivered to the paying agent the Series A Preferred Stock properly accepted together
with an officers&rsquo; certificate stating the Series A Preferred Stock being redeemed.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are not required to make
a Change of Control Redemption upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the
manner, at the times and otherwise in compliance with the requirements for an offer made by us and the third party redeems all Series
A Preferred Stock properly tendered and not withdrawn under its offer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will comply with the requirements
of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations
are applicable in connection with the redemption of the Series A Preferred Stock as a result of a Change of Control Triggering Event.
To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Redemption provisions
of the Series A Preferred Stock, we must comply with those securities laws and regulations and would not be deemed to have breached our
obligations under the Change of Control Redemption provisions of the Series A Preferred Stock by virtue of any such conflict.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For purposes of the foregoing
discussion of the redemption of the Series A Preferred Stock at the option of the holders, the following definitions are applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;Change of Control Triggering
Event&rdquo; means the occurrence of any of the following: (1) the direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or more series of related transactions, of all or substantially all of our assets
and the assets of our subsidiaries, taken as a whole, to any Person, other than us or one of our subsidiaries; (2) the consummation of
any transaction (including, without limitation, any merger or consolidation) the result of which is that any Person becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of our outstanding Voting
Stock or other Voting Stock into which our Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power
rather than number of shares; (3) we consolidate with, or merge with or into, any Person, or any Person consolidates with, or merges with
or into, us,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in">in any such
event pursuant to a transaction in which any of our outstanding Voting Stock or the Voting Stock of such other Person is converted into
or exchanged for cash, securities or other property, other than any such transaction where the shares of our Voting Stock outstanding
immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving
Person or any direct or indirect parent company of the surviving Person immediately after giving effect to such transaction; (4) the
first day on which a majority of the members of our board of directors are not Continuing Directors; or (5) the adoption of a plan relating
to our liquidation or dissolution. Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control Triggering
Event under clause (2) above if (i) we become a direct or indirect wholly-owned subsidiary of a holding company and (ii)(A) the direct
or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as
the holders of our Voting Stock immediately prior to that transaction or (B) immediately following that transaction no Person (other
than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50%
of the Voting Stock of such holding company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;Continuing Directors&rdquo;
means, as of any date of determination, any member of our board of directors who (A) was a member of such board of directors on the date
the Series A Preferred Stock was issued or (B) was nominated for election, elected or appointed to such board of directors with the approval
of a majority of the continuing directors who were members of such board of directors at the time of such nomination, election or appointment
(either by a specific vote or by approval of a proxy statement in which such member was named as a nominee for election as a director,
without objection to such nomination).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&ldquo;Voting Stock&rdquo;
means, with respect to any specified Person that is a corporation as of any date, the Capital Stock of such Person that is at the time
entitled to vote generally in the election of the board of directors of such Person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Liquidation Preference</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event of our voluntary
or involuntary liquidation, dissolution or winding up, the holders of shares of Series A Preferred Stock are entitled to be paid, out
of our assets legally available for distribution to our stockholders, a liquidation preference of $10.00 per share, plus an amount equal
to any accumulated and unpaid dividends to, but excluding, the date of payment, but without interest, before any distribution of assets
is made to holders of our common stock or any other class or series of our capital stock that ranks junior to the Series A Preferred Stock
as to liquidation rights. If our assets legally available for distribution to stockholders are insufficient to pay in full the liquidation
preference on the Series A Preferred Stock and the liquidation preference on any shares of preferred stock equal in rank with the Series
A Preferred Stock, all assets distributed to the holders of the Series A Preferred Stock and any other series of preferred stock equal
in rank with the Series A Preferred Stock will be distributed ratably so that the amount of assets distributed per share of Series A Preferred
Stock and such other series of preferred stock equal in rank with the Series A Preferred Stock will in all cases bear to each other the
same ratio that the liquidation preference per share on the Series A Preferred Stock and on such other series of preferred stock bear
to each other. Written notice of any such liquidation, dissolution or winding up of our company, stating the payment date or dates when,
and the place or places where, the amounts distributable in such circumstances are payable, will be given by first class mail, postage
pre-paid, not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of the Series A Preferred
Stock at the respective addresses of such holders as the same appear on our stock transfer records. After payment of the full amount of
the liquidation preference, plus any accumulated and unpaid dividends to which they are entitled, the holders of Series A Preferred Stock
have no right or claim to any of our remaining assets. If we convert into or consolidate or merge with or into any other corporation,
trust or entity, effect a statutory share exchange or sell, lease, transfer or convey all or substantially all of our property or business,
we will not be deemed to have liquidated, dissolved or wound up.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Ranking</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Series A Preferred Stock
ranks, with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding
up:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">senior to all classes or series of our common stock and to all other equity securities issued by us other
than equity securities referred to in the next two bullet points below;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">on parity with all equity securities issued by us with terms specifically providing that those equity
securities rank on a parity with the Series A Preferred Stock with respect to rights to the payment of dividends and the distribution
of assets upon our liquidation, dissolution or winding up;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">junior to all equity securities issued by us with terms specifically providing for ranking senior to the
Series A Preferred Stock with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution
or winding up (see &ldquo;Voting Rights&rdquo; below); and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">effectively junior to all of our existing and future indebtedness (including indebtedness convertible
to our common stock or preferred stock) and to any indebtedness and other liabilities of (as well as any preferred equity interests held
by others in) our existing subsidiaries.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Voting Rights</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of the Series A Preferred
Stock do not have any voting rights, except as described below or otherwise required by law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Whenever dividends on any
shares of Series A Preferred Stock are in arrears for six or more consecutive quarters, then the holders of those shares together with
the holders of all other series of preferred stock equal in rank with the Series A Preferred Stock upon which like voting rights have
been conferred and are exercisable, are entitled to vote separately as a class for the election of a total of two additional directors
to our board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The election of these directors
will take place at a special meeting called upon the written request of the holders of record of at least 20% of the Series A Preferred
Stock and the holders of record of at least 20% of any class or series of preferred stock equal in rank with the Series A Preferred Stock
which like voting rights have been conferred and are exercisable (unless such request is received less than 90 days before the date fixed
for the next annual or special meeting of our stockholders in which case, such vote will be held at the earlier of the next annual or
special meeting of our stockholders) or at the next annual meeting of our stockholders, and at each subsequent annual or special meeting
until all dividends accumulated from past dividend periods and the then current dividend period have been paid (or declared and a sum
sufficient for payment set apart). A quorum for any such meeting will exist if at least a majority of the total outstanding shares of
Series A Preferred Stock and shares of preferred stock equal in rank with the Series A Preferred Stock entitled to like voting rights
are represented in person or by proxy at that meeting. The directors elected as described above will be elected upon the affirmative vote
of a plurality of the votes cast by the holders of shares of Series A Preferred Stock and preferred stock equal in rank with the Series
A Preferred Stock voting separately as a single class, present and voting in person or by proxy at a duly called and held meeting at which
a quorum is present. If and when all accumulated dividends and the dividend for the then current dividend period on the Series A Preferred
Stock have been paid in full or declared or set apart for payment in full, the holders of the Series A Preferred Stock will be divested
of the right to elect directors and, if all dividend arrearages have been paid in full or declared and set apart for payment in full on
all series of preferred stock entitled to like voting rights, the term of office of each director so elected will terminate. Any director
so elected may be removed at any time with or without cause by, and will not be removed otherwise than by the vote of, the holders of
record of a majority of the outstanding shares of the Series A Preferred Stock having the voting rights described above, voting separately
as a single class with all classes or series of preferred stock entitled to like voting rights. So long as a dividend arrearage continues,
any vacancy in the office of a director elected as described above may be filled by written consent of the director elected as described
above who remains in office, or if none remains in office, by a vote of the holders of record of a majority of the outstanding shares
of Series A Preferred Stock when they have the voting rights described above, voting separately as a single class with all classes or
series of preferred stock entitled to like voting rights. These directors will each be entitled to one vote per director on any matter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a special meeting is not
called by us within 30 days after request from the holders of Series A Preferred Stock, then the holders of record of at least 20% of
the outstanding our preferred stock may designate a holder to call the meeting at the expense of our company and such meeting may be called
by the holder so designated upon notice similar to that required for annual meetings of stockholders and will be held at the place designated
by the holder calling such meeting. We must pay all costs and expenses of calling and holding any meeting and of electing directors as
described above, including, without limitation, the cost of preparing, reproducing and mailing the notice of such meeting, the cost of
renting a room for such meeting to be held, and the cost of collecting and tabulating votes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">So long as any shares of Series
A Preferred Stock remain outstanding, we may not, without the affirmative vote or consent of the holders of at least a majority of the
shares of the Series A Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting
separately as a class), amend, alter or repeal the provisions of our charter, including the articles supplementary designating the Series
A Preferred Stock, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege
or voting power of the Series A Preferred Stock. However, with respect to the occurrence of any event listed above, so long as the Series
A Preferred Stock remains outstanding (or shares issued by a surviving entity in substitution for the Series A Preferred Stock) with its
terms materially unchanged, taking into account that upon the occurrence of such an event, we may not be the surviving entity, the occurrence
of any such event will not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders
of the Series A Preferred Stock. In addition (i) any increase in the number of authorized shares of Series A Preferred Stock, (ii) any
increase in the number of authorized preferred stock or the creation or issuance of any other class or series of preferred stock, or (iii)
any increase in the number of authorized shares of such class or series, in each case ranking equal with or junior to the Series A Preferred
Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, will not be deemed
to materially and adversely affect such rights, preferences, privileges or voting powers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing voting provisions
do not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required to be effected, all
outstanding shares of Series A Preferred Stock will have been redeemed or called for redemption upon proper notice and sufficient funds
shall have been deposited in trust to effect such redemption.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Conversion</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Series A Preferred Stock
is not convertible into or exchangeable for any of our other property or securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Information Rights</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During any period in which
we are not subject to Section 13 or 15(d) of the Exchange Act and any shares of our preferred stock are outstanding, we agreed to use
our best efforts to (i) make available on our corporate investor webpage, copies of the Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q that we would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were subject
thereto (other than any exhibits that would have been required) and (ii) promptly, upon request, supply copies of such reports to any
holders of Series A Preferred Stock. We agreed to use our best effort to provide the information to the holders of the Series A Preferred
Stock within 15 days after the respective dates by which a periodic report on Form 10-K or Form 10-Q, as the case may be, in respect of
such information would have been required to be filed with the SEC, if we were subject to Section 13 or 15(d) of the Exchange Act, in
each case, based on the dates on which we would be required to file such periodic reports if we were a &ldquo;non-accelerated filer&rdquo;
within the meaning of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">No Preemptive Rights</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of our Series A Preferred
Stock do not have any preemptive rights to purchase or subscribe for our common stock or any other security.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>Listing</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Series A Preferred Stock
is listed for trading on The Nasdaq Global Market under the symbol &ldquo;STRRP.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>Transfer Agent and Dividend Paying Agent</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">American Stock Transfer &amp;
Trust Company acts as the transfer agent and dividend payment agent for the Series A Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><B>Series
C Participating Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 2, 2021, in connection with entering into the Rights Agreement described under &ldquo;Prospectus
Summary - Our Company; Recent Developments,&rdquo; we filed with the Delaware Secretary of State a Certificate of Designation of Series
C Participating Preferred Stock (the &ldquo;Series C Preferred Stock&rdquo;) to create our Series C Preferred Stock. If the rights issuable
under the Rights Agreement become exercisable, each right would allow its holder to purchase from us one one-thousandth of a share of
our Series C Preferred Stock for a purchase price of $12.00. Each fractional share of Series C Preferred Stock would give the stockholder
approximately the same dividend, voting and liquidation rights as does one share of our common stock. The shares of Series C Preferred
Stock rank, with respect to the payment of dividends and the distribution of assets, junior to all other series of our preferred stock
and rank senior to our common stock as to such matters. Prior to exercise, however, a right does not give its holder any dividend, voting
or liquidation rights. The rights will not be exercisable until the earlier of ten days after a public announcement by us that a person
or group has become an acquiring person and ten business days (or a later date determined by our board) after a person or group begins
a tender or an exchange offer that, if completed, would result in that person or group becoming an acquiring person. No shares of Series
C Preferred Stock have been issued or are outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pre-Funded Warrants</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following description
of our pre-funded warrants we are offering is a summary and is qualified in its entirety by reference to the provisions of the pre-funded
warrant, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Duration and Exercise Price</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each pre-funded warrant offered
hereby will have an initial exercise price equal to $0.01 per share. The pre-funded warrants will be immediately exercisable and may be
exercised at any time until the pre-funded warrants are exercised in full. The exercise price and number of shares of common stock issuable
upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting
our shares of common stock and the exercise price. The pre-funded warrants will be issued in certificate form.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Exercisability</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The pre-funded warrants will
be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly-executed exercise notice accompanied by
payment in full for the number of shares of common stock purchased upon such exercise (except in the case of a cashless exercise as discussed
below). Purchasers of the pre-funded warrants in this offering may elect to deliver their exercise notice following the pricing of the
offering and prior to the issuance of the pre-funded warrants at closing to have their pre-funded warrants exercised immediately upon
issuance and receive shares of common stock underlying the pre-funded warrants upon closing of this offering. A holder (together with
its affiliates) may not exercise any portion of the pre-funded warrant to the extent that the holder would own more than 4.99% of the
outstanding shares of common stock immediately after exercise. However, any exercise of the pre-funded warrants which would result in
a holder beneficially owning more than 4.99% of the outstanding shares of our common stock will be subject to our consent, provided that
any beneficial ownership in excess of the 4.99% threshold will not take effect until 61 days following notice to, and approval by, us.
We may, in our sole discretion, waive the 4.99% ownership limitation in connection with this offering with respect to one or more potential
purchasers. No fractional shares of common stock will be issued in connection with the exercise of a pre-funded warrant. In lieu of fractional
shares, we will round up to the nearest whole share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Cashless Exercise</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If at the time of exercise
there is no effective registration statement registering the shares of common stock underlying the pre-funded warrants, or the prospectus
contained therein is not available for the issuance of such shares then the holders of the pre-funded warrants may exercise the pre-funded
warrants, in whole or in part, by means of a &ldquo;cashless exercise&rdquo; in lieu of making the cash payment otherwise contemplated
to be made to us upon such exercise and receive the net number of the shares of common stock determined according to a formula set forth
in the pre-funded warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Transferability</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subject to applicable laws,
a pre-funded warrant may be transferred at the option of the holder upon surrender of the pre-funded warrant to us together with the appropriate
instruments of transfer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">No Trading Market</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is no trading market
available for the pre-funded warrants on any securities exchange or nationally recognized trading system. We do not intend to list the
pre-funded warrants on any securities exchange or nationally recognized trading system.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Rights as a Stockholder</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise provided
in the pre-funded warrants or by virtue of such holder&rsquo;s ownership of our shares of common stock, the holders of the pre-funded
warrants do not have the rights or privileges of holders of our shares of common stock, including any voting rights, until they exercise
their pre-funded warrants. However, during such time as the warrant is outstanding, if we declare or make any dividend or other distribution of our assets (or rights
to acquire our assets) to all or substantially all of holders of shares of our common stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction), at any time after the issuance of the
warrant, then, in each such case, the holder will be entitled to participate in such distribution to the same extent that the holder would
have participated if the holder had held the number of shares of common stock acquirable upon complete exercise of the warrant (without
regard to any limitations on exercise hereof, including without limitation, the beneficial ownership limitation) immediately before the
date of which a record is taken for such distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Fundamental Transaction</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event of a fundamental
transaction, as described in the pre-funded warrants and generally including any reorganization, recapitalization or reclassification
of our shares of common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation
or merger with or into another person, the acquisition of more than 50% of the outstanding shares of our common stock, or any person or
group becoming the beneficial owner of 50% of the voting power represented by the outstanding shares of our common stock, then the successor
entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of
our obligations under the pre-funded warrants with the same effect as if such successor entity had been named in the pre-funded warrant
itself. If holders of our common stock are given a choice as to the securities, cash or property to be received in a fundamental transaction,
then the holder shall be given the same choice as to the consideration it receives upon any exercise of the pre-funded warrant following
such fundamental transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Offering Warrants</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following summary of certain
terms and provisions of the warrants offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions
of the warrant agent agreement between us and American Stock Transfer &amp; Trust Company, as warrant agent, and the form of warrant,
both of which are filed as exhibits to the registration statement of which this prospectus is a part. Prospective investors should carefully
review the terms and provisions set forth in the warrant agent agreement, including the annexes thereto, and form of warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Form</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to a warrant agent
agreement between us and American Stock Transfer &amp; Trust Company, as warrant agent, the warrants will be issued in book-entry form
and will initially be represented only by one or more global warrants deposited with the warrant agent, as custodian on behalf of The
Depository Trust Company, or DTC, and registered in the name of Cede &amp; Co., a nominee of DTC, or as otherwise directed by DTC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Exercisability</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The warrants are exercisable
at any time after their original issuance, expected to be [&bull;], 2022, and at any time up to the date that is five years after their
original issuance. The warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed
exercise notice and, at any time a registration statement registering the issuance of the shares of common stock underlying the warrants
under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the Securities
Act is available for the issuance of such shares, by payment in full in immediately available funds for the number of shares of common
stock purchased upon such exercise. No fractional shares of common stock will be issued in connection with the exercise of a warrant.
In lieu of fractional shares, we will round up to the nearest whole share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Exercise Limitation</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A holder will not have the
right to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of
the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is
determined in accordance with the terms of the warrants. However, any exercise of the warrants which would result in a holder beneficially
owning more than 4.99% of the outstanding shares of our common stock will be subject to our consent, provided that any beneficial ownership
in excess of the 4.99% threshold will not take effect until 61 days following notice to, and approval by, us. We may, in our sole discretion,
waive the 4.99% ownership limitation in connection with this offering with respect to one or more potential purchasers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Exercise Price</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The warrants will have an
exercise price of $[&bull;] per share, which will be at least 100%, and up to 125%, of the public offering price per share of our common
stock in this offering. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting our common stock and also upon any distributions of assets,
including cash, stock or other property to our stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Cashless Exercise</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If at the time of exercise
there is no effective registration statement registering the shares of common stock underlying the warrants, or the prospectus contained
therein is not available for the issuance of such shares then the holders of the warrants may exercise the warrants, in whole or in part,
by means of a &ldquo;cashless exercise&rdquo; in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise
and receive the net number of the shares of common stock determined according to a formula set forth in the warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Transferability</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subject to applicable laws,
the warrants may be offered for sale, sold, transferred or assigned without our consent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">No Trading Market</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is no established trading
market for the warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the warrants
on any national securities exchange or other trading market. Without an active trading market, the liquidity of the warrants will be limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Fundamental Transactions</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a fundamental transaction
occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise
and will assume all of our obligations under the warrants with the same effect as if such successor entity had been named in the warrant
itself. If holders of our common stock are given a choice as to the securities, cash or property to be received in a fundamental transaction,
then the holder will be given the same choice as to the consideration it receives upon any exercise of the warrant following such fundamental
transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Rights as a Stockholder</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise provided
in the warrants or by virtue of such holder&rsquo;s ownership of shares of our common stock, the holder of a warrant does not have the
rights or privileges of a holder of our common stock, including any voting rights, until the holder exercises the warrant. However, during such time as the warrant is outstanding, if we declare or make any dividend or other distribution of our assets (or rights
to acquire our assets) to all or substantially all of holders of shares of our common stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction), at any time after the issuance of the
warrant, then, in each such case, the holder will be entitled to participate in such distribution to the same extent that the holder would
have participated if the holder had held the number of shares of common stock acquirable upon complete exercise of the warrant (without
regard to any limitations on exercise hereof, including without limitation, the beneficial ownership limitation) immediately before the
date of which a record is taken for such distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>Warrant Agent</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The warrant agent for our
warrants is American Stock Transfer &amp; Trust Company. Its address is 6201 15th Avenue, Brooklyn, New York 11219, and its telephone
number is (718) 921-8200.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><B>May 2020
Common Stock Purchase Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As part of our
registered underwritten public offering of common stock in May 2020, we issued warrants to purchase up to 1,112,500 shares of our
common stock pursuant to a warrant agent agreement between us and American Stock Transfer &amp; Trust Company, as warrant agent. The
warrants are exercisable at any time up to May 28, 2025, which is five years after their original issuance. The warrants have an
exercise price of $2.25 per share (subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting our common stock). A holder will not have the right
to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the
number of shares of our common stock outstanding immediately after giving effect to the exercise. However, any exercise of the
warrants which would result in a holder beneficially owning more than 4.99% of our outstanding shares of common stock will be
subject to our consent, provided that any beneficial ownership in excess of the 4.99% threshold will not take effect until 61 days
following notice to, and approval by, us. If at the time of exercise there is no effective registration statement registering the
shares of common stock underlying the warrants, or the prospectus contained therein is not available for the issuance of such
shares, then the holders of the warrants may exercise the warrants by means of a &ldquo;cashless exercise&rdquo; in lieu of making
the cash payment otherwise contemplated to be made to us upon such exercise and receive the net number of the shares of common stock
determined according to a formula set forth in the warrants. Except as otherwise provided in the warrants or by virtue of such
holder's ownership of shares of our common stock, the holder of a warrant does not have the rights or privileges of a holder of our
common stock, including any voting rights, until the holder exercises the warrant; however, during such time as the warrant is outstanding, if we declare or make any cash or stock dividend or other distribution of our
assets to all or substantially all of our common shareholders, a warrant holder will be entitled to participate in such distribution to
the same extent that the holder would have participated if the holder had held the number of shares of our common stock acquirable upon
complete exercise of the warrant. There is no established trading market for these
warrants. There are 702,270 shares of our common stock currently issuable upon the exercise of the warrants (including the
underwriter's warrants having substantially similar terms) issued in connection with our May 2020 public offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certain Anti-Takeover Provisions of Our Restated Certificate of
Incorporation and Bylaws</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Delaware Takeover Statute</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are subject to Section
203 of the Delaware General Corporation Law. This statute regulating corporate takeovers prohibits a Delaware corporation from engaging
in any business combination with any interested stockholder for three years following the date that the stockholder became an interested
stockholder, unless:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">prior to the date of the transaction, the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an interested stockholder;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who
are directors and also officers and (b) shares owned by employee stock plans in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">on or subsequent to the date of the transaction, the business combination is approved by the board and
authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds
of the outstanding voting stock which is not owned by the interested stockholder.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">Section 203 defines
a business combination to include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">any merger or consolidation involving the corporation and the interested stockholder;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of
the assets of the corporation;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">subject to exceptions, any transaction that results in the issuance or transfer by the corporation of
any stock of the corporation to the interested stockholder; or</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or
other financial benefits provided by or through the corporation.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, Section 203 defines
an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and
any entity or person affiliated with or controlling or controlled by the entity or person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Restated Certificate of Incorporation and Bylaw
Provisions</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Provisions of our Restated
Certificate of Incorporation and Bylaws may have the effect of making it more difficult for a third party to acquire, or discourage a
third party from attempting to acquire, control of us by means of a tender offer, a proxy contest or otherwise. These provisions may also
make the removal of incumbent officers and directors more difficult. These provisions are intended to discourage certain types of coercive
takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us.
These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock. These
provisions may make it more difficult for our stockholders to take specific corporate actions and could have the effect of delaying or
preventing a change in control of us. The amendment of any of these anti-takeover provisions would require approval by holders of at least
two-thirds of our outstanding common stock entitled to vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In particular, our Restated
Certificate of Incorporation and Bylaws provide for the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">No Written Consent of Stockholders</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any action to be taken by
our stockholders must be taken and given effect at a duly called annual or special meeting and may not be taken or given effect by written
consent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Special Meetings of Stockholders</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Special meetings of our stockholders
may be called only by the president, chief executive officer, chairman of our board of directors, a majority of the members of our board
of directors or our stockholders holding not less than 20% of the total number of votes to be cast at such a meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Advance Notice Requirement</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Stockholder proposals to be
brought before an annual meeting of our stockholders must comply with advance notice procedures. These advance notice procedures require
timely notice and apply in several situations, including stockholder proposals relating to the nominations of persons for election to
the board of directors. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days or more
than 120 days prior to the first anniversary date of the annual meeting for the preceding year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Amendment of Restated Certificate of Incorporation
and Bylaws</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The approval of not less than
two-thirds of the outstanding shares of our capital stock entitled to vote is required to amend the provisions of our Bylaws by stockholder
action, or to amend the provisions of our Restated Certificate of Incorporation that are described in this section or certain other terms
as specified in our Bylaws. These provisions will make it more difficult to circumvent the anti-takeover provisions of our Restated Certificate
of Incorporation and our Bylaws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Issuance of Undesignated Preferred Stock</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our board of directors is
authorized to issue, without further action by the stockholders, up to a further 1,500,000 shares of undesignated preferred stock with
rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but
unissued shares of preferred stock enables our board of directors to render more difficult or to discourage an attempt to obtain control
of us by means of a merger, tender offer, proxy contest or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Protective Amendment</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Restated Certificate of
Incorporation contains a protective provision (the &ldquo;Protective Amendment&rdquo;) to protect our significant net operating losses
(&ldquo;NOLs&rdquo;). The Protective Amendment was approved by our stockholders at our 2021 Annual Meeting of Stockholders held on October
21, 2021. The Protective Amendment is designed to assist us in protecting the long-term value of our accumulated NOLs by limiting certain
transfers of our common stock. The Protective Amendment&rsquo;s transfer provisions generally restrict any direct or indirect transfers
of the common stock if the effect would be to increase the direct or indirect ownership of the common stock by any person from less than
4.99% to 4.99% or more of the outstanding number of shares of our common stock, or increase the percentage of the common stock owned directly
or indirectly by a person owning or deemed to own 4.99% or more of the outstanding number of shares of our common stock. Any direct or
indirect transfer attempted in violation of the Protective Amendment will be void as of the date of the prohibited transfer as to the
purported transferee. The Protective Amendment also requires any person attempting to become a holder of 4.99% or more of the outstanding
number of shares of our common stock to seek the approval of our board of directors. This may have an unintended &ldquo;anti-takeover&rdquo;
effect because our board of directors may be able to prevent any future takeover. Similarly, any limits on the number of shares of our
common stock that a stockholder may own could have the effect of making it more difficult for our stockholders to replace our management.
Because the Protective Amendment may have the effect of restricting a stockholder&rsquo;s ability to dispose of or acquire our common
stock, the liquidity and market value of our common stock might suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Repurchases</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under a stock repurchase program
approved by our board of directors, we may purchase shares of our common stock through various means, including open market transactions
in compliance with Rule 10b-18 under the Exchange Act, privately negotiated transactions, tender offers or any combination thereof. The
number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, stock price,
trading volume and general market conditions, along with our working capital requirements, general business conditions and other factors.
The stock repurchase program has no time limit and may be modified, suspended or terminated at any time by our board of directors. Repurchases
under the stock repurchase program will be funded from our existing cash and cash equivalents or future cash flow and equity or debt financings.
As of the date of this prospectus, we have not repurchased any shares of our common stock under the repurchase program approved in 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">MATERIAL U.S. FEDERAL INCOME
TAX CONSEQUENCES TO HOLDERS OF COMMON STOCK, PRE-FUNDED WARRANTS AND WARRANTS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a summary
of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of our common stock and pre-funded
warrants, and the acquisition, ownership, exercise, expiration or disposition of the warrants (together with our common stock and pre-funded
warrants, the &ldquo;Securities&rdquo;). This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the
&ldquo;Code&rdquo;), Treasury Regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof.
These authorities may be changed or subject to differing interpretations, possibly with retroactive effect, so as to result in U.S. federal
income tax consequences different from those set forth below. We have not sought and will not seek any ruling from the Internal Revenue
Service (the &ldquo;IRS&rdquo;), with respect to the statements made and the conclusions reached in the following summary, and there can
be no assurance that the IRS or a court will agree with such statements and conclusions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This summary does not purport
to be a complete analysis of all the potential tax considerations relating to the Securities. In addition, this summary does not address
the tax considerations arising under the laws of any U.S. state or local or any non-U.S. jurisdiction, estate or gift tax, the 3.8% Medicare
tax on net investment income or any alternative minimum tax consequences. In addition, this discussion does not address tax considerations
applicable to a holder&rsquo;s particular circumstances or to a holder that may be subject to special tax rules, including, without limitation:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">banks, insurance companies or other financial institutions;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">tax-exempt entities, tax-exempt or government organizations;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">brokers or dealers in securities or currencies;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">persons that own, or are deemed to own, more than 5% of our capital stock;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">certain U.S. expatriates, citizens or former long-term residents of the United States;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">U.S. Holders (as defined below) of any Security whose &ldquo;functional currency&rdquo; is not the U.S.
dollar;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">persons who hold any Security as a position in a hedging transaction, &ldquo;straddle,&rdquo; &ldquo;conversion
transaction,&rdquo; synthetic security, other integrated investment or other risk reduction transaction;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">persons who do not hold any Security as a capital asset within the meaning of Section 1221 of the Code
(generally, for investment purposes);</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">persons deemed to sell any Security under the constructive sale provisions of the Code;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">pension plans;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">foreign or domestic partnerships, or other entities or arrangements treated as partnerships for U.S. federal
income tax purposes, or investors in any such entities;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">real estate investment trusts or regulated investment companies;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">personal holding companies or grantor trusts;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">persons for whom our stock constitutes &ldquo;qualified small business stock&rdquo; within the meaning
of Section 1202 of the Code;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">integral parts or controlled entities of foreign sovereigns;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">controlled foreign corporations;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">passive foreign investment companies and corporations that accumulate earnings to avoid U.S. federal income
tax; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">persons that acquire any Security as compensation for services.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, if a partnership,
including any entity or arrangement classified as a partnership for U.S. federal income tax purposes, holds any Security, the tax treatment
of a partner generally will depend on the status of the partner, the activities of the partnership and certain determinations made at
the partner level. Accordingly, partnerships that hold any Security, and partners in such partnerships, should consult their tax advisors
regarding the U.S. federal income tax consequences to them of the acquisition, ownership, exercise, expiration and disposition of any
Security, as the case may be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You are urged to consult your
tax advisor with respect to the application of the U.S. federal income tax laws to your particular situation, as well as any tax consequences
of the acquisition, ownership, exercise, expiration and disposition of any Security, as the case may be, arising under the U.S. federal
estate or gift tax rules or under the laws of any U.S. state or local or any non-U.S. or other taxing jurisdiction or under any applicable
tax treaty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Definition of a U.S. Holder</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As used herein, the term &ldquo;U.S.
Holder&rdquo; means a beneficial owner of any Security that is, for U.S. federal income tax purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">an individual who is a citizen or resident of the United States;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">a corporation, or an entity treated as a corporation for U.S. federal income tax purposes, created or
organized in the United States or under the laws of the United States or of any state thereof or the District of Columbia;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">an estate, the income of which is subject to U.S. federal income tax regardless of its source; or</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">a trust if (1) a U.S. court is able to exercise primary supervision over the trust&rsquo;s administration
and one or more U.S. persons have the authority to control all of the trust&rsquo;s substantial decisions or (2) the trust has a valid
election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Treatment of Pre-funded Warrants</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although it is not entirely
free from doubt, a pre-funded warrant should be treated as a share of our common stock for U.S. federal income tax purposes and a holder
of pre-funded warrants should generally be taxed in the same manner as a holder of our common stock, as described below. Accordingly,
no gain or loss should be recognized upon the exercise of a pre-funded warrant and, upon exercise, the holding period of a pre-funded
warrants should carry over to the share of common stock received. Similarly, the tax basis of the pre-funded warrant should carry over
to the share of common stock received upon exercise, increased by the exercise price of $0.01. Each holder should consult his, her or
its own tax advisor regarding the risks associated with the acquisition of pre-funded warrants pursuant to this offering (including potential
alternative characterizations). The balance of this discussion generally assumes that the characterization described above is respected
for U.S. federal income tax purposes and, any references to our common stock in the balance of this discussion, shall incorporate by reference
and include the pre-funded warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Allocation of Purchase Price</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For U.S. federal income tax
purposes, a purchase of our common stock together with a warrant should be treated as an investment unit. The purchase price for each
investment unit must be allocated between the Securities making up the investment unit, in proportion to their relative fair market values
at the time of purchase. This allocation of the purchase price for each investment unit will establish your initial tax basis in each
Security for U.S. federal income tax purposes. The separation of common stock and the warrant included in each investment unit should
not be a taxable event for U.S. federal income tax purposes. You should consult your own tax advisor regarding the allocation of the purchase
price for an investment unit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Tax Consequences to U.S. Holders</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Distributions on Common Stock</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As discussed above under &ldquo;Dividend
Policy,&rdquo; we do not currently expect to make distributions on our common stock. In the event that we do make distributions of cash
or other property, distributions paid on our common stock, other than certain pro rata distributions of common stock, will be treated
as a dividend to the extent paid out of our current or accumulated earnings and profits and will be includible in income by the U.S. Holder
and taxable as ordinary income when received. If a distribution exceeds our current and accumulated earnings and profits, the excess will
be first treated as a tax-free return of the U.S. Holder&rsquo;s investment, up to the U.S. Holder&rsquo;s tax basis in the common stock.
Any remaining excess will be treated as a capital gain. Subject to applicable limitations, dividends paid to certain non-corporate U.S.
Holders may be eligible for taxation as &ldquo;qualified dividend income&rdquo; and therefore may be taxable at rates applicable to long-term
capital gains. U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate on dividends in their
particular circumstances. Dividends received by a corporate U.S. Holder will be eligible for the dividends-received deduction if the U.S.
Holder meets certain holding period and other applicable requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Constructive Dividends on Warrants</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under Section 305 of the Code,
an adjustment to the number of shares of common stock that will be issued on the exercise of the warrants, or an adjustment to the exercise
price of the warrants, may be treated as a constructive distribution to a U.S. Holder of the warrants if, and to the extent that, such
adjustment has the effect of increasing such U.S. Holder&rsquo;s proportionate interest in our &ldquo;earnings and profits&rdquo; or assets,
depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash or other
property to our stockholders). Adjustments to the number of shares of common stock that will be issued on the exercise of a warrant or
adjustments to the exercise price of a warrant made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing
dilution of the interest of the holders of the warrants should generally not result in a constructive distribution. Any constructive distributions
would generally be subject to the tax treatment described above under &ldquo;&ndash;Distributions on Common Stock.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sale or Other Disposition of Common Stock</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For U.S. federal income tax
purposes, gain or loss realized on the sale or other disposition of common stock will be capital gain or loss, and will be long-term capital
gain or loss if the U.S. Holder held the common stock for more than one year. The amount of the gain or loss will equal the difference
between the U.S. Holder&rsquo;s tax basis in the common stock disposed of and the amount realized on the disposition. Long-term capital
gains recognized by non-corporate U.S. Holders will be subject to reduced tax rates. The deductibility of capital losses is subject to
limitations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sale or Other Disposition, Exercise or Expiration of Warrants</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For U.S. federal income tax
purposes, gain or loss realized on the sale or other disposition of a warrant (other than by exercise) will be capital gain or loss and
will be long-term capital gain or loss if the U.S. Holder held the warrant for more than one year at the time of the sale or other disposition.
The amount of the gain or loss will equal the difference between the U.S. Holder&rsquo;s tax basis in the warrant disposed of and the
amount realized on the disposition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, a U.S. Holder
will not be required to recognize income, gain or loss upon the exercise of a warrant by payment of the exercise price, except to the
extent of cash paid in lieu of a fractional share. A U.S. Holder&rsquo;s tax basis in a share of common stock received upon exercise will
be equal to the sum of (1) the U.S. Holder&rsquo;s tax basis in the warrant and (2) the exercise price of the warrant. A U.S. Holder&rsquo;s
holding period in the stock received upon exercise will commence on the day or the day after such U.S. Holder exercises the warrant. No
discussion is provided herein regarding the U.S. federal income tax treatment on the exercise of a warrant on a cashless basis, and U.S.
Holders are urged to consult their tax advisors as to the exercise of a warrant on a cashless basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a warrant expires without
being exercised, a U.S. Holder will recognize a capital loss in an amount equal to such U.S. Holder&rsquo;s tax basis in the warrant.
This loss will be long-term capital loss if, at the time of the expiration, the U.S. Holder&rsquo;s holding period in the warrant is more
than one year. The deductibility of capital losses is subject to limitations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Redemption of Common Stock</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event that a U.S. Holder&rsquo;s
common stock is redeemed or if we purchase a U.S. Holder&rsquo;s common stock in an open market transaction, the treatment of the transaction
for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of the common stock under Section 302 of
the Code. If the redemption qualifies as a sale of common stock, the U.S. Holder will be treated as described under &ldquo;&ndash;Sale
or Other Disposition of Common Stock&rdquo; above. If the redemption does not qualify as a sale of common stock, the U.S. Holder will
be treated as receiving a corporate distribution with the tax consequences described above under &ldquo;&mdash;&ndash;Distributions on
Common Stock.&rdquo; Whether a redemption qualifies for sale treatment will depend largely on the total number of shares of our stock
treated as held by the U.S. Holder relative to all of our shares outstanding both before and after the redemption. The redemption of common
stock generally will be treated as a sale of the common stock (rather than as a corporate distribution) if the redemption (1) is &ldquo;substantially
disproportionate&rdquo; with respect to the U.S. Holder, (2) results in a &ldquo;complete termination&rdquo; of the U.S. Holder&rsquo;s
interest in us or (3) is &ldquo;not essentially equivalent to a dividend&rdquo; with respect to the U.S. Holder. These tests are explained
more fully below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In determining whether any
of the foregoing tests are satisfied, a U.S. Holder takes into account not only stock actually owned by the U.S. Holder, but also shares
of our stock that are constructively owned by it. A U.S. Holder may constructively own, in addition to stock owned directly, stock owned
by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as
well as any stock the U.S. Holder has a right to acquire by exercise of an option (i.e. pre-funded warrants and warrants). In order to
meet the substantially disproportionate test, the percentage of our outstanding voting stock actually and constructively owned by the
U.S. Holder immediately following the redemption of common stock must, among other requirements, be less than 80% of the percentage of
our outstanding voting stock actually and constructively owned by the U.S. Holder immediately before the redemption. There will be a complete
termination of a U.S. Holder&rsquo;s interest if either (1) all of the shares of our stock actually and constructively owned by the U.S.
Holder are redeemed or (2) all of the shares of our stock actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible
to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S.
Holder does not constructively own any other shares of our stock. The redemption of the common stock will not be essentially equivalent
to a dividend if the redemption results in a &ldquo;meaningful reduction&rdquo; of the U.S. Holder&rsquo;s proportionate interest in us.
Whether the redemption will result in a meaningful reduction in a U.S. Holder&rsquo;s proportionate interest in us will depend on the
particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate
interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute
such a &ldquo;meaningful reduction.&rdquo; A U.S. Holder should consult with its own tax advisors as to the tax consequences of a redemption.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If none of the foregoing tests
is satisfied, then the redemption will be treated as a corporate distribution and the tax effects will be as described under &ldquo;&ndash;Distributions
on Common Stock,&rdquo; above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed common
stock will be added to the U.S. Holder&rsquo;s adjusted tax basis in its remaining stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Tax Consequences to Non-U.S. Holders</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a general
discussion of the material U.S. federal income tax considerations applicable to &ldquo;Non-U.S. Holders&rdquo; (as defined herein) with
respect to their ownership and disposition of any Security issued pursuant to this offering. All prospective Non-U.S. Holders of any Security
should consult their tax advisors with respect to the U.S. federal, state, local and non-U.S. tax consequences of the acquisition, ownership,
exercise, expiration and disposition of any Security, as the case may be. In general, a Non-U.S. Holder means a beneficial owner of any
Security (other than a partnership or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) that is
not, for U.S. federal income tax purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">an individual who is a citizen or resident of the United States;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">a corporation, or an entity treated as a corporation for U.S. federal income tax purposes, created or
organized in the United States or under the laws of the United States or of any state thereof or the District of Columbia;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">an estate, the income of which is subject to U.S. federal income tax regardless of its source; or</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">a trust if (1) a U.S. court can exercise primary supervision over the trust&rsquo;s administration and
one or more U.S. persons have the authority to control all of the trust&rsquo;s substantial decisions or (2) the trust has a valid election
in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Distributions on Common Stock</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As discussed above under &ldquo;Dividend
Policy,&rdquo; we do not currently expect to make distributions on our common stock. In the event that we do make a distribution on our
common stock, those payments will constitute dividends for U.S. federal income tax purposes to the extent we have current or accumulated
earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed both our current
and our accumulated earnings and profits, they will constitute a return of capital and will first reduce a Non-U.S. Holder&rsquo;s basis
in our common stock, as applicable, but not below zero. Any excess will be treated as capital gain and will be treated as described below
under &ldquo;&ndash;Sale or Other Disposition of Securities.&rdquo; Any such distributions would be subject to the discussions below regarding
back-up withholding and the Foreign Account Tax Compliance Act (&ldquo;FATCA&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subject to the discussion
below on effectively connected income, any dividend paid to a Non-U.S. Holder generally will be subject to U.S. withholding tax either
at a rate of 30% of the gross amount of the dividend or such lower rate as may be specified by an applicable income tax treaty. To receive
a reduced treaty rate, a Non-U.S. Holder must provide us or our agent with an IRS Form W-8BEN, IRS Form W-8 BEN-E or another appropriate
version of IRS Form W-8 (or a successor form), which must be updated periodically, and which, in each case, must certify qualification
for the reduced rate. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable
income tax treaty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Dividends paid to a Non-U.S.
Holder that are effectively connected with the Non-U.S. Holder&rsquo;s conduct of a trade or business within the United States and that
are not eligible for relief from U.S. (net basis) income tax under an applicable income tax treaty generally are exempt from the (gross
basis) withholding tax described above. To obtain this exemption from withholding tax, the Non-U.S. Holder must provide the applicable
withholding agent with an IRS Form W-8ECI or successor form or other applicable IRS Form W-8 certifying that the dividends are effectively
connected with the Non-U.S. Holder&rsquo;s conduct of a trade or business within the United States. Such effectively connected dividends,
if not eligible for relief under an income tax treaty, would not be subject to a withholding tax, but would be taxed at the same graduated
rates applicable to U.S. persons, net of certain deductions and credits and if, in addition, the Non-U.S. Holder is a corporation, may
also be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you are eligible for a
reduced rate of withholding tax pursuant to an income tax treaty, you may be able to obtain a refund of any excess amounts withheld if
you timely file an appropriate claim for a refund with the IRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Constructive Dividends on Warrants</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">See the discussion of the
rules applicable to constructive distributions on a warrant under &ldquo;&ndash;Tax Consequences to U.S. Holders &ndash;Constructive Dividends
on Warrants&rdquo; above. Any constructive distributions would generally be subject to the tax treatment described above under &ldquo;&ndash;Distributions
on Common Stock.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Exercise or Expiration of Warrants</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, a Non-U.S. Holder
will not be required to recognize income, gain or loss upon the exercise of a warrant by payment of the exercise price, except possibly
to the extent of cash paid in lieu of a fractional share. However, no discussion is provided herein regarding the U.S. federal income
tax treatment on the exercise of a warrant on a cashless basis, and Non-U.S. Holders are urged to consult their tax advisors as to the
exercise of a warrant on a cashless basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a warrant expires without
being exercised, a Non-U.S. Holder that is engaged in a U.S. trade or business to which any income from the warrant would be effectively
connected or who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which
the expiration occurs (and certain other conditions are met) will recognize a capital loss in an amount equal to such Non-U.S. Holder&rsquo;s
tax basis in the warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sale or Other Disposition of Securities</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subject to the discussion
below regarding backup withholding and FATCA, a Non-U.S. Holder generally will not be required to pay U.S. federal income tax on any gain
realized upon the sale or other disposition of any Security unless:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the gain is effectively connected with the Non-U.S. Holder&rsquo;s conduct of a trade or business within
the United States and not eligible for relief under an applicable income tax treaty, in which case the Non-U.S. Holder will be required
to pay tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates, and for a Non-U.S. Holder that
is a corporation, such Non-U.S. Holder may be subject to the branch profits tax at a 30% rate (or such lower rate as may be specified
by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the Non-U.S. Holder is an individual who is present in the United States for a period or periods aggregating
183 days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met, in which case
the Non-U.S. Holder will be required to pay a flat 30% tax on the gain derived from the sale, which tax may be offset by U.S. source capital
losses (even though the Non-U.S. Holder is not considered a resident of the United States) (subject to applicable income tax or other
treaties); or</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">we are a &ldquo;U.S. real property holding corporation&rdquo; for U.S. federal income tax purposes, or
a U.S. personal holding company (&ldquo;USPHC&rdquo;), at any time within the shorter of the five-year period preceding the disposition
or the Non-U.S. Holder&rsquo;s holding period for any Security. We believe we are not currently and do not anticipate becoming a USPHC.
However, because the determination of whether we are a USPHC depends on the fair market value of our United States real property interests
relative to the fair market value of our other business assets, there can be no assurance that we will not become a USPHC in the future.
Even if we become a USPHC, a Non-U.S. Holder may qualify for an exemption from U.S federal income tax based on our status as a USPHC.
If no exemption is available and we are a USPHC, a Non-U.S. Holder&rsquo;s proceeds received on the disposition any Security will generally
be subject to withholding at a rate of 15% and such Non-U.S. Holder will generally be taxed on any gain in the same manner as gain that
is effectively connected with the conduct of a U.S. trade or business, except that the branch profits tax generally will not apply. Non-U.S.
Holders should consult with their tax advisors on the availability of any such exemption in the event of we become a USPHC.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Redemption of Our Common Stock</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The characterization for U.S.
federal income tax purposes of the redemption of a Non-U.S. Holder&rsquo;s common stock generally will correspond to the U.S. federal
income tax characterization of such a redemption of a U.S. Holder&rsquo;s common stock, as described under &ldquo;Tax Consequences to
U.S. Holders&mdash;Redemption of Common Stock&rdquo; above, and the consequences of the redemption to the Non-U.S. Holder will be as described
above under &ldquo;&mdash;Distributions of Common Stock&rdquo; and &ldquo;&mdash;Sale or Other Disposition of Securities,&rdquo; as applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Backup Withholding and Information Reporting</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Information returns may be
filed with the IRS in connection with distributions on our common stock or constructive dividends on the warrants, and the proceeds of
a sale or other disposition of any Security. A non-exempt U.S. Holder may be subject to U.S. backup withholding on these payments if it
fails to provide its taxpayer identification number to the withholding agent and comply with certification procedures or otherwise establish
an exemption from backup withholding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A Non-U.S. Holder may be subject
to U.S. information reporting and backup withholding on these payments unless the Non-U.S. Holder complies with certification procedures
to establish that it is not a U.S. person (as defined in the Code). The certification requirements generally will be satisfied if the
Non-U.S. Holder provides the applicable withholding agent with a statement on the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or
suitable substitute or successor form), together with all appropriate attachments, signed under penalties of perjury, stating, among other
things, that such Non-U.S. Holder is not a U.S. person. Applicable Treasury Regulations provide alternative methods for satisfying this
requirement. In addition, the amount of distributions on common stock or constructive dividends on warrants paid to a Non-U.S. Holder,
and the amount of any U.S. federal income tax withheld therefrom, must be reported annually to the IRS and the holder. This information
may be made available by the IRS under the provisions of an applicable tax treaty or agreement to the tax authorities of the country in
which the Non-U.S. Holder resides.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Payment of the proceeds of
the sale or other disposition of any Security to or through a non-U.S. office of a U.S. broker or of a non-U.S. broker with certain specified
U.S. connections generally will be subject to information reporting requirements, but not backup withholding, unless the Non-U.S. Holder
certifies under penalties of perjury that it is not a U.S. person or an exemption otherwise applies. Payments of the proceeds of a sale
or other disposition of any Security to or through a U.S. office of a broker generally will be subject to information reporting and backup
withholding, unless the Non-U.S. Holder certifies under penalties of perjury that it is not a U.S. person or otherwise establishes an
exemption.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Backup withholding is not
an additional tax. The amount of any backup withholding from a payment generally will be allowed as a credit against the holder&rsquo;s
U.S. federal income tax liability and may entitle the holder to a refund, provided that the required information is timely furnished to
the IRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Foreign Account Tax Compliance Act</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">FATCA imposes withholding
tax on certain types of payments made to foreign financial institutions and certain other non-U.S. entities. The legislation imposes a
30% withholding tax on dividends on, or, subject to the discussion of certain proposed Treasury Regulations below, gross proceeds from
the sale or other disposition of any Security paid to a &ldquo;foreign financial institution&rdquo; or to certain &ldquo;non-financial
foreign entities&rdquo; (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting
obligations, (2) the non-financial foreign entity either certifies it does not have any &ldquo;substantial United States owners&rdquo;
(as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial
institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial
institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an agreement with the U.S. Treasury
requiring, among other things, that it undertakes to identify accounts held by &ldquo;specified United States persons&rdquo; or &ldquo;United
States-owned foreign entities&rdquo; (each as defined in the Code), annually report certain information about such accounts, and withhold
30% on payments to account holders whose actions prevent it from complying with these reporting and other requirements. If the country
in which a payee is resident has entered into an &ldquo;intergovernmental agreement&rdquo; with the United States regarding FATCA, that
agreement may permit the payee to report to that country rather than to the U.S. Department of the Treasury. The U.S. Treasury recently
released proposed Treasury Regulations which, if finalized in their present form, would eliminate the federal withholding tax of 30% applicable
to the gross proceeds of a sale or other disposition of any Security. In its preamble to such proposed Treasury Regulations, the U.S.
Treasury stated that taxpayers may generally rely on the proposed regulations until final regulations are issued. Prospective investors
should consult their own tax advisors regarding the possible impact of these rules on their investment in any Security, and the possible
impact of these rules on the entities through which they hold any Security, including, without limitation, the process and deadlines for
meeting the applicable requirements to prevent the imposition of this 30% withholding tax under FATCA.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">THE PRECEDING DISCUSSION IS FOR GENERAL INFORMATION
ONLY. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX
CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF ANY SECURITIY, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 6pt"><P STYLE="margin-top: 0pt; margin-bottom: 0pt; text-align: center; font-size: 10pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">UNDERWRITING</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Maxim Group LLC (&ldquo;Maxim&rdquo;)
is acting as sole book-runner and as representative of the underwriters (the &ldquo;Representative&rdquo;). Subject to the terms and conditions
of an underwriting agreement between us and the Representative, we have agreed to sell to each underwriter named below, and each underwriter
named below has severally agreed to purchase, at the public offering price less the underwriting discounts set forth on the cover page
of this prospectus, the number of shares of common stock, pre-funded warrants and warrants, listed next to its name in the following table:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 50%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"><B>Name of Underwriter</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 0.5pt solid"></P></TD>
    <TD STYLE="width: 15%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Number
of&nbsp;shares</B>&nbsp;</P></TD>
    <TD STYLE="width: 15%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Number
of pre-funded warrants</B>&nbsp;</P></TD>
    <TD STYLE="width: 20%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Number
of accompanying warrants</B>&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD>Maxim Group LLC</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Total</P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The underwriters are
committed to purchase all the shares of common stock and/or pre-funded warrants, and warrants, offered by this prospectus if they
purchase any shares of common stock, pre-funded warrants and warrants. The underwriting agreement also provides that if an
underwriter defaults, the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.
The underwriters are not obligated to purchase the shares of common stock and/or warrants, covered by the
underwriters&rsquo; over-allotment option described below. The underwriters are offering the shares of common stock, pre-funded
warrants and warrants, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters
by their counsel, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of
officer&rsquo;s certificates and a legal opinion. The underwriters reserve the right to withdraw, cancel or modify offers to the
public and to reject orders in whole or in part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Over-Allotment Option</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have granted to the underwriters
an option, exercisable no later than 45 calendar days after the date of the underwriting agreement, to purchase up to an additional [&bull;]
shares of common stock and/or up to an additional [&bull;] warrants, in each case, at the public offering price
listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option only
to cover over-allotments, if any, made in connection with this offering and may exercise this option to purchase additional shares  and/or warrants. To the extent the option is exercised and the conditions of the underwriting agreement are satisfied,
we will be obligated to sell to the underwriters, and the underwriters will be obligated to purchase, these additional shares of common
stock and/or warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Discounts and Commissions</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have agreed to pay the
underwriters a cash fee equal to 7.0% of the aggregate gross proceeds from the sale of the common stock and pre-funded warrants and warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Representative has advised
us that the underwriters propose to offer the shares, pre-funded warrants and warrants, directly to the public at the public offering
price set forth on the cover of this prospectus. In addition, the representative may offer some of the shares and/or pre-funded warrants
and/or warrants, to other securities dealers at such price less a concession of up to $[&bull;] per share of our common stock or pre-funded
warrant. After the offering to the public, the offering price and other selling terms may be changed by the Representative without changing
our proceeds from the underwriters&rsquo; purchase of the shares and/or pre-funded warrants and warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table summarizes
the public offering price, underwriting commissions and proceeds before expenses to us assuming both no exercise and full exercise of
the underwriters&rsquo; option to purchase additional shares of common stock and/or warrants. The underwriting
commissions are equal to the public offering price per share, pre-funded warrant and warrant, less the amount per share the underwriters
pay us for the shares of common stock, pre-funded warrants and warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 40%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 15%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Per share
    and accompanying warrant</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"></P></TD>
    <TD STYLE="width: 15%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Per pre-funded
    warrant and accompanying warrant</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"></P></TD>
    <TD STYLE="width: 15%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Total<BR>
    (No Exercise)</B></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"></P></TD>
    <TD STYLE="width: 15%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; border-bottom: Black 0.5pt solid"><B>Total
(Full Exercise)</B>&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>Public offering price</TD>
    <TD>$</TD>
    <TD>$</TD>
    <TD>$</TD>
    <TD>$</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>Underwriting discounts and commissions</TD>
    <TD>$</TD>
    <TD>$</TD>
    <TD>$</TD>
    <TD>$</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>Proceeds, before expenses, to us</TD>
    <TD>$</TD>
    <TD>$</TD>
    <TD>$</TD>
    <TD>$</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have agreed to reimburse
Maxim for its out-of-pocket accountable expenses, including Maxim&rsquo;s legal fees up to a maximum of $90,000, in connection with the
offering. We have paid $25,000 to Maxim as an advance to be applied towards reasonable out-of-pocket expenses, or the Advance. Any portion
of the Advance shall be returned back to us to the extent not actually incurred. We estimate that the total expenses of the offering,
including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding underwriting discounts
and commissions, will be approximately $[&bull;], all of which are payable by us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.5in">Jeffrey E. Eberwein, our
Executive Chairman, has indicated to us his intention to purchase up to $[&bull;] of our common stock and warrants in this offering.
Several other officers and board members of our company may also purchase shares of our common stock and warrants in this offering.
However, because indications of interest are not binding agreements or commitments to purchase, there can be no assurance that the
underwriter will determine to sell our shares and warrants in this offering to any of these persons, or that any of these persons
will determine to purchase these securities in this offering. Any securities sold to our officers and board members will be at the
same public offering price and on the same terms as the securities sold to other investors in this offering. The underwriter will
receive the same underwriting discount on any securities purchased by these persons as it will on any other securities sold to the
public in this offering. The shares being purchased by our officers and board members will be restricted from sale for a limited
period of time under the terms of lock-up agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Underwriter&rsquo;s Warrant</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have agreed to issue to
the underwriters, an Underwriter&rsquo;s Warrant to purchase shares of our common stock which represents 2.5% of the number of shares
of common stock and/or pre-funded warrants sold in this offering. The Underwriter's Warrant will have a term of five years from the effective date of this prospectus and an exercise price per share equal
to 110% of the public offering per share price and may be exercised on a cashless basis. The Underwriter's Warrants are exercisable commencing
six months after the effective date of the registration statement related to this offering, and will expire five years after the effective
date of such registration statement. The Underwriter's Warrants are not redeemable by us. The Underwriter's Warrants provide for unlimited
&ldquo;piggyback&rdquo; registration rights at our expense with respect to the underlying common stock for a period of seven-year commencing
from the effective date of the registration statement related to this offering. The Underwriter's Warrants and the common stock underlying
the Underwriter's Warrants, have been deemed compensation by the Financial Industry Regulatory Authority, or FINRA, and are therefore
subject to a 180-day lock-up pursuant to Rule 5110(e)(1) of FINRA. The underwriters (or permitted assignees under the Rule) may not sell,
transfer, assign, pledge or hypothecate the Underwriter's Warrants or the securities underlying the Underwriter's Warrants, nor will they
engage in any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the
Underwriter's Warrants or the underlying securities for a period of six months from the effective date of this offering, except to any
FINRA member participating in the offering and their bona fide officers or partners. The Underwriter's Warrants will provide for adjustment
in the number and price of such Underwriter's Warrants (and the common stock underlying such Underwriter's Warrants) to prevent dilution
in the event of a forward or reverse stock split, stock dividend or similar recapitalization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Warrant Solicitation Fee</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have agreed to pay Maxim
a warrant solicitation fee of 6.0% of the gross proceeds received by us from the exercise of any warrant sold in this offering that has
been solicited by Maxim at our request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Lock-Up Agreements</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We and each of our officers
and directors have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for
the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable
for shares of our common stock for a period of ninety (90) days after this offering is completed without the prior written consent of Maxim.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Maxim may in its sole discretion
and at any time without notice release some or all of the shares subject to lock-up agreements prior to the expiration of the lock-up
period. When determining whether or not to release shares from the lock-up agreements, the representative will consider, among other factors,
the security holder&rsquo;s reasons for requesting the release, the number of shares for which the release is being requested and market
conditions at the time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Right of First Refusal; Tail</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have granted the
Representative a right of first refusal, for a period of nine (9) months from the commencement of sales of this offering, to act as
sole underwriter and sole book running manager and/or sole placement agent for any and all public and private equity, equity-linked,
convertible or debt offerings of us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, if within six
months following the closing of this offering, we complete any financing of equity, equity-linked, convertible or debt or other capital
raising activity (other than the exercise by any person or entity of any options, warrants or other convertible securities) with any of
the investors contacted by the underwriters during this offering, then we will pay to Maxim upon the closing of such other financing a
cash fee equal to 7.0% of the aggregate gross proceeds of such financing and a warrant to purchase securities which represent 2.5% of
the number of securities sold in such financing exercisable at a price equal to 110% of the offering price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indemnification</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have agreed to indemnify
the underwriters against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters
may be required to make for these liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Price Stabilization, Short Positions, and Penalty Bids</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with this offering,
the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock, warrants or pre-funded
warrants. Specifically, the underwriters may over-allot in connection with this offering by selling more shares or pre-funded warrants
and/or warrants than are set forth on the cover page of this prospectus. This creates a short position in our common stock for its own
account. The short position may be either a covered short position or a naked short position. In a covered short position, the number
of shares of common stock or pre-funded warrants over-allotted by the underwriters is not greater than the number of shares of common
stock or pre-funded warrants that they may purchase in the over-allotment option. In a naked short position, the number of shares of common
stock or pre-funded warrants involved is greater than the number of shares of common stock or pre-funded warrants in the over-allotment
option. To close out a short position, the underwriters may elect to exercise all or part of the over-allotment option. The underwriters
may also elect to stabilize the price of our common stock or pre-funded warrants or reduce any short position by bidding for, and purchasing,
common stock or pre-funded warrants in the open market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The underwriters may also
impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing a
security in this offering because the underwriter repurchases that security in stabilizing or short covering transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Finally, the underwriters
may bid for, and purchase, shares of our common stock or pre-funded warrants in market making transactions, including &ldquo;passive&rdquo;
market making transactions as described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These activities may stabilize
or maintain the market price of our common stock or pre-funded warrants at a price that is higher than the price that might otherwise
exist in the absence of these activities. The underwriters are not required to engage in these activities, and may discontinue any of
these activities at any time without notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with this offering,
the underwriters and selling group members, if any, or their affiliates may engage in passive market making transactions in our common
stock or pre-funded warrants immediately prior to the commencement of sales in this offering, in accordance with Rule 103 of Regulation
M under the Exchange Act. Rule 103 generally provides that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">a passive market maker may not effect transactions or display bids for our common stock or pre-funded
warrants in excess of the highest independent bid price by persons who are not passive market makers;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">net purchases by a passive market maker on each day are generally limited to 30% of the passive market
maker&rsquo;s average daily trading volume in our common stock or pre-funded warrants during a specified two-month prior period or 200
shares, whichever is greater, and must be discontinued when that limit is reached; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">passive market making bids must be identified as such.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Electronic Distribution</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A prospectus in electronic
format may be made available on a website maintained by the representatives of the underwriters and may also be made available on a website
maintained by other underwriters. The underwriters may agree to allocate a number of shares or pre-funded warrants to underwriters for
sale to their online brokerage account holders. Internet distributions will be allocated by the representatives of the underwriters to
underwriters that may make internet distributions on the same basis as other allocations. In connection with the offering, the underwriters
or syndicate members may distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable
as Adobe&reg; PDF will be used in connection with this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The underwriters have informed
us that they do not expect to confirm sales of shares or pre-funded warrants offered by this prospectus to accounts over which they exercise
discretionary authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other than the prospectus
in electronic format, the information on any underwriter&rsquo;s website and any information contained in any other website maintained
by an underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved
and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Maxim has acted in the past,
and may act from time to time in the future, as our investment banking firm. Maxim served as the sole book-running manager of our underwritten
public offering of securities in May 2020.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP></SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">LEGAL MATTERS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The validity of the securities
being offered hereby will be passed upon for us by our counsel Olshan Frome Wolosky LLP, New York, New York. Loeb &amp; Loeb LLP, New
York, New York is representing the underwriter in this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">EXPERTS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The consolidated financial
statements as of December 31, 2020 and 2019 and for the years then ended incorporated by reference in this prospectus and in the registration
statement have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated
herein by reference, given on the authority of said firm as experts in auditing and accounting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">WHERE YOU CAN FIND MORE
INFORMATION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This prospectus constitutes
a part of a registration statement on Form S-1 filed by us with the SEC under the Securities Act with respect to our common stock, warrants
and pre-funded warrants offered by this prospectus. This prospectus does not contain all of the information included in the registration
statement. We have omitted certain parts of the registration statement, as allowed by the rules and regulations of the SEC. You may wish
to inspect the registration statement and the exhibits to that registration statement for further information with respect to us and our
common stock, warrants and pre-funded warrants offered by this prospectus. Copies of the registration statement and the exhibits to such
registration statement are on file at the offices of the SEC and may be obtained upon payment of the prescribed fee or may be examined
without charge at the public reference facilities of the SEC described below. Statements contained or incorporated by reference in this
prospectus concerning the provisions of certain documents are necessarily summaries of the material provisions of such documents, and
each statement is qualified in its entirety by reference to the copy of the applicable document filed with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We file annual reports, quarterly
and current reports, proxy statements and other information with the SEC. The public may read and copy any materials that we file with
the SEC at the SEC&rsquo;s Public Reference Room at 100 F Street, N.E., Washington, DC 20549. You may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet website that contains reports, proxy
and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We maintain an Internet website
at www.starequity.com. All of our reports filed with the SEC (including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and proxy statements) are accessible through the Investor Relations section of our website, free of charge, as soon
as reasonably practicable after electronic filing. The reference to our website in this prospectus is an inactive textual reference only
and is not a hyperlink. The contents of our website are not part of this prospectus, and you should not consider the contents of our website
in making an investment decision with respect to our securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">INCORPORATION OF INFORMATION
BY REFERENCE</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SEC allows us to &ldquo;incorporate
by reference&rdquo; into this prospectus information contained in documents that we file with it. This means that we can disclose important
information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus.
The documents we are incorporating by reference as of their respective dates of filing are:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 29, 2021;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 filed with the SEC on May 14,
2021, June 30, 2021 filed with the SEC on August 10, 2021, and September 30, 2021 filed with the SEC on November 12, 2021;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our Current Reports on Form 8-K filed with the SEC on March 9, 2021, March 9, 2021, March 29, 2021, April
1, 2021, April 6, 2021, May 14, 2021, June 1, 2021, June 2, 2021, August 6, 2021, August 10, 2021, August 16, 2021, October 25, 2021,
November 12, 2021, November 22, 2021,  December 13, 2021, and December 22, 2021; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the description of our common stock contained in our Registration Statement on Form 8-A filed with the
SEC on June 3, 2004, including any amendments and reports filed for the purpose of updating such description.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any statement incorporated
by reference in this prospectus from an earlier dated document that is inconsistent with a statement contained in this prospectus or in
any other document filed after the date of the earlier dated document, but prior to the date hereof, which also is incorporated by reference
into this prospectus, shall be deemed to be modified or superseded for purposes of this prospectus by such statement contained in this
prospectus or in any other document filed after the date of the earlier dated document, but prior to the date hereof, which also is incorporated
by reference into this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any person, including any
beneficial owner, to whom this prospectus is delivered may request copies of this prospectus and any of the documents incorporated by
reference into this prospectus, without charge, by written request directed to Star Equity Holdings, Inc., 53 Forest Avenue, Suite 101,
Old Greenwich, Connecticut 06870, or via the investor relation&rsquo;s section of our website at http://starequity.com/investor-relations,
or from the SEC through the SEC&rsquo;s internet website at the address provided under &ldquo;Where You Can Find More Information.&rdquo;
Documents incorporated by reference into this prospectus are available without charge, excluding any exhibits to those documents unless
the exhibit is specifically incorporated by reference into those documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as expressly provided
above, no other information, including none of the information on our website, is incorporated by reference into this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">DISCLOSURE OF COMMISSION
POSITION ON<BR>
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our directors and officers
are indemnified as provided by Section 145 of the Delaware General Corporation Law and our Bylaws. We have agreed to indemnify each of
our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions
described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="image_002.jpg" ALT="digirad-20210930_g1.jpg" STYLE="height: 75px; width: 206px"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Star Equity Holdings, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[&bull;] Shares of Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[&bull;] Pre-funded Warrants (each Pre-funded
Warrant to purchase one Share of Common Stock)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[&bull;] Shares of Common Stock underlying the
Pre-funded Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Warrants to Purchase up to [&bull;] Shares of
Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[&bull;] Shares of Common Stock underlying the
Common Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>_______________</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROSPECTUS</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">_______________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>Sole Book-Running Manager</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Maxim Group LLC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[&bull;], 2022</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PART II</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">INFORMATION NOT REQUIRED IN PROSPECTUS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The estimated expenses payable
by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions)
will be as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: left">SEC Registration Fee</TD><TD STYLE="width: 10%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 18%; font-size: 10pt; text-align: right">2,642.47</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">FINRA filing fee</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,775.84</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Accounting fees and expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Nasdaq listing fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Printing and engraving expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Legal fees and expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">[&bull;]</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt">Total</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">&#9;[&bull;]</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Restated Certificate of
Incorporation provides that, to the fullest extent permitted by law, a director of Star Equity Holdings, Inc. (the &ldquo;Corporation&rdquo;)
shall not be personally liable to the Corporation or to its stockholders for monetary damages for any breach of fiduciary duty as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Article V of our Restated
Certificate of Incorporation also provides:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&ldquo;(A) EXCULPATION. A director of the
Corporation (each, a &ldquo;Director&rdquo; and collectively, the &ldquo;Directors&rdquo;) shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (i) for any breach of the Director&rsquo;s
duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which
the Director derived any improper personal benefit. If the Delaware General Corporation Law is hereafter amended to further reduce or
to authorize, with the approval of the Corporation&rsquo;s stockholders, further reductions in the liability of the Directors for breach
of fiduciary duty, then a Director shall not be liable for any such breach to the fullest extent permitted by the Delaware General Corporation
Law as so amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(B) INDEMNIFICATION. To the extent permitted
by applicable law, the Corporation is also authorized to provide indemnification of (and advancement of expenses to) such agents (and
any other persons to which Delaware law permits the Corporation to provide indemnification) through bylaw provisions, agreements with
such agents or other persons, vote of stockholders or disinterested Directors or otherwise, in excess of the indemnification and advancement
otherwise permitted by Section 145 of the Delaware General Corporation Law, subject only to limits created by applicable Delaware law
(statutory or non-statutory), with respect to actions for breach of duty to the Corporation, its stockholders and others.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(C) EFFECT OF REPEAL OR MODIFICATION. Any
repeal or modification of any of the foregoing provisions of this Article V shall be prospective and shall not adversely affect any right
or protection of a Director, officer, agent or other person existing at the time of, or increase the liability of any Director with respect
to any acts or omissions of such Director occurring prior to, such repeal or modification.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, our bylaws provide
(A) for indemnification of Directors as set forth above, and (B) indemnification of officers of the Corporation to the fullest extent
permitted by the Delaware General Corporation Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Section 145 of the Delaware
General Corporation Law also provides for indemnification of officers, directors, employees, and agents of Delaware corporations. It is
set forth below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&ldquo;Section 145. Indemnification of officers,
directors, employees and agents; insurance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right
of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys&rsquo; fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the person&rsquo;s conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person&rsquo;s conduct
was unlawful.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person
is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys&rsquo;
fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person
acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem
proper.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses (including attorneys&rsquo; fees) actually and reasonably incurred by such person in
connection therewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper
in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section.
Such determination shall be made, with respect to a person who is a director or officer of the corporation at the time of such determination:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
a committee of such directors designated by majority vote of such directors, even though less than a quorum; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
the stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses
(including attorneys&rsquo; fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative
or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys&rsquo;
fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request
of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise
may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action in such person&rsquo;s official capacity and as to action
in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the
certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or the
bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action,
suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such
act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by
such person in any such capacity, or arising out of such person&rsquo;s status as such, whether or not the corporation would have the
power to indemnify such person against such liability under this section.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this section, references to &ldquo;the corporation&rdquo; shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position
under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation
if its separate existence had continued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this section, references to &ldquo;other enterprises&rdquo; shall include employee benefit plans; references to &ldquo;fines&rdquo;
shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to &ldquo;serving at the
request of the corporation&rdquo; shall include any service as a director, officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants
or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner &ldquo;not opposed to the best interests of the
corporation&rdquo; as referred to in this section.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized
or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation&rsquo;s obligation to advance expenses (including attorneys&rsquo; fees).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have entered into, and
intend to continue to enter into, separate indemnification agreements with our directors, executive officers, and other key employees,
in addition to the indemnification provided for in our Restated Certificate of Incorporation and bylaws. We also have directors and officers
insurance which includes insurance for claims against these persons brought under securities laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 10, 2019, we
issued 300,000 shares of our Series A Preferred Stock in a private placement (the &ldquo;Series A Private Placement&rdquo;) to Lone Star Value Investors, LP for a price of $10 per share for total proceeds to us of $3 million. The Private Placement was made pursuant to the terms of
a Stock Purchase Agreement, dated as of September 10, 2019 (the &ldquo;SPA&rdquo;). We used the proceeds from the Private Placement for
the repayment of debt owed by a wholly-owned subsidiary. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 10, 2021, we entered
into a securities purchase agreement (the &ldquo;Purchase Agreement&rdquo;) with Mr. Eberwein, relating to the issuance and sale of 650,000
shares of our common stock at a purchase price of $3.25 per share pursuant to a private placement (the &ldquo;Common Stock Private Placement&rdquo;
and, together with the Series A Private Placement, the &ldquo;Private Placements&rdquo;). The Common Stock Private Placement was approved
by a Special Committee of our board of directors made up of independent directors and by the Audit Committee of our board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No placement agent or other
financial intermediary was engaged or compensated in connection with the Private Placements. The issuances of shares of Series A Preferred
Stock and common stock in the Private Placements were exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as
amended (the &ldquo;Act&rdquo;), as sales by an issuer not involving a public offering. The foregoing issuances were not registered under
the Act, or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section
4(a)(2) and corresponding provisions of state securities laws, which exempts transactions by an issuer not involving any public offering.
In each case, the issuance was made, without any general solicitation or advertising, to a limited number of sophisticated investors with
knowledge and experience of financial and business matters related to an investment in our securities. In addition, the securities issued
in the foregoing issuances are restricted securities bearing transfer restrictions and the recipient acquired such securities for its
own account without a view to resell or distribute them. Such securities may not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirements and certificates evidencing such shares contain a legend stating the same.
Accordingly, the foregoing issuances were subject to the private placement exemption from registration provided by Section 4(a)(2) of
the Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following exhibits are filed as part of this Registration Statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">EXHIBIT INDEX</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 12%">
    <P STYLE="border-bottom: Black 0.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Exhibit<BR>
    Number</B></P>
    <P STYLE="border-bottom: Black 0.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD>
    <TD STYLE="width: 88%">
    <P STYLE="border-bottom: Black 0.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Description</B></P>
    <P STYLE="border-bottom: Black 0.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>1.1**</TD>
    <TD><P STYLE="margin-top: 0; margin-bottom: 0">Underwriting Agreement.</P>
        <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>2.1</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738815000011/a3615exhibit101.htm" STYLE="-sec-extract: exhibit">Agreement of Merger and Plan of Reorganization, dated March 5, 2015 by and between Digirad Corporation, Maleah Incorporated, MD Office Solutions and the Stockholders party thereto (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on March 6, 2015). Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementary copies of any of the omitted schedules or exhibits upon request by the Commission.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>2.2</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738816000057/exhibit21stockpurchaseagre.htm" STYLE="-sec-extract: exhibit">Stock Purchase Agreement dated as of October 13, 2015, by and among Digirad Corporation, Project Rendezvous Holding Corporation, the stockholders of Project Rendezvous Holding Corporation, and Platinum Equity Advisors, LLC as the stockholder representative (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Commission on January 7, 2016). Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementary copies of any of the omitted schedules or exhibits upon request by the Commission.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>2.3</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738816000057/exhibit22amendmenttostockp.htm" STYLE="-sec-extract: exhibit">Amendment to Stock Purchase Agreement dated as of December 31, 2015, by and between Digirad Corporation and Platinum Equity Advisors, LLC as the stockholder representative (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed with the Commission on January 7, 2016).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>2.4</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738816000080/drad-6302016xex21.htm" STYLE="-sec-extract: exhibit">Second Amendment to Stock Purchase Agreement dated as of June 7, 2016, by and between Digirad Corporation and Platinum Equity Advisors, LLC as the stockholder representative (incorporated by reference to Exhibit 2.1 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on August 1, 2016).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>2.5</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738818000008/digirad10k2017ex28philipsa.htm" STYLE="-sec-extract: exhibit">Asset Purchase Agreement by and between DMS Health Technologies, Inc., as Seller, and Philips North America LLC, as Buyer dated as of December 22, 2017 (incorporated by reference to Exhibit 2.8 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on February 28, 2018). Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementary copies of any of the omitted schedules or exhibits upon request by the Commission.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>2.6</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000092189519001967/ex21to8k09271030_06282019.htm" STYLE="-sec-extract: exhibit">Agreement and Plan of Merger, dated as of July 3, 2019, by and among Digirad Corporation, ATRM Holdings, Inc. and Digirad Acquisition Corporation (incorporated by reference to Exhibit 2.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on July 3, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>3.1</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119312506098616/dex102.htm" STYLE="-sec-extract: exhibit">Restated
Certificate of Incorporation of Digirad Corporation (incorporated by reference to Exhibit 10.2 to the Company&rsquo;s Current Report
on Form 8-K filed with the Commission on May 3, 2006).</A></P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">3.2</TD>
    <TD STYLE="text-align: justify; width: 88%"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738813000028/a8k5232013-exhibit31.htm" STYLE="-sec-extract: exhibit">Certificate of Designation of Rights, Preferences and Privileges of Series B Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on May 24, 2013).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>3.3</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738815000026/exhibit31certificateofamen.htm" STYLE="-sec-extract: exhibit">Certificate of Amendment of the Restated Certificate of Incorporation of Digirad Corporation (incorporated by reference to Exhibit 3.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on May 5, 2015).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>3.4</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000092189518001520/ex31to8k09271004_04302018.htm" STYLE="-sec-extract: exhibit">Certificate of Amendment of the Restated Certificate of Incorporation of Digirad Corporation (incorporated by reference to Exhibit 3.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on May 1, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>3.5</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738817000015/drad10q-q12017xex31.htm" STYLE="-sec-extract: exhibit">Amended and Restated Bylaws of Digirad Corporation dated May 4, 2007 and Amendment No. 1 to the Amended and Restated Bylaws of Digirad Corporation dated April 5, 2017 (incorporated by reference to Exhibit 3.1 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 1, 2017).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>3.6</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738819000034/ex31digiradstocksplitcerti.htm" STYLE="-sec-extract: exhibit">Certificate of Amendment of the Restated Certificate of Incorporation of Digirad Corporation (incorporated by reference to Exhibit 3.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on May 31, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>3.7</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000138713119006882/ex3-1.htm" STYLE="-sec-extract: exhibit">Certificate of Designations, Rights and Preferences of 10% Series A Cumulative Perpetual Preferred Stock of Digirad Corporation (incorporated by reference to Exhibit 3.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on September 11, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>3.8</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000092189520003281/ex31to8k09271004_12282020.htm" STYLE="-sec-extract: exhibit">Certificate of Amendment of the Restated Certificate of Incorporation of Digirad Corporation (incorporated by reference to Exhibit 3.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on December&nbsp;28, 2020.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>3.9</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380521000780/e620666_ex3-1.htm" STYLE="-sec-extract: exhibit">Certificate of Designation of Series C Participating Preferred Stock of Star Equity Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on June 2, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>3.10</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000036/definitiveproxystatement20.htm" STYLE="-sec-extract: exhibit">Certificate of Amendment of the Restated Certificate of Incorporation of Star Equity Holdings, Inc. (incorporated by reference to Annex B to the Company&rsquo;s Definitive Proxy Statement filed with the Commission on September 22, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.1</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000104746904018247/a2136366zex-4_1.htm" STYLE="-sec-extract: exhibit">Form of Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1 (File No. 333-113760) filed with the Commission on March 19, 2004).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.2</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000110465905058149/a05-20986_1ex4d1.htm" STYLE="-sec-extract: exhibit">Preferred Stock Rights Agreement, by and between Digirad Corporation and American Stock Transfer and Trust Company, dated November&nbsp;22, 2005 (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form 8-A filed with the Commission on November&nbsp;29, 2005).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.3</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738813000028/a8k5232013-exhibit41v2.htm" STYLE="-sec-extract: exhibit">Tax Benefit Preservation Plan by and between Digirad Corporation and American Stock Transfer &amp; Trust Company, dated as of May 23, 2013 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Company with the Commission on May 24, 2013).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.4</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738814000012/digirad10k2013exhibit1026t.htm" STYLE="-sec-extract: exhibit">Tax Benefit Preservation Plan Amendment, dated November 11, 2013, by and between the Company and American Stock Transfer &amp; Trust Company, LLC (incorporated by reference to Exhibit 10.26 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 20, 2014).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.5</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738815000013/digirad10k2014exhibit45.htm" STYLE="-sec-extract: exhibit">First Amendment to Preferred Stock Rights Agreement, dated as of March 5, 2015, by and between the Company and American Stock Transfer &amp; Trust Company, LLC (incorporated by reference to Exhibit 4.5 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 6, 2015).</A></P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">4.6</TD>
    <TD STYLE="text-align: justify; width: 88%"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000149315218000793/ex4-1.htm" STYLE="-sec-extract: exhibit">Promissory Note, dated January 12, 2018, made by ATRM Holdings, Inc. for the benefit of Lone Star Value Co-Invest I, LP (incorporated by reference to Exhibit 4.1 to ATRM Holdings, Inc.&rsquo;s Current Report on Form 8-K filed with the Commission on January 19, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.7</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000149315218008363/ex4-1.htm" STYLE="-sec-extract: exhibit">Promissory Note, dated June 1, 2018, made by ATRM Holdings, Inc. for the benefit of Lone Star Value Co-Invest I, LP (incorporated by reference to Exhibit 4.1 to ATRM Holdings, Inc.&rsquo;s Current Report on Form 8-K filed with the Commission on June 7, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.8</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000149315218017637/ex4-2.htm" STYLE="-sec-extract: exhibit">Promissory Note, dated December 17, 2018, made by ATRM Holdings, Inc. for the benefit of Lone Star Value Management, LLC (incorporated by reference to Exhibit 4.2 to ATRM Holdings, Inc.&rsquo;s Current Report on Form 8-K filed with the Commission on December 18, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.9</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000032/a41descriptionofsecuri.htm" STYLE="-sec-extract: exhibit">Description of Registrant&rsquo;s Securities (incorporated by reference to Exhibit 4.1 to the Company&rsquo;s Quarterly&nbsp;Report on Form 10-Q filed with the Commission on August 13, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.10</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000138713120005343/ex1-1.htm" STYLE="-sec-extract: exhibit">Form of Maxim Warrant (incorporated by reference to Exhibit 4.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on May 29, 2020, referencing Exhibit 1.1 (Underwriting Agreement) to the same&nbsp;Current Report on Form 8-K).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.11</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000138713120005343/ex4-2.htm" STYLE="-sec-extract: exhibit">Form of Warrant (incorporated by reference to Exhibit 4.2 to the Company&rsquo;s Current Report on Form 8-K filed&nbsp;with the Commission on May 29, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.12</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000138713120005343/ex4-3.htm" STYLE="-sec-extract: exhibit">Warrant Agent Agreement, dated May 28, 2020, between Digirad Corporation and American Stock Transfer &amp;&nbsp;Trust Company, LLC (incorporated by reference to Exhibit 4.3 to the Company&rsquo;s Current Report on Form 8-K&nbsp;filed&nbsp;with the Commission on May 29, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.13</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380521000780/e620666_ex4-1.htm" STYLE="-sec-extract: exhibit">Rights Agreement, dated as of June 2, 2021, by and between Star Equity Holdings, Inc. and American Stock Transfer &amp; Trust Company, LLC, as Rights Agent (incorporated by reference to Exhibit 4.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on June 2, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.14</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000036/definitiveproxystatement20.htm" STYLE="-sec-extract: exhibit">Tax Benefit Preservation Plan by and between Star Equity Holdings, Inc. and American Stock Transfer &amp; Trust Company, dated as of June 2, 2021 (incorporated by reference to Annex A to the Company&rsquo;s Definitive Proxy Statement filed with the Commission on September 22, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.15*</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="e621187_ex4-15.htm" STYLE="-sec-extract: exhibit">Form of Pre-Funded Common Stock Purchase Warrant to be issued in this offering.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.16*</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="e621187_ex4-16.htm" STYLE="-sec-extract: exhibit">Form of Common Stock Purchase Warrant to be issued in this offering.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.17*</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="e621187_ex4-17.htm" STYLE="-sec-extract: exhibit">Warrant Agent Agreement, dated [&bull;], 2022, between Star Equity Holdings, Inc. and American Stock Transfer &amp; Trust Company, LLC.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>4.18**</TD>
    <TD STYLE="text-align: justify">Underwriter's Warrant (Included in Exhibit 1.1).</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>5.1**</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0">Opinion of Olshan Frome Wolosky LLP (and Consent).</P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.1#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119312507173467/dex101.htm" STYLE="-sec-extract: exhibit">Digirad Corporation 2004 Stock Incentive Plan, as Amended and Restated on August 2, 2007 (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on August&nbsp;7, 2007).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.2#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000110465905009367/a05-4126_2ex10d22.htm" STYLE="-sec-extract: exhibit">Form of Notice of Stock Option Award and Stock Option Award Agreement for 2004 Stock Incentive Plan (incorporated by reference to Exhibit 10.22 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March&nbsp;3, 2005).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.3#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000104746904018247/a2136366zex-10_19.htm" STYLE="-sec-extract: exhibit">2004
Non-Employee Director Option Program (incorporated by reference to Exhibit 10.19 to the Company&rsquo;s Amended Registration Statement
on Form S-1/A (File No. 333-113760) filed with the Commission on May 24, 2004).</A></P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">10.4#</TD>
    <TD STYLE="text-align: justify; width: 88%"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000110465905009367/a05-4126_2ex10d24.htm" STYLE="-sec-extract: exhibit">Form of Notice of Non-Qualified Stock Option Award and Stock Option Award Agreement for 2004 Non-Employee Director Option Program (incorporated by reference to Exhibit 10.24 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March&nbsp;3, 2005).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.5#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000104746904014475/a2134562zex-10_20.htm" STYLE="-sec-extract: exhibit">Form of Indemnification Agreement (incorporated by reference to Exhibits 10.20 to the Registration Statement on Form S-1/A (File No. 333-113760) filed with the Commission on April 29, 2004).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.6#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000110262413000278/exh10_1.htm" STYLE="-sec-extract: exhibit">Employment Agreement, dated as of May 1, 2007, as amended on September 30, 2010, by and between the Company and Matthew G. Molchan (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on March 5, 2013).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.7#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119312511203013/dex101.htm" STYLE="-sec-extract: exhibit">Form of 2011 Inducement Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on July 29, 2011).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.8#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119312511203013/dex102.htm" STYLE="-sec-extract: exhibit">Form of 2011 Inducement Stock Incentive Plan Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on July 29, 2011).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.9#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119312511203013/dex103.htm" STYLE="-sec-extract: exhibit">Form of 2011 Inducement Stock Incentive Plan Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.3 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on July 29, 2011).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.10#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738814000030/exhibit41.htm" STYLE="-sec-extract: exhibit">Digirad Corporation 2014 Equity Incentive Award Plan (incorporated by reference to Exhibit 4.1 to the Company&rsquo;s Registration Statement on Form S-8 filed with the Commission on June 6, 2014).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.11#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738815000013/digirad10k2014exhibit1019.htm">Form Indemnification Agreement of the Company for directors and officers (incorporated by reference to Exhibit 10.19 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 6, 2015).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.12</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738815000022/drad-3312015xex101.htm" STYLE="-sec-extract: exhibit">Registration Rights Agreement, dated March 5, 2015, by and among the Company, Keenan - Thornton Family Trust, David Keenan and Samia Arram (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 1, 2015).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.13</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738817000033/drad10q-q32017xex101.htm" STYLE="-sec-extract: exhibit">Consolidated Agreements, dated April 1, 2014, between DMS Health Technologies, Inc. and Philips Healthcare, a Division of Philips Electronics North America Corporation (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on November 3, 2017).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.14</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738817000033/drad10q-q32017xex102.htm" STYLE="-sec-extract: exhibit">Amendment, dated June 9, 2015, to the Consolidated Agreements between DMS Health Technologies, Inc. and Philips Healthcare, a Division of Philips Electronics North America Corporation (incorporated by reference to Exhibit 10.2 to the Company&rsquo;s Current Report on Form 10-Q filed with the Commission on November 3, 2017).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.15#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000092189518001520/ex101to8k09271004_04302018.htm" STYLE="-sec-extract: exhibit">Digirad Corporation 2018 Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on May 1, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.16#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000092189518002948/ex992tos809271004_11062018.htm" STYLE="-sec-extract: exhibit">Form of 2018 Incentive Plan Restricted Stock Unit Agreement (incorporated by reference to Exhibit 99.2 to the Company&rsquo;s Registration Statement on Form S-8 filed with the Commission on November 6, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.17#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000092189518002948/ex993tos809271004_11062018.htm" STYLE="-sec-extract: exhibit">Form
of 2018 Incentive Plan Restricted Stock Unit Agreement (Performance Based) (incorporated by reference to Exhibit 99.3 to the Company&rsquo;s
Registration Statement on Form S-8 filed with the Commission on November 6, 2018).</A></P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">10.18#</TD>
    <TD STYLE="text-align: justify; width: 88%"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738818000030/drad10q-q32018ex102nobleem.htm" STYLE="-sec-extract: exhibit">Employment Agreement, by and between Digirad Corporation and David Noble, dated October 31, 2018 (incorporated by reference to Exhibit 10.2 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on November 5, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.19#</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738818000030/drad10q-q32018xex103indemn.htm" STYLE="-sec-extract: exhibit">Indemnification Agreement, by and between Digirad Corporation and David Noble, dated October 25, 2018 (incorporated by reference to Exhibit 10.3 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on November 5, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.20</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738819000006/digirad10k2018exhibit1031.htm" STYLE="-sec-extract: exhibit">Limited Liability Company Agreement for Star Procurement, LLC, dated December 14, 2018, by and among Star Procurement LLC, Digirad Corporation and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.31 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 1, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.21</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380519000343/ex101to8k09271004_04022019.htm" STYLE="-sec-extract: exhibit">Purchase and Sale Agreement, dated March 27, 2019, by and between RJF &ndash; Keiser Real Estate, LLC and 56 Mechanic Falls Road, LLC (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.22</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380519000343/ex102to8k09271004_04022019.htm" STYLE="-sec-extract: exhibit">Purchase and Sale Agreement, dated April 3, 2019, by and between KBS Builders, Inc. and 947 Waterford Road, LLC (incorporated by reference to Exhibit 10.2 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.23</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380519000343/ex103to8k09271004_04022019.htm" STYLE="-sec-extract: exhibit">Purchase and Sale Agreement, dated April 3, 2019, by and between KBS Builders, Inc. and 300 Park Street, LLC (incorporated by reference to Exhibit 10.3 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.24</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380519000343/ex104to8k09271004_04022019.htm" STYLE="-sec-extract: exhibit">Lease Agreement, dated April 3, 2019, by and between KBS Builders, Inc. and 947 Waterford Road, LLC (incorporated by reference to Exhibit 10.4 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.25</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380519000343/ex105to8k09271004_04022019.htm" STYLE="-sec-extract: exhibit">Lease Agreement, dated April 3, 2019, by and between KBS Builders, Inc. and 300 Park Street, LLC (incorporated by reference to Exhibit 10.5 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.26</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738819000030/ex106oxfordlease.htm" STYLE="-sec-extract: exhibit">Lease Agreement, dated April 3, 2019, by and between KBS Builders, Inc. and 56 Mechanic Falls Road, LLC (incorporated by reference to Exhibit 10.6 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 8, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.27</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738819000030/drad10q-q12019ex107firstam.htm" STYLE="-sec-extract: exhibit">First Amendment to Lease, dated April 18, 2019, by and between 56 Mechanic Falls Road, LLC and KBS Builders, Inc. (incorporated by reference to Exhibit 10.7 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 8, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.28</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380519000343/ex106to8k09271004_04022019.htm" STYLE="-sec-extract: exhibit">Loan
and Security Agreement, dated March 29, 2019, by and among Digirad Corporation, certain subsidiaries of the Digirad Corporation identified
on the signature pages thereto, and Sterling National Bank (incorporated by reference to Exhibit 10.6 to the Company&rsquo;s Current
Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company
agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.</A></P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">10.29</TD>
    <TD STYLE="text-align: justify; width: 88%"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000138713119006882/ex10-1.htm" STYLE="-sec-extract: exhibit">Stock Purchase Agreement, dated as of September 10, 2019, by and between Digirad Corporation and Lone Star Value Investors, LP (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on September 11, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.30</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000138713119006882/ex10-2.htm" STYLE="-sec-extract: exhibit">Registration Rights Agreement, dated as of September 10, 2019, by and between Digirad Corporation and Lone Star Value Investors, LP (incorporated by reference to Exhibit 10.2 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on September 11, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.31</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000138713119006882/ex10-3.htm" STYLE="-sec-extract: exhibit">Put Option Purchase Agreement, dated as of September 10, 2019, by and between Digirad Corporation and Jeffrey Eberwein (incorporated by reference to Exhibit 10.3 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on September 11, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.32</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000138713119006882/ex10-4.htm" STYLE="-sec-extract: exhibit">Consent and Acknowledgment Agreement and Twelfth Amendment to Loan Agreement, dated as of September 10, 2019, by and among Gerber Finance Inc., KBS Builders, Inc., ATRM Holdings, Inc. and Digirad Corporation. (incorporated by reference to Exhibit 10.4 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on September 11, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.33</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738819000063/drad10q-2019q3xex106.htm" STYLE="-sec-extract: exhibit">Waiver of Promissory, Note dated July 17, 2019, by Lone Star Value Co-Invest I, LP to Promissory Note dated January 12, 2018, made by ATRM Holdings, Inc. in favor of Lone Star Value Co-Invest I, LP (incorporated by reference to Exhibit 10.6 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on November 14, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.34</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738819000063/drad10q-2019q3xex107.htm" STYLE="-sec-extract: exhibit">Waiver of Promissory Note, dated July 17, 2019, by Lone Star Value Co-Invest I, LP to Promissory Note dated June 1, 2018, made by ATRM Holdings, Inc. in favor of Lone Star Value Co-Invest I, LP (incorporated by reference to Exhibit 10.7 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on November 14, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.35</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738819000063/drad10q-2019q3xex108.htm" STYLE="-sec-extract: exhibit">Waiver of Promissory Note, dated July 17, 2019, by Lone Star Value Management, LLC to Promissory Note dated December 17, 2018, made by ATRM Holdings, Inc. in favor of Lone Star Value Management, LLC (incorporated by reference to Exhibit 10.8 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on November 14, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.36</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738819000063/drad10q-2019q3xex109.htm" STYLE="-sec-extract: exhibit">Extension/Revision Agreement of Note dated October 1, 2019, by Premier Bank to Promissory Note dated June 30, 2017, made by Glenbrook Building Supply, Inc. and EdgeBuilder, Inc. in favor of Premier Bank (incorporated by reference to Exhibit 10.9 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on November 14, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.37</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738819000063/drad10q-2019q3xex1010.htm" STYLE="-sec-extract: exhibit">Extension/Revision Agreement of Note dated November 1, 2019, by Premier Bank to Promissory Note dated June 30, 2017, made by Glenbrook Building Supply, Inc. and EdgeBuilder, Inc. in favor of Premier Bank (incorporated by reference to Exhibit 10.10 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on November 14, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.38</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000149315216009920/ex10-1.htm" STYLE="-sec-extract: exhibit">Loan and Security Agreement, dated as of February 23, 2016, by and among Gerber Finance Inc., KBS Builders, Inc., Maine Modular Haulers, Inc., and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.1 to ATRM Holdings, Inc.&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 16, 2016).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.39</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000090859819000010/q3201710qexhibit103.htm" STYLE="-sec-extract: exhibit">Third
Agreement of Amendment to the Loan and Security Agreement, dated as of September 29, 2017, by and among Gerber Finance, Inc., KBS Builders,
Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.3 to ATRM Holdings, Inc.&rsquo;s Quarterly Report on Form 10-Q
filed with the Commission on April 16, 2019).</A></P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">10.40</TD>
    <TD STYLE="text-align: justify; width: 88%"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000090859819000008/q2201710qexhibit103.htm" STYLE="-sec-extract: exhibit">Revolving Credit Loan Agreement, dated as of June 30, 2017, by and between Glenbrook Building Supply, Inc., EdgeBuilder, Inc. and Premier Bank (incorporated by reference to Exhibit 10.3 to ATRM Holdings, Inc.&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on April 16, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.41</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000090859819000010/q3201710qexhibit101.htm" STYLE="-sec-extract: exhibit">Fourth Agreement of Amendment to Loan and Security Agreement, dated as of July 20, 2017, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.1 to ATRM Holdings, Inc.&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on April 16, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.42</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000090859819000010/q3201710qexhibit102.htm" STYLE="-sec-extract: exhibit">Fifth Agreement of Amendment to Loan and Security Agreement, dated as of September 29, 2017, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit10.2 to ATRM Holdings, Inc.&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on April 16, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.43</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000090859819000013/a201710kexhibit1022.htm" STYLE="-sec-extract: exhibit">Sixth Agreement of Amendment to Loan and Security Agreement, dated as of December 22, 2017, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit10.22 to ATRM Holdings, Inc.&rsquo;s Annual Report on Form 10-K filed with the Commission on April 30, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.44</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000149315218000793/ex10-1.htm" STYLE="-sec-extract: exhibit">Securities Purchase Agreement, dated as of January 12, 2018, by and between ATRM Holdings, Inc. and Lone Star Co-Invest I, LP (incorporated by reference to Exhibit 10.1 to ATRM Holdings, Inc.&rsquo;s Current Report on Form 8-K filed with the Commission on January 19, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.45</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000149315218008363/ex10-1.htm" STYLE="-sec-extract: exhibit">Securities Purchase Agreement, dated as of June 1, 2018, by and between ATRM Holdings, Inc. and Lone Star Co-Invest I, LP (incorporated by reference to Exhibit 10.1 to ATRM Holdings, Inc.&rsquo;s Current Report on Form 8-K filed with the Commission on June 7, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.46</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000090859819000013/a201710kexhibit1025.htm" STYLE="-sec-extract: exhibit">Eighth Agreement of Amendment to Loan and Security Agreement, dated as of October 1, 2018, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.25 to ATRM Holdings, Inc.&rsquo;s Annual Report on Form 10-K filed with the Commission on April 30, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.47</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000149315218017637/ex10-1.htm" STYLE="-sec-extract: exhibit">Securities Purchase Agreement, dated as of December 17, 2018, by and between ATRM Holdings, Inc. and Lone Star Value Management, LLC (incorporated by reference to Exhibit 10.1 to ATRM Holdings, Inc.&rsquo;s Current Report on Form 8-K filed with the Commission on December 18, 2018).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.48</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000090859819000013/a201710kexhibit1029.htm" STYLE="-sec-extract: exhibit">Ninth Agreement of Amendment to Loan and Security Agreement, dated as of February 22, 2019, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.29 to ATRM Holdings, Inc.&rsquo;s Annual Report on Form 10-K filed with the Commission on April 30, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.49</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000090859819000013/a201710kexhibit1030.htm" STYLE="-sec-extract: exhibit">Tenth Agreement of Amendment to Loan and Security Agreement, dated as of April 1, 2019, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.30 to ATRM Holdings, Inc.&rsquo;s Annual Report on Form 10-K filed with the Commission on April 30, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.50</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000090859819000013/a201710kexhibit1031.htm" STYLE="-sec-extract: exhibit">Fifth
Agreement of Amendment to Loan and Security Agreement, dated as of April 1, 2019, by and among Gerber Finance Inc., Edgebuilder, Inc.,
Glenbrook Building Supply Inc., ATRM Holdings, Inc. and KBS Builders, Inc. (incorporated by reference to Exhibit 10.31 to ATRM Holdings,
Inc.&rsquo;s Annual Report on Form 10-K filed with the Commission on April 30, 2019).</A></P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">10.51</TD>
    <TD STYLE="text-align: justify; width: 88%"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000092189519001177/ex103to8k09663002_04252019.htm" STYLE="-sec-extract: exhibit">Membership Interest Purchase Agreement, dated as of April 1, 2019, by and among ATRM Holdings, Inc., Lone Star Value Management, LLC and Jeffrey E. Eberwein (incorporated by reference to Exhibit 10.3 to ATRM Holdings, Inc.&rsquo;s Current Report on Form 8-K filed with the Commission on April 26, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.52</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000090859819000013/a201710kexhibit1039.htm" STYLE="-sec-extract: exhibit">Eleventh Agreement of Amendment to Loan and Security Agreement, dated as of April 15, 2019, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.39 to ATRM Holdings, Inc.&rsquo;s Annual Report on Form 10-K filed with the Commission on April 30, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.53</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/908598/000162828019008385/a201810kexhibit1040.htm" STYLE="-sec-extract: exhibit">Agreement, dated as of May 15, 2019, by and between Digirad Corporation and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.39 to ATRM Holdings, Inc.&rsquo;s Annual Report on Form 10-K filed with the Commission on June 26, 2019).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.54</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380520000105/e619323_ex10-1.htm" STYLE="-sec-extract: exhibit">Loan and Security Agreement, dated January 31, 2020, by and among Star Real Estate Holdings USA, Inc., 300 Park Street, LLC, 947 Waterford Road, LLC, 56 Mechanic Falls Road, LLC, ATRM Holdings, Inc., EdgeBuilder, Inc., Glenbrook Building Supply, Inc., KBS Builders, Inc., Digirad Corporation, and Gerber Finance Inc. (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on February 6, 2020). Schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.55</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380520000105/e619323_ex10-2.htm" STYLE="-sec-extract: exhibit">Loan and Security Agreement, dated January 31, 2020, by and among EdgeBuilder, Inc., Glenbrook Building Supply, Inc., Star Real Estate Holdings USA, Inc., 300 Park Street, LLC, 947 Waterford Road, LLC, 56 Mechanic Falls Road, LLC, ATRM Holdings, Inc., KBS Builders, Inc., Digirad Corporation, and Gerber Finance Inc. (incorporated by reference to Exhibit 10.2 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on February 6, 2020). Schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.56</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380520000105/e619323_ex10-3.htm" STYLE="-sec-extract: exhibit">Extension and Modification Agreement, dated January 31, 2020, by and among EdgeBuilder, Inc., Glenbrook Building Supply, Inc. and Premier Bank (incorporated by reference to Exhibit 10.3 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on February 6, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.57</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380520000105/e619323_ex10-4.htm" STYLE="-sec-extract: exhibit">Thirteenth Amendment to Loan and Security Agreement, dated January 31, 2020, by and among Gerber Finance Inc., KBS Builders, Inc. ATRM Holdings, Inc., and Digirad Corporation (incorporated by reference to Exhibit 10.4 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on February 6, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.58</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000007/digirad10k2019exhibit1063.htm" STYLE="-sec-extract: exhibit">First Amendment to Loan and Security Agreement, dated February 20, 2020, by and among Star Real Estate Holdings USA, Inc., 300 Park Street, LLC, 947 Waterford Road, LLC, 56 Mechanic Falls Road, LLC and Gerber Finance Inc. (incorporated by reference to Exhibit 10.63 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 9, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.59</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000007/digirad10k2019exhibit1064.htm" STYLE="-sec-extract: exhibit">First Amendment to Loan and Security Agreement Dated January 31, 2020, dated as of March 5, 2020, by and among Gerber Finance Inc., EdgeBuilder, Inc. and Glenbrook Building Supply, Inc.; and Consent and as a Fourteenth Amendment to Loan and Security Agreement Dated February 23, 2016, by and among Gerber Finance Inc., KBS Builders, Inc., ATRM Holdings, Inc. and Digirad Corporation (incorporated by reference to Exhibit 10.64 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 9, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.60</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000013/employmentagreementmar.htm" STYLE="-sec-extract: exhibit">Severance
Agreement, dated January 28, 2014, between Digirad Corporation and Martin B. Shirley (incorporated by reference to Exhibit 10.65 to the
Company&rsquo;s Amendment No. 1 to Annual Report on Form 10-K/A filed with the Commission on April 17, 2020).</A></P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">10.61</TD>
    <TD STYLE="text-align: justify; width: 88%"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000092189520001293/ex101to8k09271004_05062020.htm" STYLE="-sec-extract: exhibit">Note, dated April 30, 2020, made by KBS Builders, Inc. in favor of Bremer Bank (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on May 6, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.62</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000092189520001293/ex102to8k09271004_05062020.htm" STYLE="-sec-extract: exhibit">Note, dated April 30, 2020, made by EdgeBuilder, Inc. in favor of Bremer Bank (incorporated by reference to Exhibit 10.2 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on May 6, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.63</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000092189520001293/ex103to8k09271004_05062020.htm" STYLE="-sec-extract: exhibit">Note, dated April 30, 2020, made by Glenbrook Building Supply Inc. in favor of Bremer Bank (incorporated by reference to Exhibit 10.3 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on May 6, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.64</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000020/a1010secondamendment.htm" STYLE="-sec-extract: exhibit">Second Amendment to Loan and Security Agreement, dated April 30, 2020, by and among Star Real Estate Holdings USA, Inc., 300 Park Street, LLC, 947 Waterford Road, LLC, 56 Mechanic Falls Road, LLC and Gerber Finance Inc. (incorporated by reference to Exhibit 10.10 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.65</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000020/a101115thamendmenttolo.htm" STYLE="-sec-extract: exhibit">Fifteenth Amendment to Loan and Security Agreement dated April 1, 2020, between KBS Builders, Inc. and Gerber Finance Inc. (incorporated by reference to Exhibit 10.11 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.66</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000020/a1012dmsimagingsnbprom.htm" STYLE="-sec-extract: exhibit">Promissory Note, dated May 5, 2020, made by DMS Imaging, Inc. in favor of Sterling National Bank (incorporated by reference to Exhibit 10.12 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.67</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000020/a1013digiradimagingsol.htm" STYLE="-sec-extract: exhibit">Promissory Note, dated May 5, 2020, made by Digirad Imaging Solutions, Inc. in favor of Sterling National Bank (incorporated by reference to Exhibit 10.13 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.68</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000020/a1014dmshealthtechnolo.htm" STYLE="-sec-extract: exhibit">Promissory Note, dated May 7, 2020, made by DMS Health Technologies, Inc. in favor of Sterling National Bank (incorporated by reference to Exhibit 10.14 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.69</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000020/a1015digiradsnbpromiss.htm" STYLE="-sec-extract: exhibit">Promissory Note, dated May 7, 2020, made by Digirad Corporation in favor of Sterling National Bank (incorporated by reference to Exhibit 10.15 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.70</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000032/a10102ndamendmenttothe.htm" STYLE="-sec-extract: exhibit">Second Amendment to Loan and Security Agreement, dated July 1, 2020, by and among Gerber Finance Inc., EdgeBuilder, Inc., and Glenbrook Building Supply, Inc. (incorporated by reference to Exhibit 10.10 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on August 13, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.71</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738820000032/a1011digirad2018incent.htm" STYLE="-sec-extract: exhibit">2018 Incentive Plan, as amended July 31, 2020 (incorporated by reference to Exhibit 10.11 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on August 13, 2020).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.72</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000009/exhibit1072firstamendmentt.htm" STYLE="-sec-extract: exhibit">First Amendment to Loan and Security Agreement, Consent and Release, dated February 1, 2021, by and among Digirad Health, Inc., Digirad Imaging Solutions, Inc., MD Office Solutions, DMS Health Technologies, Inc., DMS Imaging, Inc., DMS Health Technologies-Canada, Inc., Project Rendezvous Holding Corporation, Project Rendezvous Acquisition Corporation, Digirad Diagnostic Imaging, Inc., Star Equity Holdings, Inc., and Sterling National Bank (incorporated by reference to Exhibit 10.72 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 29, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.73</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000009/exhibit1073gerberkbs16tham.htm" STYLE="-sec-extract: exhibit">Sixteenth
Amendment to Loan and Security Agreement, dated January 5, 2021, by and among Gerber Finance Inc., KBS Builders, Inc., ATRM Holdings,
Inc., and Star Equity Holdings, Inc. (incorporated by reference to Exhibit 10.73 to the Company&rsquo;s Annual Report on Form 10-K filed
with the Commission on March 29, 2021).</A></P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">10.74</TD>
    <TD STYLE="text-align: justify; width: 88%"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000009/exhibit1074gerberkbssevent.htm" STYLE="-sec-extract: exhibit">Seventeenth Amendment to Loan and Security Agreement, dated February 26, 2021, by and among Gerber Finance Inc., KBS Builders, Inc., ATRM Holdings, Inc., and Star Equity Holdings, Inc. (incorporated by reference to Exhibit 10.74 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 29, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.75</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000009/exhibit1075gerberstrthirda.htm" STYLE="-sec-extract: exhibit">Third Amendment to Loan and Security Agreement, dated January 31, 2020, by and among Gerber Finance Inc., Star Real Estate Holdings USA, Inc., 300 Park Street, LLC, 947 Waterford Road, LLC, and 56 Mechanic Falls Road, LLC (incorporated by reference to Exhibit 10.75 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 29, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.76</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000009/exhibit1076gerberebglthird.htm" STYLE="-sec-extract: exhibit">Third Amendment to Loan and Security Agreement, dated January 31, 2020, by and among Gerber Finance Inc., EdgeBuilder, Inc., and Glenbrook Building Supply, Inc. (incorporated by reference to Exhibit 10.76 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 29, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.77</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000009/exhibit1077dmshealthstockp.htm" STYLE="-sec-extract: exhibit">Stock Purchase Agreement, dated October 30, 2020, by and among Knob Creek Acquisition Corp., Digirad Corporation, Project Rendezvous Acquisition Corporation and DMS Health Technologies, Inc. The schedules and exhibits to this exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request (incorporated by reference to Exhibit 10.77 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 29, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.78</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000009/exhibit1078amendmenttostoc.htm" STYLE="-sec-extract: exhibit">Amendment to Stock Purchase Agreement dated as of March 26, 2021, by and between Project Rendezvous Acquisition Corporation and Knob Creek Acquisition Corp. (incorporated by reference to Exhibit 10.78 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 29, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.79</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000013/a101secondamendmenttolsadi.htm" STYLE="-sec-extract: exhibit">Second Amendment to Loan and Security Agreement, Consent and Release, dated March 31, 2021, by and among Digirad Health, Inc., Digirad Imaging Solutions, Inc., DMS Health Technologies, Inc., DMS Imaging, Inc., DMS Health Technologies-Canada, Inc., Project Rendezvous Holding Corporation, Project Rendezvous Acquisition Corporation, Digirad Diagnostic Imaging, Inc., Star Equity Holdings, Inc., and Sterling National Bank (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on April 1, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.80</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000029/a104waterfordsaleagreement.htm" STYLE="-sec-extract: exhibit">Waterford Sale Agreement, dated June 9, 2021, by and between 947 Waterford Road, LLC, and Barnum Holdings, LLC (incorporated by reference to Exhibit 10.4 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.81</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000029/a105gerberkbseighteenthame.htm" STYLE="-sec-extract: exhibit">Gerber KBS Eighteenth Amendment to Loan and Security Agreement, dated July 30, 2021, by and among Gerber Finance Inc., KBS Builders, Inc., ATRM Holdings, Inc., and Star Equity Holdings, Inc. (incorporated by reference to Exhibit 10.5 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.82</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000029/a106starrealestateholdings.htm" STYLE="-sec-extract: exhibit">Star Real Estate Holdings USA, Inc. Subordination Agreement, dated July 30, 2021, among Star Real Estate Holdings USA, Inc., and Gerber Finance Inc. (incorporated by reference to Exhibit 10.6 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.83</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000029/a107starequityholdingsinca.htm" STYLE="-sec-extract: exhibit">Star Equity Holdings Inc. Amended and Restated Subordination Agreement, dated July 30, 2021, by and among Star Equity Holdings, Inc., and Gerber Finance Inc. (incorporated by reference to Exhibit 10.7 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">10.84</TD>
    <TD STYLE="text-align: justify; width: 88%"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000029/a108gerberebglfourthamendm.htm" STYLE="-sec-extract: exhibit">Gerber EBGL Fourth Amendment to Loan and Security Agreement, dated July 30, 2021, by and among Gerber Finance Inc., EdgeBuilder, Inc., and Glenbrook Building Supply, Inc. (incorporated by reference to Exhibit 10.8 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.85</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000029/a109gerberebglamendedandre.htm" STYLE="-sec-extract: exhibit">Gerber EBGL Amended and Restated Promissory Note, dated July 30, 2021, by and among EdgeBuilder, Inc., and Glenbrook Building Supply, Inc. (incorporated by reference to Exhibit 10.9 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.86</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000044/a101ebglamendment5thloc.htm" STYLE="-sec-extract: exhibit">Gerber EBGL Fifth Amendment to Loan and Security Agreement, dated October 21, 2021, by and among Gerber Finance Inc., EdgeBuilder, Inc., and Glenbrook Building Supply, Inc. (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Quarterly Report on Form 10-Q filed with the Commission on November 12, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.87</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380521001731/e621152_ex10-1.htm" STYLE="-sec-extract: exhibit">Securities Purchase Agreement, dated December 10, 2021, between Star Equity Holdings, Inc. and the purchaser signatory thereto (incorporated by reference to Exhibit 10.1 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on December 13, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>10.88</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000119380521001731/e621152_ex10-2.htm" STYLE="-sec-extract: exhibit">Lock-Up Agreement, dated December 10, 2021, between Star Equity Holdings, Inc. and the purchaser signatory thereto (incorporated by reference to Exhibit 10.2 to the Company&rsquo;s Current Report on Form 8-K filed with the Commission on December 13, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>21.1</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="http://www.sec.gov/Archives/edgar/data/707388/000070738821000009/starequity2020ex211subsidi.htm" STYLE="-sec-extract: exhibit">Subsidiaries of Star Equity Holdings, Inc. (incorporated by reference to Exhibit 21.1 to the Company&rsquo;s Annual Report on Form 10-K filed with the Commission on March 29, 2021).</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>23.1*</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="e621187_ex23-1.htm" STYLE="-sec-extract: exhibit">Consent of BDO USA, LLP, Independent Registered Public Accounting Firm.</A></P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>23.2**</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0">Consent of Olshan Frome Wolosky LLP (included in Exhibit 5.1).</P>
                                    <P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>24.1*</TD>
    <TD STYLE="text-align: justify"><P STYLE="margin-top: 0; margin-bottom: 0"><A HREF="#poa">Power of Attorney (set forth on the signature page of this registration statement).</A></P></TD></TR>
  </TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">#</TD><TD STYLE="text-align: justify">Indicates management contract or compensatory plan.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">*</TD><TD STYLE="text-align: justify">Filed herewith.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">**</TD><TD STYLE="text-align: justify">To be filed by amendment.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">ITEM 17. UNDERTAKINGS.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">The undersigned registrant hereby undertakes:</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">To file, during any period in which offers or sales are being made, a post-effective amendment to this
registration statement:</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">To reflect in the prospectus any facts or events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price
set forth in the &ldquo;Calculation of Registration Fee&rdquo; table in the effective registration statement;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD STYLE="text-align: justify">To include any material information with respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such information in the registration statement;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">provided, however, that paragraphs (i), (ii) and
(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports
filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that
is part of the registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">To remove from registration by means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(4)</TD><TD STYLE="text-align: justify">That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(A)</TD><TD STYLE="text-align: justify">Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed part of and included in the registration statement; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(B)</TD><TD STYLE="text-align: justify">Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing
the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of
sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective date.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(5)</TD><TD STYLE="text-align: justify">That for the purpose of determining any liability under the Securities Act of 1933 in a primary offering
of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications,
the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required
to be filed pursuant to Rule 424;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant
or used or referred to by the undersigned registrant;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD STYLE="text-align: justify">The portion of any other free writing prospectus relating to the offering containing material information
about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(iv)</TD><TD STYLE="text-align: justify">Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: justify">The undersigned registrant hereby undertakes that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant&rsquo;s annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan&rsquo;s annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(c)</TD><TD STYLE="text-align: justify">Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(d)</TD><TD STYLE="text-align: justify">The undersigned registrant hereby undertakes that:</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">For purposes of determining any liability under the Securities Act of 1933, the information omitted from
the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed
by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SIGNATURES</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the requirements
of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Old Greenwich, Connecticut on the 30th  day of December 2021.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3"><B>STAR EQUITY HOLDINGS, INC.</B></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid">
/s/ Jeffrey E. Eberwein</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 51%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 9%">Name:</TD>
    <TD STYLE="width: 34%">Jeffrey E. Eberwein</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD>Executive Chairman</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="poa"></A>POWER OF ATTORNEY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">KNOW ALL PERSONS BY THESE
PRESENTS, each director and officer whose signature appears below constitutes and appoints each of Jeffrey E. Eberwein and David J. Noble,
his true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, to sign in any and all capacities
any and all amendments or post-effective amendments to this registration statement on Form S-1, and to sign any and all additional registration
statements relating to the same offering of securities of the Registration Statement that are filed pursuant to Rule 462(b) of the Securities
Act, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission,
granting such attorney-in-fact and agent full power and authority to do all such other acts and execute all such other documents as he
may deem necessary or desirable in connection with the foregoing, as fully as the undersigned may or could do in person, hereby ratifying
and confirming all that such attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates
indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
  <TD STYLE="text-align: center; border-bottom: Black 1pt solid; width: 30%; vertical-align: bottom"><B>Name</B></TD>
  <TD STYLE="text-align: center; padding-bottom: 1pt; width: 5%; vertical-align: bottom"><B>&nbsp;</B></TD>
  <TD STYLE="text-align: center; border-bottom: Black 1pt solid; width: 30%; vertical-align: bottom"><B>Position</B></TD>
  <TD STYLE="text-align: center; padding-bottom: 1pt; width: 5%; vertical-align: bottom"><B>&nbsp;</B></TD>
  <TD STYLE="text-align: center; border-bottom: Black 1pt solid; width: 30%; vertical-align: bottom"><B>Date</B></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD STYLE="border-bottom: Black 1pt solid">/s/ Jeffrey E. Eberwein</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>Jeffrey E. Eberwein</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">Executive Chairman of the Board of Directors (Principal Executive Officer)</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">December 30, 2021&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD STYLE="border-bottom: Black 1pt solid">/s/ David J. Noble</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>David J. Noble</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">Chief Financial Officer (Principal Financial and Accounting Officer)</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">December 30, 2021&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD STYLE="border-bottom: Black 1pt solid">/s/ Mitchell I. Quain</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>Mitchell I. Quain</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">Director</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">December 30, 2021&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD STYLE="border-bottom: Black 1pt solid">/s/ Michael A. Cunnion</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>Michael A. Cunnion</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">Director</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">December 30, 2021&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD STYLE="border-bottom: Black 1pt solid">/s/ John W. Sayward</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>John W. Sayward</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">Director</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">December 30, 2021&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD STYLE="border-bottom: Black 1pt solid">/s/ John W. Gildea</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
  <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
  <TD>John W. Gildea</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">Director</TD>
  <TD>&nbsp;</TD>
  <TD STYLE="text-align: center; vertical-align: top">December 30, 2021&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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{"company-data": {"conformed-name": "STAR EQUITY HOLDINGS, INC.", "cik": "0000707388", "assigned-sic": "3845", "irs-number": "330145723", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-261957", "film-number": "211533333"}, "business-address": {"street1": "53 FOREST AVENUE", "city": "OLD GREENWICH", "state": "CT", "zip": "06870", "phone": "203-489-9501"}, "mail-address": {"street1": "13100 GREGG STREET", "street2": "SUITE A", "city": "POWAY", "state": "CA", "zip": "92064"}, "former-company": {"former-conformed-name": "DIGIRAD CORP", "date-changed": "19821006"}}
As filed with the Securities and Exchange Commission
on December 30, 2021
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
under the Securities Act of 1933
Star Equity Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
3845
(Primary Standard Industrial
Classification Number)
33-0145723
(I.R.S. Employer
Identification No.)
Star Equity Holdings, Inc.
53 Forest Avenue, Suite 101
Old Greenwich, Connecticut 06870
Tel: (203) 489-9500
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Jeffrey E. Eberwein
Executive Chairman
Star Equity Holdings, Inc.
53 Forest Avenue, Suite 101
Old Greenwich, Connecticut 06870
Tel: (203) 489-9500
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
Spencer G.
Feldman, Esq.
Kenneth A.
Schlesinger, Esq.
Olshan Frome
Wolosky LLP
1325 Avenue of the Americas, 15
th
Floor
New York, New York 10019
(212) 451-2300
Mitchell Nussbaum, Esq.
Angela Dowd, Esq.
Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
(212) 407-4000
Approximate date of commencement of proposed
sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following
box. ☒
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is
a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company"
and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☐
Accelerated Filer ☐
Non-Accelerated Filer ☒
Smaller Reporting Company ☒
Emerging Growth Company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities
to be Registered
Proposed Maximum
Aggregate Offering Price(1)(2)
Amount of
Registration Fee(3)
Common stock, par value $0.0001 per share
(1) (5)
$17,250,000
$1,599.08
Pre-funded warrants, each warrant exercisable for one share of common stock
(4) (5)
—
—
Shares of common stock issuable upon exercise of the pre-funded warrants to purchase shares of common stock
(5) (7)
—
—
Common stock purchase warrants to purchase shares of common stock
(8)
—
—
Common stock underlying common stock purchase warrants
(7) (8)
10,781,250
999.42
Underwriter's warrant to purchase shares of common stock
(6)
—
—
Common stock issuable upon exercise of the underwriter's warrant
(7)
474,375
43.97
Total
$28,505,625
$2,642.47
(1)
Includes shares to cover the exercise of the over-allotment option granted to the underwriter.
(2)
Estimated solely for the purpose of calculating the amount of the registration fee in accordance with
Rule 457(o) under the Securities Act of 1933, as amended (the "Securities Act"). Includes the offering price of any additional
securities that the underwriter has the option to purchase. In accordance with Rule 457(o) under the Securities Act, the number of securities
being registered and the proposed maximum offering price per pre-funded warrant and per common stock purchase warrant are not included
in this table.
(3)
Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.
(4)
No separate fee is required pursuant to Rule 457(i) of the Securities Act.
(5)
The proposed maximum aggregate offering price of the common stock proposed to be sold in the offering
will be reduced on a dollar-for-dollar basis based on the aggregate offering price of any pre-funded warrants offered and sold in the
offering, and the proposed maximum aggregate offering price of the pre-funded warrants to be sold in the offering will be reduced on a
dollar-for-dollar basis based on the aggregate offering price of any shares of common stock sold in the offering. Accordingly, the proposed
maximum aggregate offering price of the common stock and the pre-funded warrants (including the common stock issuable upon exercise of
the pre-funded warrants and the underwriter's over-allotment option), if any, is $17,250,000.
(6)
Represents a warrant issuable to the underwriter (the "Underwriter's Warrant") to purchase
a number of shares of common stock equal to 2.5% of the number of shares of common stock (including the shares of common stock issued
pursuant to the underwriter's exercise of its over-allotment option and upon exercise of the pre-funded warrants) being offered
at an exercise price equal to 110% of the public offering price of the common stock. See the "Underwriting" section of the
prospectus included in this registration statement. In accordance with Rule 457(g) under the Securities Act, because the common stock
of the registrant underlying the Underwriter's Warrant is registered hereby, no separate registration fee is required with respect
to the Underwriter's Warrant registered hereby.
(7)
Pursuant to Rule 416 under the Securities Act, the securities being registered hereunder include such
indeterminate number of additional securities as may be issued after the date hereof as a result of stock splits, stock dividends or similar
transactions.
(8)
Each share of common stock and pre-funded warrant is being sold together with an accompanying warrant
to purchase 0.5 of a share of our common stock. Two common stock purchase warrants will be exercisable for one share of common at a per
share exercise price of up to 125% of the public offering price of one share of common stock. The proposed maximum aggregate public offering
price of the shares of common stock issuable upon exercise of the common warrants was calculated to be $10,781,250, which is equal to
125% of one-half of the proposed maximum aggregate public offering price of the shares of common stock in this offering. In accordance
with Rule 457(g) under the Securities Act, because the common stock of the registrant underlying the common stock purchase warrants is
registered hereby, no separate registration fee is required with respect to the common stock purchase warrants registered hereby.
The Registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment
which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary
prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities
and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these
securities in any state or jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED DECEMBER 30, 2021
Star Equity Holdings, Inc.
[•] Shares of Common Stock
[•] Pre-funded Warrants (each Pre-funded
Warrant to purchase one Share of Common Stock)
[•] Shares of Common Stock underlying
the Pre-funded Warrants
Warrants to Purchase up to [•] Shares
of Common Stock
[•] Shares of Common Stock underlying
the Common Warrants
This is an offering of [•]
shares of our common stock, par value of $0.0001 per share, together with common stock purchase warrants to purchase up to an aggregate
of [•] shares of our common stock (and the shares of common stock that are issuable from time to time upon exercise of the warrants).
We are also offering to each
purchaser whose purchase of shares in this offering would otherwise result in the purchaser, together with its affiliates and certain
related parties, beneficially owning more than 4.99% of the outstanding shares of our common stock immediately following the consummation
of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded warrants, in lieu of shares that would otherwise
result in such purchaser's beneficial ownership exceeding 4.99% of the outstanding shares of our common stock. Each pre-funded warrant
will be exercisable for one share of common stock. The purchase price of each pre-funded warrant will be equal to the price per share
being sold to the public in this offering, minus $0.01, and the exercise price of each pre-funded warrant will be $0.01 per share. The
pre-funded warrants will be certificated and will be immediately exercisable and may be exercised at any time until all of the pre-funded
warrants are exercised in full. Any exercise of the pre-funded warrants which would result in a holder beneficially owning more than 4.99%
of the outstanding shares of our common stock will be subject to our consent. We may, in our sole discretion, waive the 4.99% ownership
limitation in connection with this offering with respect to one or more potential purchasers.
For each pre-funded warrant
we sell, the number of shares we are offering will be decreased on a one-for-one basis. Each share of common stock and pre-funded warrant
is being sold together with an accompanying warrant to purchase 0.5 of a share of our common stock, at an exercise price of $[•]
per whole share (at least 100%, and up to 125%, of the public offering price of one share of common stock). Because we will issue a warrant
for each share of our common stock and for each pre-funded warrant sold in this offering, the number of warrants sold in this offering
will not change as a result of a change in the mix of the shares of our common stock and pre-funded warrants sold.
The warrants will be exercisable
immediately and will expire five years after the date of issuance. The warrants will only be exercisable for whole shares of common stock.
The shares of common stock or pre-funded warrants can be purchased only with the accompanying warrants (other than the over-allotment
option), but will be issued separately and will be immediately separable upon issuance.
Our common stock is listed
for trading on The Nasdaq Global Market under the symbol "STRR." On December 30, 2021, the last reported sale price
of our common stock on The Nasdaq Global Market was $3.04 per share, and this preliminary prospectus assumes a public offering price
of $[•] per share or pre-funded warrant. The actual public offering price per share of common stock or pre-funded warrant, as the
case may be, will be determined between us and the investors in the offering and may be at a discount to the current market price. Therefore,
the assumed public offering price used throughout this prospectus may not be indicative of the final offering price. There is no established
public trading market for the warrants or the pre-funded warrants, and we do not expect a market to develop. In addition, we do not intend
to apply for a listing of the warrants or pre-funded warrants on any national securities exchange or other nationally recognized trading
system. Without an active trading market, the liquidity of the warrants and the pre-funded warrants will be limited.
Investing in our securities
involves a high degree of risk. See the section entitled "Risk Factors" beginning on page [•] of this prospectus and
in the documents incorporated by reference into this prospectus for a discussion of risks that should be considered in connection with
an investment in our securities.
NEITHER THE SECURITIES
AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Per Share and Accompanying Warrant
Per Pre-funded Warrant and Accompanying Warrant
Total
Public offering price (1)
$
$
$
Underwriting discounts and commissions (2)
$
$
$
Proceeds to us, before expenses (3)
$
$
$
(1)
The public offering price is $[•] per share of common stock and $0.01 per accompanying warrant and
$[•] per pre-funded warrant and $0.01 per accompanying warrant.
(2)
See "Underwriting" for a description of the compensation payable to the underwriter, including
a warrant to purchase shares of our common stock, which represents 2.5% of the number of shares of common stock and/or pre-funded warrants
sold in this offering, and reimbursable expenses in connection with the offering.
(3)
The above summary of the offering proceeds does not give effect to any proceeds from the exercise of the
pre-funded warrants, accompanying warrants or underwriter's warrant being issued in this offering, or the exercise of the underwriter's
over-allotment option.
The underwriter has the option
to purchase up to an additional [•] shares of common stock and/or warrants to purchase up to an additional
[•] shares of common stock from us at the public offering price, less the underwriting discounts and commissions, within 45 days
after the date of this prospectus to cover over-allotments, if any.
Jeffrey E. Eberwein, our
Executive Chairman, has indicated to us his intention to purchase up to $[•] of our common stock and warrants in this offering.
Several other officers and board members of our company may also purchase shares of our common stock and warrants in this offering.
However, because indications of interest are not binding agreements or commitments to purchase, there can be no assurance that the
underwriter will determine to sell our shares and warrants in this offering to any of these persons, or that any of these persons
will determine to purchase these securities in this offering. Any securities sold to our officers and board members will be at the
public offering same price and on the same terms as the securities sold to other investors in this offering. The underwriter will
receive the same underwriting discount on any securities purchased by these persons as it will on any other securities sold to the
public in this offering.
The underwriter expects to
deliver the shares, warrants and pre-funded warrants against payment in New York, New York on or about [•], 2022.
Sole Book-Running Manager
Maxim Group LLC
The date of this prospectus is [•], 2022
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY
1
THE OFFERING
9
SUMMARY CONSOLIDATED FINANCIAL DATA
11
RISK FACTORS
15
USE OF PROCEEDS
34
DIVIDEND POLICY
35
CAPITALIZATION
36
DILUTION
38
DESCRIPTION OF OUR CAPITAL STOCK AND SECURITIES WE ARE OFFERING
40
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS
OF COMMON STOCK, PRE-FUNDED WARRANTS AND WARRANTS
54
UNDERWRITING
62
LEGAL MATTERS
66
EXPERTS
66
WHERE YOU CAN FIND MORE INFORMATION
66
INCORPORATION OF INFORMATION BY REFERENCE
66
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
67
___________________________
You should rely only on the
information contained or incorporated into this prospectus. Neither we nor the underwriter has authorized anyone to provide any information
or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We
take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This
prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful
to do so. The information contained in this prospectus is current only as of its date regardless of the time of delivery of this prospectus
or any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date.
You should also read this prospectus together with the additional information described under "Where You Can Find More Information"
and "Incorporation of Information by Reference."
No action is being taken in
any jurisdiction outside the U.S. to permit a public offering of our securities or possession or distribution of this prospectus in any
such jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the U.S. are required to inform themselves
about and to observe any restrictions about this offering and the distribution of this prospectus applicable to those jurisdictions.
PROSPECTUS SUMMARY
The following summary highlights selected information contained in other parts of this prospectus or incorporated by reference into this prospectus from our filings with the Securities and Exchange Commission, or "SEC," listed in the section of the prospectus entitled "Incorporation of Information by Reference." Because it is only a summary, it does not contain all of the information that you should consider before purchasing our securities in this offering and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere or incorporated by reference into this prospectus. You should read the entire prospectus, the registration statement of which this prospectus is a part, and the information incorporated by reference herein in their entirety, including our financial statements and the related notes incorporated by reference into this prospectus, before making an investment decision. Some of the statements in this prospectus and the documents incorporated by reference herein constitute forward-looking statements that involve risks and uncertainties. See information set forth under the section "Special Note Regarding Forward-Looking Statements."
Unless the context otherwise requires or indicates, all references in this prospectus to "we," "our," "us," "Star Equity" and the "Company" each mean Star Equity Holdings, Inc., a Delaware corporation, and its consolidated subsidiaries.
Our Company
Overview of Our Business
Star Equity Holdings, Inc. is a diversified multi-industry holding company that currently operates primarily in the healthcare and construction business sectors. These businesses, which are 100% controlled by us through our healthcare subsidiary Digirad Health, Inc. and our construction subsidiaries KBS Builders, Inc. and EdgeBuilder, Inc. have their own experienced, specialized management teams. We are presently focused on investing in additional operating businesses and potentially entering additional industry sectors. We also maintain a third internally-focused business which holds our corporate real estate and investments and is directly managed at the holding company level.
We report our continuing operations through our Healthcare, Construction and Investments segments, as described below.
·
Healthcare.
Through Digirad Health, Inc. ("Digirad Health"), we provide mobile medical imaging services and design, manufacture, service and distribute diagnostic medical imaging equipment. Our direct and indirect subsidiaries included in this division are referred to as our "Healthcare Subsidiaries." Our Diagnostic Services division offers imaging services to healthcare providers, primarily cardiology practices, as an alternative to purchasing and operating the equipment or outsourcing the procedures. Our Diagnostic Imaging division develops, sells and services solid-state mobile gamma imaging cameras to hospitals and physicians.
·
Construction.
We design, manufacture and distribute wood-based products used in residential and commercial construction projects through this segment. KBS Builders, Inc. ("KBS"), EdgeBuilder, Inc. ("EdgeBuilder") and Glenbrook Building Supply, Inc. ("Glenbrook") are our wholly owned subsidiaries and are referred to as our "Construction Subsidiaries" and our "Construction businesses." Our KBS business primarily manufactures modular housing units, mainly for the New England market, at our production facility in South Paris, Maine. We are continually evaluating the possibility of opening a second modular line at the Oxford facility as demand for our product increases. Opening and operating a second modular manufacturing facility may become necessary as we continue pursuing larger commercial-scale multi-family projects, in addition to producing single-family homes. Our EdgeBuilder and Glenbrook businesses, which operate as a single business unit called "EBGL," are located in the Minneapolis-St. Paul, Minnesota metropolitan area. EBGL manufactures structural wall panels, permanent wood foundation systems and other engineered wood products, and supply general contractors with building materials.
·
Investments.
Our investments division is an internally-focused unit that is directly supervised by our holding company management and is primarily responsible for the management of our real estate and investments. Currently, our main revenue-generating activity in this segment is the intercompany monthly rent from KBS, which leases three modular factories from Star Real Estate Holdings USA, Inc. ("SRE"). Our direct and indirect subsidiaries included in this segment are SRE, 947 Waterford Road, LLC, 300 Park Street, LLC, 56 Mechanic Falls Road, LLC, Star Value, LLC, and Star Equity Fund, LLC. These entities are referred to as our "Investments Subsidiaries."
Our Growth Strategy
We believe our diversified multi-industry holding company structure will allow our management to better focus on specialized capital allocation, strategic leadership, mergers and acquisitions, capital markets transactions, investor relations, management of our real estate and investments, and other public company activities. Our structure will free up our operating chief executive officers to manage their respective businesses, improve operations and look for organic and bolt-on growth opportunities, with fewer distractions and less administrative burden.
We continue to explore strategic alternatives to improve the market position and profitability of our product offerings in niche marketplaces, generate additional liquidity and enhance our valuation. We may pursue our goals through organic growth or through strategic transactions. Some of these strategic transactions have included, and could continue to include, selective acquisitions of business segments or entire businesses, divestitures of assets or divisions, and internal restructurings of our company.
We believe that both of our primary businesses are well positioned for growth in large addressable markets. The key elements of our growth strategy include the following:
·
Organic growth from our core businesses
. We believe that we operate in markets and geographies that will allow us to continue to grow our core businesses, allowing us to benefit from our scale and strengths. We plan to focus our efforts on markets in which we already have a presence to take advantage of the personnel, infrastructure and brand recognition we have in these areas.
·
Introduction
    of new services
. In our Healthcare division, we plan to continue to focus on providing healthcare solutions that deliver
    necessary assets, services and logistics directly to the customer site. We believe that over time we can either purchase or develop
    new and complementary businesses and take advantage of our customer loyalty and distribution channels. Additionally, we are looking
    into new imaging technologies through the recent establishment of a joint venture that is presently conducting research and
    development in the area of heart imaging. In our Construction division, we will consider opportunities to augment our service offering to better serve our
    customer base. We have recently accomplished this at KBS for the New England market by re-entering the multi-family housing segment.
    At EBGL, we are piloting a program to act as an outsourced supplier of components to a large-scale homebuilder.
·
Acquisition of complementary businesses
. We regularly search for and review complementary businesses that meet our internally developed financially disciplined approach for acquisitions to grow our company. We believe there are many potential small targets that can be acquired over time and integrated into our platform. We will also look at larger, more transformational acquisitions (public or private) if we believe the appropriate mix of value, risk and return is present for our stockholders. The timing of these potential acquisitions will always depend on market conditions, available capital and the value for each transaction. In general, we want to be "value" buyers, and will not pursue any transaction unless we believe the post-transaction potential value is high for stockholders.
Healthcare Operations and Industry
Our Healthcare division designs, manufactures and distributes diagnostic medical imaging products. The division operates in two businesses: Diagnostic Services and Diagnostic Imaging. Our Diagnostic Services business offers imaging and monitoring services to healthcare providers as an alternative to purchasing the equipment or outsourcing the procedure. Our Diagnostic Imaging business develops, sells and maintains solid-state gamma cameras for use in nuclear cardiology and general nuclear medicine.
Diagnostic imaging depictions of the internal anatomy or physiology are generated primarily through non-invasive means. Diagnostic imaging facilitates the early diagnosis of diseases and disorders, often minimizing the scope, cost and amount of care required and reducing the need for more invasive procedures. Currently, the major types of non-invasive diagnostic imaging technologies available are x-ray, MRI, CT, ultrasound, PET and nuclear imaging. The most widely used imaging acquisition technology utilizing gamma cameras is single photon emission computed tomography, or SPECT. Our current internally-developed cardiac gamma cameras employ SPECT technology. Our Healthcare division is comprised of two segments that specialize in delivering SPECT in a unique and effective manner in order to deliver convenient healthcare solutions on an as needed, when needed and where needed basis.
2
Diagnostic Services.
Through Diagnostic Services, we offer a convenient and economically efficient imaging services program as an alternative to purchasing equipment or outsourcing the procedures to another physician or imaging center. For physicians who wish to perform nuclear imaging, echocardiography, vascular or general ultrasound tests, we provide imaging systems, qualified personnel, radiopharmaceuticals, licensing services and the logistics required to perform imaging in their own offices, and thereby the ability to bill Medicare, Medicaid or one of the third-party healthcare insurers directly for those services, which are primarily cardiac in nature. We provide imaging services primarily to cardiologists, internal medicine physicians and family practice doctors who typically enter into annual contracts for a set number of days ranging from once per month to five times per week. Many of our physician customers are reliant on reimbursements from Medicare, Medicaid and third-party insurers. Although reimbursement for procedures provided by our services have been stable during the last several years, any future changes to underlying reimbursements may require modifications to our current business model in order for us to maintain a viable economic model.
Our portable nuclear and ultrasound imaging operations utilize a "hub and spoke" model in which centrally located regional hubs anchor multiple van routes in the surrounding metropolitan areas. At these hubs, clinical personnel load the equipment, radiopharmaceuticals and other supplies onto specially equipped vans for transport to customer locations, where they set up the equipment for the day. After quality assurance testing, a technologist under the physician's supervision will gather patient information, inject the patient with a radiopharmaceutical and then acquire images for interpretation by the physician. At the conclusion of the day of service, all equipment and supplies are removed from the customer location and transported back to the central hub location. Our model relies on density and customer concentration to allow for efficiencies and maximum profitability, and therefore we are only located in geographies where there is a high concentration of people, cardiac disease and associated likely customer locations.
For our nuclear imaging services, we have obtained Radsite Intersocietal Accreditation Commission ("IAC") and Intersocietal Commission for Echocardiography Laboratories ("ICAEL") accreditation for our services. Our licensing infrastructure provides radioactive materials licensing, radiation safety officer services, radiation safety training, monitoring and compliance policies and procedures, and quality assurance functions, to ensure adherence to applicable state and federal nuclear regulations.
Diagnostic Imaging.
Through Diagnostic Imaging, we sell our internally developed solid-state gamma cameras, imaging systems and camera maintenance contracts. Our imaging systems include nuclear cardiac imaging systems, as well as general purpose nuclear imaging systems. We sell our imaging systems to physician offices and hospitals primarily in the United States, although we have sold a small number of imaging systems internationally. Our imaging systems are sold in both portable and fixed configurations, provide enhanced operability and improved patient comfort, fit easily into floor spaces as small as seven feet by eight feet, and facilitate the delivery of nuclear medicine procedures in a physician's office, an outpatient hospital setting, or within multiple departments of a hospital (e.g., emergency and operating rooms). Our Diagnostic Imaging segment revenues derive primarily from selling solid-state gamma cameras and post-warranty camera maintenance contracts.
The central component of a nuclear camera is the detector, which ultimately determines the overall clinical quality of images a camera produces. Our nuclear cameras feature detectors with advanced proprietary solid-state technology developed by us. Solid-state systems have a number of benefits over conventional photomultiplier tube-based camera designs typically offered by our competitors. Our solid-state technology systems are typically 2 to 5 times lighter and considerably more compact than most traditional nuclear systems, making them far easier and less costly to build, very reliable, and able to be utilized for mobile applications. We believe we are one of the market leaders in the mobile solid-state nuclear camera segment.
We believe our current imaging systems, with their state-of-the-art technology and robust underlying patents, will continue to be relevant for the foreseeable future. We will continue to enhance and adjust our existing systems for the changing nuclear imaging market, including software upgrades and smaller enhancements. However, to accomplish any significant changes and enhancements, we will utilize what we believe is a deep available pool of contract engineers on a flexible, as needed basis and do not maintain a fully staffed research and development department.
3
For the nine months ended September 30, 2021 and the years ended December 31, 2020 and 2019, our Healthcare operations accounted for 55.8%, 63.0% and 84.5%, respectively, of our consolidated revenues.
Construction Operations and Industry
Our Construction division designs and manufactures residential and commercial modular units and structural wall panels for the New England and Midwest markets, respectively. Our subsidiaries include KBS, which primarily manufactures modular housing units, and EBGL, which manufactures structural wall panels, permanent wood foundation systems and other engineered wood products, and supplies general contractors with building materials.
The building and construction industries lag behind many other manufacturing industry sectors with respect to offsite production. Both modular and prefabricated structural wall panels, produced offsite, are gaining market share in a sector once dominated by more traditional onsite or "stick built" construction.
KBS has been in the modular business since 2001 and primarily services the New England market, including Cape Cod and the islands of Martha's Vineyard and Nantucket, as it is typically not cost-effective to ship modules beyond 300 miles from where they are produced due to their size and weight. We believe the market opportunity for single-family modular homes across our target geography is strong. The opportunity in commercial-scale multi-family modular projects is focused in and around the Boston metropolitan area, although we believe there will be increasing interest in other secondary cities and more densely settled areas. The shortage of affordable housing is a nation-wide problem and we believe modular construction methods offer a compelling option to help address upfront construction costs, ongoing domestic energy costs and time-to-market concerns associated with solving this challenge.
EdgeBuilder benefits from the same macro drivers towards more factory-built construction. The target market for the structural wall panels it produces is the Minneapolis-St. Paul, Minnesota area where the need for housing has been growing. EdgeBuilder's panels are sold to builders constructing multi-story, multi-unit structures, including senior living facilities and apartment buildings. Our wood foundations are sold primarily to builders of single-family home developments. On the building products distribution side, our showroom and lumber yard focuses on professional builder sales, while also providing loose lumber and materials that are bundled with our structural wall panel contracts to streamline the procurement process for these commercial customers. We also supply windows, doors, roofing, decking, drywall, hardware and other value-added products.
EdgeBuilder markets its engineered structural wall panels and permanent wood foundation systems through direct sales-people and a network of builders, general contractors and developers in and around Minneapolis and St. Paul areas. EdgeBuilder's direct sales organization is responsible for both residential and commercial projects and it works with general contractors, developers and builders to provide bids and quotes for specific projects. Our marketing efforts include participation in industry trade shows, production of product literature and sales support tools. These efforts are designed to generate sales leads for our independent builders and dealers, and direct salespeople.
For the nine months ended September 30, 2021 and the years ended December 31, 2020 and 2019, our Construction operations accounted for 44.2%, 36.9% and 15.4%, respectively, of our consolidated revenues.
For further information about our business segments and operations, you should refer to the information included under the heading "Business" in our Annual Report on Form 10-K for the year ended December 31, 2020, as well as our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, which are incorporated herein by reference, as updated by other reports and documents we file with the SEC.
4
Our Competitive Strengths
Healthcare Services and Products
Our Healthcare division delivers convenient, effective and efficient healthcare solutions on an as needed, when needed and where needed basis through our mobile products and services. Our Healthcare division's diverse portfolio of mobile healthcare solutions and diagnostic imaging equipment and services provides hospitals, physician practices and imaging centers throughout the United States access to technology and services necessary to provide patient care in the rapidly changing healthcare environment.
We believe that our competitive strengths are centered around our streamlined and cost-efficient approach to providing healthcare solutions to our customers at the point of need, while providing an array of industry-leading, technologically-enabled healthcare imaging and monitoring services, as described below:
·
Broad Array of Diagnostic Imaging Services
. Approximately 42.9% of our consolidated revenues for
the nine months ended September 30, 2021 were derived from our diagnostic imaging business. We have developed and continue to refine an
industry-leading, customer-service focused approach to our customers. We have found our focus in this area is a key factor in acquiring
and retaining our service-based customers. We also recruit and maintain highly trained staff for our clinical and repair services, which
allows us to provide superior and more efficient services.
·
Unique Dual Sales and Service Offerings
. For the majority of our business, we offer a service-based
model to our customers, allowing them to avoid making costly capital and logistical investments required to offer these services internally.
Further, for a smaller portion of our business, we have the ability to sell the underlying capital equipment directly to our customers
should their needs change and they desire to provide services on their own with the required capital equipment. This ability to serve
our customers in a variety of capacities from selling equipment directly, or providing more flexibility through a service-based model,
allows us to serve our customers according to their exact needs, as well as the ability to capture both ends of the revenue spectrum.
·
Leading
                                            Solid-State Technology
. Our solid-state gamma cameras utilize proprietary photo detector
                                            modules that enable us to build smaller and lighter cameras that are portable with a degree
                                            of ruggedness that can withstand the vibration associated with transportation. Our dedicated
                                            cardiac imagers require a floor space as little as seven feet by eight feet, can generally
                                            be installed without facility renovations, and use standard power. Our portable cameras are
                                            ideal for mobile operators or practices desiring to service multiple office locations or
                                            imaging facilities.
·
Addressable
                                            Markets and Revenue Opportunities
. Bolstered by advances in medical imaging technology,
                                            large and growing global healthcare expenditures, an increasing demand for early disease
                                            detection and diagnosis, an aging population and the anticipated end of the COVID-19 pandemic,
                                            we believe the vast size of the addressable market and the multitude of imaging procedures
                                            and applications in the diagnostic imaging market position us to experience revenue growth
                                            and market share in the coming years.
Construction Services and Products
Our competitive strengths at KBS include our strategic location in the Greater Boston and broader New England market, the largest manufacturing capacity in the New England region, and an ability to provide high quality wood-based volumetric modules for both single and commercial scale multi-family residential buildings. We also provide significant value through our longstanding engineering and design expertise, with a focus on customization to suit the specific project requirements. We continue to develop our expertise and specialized knowledge in highly energy-efficient passive homes, which includes the delivery of our first zero energy modular homes to address the need for affordable housing during 2020. Additionally, we believe there is a large opportunity in the commercial-scale multi-family modular segment and we have continued to pursue more of these projects since 2020.
5
At EdgeBuilder, we also offer a superior product for commercial scale multi-family projects, focusing on structural wall panels. Our engineering and design capabilities allow us to create a product that is unique to the specific project's requirements. We also provide value with our vertically integrated in-house delivery capability, helping us to be cost-competitive. Our production strategy is to utilize automation and the most efficient methods of manufacturing and high-quality materials in all EdgeBuilder projects. Through our building products distribution business, we operate a professional lumber yard and showroom and deliver highly personalized service, knowledgeable salespeople, and attention to detail that the larger, big-box chain home stores do not provide.
We expect the modular construction industry to achieve revenue growth over the next several years due to the rising demand for modular engineering in several sectors, such as healthcare, education and multi-family housing, given the comparatively low cost and availability of fully-equipped manufactured housing versus site-built construction housing. We believe our construction business is well positioned to capitalize on the growing popularity of modular and panelized housing in our key markets in the United States.
Recent Developments
December 2021 Private Placement
. On December 10, 2021, we entered into a securities purchase agreement (the "Purchase Agreement") with Jeffrey E. Eberwein, our Executive Chairman, relating to the issuance and sale of 650,000 shares of our common stock at a purchase price of $3.25 per share pursuant to a private placement. The transaction was approved by a Special Committee of our board of directors made up of independent directors and by the Audit Committee of our board of directors. The gross proceeds to us from the transaction, before deducting transaction fees and other estimated transaction expenses, were $2.1 million.
Pursuant to the Purchase Agreement, we agreed to use commercially reasonable efforts to file a resale registration statement to register under the Securities Act the resale by Mr. Eberwein of the shares as soon as practicable following the issuance and filing with the SEC of our audited financial statements for the year ending December 31, 2021 in connection with the filing of our Annual Report on Form 10-K. In connection with the Purchase Agreement, Mr. Eberwein agreed to enter into a lock-up agreement whereby he agreed not to offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of or enter into any transaction which is designed to result in the disposition of the shares, subject to certain exceptions, until the date that is six months following the closing date of the transaction.
NOL Rights Agreement and Protective Amendment
. On June 2, 2021, our board of directors adopted, and we entered into, a Rights Agreement (the "Rights Agreement") with American Stock Transfer & Trust Company, LLC, as rights agent, designed to preserve the value of our significant U.S. net operating loss carryforwards ("NOLs") and other tax benefits by deterring transfers of our common stock that could result in an "ownership change" under Section 382. In connection with the Rights Agreement, our board of directors declared a dividend to our stockholders of record as of the close of business on June 14, 2021, for each outstanding share of our common stock, of one right to purchase one one-thousandth of a share of a new series of participating preferred stock of our company at a specified exercise price.
Pursuant to the Rights
    Agreement, if any person or group acquires 4.99% or more of the outstanding shares of our common stock without our board of
    directors' permission, or if a person or group that already owns 4.99% or more of our common stock acquires additional shares
    without our board of directors' permission, then, subject to certain exceptions, there would be a triggering event under the
    Rights Agreement. The Rights would then become exercisable and entitle stockholders (other than the acquiring person or group) to
    purchase additional shares at a significant discount and result in significant dilution in the economic interest and voting power of
    the acquiring person or group. In its discretion, our board of directors may exempt certain transactions from the provisions of the
    Rights Agreement, including if our board of directors determines that the transaction will not jeopardize our tax benefits, or the
    transaction will otherwise serve our best interests. Any stockholder desiring to own 5% or more of our shares, or increase an
    existing ownership position that is already at or above 5%, can request an exemption from our board of directors by submitting
    certain basic information to us and following the other instructions included in the Rights Agreement. If an investor needs an
    exemption to participate in this offering or otherwise exercise any pre-funded warrants that it purchases in the offering, it is the
    intention of our board of directors to grant any such investor an exemption from the ownership limitations characterized in the Rights Agreement.
    The Rights Agreement and the rights issued under the Rights Agreement will expire on June 2, 2024, or on an earlier date if certain
    events occur, as described more fully in the Rights Agreement.
6
At our Annual Meeting of Stockholders held on October 21, 2021, our stockholders ratified and approved the Rights Agreement and a protective amendment to our Restated Certificate of Incorporation designed to protect the tax benefits of our NOLs. See "Description of Our Capital Stock and Securities We Are Offering—Certain Anti-Takeover Provisions of Our Restated Certificate of Incorporation and Bylaws; Protective Amendment." Additional information regarding the Rights Agreement is contained in our Definitive Proxy Statement filed with the SEC on September 22, 2021.
New Chief Operating Officer
. Beginning January 1, 2022, we appointed Richard K. Coleman, Jr. as our new Chief Operating Officer. Mr. Coleman's addition increases the capacity of our senior leadership team. In this role, he will oversee our operations, assist our business leaders in achieving their growth and profitability goals and launch new business initiatives, as well as help analyze and integrate future acquisitions. Mr. Coleman brings more than 30 years of executive leadership experience with extensive expertise in business development, operational excellence and acquisitions. He has served in a variety of senior executive roles, including President, CEO and director of Command Center Inc., a provider of flexible on-demand employment solutions; President, CEO and director of Crossroads Systems, Inc., a global provider of data archive solutions; CEO of Vroom Technologies Inc.; Chief Operating Officer of MetroNet Communications; and President of US West Long Distance. He also has held significant officer-level positions with Frontier Communications, Centex Telemanagement and Sprint Communications.
Risks Affecting Our Business
Our business is subject to numerous risks and uncertainties that you should consider before investing in our company. These risks are described more fully in the section titled "Risk Factors" in this prospectus. Below are the principal factors that make an investment in our company speculative or risky:
·
Even if this offering is successful, we may need to raise additional capital in the future to continue
operations, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital if needed may have an
adverse impact on our business and operations.
·
We have a history of annual net losses attributable to common shareholders which may continue and which
may negatively impact our ability to achieve our growth initiatives.
·
We rely on information technology in our operations, and any material failure, inadequacy, interruption
or security failure of that technology could materially harm our business.
·
We may not be able to achieve the anticipated synergies and benefits from business acquisitions.
·
We face risks related to health pandemics and other widespread outbreaks of contagious disease, including
COVID-19 and its variants, which could significantly disrupt our operations (particularly in our healthcare business) and impact our financial
results.
·
Operating results may be adversely affected by changes in the costs and availability of supplies and materials.
·
Our quarterly and annual financial results are difficult to predict and are likely to fluctuate from period
to period.
·
We spend considerable time and money complying with federal and state laws, regulations, and other rules
which may fluctuate based on healthcare policy, and if we are unable to fully comply with such laws, regulations, and other rules, we
could face substantial penalties.
·
The medical device industry is litigious, which could result in the diversion of our management's
time and efforts, and require us to incur expenses and pay damages that may not be covered by our insurance.
·
Our long-term results depend upon our ability to improve existing products and services and develop, introduce,
and market new products and services successfully.
·
Our ability to protect our intellectual property and proprietary technology through patents and other
means is uncertain.
7
·
We may make financial investments in other businesses that may lose value.
·
Our goodwill and other long-lived assets are subject to potential impairment that could negatively impact
our earnings.
·
Our indebtedness could restrict our operations and make us more vulnerable to adverse economic conditions.
·
The inability of our company, KBS, EdgeBuilder or any of our other subsidiaries to comply with applicable
financial covenants under the Company Loan Agreements could have a material adverse effect on our financial condition.
·
The market price of our common stock may be volatile, and the value of your investment could decline significantly.
·
Payment of dividends on our common stock is prohibited unless we have declared and paid (or set apart
for payment) full accumulated dividends on the Series A Preferred Stock, which also has a significant liquidation value.
·
If we fail to pay dividends on our Series A Preferred Stock for six or more consecutive quarters, holders
of our Series A Preferred Stock will be entitled to elect two additional directors to our board of directors.
·
The protective amendment contained in our Restated Certificate of Incorporation, which is intended to
help preserve the value of certain income tax assets, primarily tax net operating loss carryforwards, may have unintended negative effects.
·
Material weakness in our internal control over financial reporting could have a significant adverse effect
on our business and the price of our common stock.
Corporate Information
We are a diversified holding company with three divisions: Healthcare, Construction and Investments. We were incorporated in the State of Delaware in 1997. Our principal executive offices are located at 53 Forest Avenue, Suite 101, Old Greenwich, Connecticut 06870, and our telephone number is (203) 489-9500. Our website is www.starequity.com. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our securities.
8
The Offering
The following summary contains basic
    terms about this offering and the securities in this offering and is not intended to be complete. It may not contain all of the
    information that is important to you. You should read the more detailed information contained in this prospectus, including but not
    limited to, the Risk Factors section beginning on page 15 of this prospectus. For a more complete description of the terms of the
    common stock, accompanying warrants and pre-funded warrants, see the section of this prospectus entitled "Description of Our
    Capital Stock and Securities We Are Offering."
Common stock offered by us:
[•] shares of common stock.
Offering price:
This preliminary prospectus assumes an offering price of $[•] per share of common stock or pre-funded warrant.
Over-allotment option:
We have granted the underwriters an option to purchase up to [•] additional shares of common stock and/or up to [•] additional warrants (for the purchase of up to an additional [•] shares of common stock), in each case, solely to cover over-allotments, if any.
Pre-funded warrants offered by us:
We are also offering to each purchaser whose purchase of shares in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% of the outstanding shares of our common stock immediately following the consummation of this offering, the opportunity to purchase, if such purchasers so choose, pre-funded warrants, in lieu of shares of common stock that would otherwise result in any such purchaser's beneficial ownership exceeding 4.99% of the outstanding shares of our common stock. Each pre-funded warrant will be exercisable for one share of common stock. The purchase price of each pre-funded warrant will equal the public offering price at which shares are being sold to the public in this offering, minus $0.01, and the exercise price of each pre-funded warrant included will be $0.01 per share. The pre-funded warrants will be exercisable immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full. Any exercise of the pre-funded warrants which would result in a holder beneficially owning more than 4.99% of the outstanding shares of our common stock will be subject to our consent. For each pre-funded warrant we sell, the number of shares we are offering will be decreased on a one-for-one basis. We may, in our sole discretion, waive the 4.99% ownership limitation in connection with this offering with respect to one or more potential purchasers.
Warrants offered by us:
We are also offering warrants to purchase up to an aggregate of [•] shares of common stock. Each share of common stock (other than those sold pursuant to the over-allotment option) is being sold together with a warrant to purchase 0.5 of a share of common stock. The warrants will only be exercisable for whole shares of common stock, and will have an exercise price of $[•] per share, and will be immediately exercisable and will expire on the fifth anniversary of the original issuance date. This offering also relates to the shares of common stock issuable upon exercise of the warrants.
Common stock to be outstanding after this offering:
[•] shares, assuming all shares offered by this prospectus are sold and assuming no exercise of the accompanying warrants or the underwriter's warrant (or [•] shares if the over-allotment option is exercised in full and no exercise of the accompanying warrants or the underwriter's warrant).
Use of proceeds:
We estimate that our net proceeds from the offering will be approximately $[•] million (approximately $[•] million if the underwriter's over-allotment option is exercised in full) before deducting estimated offering expenses of approximately $[•] million. We intend to use the net proceeds of this offering to pursue organic growth initiatives and fund potential acquisitions, and for working capital and other general corporate purposes.
9
Risk factors:
You should read the "Risk Factors" section of this prospectus as well as all other information included in this prospectus, including the information in the documents incorporated by reference into this prospectus, for a discussion of certain of the factors to consider carefully before deciding to purchase any securities in this offering.
Lock-up:
We and each of our officers and directors have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable for shares of our common stock for a period of 90 days after this offering is completed without the prior written consent of Maxim.
Transfer agent:
The registrar and transfer agent for our common stock and the warrant agent for our warrants is American Stock Transfer & Trust Company.
Nasdaq Global Markets Listing:
Our common stock is listed for trading on The Nasdaq Global Market under the symbol "STRR." There is no established trading market for the pre-funded warrants or the warrants and we do not expect a market for such securities to develop. We do not intend to list the warrants or pre-funded warrants on any securities exchange or nationally recognized trading system. Without an active trading market, the liquidity of the pre-funded warrants and the warrants will be limited.
Jeffrey E. Eberwein, our
                                               Executive Chairman, has indicated to us his intention to purchase up to $[•] of our common stock and warrants in this offering.
                                               Several other officers and board members of our company may also purchase shares of our common stock and warrants in this offering.
                                               However, because indications of interest are not binding agreements or commitments to purchase, there can be no assurance that the
                                               underwriter will determine to sell our shares and warrants in this offering to any of these persons, or that any of these persons
                                               will determine to purchase these securities in this offering. Any securities sold to our officers and board members will be at the
                                               same public offering price and on the same terms as the securities sold to other investors in this offering. The underwriter will
                                               receive the same underwriting discount on any securities purchased by these persons as it will on any other securities sold to the
                                               public in this offering. The shares being purchased by our officers and board members will be restricted from sale for a limited
                                               period of time under the terms of lock-up agreements.
The number of shares of our common stock to outstanding before and after this offering is based on 5,805,916 shares of common stock outstanding as of the date of this prospectus and excludes, as of such date:
·
26,517 shares of common stock reserved for issuance pursuant to grants outstanding under our 2011 Inducement
Award Plan;
·
40,620 shares of common stock reserved for issuance pursuant to grants outstanding under our 2014 Equity
Incentive Award Plan;
·
23,662 shares of common stock reserved for future issuance under our 2018 Equity Incentive Award Plan;
·
702,270 shares of common stock issuable upon the exercise of the warrants (including the underwriter's
warrants) issued in connection with the public offering that we completed in May 2020;
·
[•] shares of common stock issuable upon the exercise of the warrants offered hereby; and
·
[•] shares of common stock issuable upon the exercise of the warrant we expect to grant to the underwriter
in connection with this offering.
Except as otherwise noted, all information in this prospectus reflects and assumes (i) no sale of pre-funded warrants in this offering, which, if sold, would reduce the number of shares that we are offering on a one-for-one basis (and the shares of common stock issuable upon exercise of the pre-funded warrants would be at an exercise price of $0.01 per share), (ii) no exercise of outstanding options issued under our equity incentive plans and (iii) no exercise of the accompanying warrants or the underwriter's warrant listed above. Additionally, this prospectus assumes that the underwriter will not exercise its over-allotment option.
10
Summary Consolidated Financial Data
The following tables set forth a summary of our financial data. The summary consolidated statements of operations data for the years ended December 31, 2020 and 2019 are derived from our audited financial statements which are incorporated herein by reference from our Annual Report on Form 10-K for the year ended December 31, 2020. The summary statements of operations data for the nine months ended September 30, 2021 and 2020 and the summary consolidated balance sheet data as of September 30, 2021 are derived from our unaudited interim condensed financial statements incorporated herein by reference from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. Our unaudited interim condensed financial statements have been prepared on a basis consistent with our audited financial statements and, in the opinion of management, reflect all adjustments, consisting solely of normal recurring adjustments, necessary for the fair presentation of the financial information in those statements. Our historical results are not necessarily indicative of our future results, and the results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year ending December 31, 2021, or any other period. When you read this summary financial data, it is important that you read it together with "Capitalization" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in conjunction with the financial statements, related notes and other financial information incorporated in this prospectus by reference.
Consolidated Statements of Operations Data
Nine Months
ended
September 30,
Year ended
December 31,
2021
2020
2020
2019
(unaudited)
(in thousands, except per share data)
Total revenues
$
77,019
$
55,018
$
78,163
$
72,934
Total cost of revenues
68,691
44,921
64,176
55,774
Gross profit
8,328
10,097
13,987
17,160
Operating expenses:
Selling, general & administrative expenses
15,839
13,061
18,635
15,898
Amortization of intangible expenses
1,298
1,696
2,124
829
Gain on sale of MD Office Solutions
(847
)
—
—
—
Merger and finance costs
—
—
—
2,342
Goodwill impairment
—
—
436
—
Total operating expenses
16,290
14,757
21,195
19,069
Loss from operations:
(7,962
)
(4,660
)
(7,208
)
(1,909
)
Other income (expense), net
4,208
967
3,344
(133
)
Interest expense, net
(732
)
(1,008
)
(1,292
)
(746
)
Loss on extinguishment of debt
—
—
—
(151
)
Total other income (expense)
3,476
(41
)
2,052
(1,030
)
Loss from continuing operations before income taxes
(4,486
)
(4,701
)
(5,156
)
(2,939
)
Income tax (provision) benefit
(34
)
(72
)
(129
)
199
Loss from continuing operations, net of income taxes
(4,520
)
(4,773
)
(5,285
)
(2,740
)
Income (loss) from discontinued operations, net of income taxes
5,955
(1,227
)
(1,172
)
(1,887
)
Net income (loss)
1,435
(6,000
)
(6,457
)
(4,627
)
Deemed dividend on Series A perpetual preferred stock
(1,437
)
(1,442
)
(1,916
)
(596
)
Net loss attributable to common stockholders
(2
)
(7,442
)
(8,373
)
(5,223
)
Basic and diluted net loss per common share attributable to common stockholders
$
—
$
(2.27
)
$
(2.29
)
$
(2.56
)
11
Consolidated Balance Sheet Data
As of September 30, 2021
Actual
Pro Forma
(1)
Pro Forma, As Adjusted
(2)
Cash and cash equivalents
$
5,572
$
[•]
$
[•]
Working capital (net)
(3)
4,744
[•]
[•]
Total current assets
34,343
[•]
[•]
Total assets
74,887
[•]
[•]
Total current liabilities, including current portion of long term debt
29,599
[•]
[•]
Total long-term liabilities
3,970
[•]
[•]
Total liabilities
33,569
[•]
[•]
Total liabilities, mezzanine equity and stockholders' equity
74,887
[•]
[•]
(1)
The pro forma balance sheet data gives effect to the December 2021 Private Placement, as described under
"Our Company – Recent Developments" above.
(2)
The pro forma, as adjusted balance sheet data gives effect to the December 2021 Private Placement and
our issuance and sale of [•] shares of common stock in this offering based on an assumed offering price of $[•] per share, assuming
net proceeds of approximately $[•] million, after deducting the underwriter's fees and estimated offering expenses payable
by us, and assuming no sale of any pre-funded warrants in this offering and no exercise of any accompanying warrants or the underwriter's
warrant.
(3)
Working capital is defined as current assets less current liabilities.
Use of Non-GAAP Financial Measurements
The following non-GAAP (defined below) financial measures are intended to supplement the GAAP financial information by providing additional insight regarding our results of operations. The non-GAAP EBITDA and adjusted EBITDA financial measures used by us are intended to provide an enhanced understanding of our underlying operational measures to manage our business, to evaluate performance compared to prior periods and the marketplace, and to establish operational goals. Certain items are excluded from these non-GAAP financial measures to provide additional comparability measures from period to period. Specifically, the table below presents the non-GAAP financial measure "EBITDA" (defined as earnings before interest, taxes, depreciation, amortization) and "Adjusted EBITDA" (defined as earnings before interest, taxes, depreciation, amortization adjusted for stock-based compensation and other one-time transaction costs such as mergers and acquisitions, financings and other extraordinary items), respectively. The most directly comparable measures for these non-GAAP financial measure are net income and diluted net income per share. EBITDA and Adjusted EBITDA are intended as supplemental measures of our performance that are not required by or presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). We believe that EBITDA and Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results.
We believe that the use of EBITDA and Adjusted EBITDA provide additional tools for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other businesses which may present similar non-GAAP financial measures to investors. We believe that EBITDA and Adjusted EBITDA are useful measures because they normalize operating results by excluding non-recurring gains, losses and other items and help to demonstrate how much cash we are able to generate annually. In addition, you should be aware when evaluating EBITDA and Adjusted EBITDA that in the future we may incur expenses similar to those excluded when calculating these measures. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate EBITDA and Adjusted EBITDA in the same fashion.
12
Our management does not consider EBITDA and Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitations of EBITDA and Adjusted EBITDA are that they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. Some of these limitations are:
a.
EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
b.
EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
c.
EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
d.
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
e.
EBITDA and Adjusted EBITDA do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and
f.
other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA only as supplements. You should review the reconciliation of net income to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
13
Reconciliation of Non-GAAP Financial Measures
(unaudited)
(in thousands)
Nine Months Ended
September 30,
2021
2020
Net loss from continuing operations
$
(4,520
)
$
(4,773
)
Depreciation and amortization
2624
3,025
Interest expense
732
1,008
Income tax expense
34
72
EBITDA from continuing operations
(1,130
)
(668
)
Unrealized loss (gain) on equity securities (1)
381
(33
)
Litigation costs (2)
213
244
Stock-based compensation
389
371
MDOS gain (3)
(847
)
—
Tenant receivable (4)
323
—
Write off of software costs (5)
70
—
Financing cost (7)
231
—
COVID-19 Protection Equipment (8)
82
46
SBA PPP Loan forgiveness (9)
(4,179
)
—
Transaction costs (6)
—
115
Adjusted EBITDA from continuing operations
$
(4,467
)
$
75
(1)
Reflects change in fair value of investments in equity securities.
(2)
Reflects one time litigation costs.
(3)
Reflects the gain from the sale of MD Office Solutions by a healthcare subsidiary.
(4)
Reflects one time write off in uncollectible tenant receivable.
(5)
Reflects one time write off in software costs.
(6)
Reflects legal and other costs related to the  merger of our construction businesses and holding company conversion.
(7)
Reflects financing costs from our credit facilities.
(8)
Reflects purchases related to COVID-19 Protection Equipment.
(9)
Reflects the forgiveness of the Paycheck Protection Program loan.
14
RISK FACTORS
Investing in our securities
involves a high degree of risk. You should carefully consider the risks described below, together with the other information contained
in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus, before making your
decision to invest in our securities. We cannot assure you that any of the events discussed in the risk factors below will not occur.
These risks could have a material and adverse impact on our business, results of operations, financial condition and cash flows, and our
future prospects would likely be materially and adversely affected. If that were to happen, the trading price of our common stock could
decline, and you could lose all or part of your investment. In addition, you should carefully consider the other risks described under
the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, which are incorporated herein by reference, as
updated by annual, quarterly and other reports and documents we file with the Securities and Exchange Commission after the date of this
prospectus and that are incorporated by reference herein.
Risks Related to this Offering
We have significant discretion over
the use of the net proceeds from this offering.
Our net proceeds from this
offering are expected to be approximately $[•] million, assuming no exercise of the underwriter's over-allotment option. We
intend to use the net proceeds of this offering to pursue organic growth initiatives and fund potential acquisitions, and for working
capital and other general corporate purposes. Our management will have broad discretion as to the application of such proceeds. As is
the case with any business, it should be expected that certain expenses unforeseeable to management at this juncture will arise in the
future. There can be no assurance that management's use of proceeds generated through this offering will prove optimal or translate
into revenue or profitability for us. Investors are urged to consult with their personal investment advisors, attorneys and accountants
prior to making any decision to invest in us.
Even if this offering is successful,
we may need to raise additional capital in the future to continue operations, which may not be available on acceptable terms, or at all.
Failure to obtain this necessary capital if needed may have an adverse impact on our business and operations.
We had a net loss from continuing
operations for the year ended December 31, 2020 and nine months ended September 30, 2021 of $5.3 million and $4.5 million, respectively.
We may incur additional net losses from operations in the future, and we may experience quarter-to-quarter fluctuations in revenues, expenses
and losses, some of which may be significant.
We estimate that we will
receive net proceeds of approximately $[•] million from the sale of common stock, pre-funded warrants and warrants offered by
us in this offering, based on the assumed public offering price of $[•] per share and warrant, and after deducting the underwriting fees
and estimated offering expenses payable by us. In the event of a decrease in the net proceeds to us from this offering as a result
of a decrease in the assumed public offering price per share or the number of shares offered by us, we may need to scale back or
eliminate certain of our business plans or raise additional capital sooner than we anticipate. However, we may not be able to raise
additional funds on acceptable terms, or at all. Conditions in the capital markets may make equity and debt financing more difficult
to obtain, and may negatively impact our ability to complete financing transactions. Any debt financing, if available, may involve
restrictive covenants, such as limitations on our ability to incur additional indebtedness and other operating restrictions that
could adversely impact our ability to conduct our business.
We expect to be limited in our ability
to utilize net operating loss carryforwards to reduce our future tax liability as a result of this offering.
As disclosed in our Annual
Report on Form 10-K for the year ended December 31, 2020 and quarterly reports on Form 10-Q for the quarters ended March 31, 2021, June
30, 2021 and September 30, 2021, under Section 382 of the Internal Revenue Code, if a corporation undergoes an "ownership change,"
generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation's ability
to use its pre-change net operating loss ("NOL") carryforwards and other pre-change tax attributes (such as research tax credits)
to offset its post-change income may be limited. We expect that this offering, alone or in conjunction with other changes in our stock
ownership that we cannot control, may result in an "ownership change." We may also experience ownership changes in the future
as a result of strategic transactions or partnerships, equity offerings and other shifts in our stock ownership. As a result, if we earn
net taxable income, our ability to use our pre-change NOL carryforwards and other deferred tax assets to offset U.S. federal taxable income
may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, similar limitations
may apply at the state level and there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which
could accelerate or permanently increase state taxes owed.
15
An investment in our securities is
speculative and there can be no assurance of any return on any such investment.
An investment in our securities
is speculative and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial
risks involved in an investment in us, including the risk of losing their entire investment.
You may experience dilution if we
issue additional equity or equity-linked securities in the future.
If we issue additional shares
of common stock, or securities convertible into or exchangeable or exercisable for shares of common stock, our stockholders, including
investors who purchase shares of common stock and accompanying warrants in this offering, will experience dilution if we issue shares
in the future at a price higher than the net tangible book value per share of our common stock, and any such issuances may result in downward
pressure on the price of our common stock. We also cannot assure you that we will be able to sell shares or other securities in any other
offering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing
shares or other securities in the future could have rights superior to existing stockholders. Furthermore, investors may experience further
dilution to the extent that shares of our common stock are issued upon the exercise of the warrants and pre-funded warrants issued in
this offering. If we issue additional equity securities, employee stock grants vest, or there are any issuances and subsequent exercises
of stock options issued in the future, you will experience additional dilution. See the section entitled "Dilution" for a
more detailed discussion of the net tangible book value per share of our common stock as impacted by this offering.
Resales of our common stock in the
public market by our stockholders as a result of this offering may cause the market price of our common stock to fall.
Sales of a substantial number
of shares of our common stock in the public market could occur at any time. The issuance of new shares of our common stock could result
in resales of our common stock by our current stockholders concerned about the potential ownership dilution of their holdings. In turn,
these resales could have the effect of depressing the market price for our common stock.
There is no public market for the
warrants or pre-funded warrants being offered in this offering.
There is no established public
trading market for the warrants or pre-funded warrants being offered in this offering, and we do not expect a market to develop. In addition,
we do not intend to apply to list the warrants or pre-funded warrants on any securities exchange or nationally recognized trading system,
including The Nasdaq Global Market. Without an active market, the liquidity of the warrants and the pre-funded warrants will be limited.
Holders of warrants and/or pre-funded
warrants purchased in this offering will have no rights as holders of shares of common stock until such holders exercise their warrants
and/or pre-funded warrants and acquire our shares of common stock, except as set forth in the warrants and/or pre-funded warrants.
Except as set forth in the
warrants and pre-funded warrants, until holders of warrants and/or pre-funded warrants acquire our shares of common stock upon exercise
of the warrants and/or pre-funded warrants, holders of warrants and/or pre-funded warrants have no rights with respect to our shares of
common stock underlying such warrants and pre-funded warrants. Upon exercise of the warrants and/or pre-funded warrants, the holders will
be entitled to exercise the rights of a stockholder of shares of common stock only as to matters for which the record date occurs after
the exercise date.
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The warrants and pre-funded warrants
are speculative in nature.
The warrants and pre-funded
warrants offered hereby do not confer any rights of share of common stock ownership on their holders, such as voting rights or the right
to receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price. Specifically, commencing
on the date of issuance, (i) holders of the pre-funded warrants may acquire the shares of common stock issuable upon exercise of such
warrants at an exercise price of $0.01 per share of common stock and (ii) holders of the warrants may exercise their right to acquire
the common stock and pay an exercise price of $[•] per share (at least 100%, and up to 125%, of the public offering price per share
of our common stock). Moreover, following this offering, the market value of the warrants and/or pre-funded warrants is uncertain and
there can be no assurance that the market value of the warrants and/or pre-funded warrants will equal or exceed their public offering
price. There can be no assurance that the market price of the shares of common stock will ever equal or exceed the exercise price of the
warrants and/or pre-funded warrants, and consequently, whether it will ever be profitable for holders of the warrants and/or pre-funded
warrants to exercise the warrants and/or pre-funded warrants.
As a smaller reporting company, we
are subject to scaled disclosure requirements that may make it more challenging for investors to analyze and compare our results of operations
and financial prospects.
Currently, we are a "smaller
reporting company," as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
As a "smaller reporting company," we are able to provide simplified executive compensation disclosures in our filings and
have certain other decreased disclosure obligations in our filings with the SEC, including being required to provide only two years of
audited financial statements in annual reports. Consequently, it may be more challenging for investors to analyze our results of operations
and financial prospects.
Furthermore, we are a non-accelerated
filer as defined by Rule 12b-2 of the Exchange Act, and, as such, are not required to provide an auditor attestation of management's
assessment of internal control over financial reporting, which is generally required for SEC reporting companies under Section 404(b)
of the Sarbanes-Oxley Act. Because we are not required to, and have not, had our auditor provide an attestation of our management's
assessment of internal control over financial reporting, a material weakness in internal controls may remain undetected for a longer period.
If we cannot continue to satisfy The
Nasdaq Global Market continued listing standards and other Nasdaq rules, our common stock could be delisted, which would harm our business,
the trading price of our common stock, our ability to raise additional capital and the liquidity of the market for our common stock.
Our common stock is currently
listed for trading on The Nasdaq Global Market. To maintain the listing of our common stock on The Nasdaq Global Market, we are required
to meet certain listing requirements, including, among others, either: (i) a minimum closing bid price of $1.00 per share, a market value
of publicly held shares (excluding shares held by our executive officers, directors and 10% or more stockholders) of at least $5.0 million
and stockholders' equity of at least $10 million; or (ii) a minimum closing bid price of $1.00 per share, a market value of publicly
held shares (excluding shares held by our executive officers, directors and 10% or more stockholders) of at least $15.0 million and total
assets of at least $50.0 million and total revenue of at least $50.0 million (in the latest fiscal year or in two of the last three fiscal
years).
There is no assurance that
we will be able to maintain compliance with the minimum closing price requirement and other listing requirements. In the event that we
fail to maintain compliance with Nasdaq listing requirements for 30 consecutive trading days, our common stock may be delisted from The
Nasdaq Global Market. If our common stock were to be delisted from Nasdaq and was not eligible for quotation or listing on another market
or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established
for unlisted securities such as the OTC Pink Market. In such event, it could become more difficult to dispose of, or obtain accurate price
quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media,
which could cause the price of our common stock to decline further.
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If securities or industry analysts
do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, the price
and trading volume of our securities could decline.
The trading market for our
securities will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do
not currently have and may never obtain research coverage by securities and industry analysts. If no or few securities or industry analysts
commence coverage of us, the trading price for our securities would be negatively impacted. In the event we obtain securities or industry
analyst coverage, if any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual
property or our stock performance, or if our clinical trials and operating results fail to meet the expectations of analysts, the price
of our securities would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly,
we could lose visibility in the financial markets, which in turn could cause the price or trading volume of our securities to decline.
Risks Related to Our Business and Industry
We have a history of annual net losses
attributable to common shareholders which may continue and which may negatively impact our ability to achieve our growth initiatives.
For
the year ended December 31, 2020, we had revenue of $78.2 million and a net loss attributable to common shareholders of $8.4 million.
At December 31, 2020, we had total stockholders' equity of $18.4 million, a decrease of $2.7 million from December 31, 2019. Our
total stockholders' equity increased to $19.3 million as of September 30, 2021 (and will increase further as a result of our December
2021 Private Placement). For the nine months ended September 30, 2021, we had revenue of $77.0 million, compared to revenue of $55.0 million
for the comparable period in 2020. We had a net loss attributable to common shareholders of $2,000 for the nine months ended September
30, 2021, compared to a net loss attributable to common shareholders of $7.4 million for the comparable 2020 period. There can be no assurance
that, even if our revenue increases, our future operations will result in net income attributable to common stockholders. Our failure
to increase our revenues or improve our gross margins will harm our business. We may not be able to sustain or increase profitability
on a quarterly or annual basis in the future. If our revenues grow more slowly than we anticipate, our gross margins fail to improve or
our operating expenses exceed our expectations, our operating results will suffer. The prices we charge for our products and services
may decrease, which would reduce our revenues and harm our business. If we are unable to sell our products at acceptable prices relative
to our costs, or if we fail to develop and introduce on a timely basis new products from which we can derive additional revenues, our
financial results will suffer.
We rely on information technology
in our operations, and any material failure, inadequacy, interruption or security failure of that technology could materially harm our
business.
We rely on information technology
and systems, including the Internet, commercially available software, and other applications, to process, transmit, store, and safeguard
information and to manage or support a variety of our business processes, including financial transactions and maintenance of records,
which may include personal identifying information and other valuable or confidential information. If we experience material failures,
inadequacies, or interruptions or security failures of our information technology, we could incur material costs and losses. Further,
third-party vendors could experience similar events with respect to their information technology and systems that impact the products
and services they provide to us or to our customers. We rely on commercially available systems, software, tools, and monitoring, as well
as other applications and internal procedures and personnel, to provide security for processing, transmitting, storing, and safeguarding
confidential information such as personally identifiable information related to our employees and others, information regarding financial
accounts, and information regarding customers and vendors. We take various actions, and we incur significant costs, to maintain and protect
the operation and security of our information technology and systems, including the data maintained in those systems. However, it is possible
that these measures will not prevent the systems' improper functioning or a compromise in security, such as in the event of a cyberattack
or the improper disclosure of information. Security breaches, computer viruses, attacks by hackers, online fraud schemes, and similar
breaches can create significant system disruptions, shutdowns, fraudulent transfer of assets, or unauthorized disclosure of confidential
information. For example, in April 2019, we became aware that we had been a victim of criminal fraud commonly referred to as "business
email compromise fraud." The incident involved the impersonation of one of our officers and improper access to his email, wherein
the transfer by us of funds to a third-party account almost occurred.
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The operation of our healthcare
business includes use of complex information technology infrastructures, access to the information technology networks of our customers,
as well as the collection of storing of patient information that is subject to HIPAA. In recent years, attacks on corporate information
technology infrastructures have become more common and more sophisticated. Any successful attack on our network could severely impact
our ability to conduct operations and could result in lost customers. Though we carry customary insurance for notification events in the
event of a patient information breach under HIPAA, our coverage may not be sufficient to cover every situation, and any notification could
severely impact our customer confidence and operations.
Despite any defensive measures
we take to manage threats to our business, our risk and exposure to these matters remain heightened because of, among other things, the
evolving nature of such threats in light of advances in computer capabilities, new discoveries in the field of cryptography, new and sophisticated
methods used by criminals including phishing, social engineering, or other illicit acts, or other events or developments that we may be
unable to anticipate or fail to adequately mitigate. Any failure to maintain the security, proper function and availability of our information
technology and systems, or certain third-party vendors' failure to similarly protect their information technology and systems that
are relevant to our operations, or to safeguard our business processes, assets, and information could result in financial losses, interrupt
our operations, damage our reputation, cause us to be in default of material contracts, and subject us to liability claims or regulatory
penalties, any of which could materially and adversely affect us.
We may not be able to achieve the
anticipated synergies and benefits from business acquisitions.
Part of our business strategy
is to acquire businesses that we believe can complement or expand our current business activities, both financially and strategically.
In September 2019, we acquired ATRM Holdings, Inc. and its subsidiaries, including KBS, EdgeBuilder and Glenbrook with these synergistic
benefits in mind. Acquisitions involve many complexities, including, but not limited to, risks associated with the acquired business'
past activities, loss of customers, regulatory changes that are not anticipated, difficulties in integrating personnel and human resource
programs, integrating ERP systems and other infrastructures, general underperformance of the business under our control versus the prior
owners, unanticipated expenses and liabilities, and the impact on its internal controls of compliance with the regulatory requirements
under the Sarbanes-Oxley Act of 2002. As a result, the realization of anticipated synergies or benefits from acquisitions may be delayed
or substantially reduced, and could potentially result in the impairment of our investment in these businesses.
We face risks related to health pandemics
and other widespread outbreaks of contagious disease, including COVID-19 and its variants, which could significantly disrupt our operations
(particularly in our healthcare business) and impact our financial results.
Our business has been disrupted
and could be further materially adversely affected by the ongoing COVID-19 pandemic. The outbreak and government measures taken in response
have also had a significant impact, both direct and indirect, on businesses and commerce. Global health concerns, such as coronavirus,
could also result in social, economic, and labor instability in the countries in which we or the third parties with whom we engage operate.
The future progression of the outbreak and its effects on our business and operations are uncertain. We cannot presently predict the scope
and severity of any potential business shutdowns or disruptions, including downturns in global economies and financial markets that could
affect our future operating results. Any adverse impact on our results and financial condition could have a negative impact on our ability
to comply with certain financial covenants in certain of our loan agreements (as described further below) and on your investment in our
common stock.
We are subject to particular risks
associated with real estate ownership, which could result in unanticipated losses or expenses.
Following our recent acquisition
of real estate, our business is subject to many risks that are associated with the ownership of real estate. For example, if our tenants
do not renew their leases or default on their leases, we may be unable to re-lease the facilities at favorable rental rates. Other risks
that are associated with real estate acquisition and ownership include, without limitation, the following:
·
general liability, property and casualty losses, some of which may be uninsured;
19
·
the inability to purchase or sell our assets rapidly due to the illiquid nature of real estate and the
real estate market;
·
leases which are not renewed or are renewed at lower rental amounts at expiration;
·
the default by a tenant or guarantor under any lease;
·
costs relating to maintenance and repair of our facilities and the need to make expenditures due to changes
in governmental regulations, such as the Americans with Disabilities Act or remediation of unknown environmental hazards; and
·
acts of God and acts of terrorism affecting our properties.
Our revenues may decline due to reductions
in Medicare and Medicaid reimbursement rates.
The success of our business
is largely dependent upon our medical professional customers' ability to provide diagnostic care to their patients in an economically
sustainable manner, either through the purchase of our imaging systems or using our diagnostic services, or both. Our customers are directly
impacted by changes (decreases and increases) in governmental and private payor reimbursements for diagnostic services. We are directly
and indirectly impacted by changes in reimbursements. In our businesses, where we are indirectly affected by reimbursement changes, we
make every effort to act as business partners with our physician customers. For example, in 2010, we proactively adjusted our diagnostic
imaging services rates down due to the dramatic reimbursement declines that our customers experienced from the Centers for Medicare &
Medicaid Services. Reimbursements remain a source of concern for our customers and downward pressure on reimbursements causes greater
pricing pressure on our services and influences the buying decisions of our customers. Although the gap is closing, hospital reimbursements
remain higher than in-office reimbursements. Our Diagnostic Imaging segment's products are targeted to serve the hospital market.
A smaller portion of our Diagnostic Services business segment operates in the hospital market.
Reductions in reimbursements
could significantly impact the viability of in-office imaging performed by independent physicians, as well as the viability of our cardiac
event monitoring services business. The historical decline in reimbursements in diagnostic imaging has resulted in cancellations of imaging
days in our Diagnostic Services business and the delay of purchase and service decisions by our existing and prospective customers in
our Diagnostic Imaging business.
Our Diagnostic Services revenues may
decline due to changes in diagnostic imaging regulations and the use of third party benefit managers by states and private payors to drive
down diagnostic imaging volumes.
Nuclear medicine is a "designated
health service" under the federal physician self-referral prohibition law known as the "Stark Law," which states that
a physician may not refer designated health services to an entity with which the physician or an immediate family member has a financial
relationship, unless a statutory exception applies. Our business model and service agreements are structured to enable our physician customers
to meet the statutory in-office ancillary services ("IOAS") exception to the Stark Law, allowing them to perform nuclear diagnostic
imaging services on their patients in the convenience of their own office. From time-to-time, the Centers for Medicare and Medicaid Services
and Congress have proposed to modify the IOAS to further limit or eliminate this exception. Various lobbying organizations, including
the Medicare Payment Advisory Commission ("MedPAC"), in the past have pushed for, discussed, and recommended that Congress
limit the availability of the IOAS exception in order to reduce federal healthcare costs. Legislation has been introduced in prior Congresses
to modify or eliminate the exception, but has not been enacted. The outcome of these efforts is uncertain at this time; however, the limitation
or elimination of the IOAS exception could significantly impact our Diagnostic Services business segment as currently structured.
Our customers who perform
imaging services in their office also experience the continuing efforts by some private insurance companies to reduce healthcare expenditures
by hiring radiology benefit managers to help them manage and limit imaging. The federal government has also set aside monies in the 2009
recession recovery acts to hire radiology benefit managers to provide image management services to Medicare/Medicaid and MedPAC has recommended
and the Centers for Medicare & Medicaid Services has, in the past, proposed legislation requiring Medicare physicians who engage in
a relatively high volume of medical imaging be required to obtain pre-authorization through a radiology benefit manager. A radiology benefit
manager is an unregulated entity that performs various functions for private payors and managed care organizations. Radiology benefit
manager activities can include pre-authorization for imaging procedures, setting and enforcing standards, approving which contracted physicians
can perform the services, such as requiring even the most experienced and highly qualified cardiologists to obtain additional board certifications,
or interfering with the financial decision of the private practitioner by requiring them to own their own imaging system and not allowing
them to lease the system. The radiology benefit managers often do not provide written documentation of their decisions or an appeals process,
leaving leasing physicians unable to challenge their decisions with the carrier or the state insurance department. Unregulated radiology
benefit manager activities have and could continue to adversely affect our physician customers' ability to receive reimbursement,
therefore impacting our customers' decision to utilize our Diagnostic Services imaging services.
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Operating results may be adversely
affected by changes in the costs and availability of supplies and materials.
Manufacturing and providing
service for our nuclear imaging cameras is highly dependent upon the availability of certain suppliers; thereby making us vulnerable to
supply problems and price fluctuations that could harm our business. Our manufacturing process within Diagnostic Imaging, and our warranty
and post-warranty camera support business, rely on a limited number of third parties to supply certain key components and manufacture
our products. Alternative sources of production and supply may not be readily available or may take several months to scale-up and develop
effective production processes. If a disruption in the availability of parts or in the operations of our suppliers were to occur, our
ability to have gamma cameras built as well as our ability to provide support could be materially adversely affected. In certain cases,
we have developed backup plans and have alternative procedures should we experience a disruption. However, if these plans are unsuccessful
or if we have a single source, delays in the production and support of our gamma cameras for an extended period of time could cause a
loss of revenue and/or higher production and support costs, which could significantly harm our business and results of operations.
Our Diagnostic Services operations
are highly dependent upon the availability of certain radiopharmaceuticals, thereby making us vulnerable to supply problems and price
fluctuations that could harm our business. Our Diagnostic Service business involves the use of radiopharmaceuticals. There is a limited
number of major nuclear reactors supplying medical radiopharmaceuticals worldwide and there is no guarantee that the reactors will remain
in good repair or that our supplier will have continuing access to ample supply of our radiopharmaceutical product. If we are unable to
obtain an adequate supply of the necessary radiopharmaceuticals, we may be unable to utilize our personnel and equipment through our in-office
service operations, or the volume of our services could decline and our business may be adversely affected. Shortages can also cause price
increases that may not be accounted for in third party reimbursement rates, thereby causing us to lose margin or require us to pass increases
on to our physician customers.
Our Construction operating
results could be adversely affected by changes in the cost and availability of raw materials. Prices and availability of raw materials
used to manufacture our products can change significantly due to fluctuations in supply and demand. Additionally, availability of the
raw materials used to manufacture our products may be limited at times resulting in higher prices and/or the need to find alternative
suppliers. Both KBS's and EdgeBuilder's major material components are dimensional lumber and wood sheet products, which include
plywood and oriented strand board. Lumber costs are subject to market fluctuations. Furthermore, the cost of raw materials may also be
influenced by transportation costs. It is not certain that any price increases can be passed on to our customers without affecting demand
or that limited availability of materials will not impact our production capabilities. The state of the financial and housing markets
may also impact our suppliers and affect the availability or pricing of materials. The inability of KBS or EdgeBuilder to raise the price
of their products in response to increases in prices of raw materials or to maintain a proper supply of raw materials could have an adverse
effect on their revenue and earnings.
Our quarterly and annual financial
results are difficult to predict and are likely to fluctuate from period to period.
We have historically experienced
seasonality in all of our businesses, volatility due to the changing healthcare environment, the variable supply of radiopharmaceuticals,
and downturns based on the changing U.S. economy. While our customers are typically obligated to pay us for imaging days to which they
have committed, our contracts permit some flexibility in scheduling when services are to be performed. We cannot predict with certainty
the degree to which seasonal circumstances such as the summer slowdown, winter holiday vacations, and weather conditions may affect the
results of our operations. We have also experienced fluctuations in demand of our diagnostic imaging product sales due to economic
21
conditions,
capital budget availability, and other financial or business reasons, most recently the abrupt increases of quarantine restrictions and
reduced demand due to the COVID-19 pandemic. In addition, due to the way that customers in our target markets acquire our products, a
large percentage of our products are booked during the last month of each quarterly accounting period, and often there can be a large
amount in the last month of the year. As such, a delivery delay of only a few days may significantly impact quarter-to-quarter comparisons
of our results of operations. Moreover, the sales cycle for all of our capital products is typically lengthy, particularly in the hospital
market, which may cause us to experience significant revenue fluctuations.
We spend considerable time and money
complying with federal and state laws, regulations, and other rules which may fluctuate based on healthcare policy, and if we are unable
to fully comply with such laws, regulations, and other rules, we could face substantial penalties.
Through our Healthcare businesses
we are directly, or indirectly through our customers, subject to extensive regulation by both the federal government and the states in
which we conduct our business, including: the federal Medicare and Medicaid anti-kickback laws and other Medicare laws, regulations, rules,
manual provisions, and policies that prescribe requirements for coverage and payment for services performed by us and our physician customers;
the federal False Claims statutes; the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended in 2009
under the HITECH Act that places direct legal obligations and higher liability on us with respect to the security and handling of personal
health information; the Stark Law; the federal Food, Drug and Cosmetic Act; federal and state radioactive materials laws; state food and
drug and pharmacy laws and regulations; state laws that prohibit the practice of medicine by non-physicians and fee-splitting arrangements
between physicians and non-physicians; state scope-of-practice laws; and federal rules prohibiting the mark-up of diagnostic tests to
Medicare under certain circumstances. If our customers are unable or unwilling to comply with these statutes, regulations, rules, and
policies, rates of our services and products could decline and our business could be harmed.
Our Construction businesses
are subject to various federal, state and local laws and regulations. In recent years, a number of new laws and regulations have been
adopted, and there has been expanded enforcement of certain existing laws and regulations by federal, state and local agencies. These
laws and regulations, and related interpretations and enforcement activity, may change as a result of a variety of factors, including
political, economic or social events. Changes in, expanded enforcement of, or adoption of new federal, state or local laws and regulations
governing minimum wage or living wage requirements; the classification of exempt and non-exempt employees; the distinction between employees
and contractors; other wage, labor or workplace regulations; healthcare; data protection and cybersecurity; the sale and pricing of some
of our products; transportation; logistics; supply chain transparency; taxes; unclaimed property; energy costs and consumption; or environmental
matters could increase our costs of doing business or impact our operations.
We maintain a compliance program
to identify and correct any compliance issues and remain in compliance with all applicable laws, to train employees, to audit and monitor
our operations, and to achieve other compliance goals. Like most companies with compliance programs, we occasionally discover compliance
concerns. In such cases, we take responsive action, including corrective measures when necessary. There can be no assurance that our responsive
actions will insulate us from liability associated with any detected compliance concerns.
If our past or present operations
are found to be in violation of any of the laws, regulations, rules, or policies described above or the other laws or regulations to which
we or our customers are subject, we may be subject to civil and criminal penalties, damages, fines, exclusion from federal or state healthcare
programs, or the curtailment or restructuring of our operations. Similarly, if our physician customers are found to be non-compliant with
applicable laws, they may be subject to sanctions that could have a negative impact on us. Any penalties, damages, fines, curtailment,
or restructuring of our operations could adversely affect our ability to operate our business and our financial results. Any action against
us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert
our management's attention from the operation of our business, and damage our reputation. Although compliance programs can mitigate
the risk of investigation and prosecution for violations of these laws, regulations, rules, and policies, the risks cannot be entirely
eliminated. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security, and fraud laws may prove
costly.
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We are subject to risks associated
with self-insurance related to health benefits.
To help control our overall
long-term costs associated with employee health benefits, we are self-insured up to certain limits for our health plans. As such, we are
subject to risks associated with self-insurance of these health plan benefits. To limit our exposure, we have third party stop-loss insurance
coverage for both individual and aggregate claim costs. However, we could still experience unforeseen and potentially significant fluctuations
in our healthcare costs based on a higher than expected volume of claims below these stop-loss levels. These fluctuations could have a
material adverse effect on our financial position and results of operations.
A portion of our operations are located
in a facility that may be at risk from fire, earthquakes, or other disasters.
Final assembly in our manufacturing
process and significant portions of our inventory are located in a single facility in Poway, California, near known fire areas and earthquake
fault zones. Future natural disasters could cause substantial delays in our operations and cause us to incur additional expenses. Although
we have taken precautions to insure our facilities and continuing operations, as well as provide for offsite back-up of our information
systems, this may not be adequate to cover our losses in any particular case.
The medical device industry is litigious,
which could result in the diversion of our management's time and efforts, and require us to incur expenses and pay damages that
may not be covered by our insurance.
Our operations entail risks
of claims or litigation relating to product liability, radioactive contamination, patent infringement, trade secret disclosure, warranty
claims, vendor disputes, product recalls, property damage, misdiagnosis, breach of contract, personal injury, and death. Any litigation
or claims against us, or claims we bring against others, may cause us to incur substantial costs, could place a significant strain on
our financial resources, divert the attention of our management from our core business, and harm our reputation. We may incur significant
liability in the event of any such litigation, regardless of the merit of the action. If we are unable to obtain insurance, or if our
insurance is inadequate to cover claims, our cash reserves and other assets could be negatively impacted. Additionally, costs associated
with maintaining our insurance could become prohibitively expensive, and our ability to become or remain profitable could be diminished.
If we cannot provide quality technical
and applications support, we could lose customers and our business and prospects will suffer.
The placement of our products
and the introduction of our technology at new customer sites requires the services of highly trained technical support personnel. Hiring
technical support personnel is very competitive in our industry due to the limited number of people available with the necessary scientific
and technical backgrounds and ability to understand our technology at a technical level. If we are unable to attract, train or retain
the number of highly qualified technical services personnel that our business needs, our business and prospects will suffer.
Our long-term results depend upon
our ability to improve existing products and services and develop, introduce, and market new products and services successfully.
Our business is dependent
on the continued improvement of our existing products and services and our development of new products and services utilizing our current
or other potential future technology. As we introduce new products and services or refine, improve or upgrade versions of existing products
and services, we cannot predict the level of market acceptance or the amount of market share these products and services will achieve,
if any. We cannot assure you that we will not experience material delays in the introduction of new products or services in the future.
We generally sell our products
and services in industries that are characterized by rapid technological changes, frequent new product introductions and changing industry
standards. If we do not develop new products and services and product enhancements based on technological innovation on a timely basis,
our products and services may become obsolete over time and our revenues, cash flow, profitability and competitive position may suffer.
Even if we successfully innovate and develop new products, services and product enhancements, we may incur substantial costs in doing
so, and our profitability may suffer.
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We may face risks associated
with launching new products and services. If we encounter development or manufacturing challenges or discover errors during our product
development cycle, the product launch dates of new products and services may be delayed. The expenses or losses associated with unsuccessful
product development or launch activities or lack of market acceptance of our new products and services could adversely affect our business
or financial condition.
Our ability to protect our intellectual
property and proprietary technology through patents and other means is uncertain.
We rely on patent protection
as well as trademark, copyright, trade secret and other intellectual property rights protection and contractual restrictions to protect
our proprietary technologies, all of which provide limited protection and may not adequately protect our rights or permit us to gain or
keep any competitive advantage. Our success depends, in part, on our ability to protect our proprietary rights to the technologies used
in our products. If we fail to protect and/or maintain our intellectual property, third parties may be able to compete more effectively
against us, we may lose our technological or competitive advantage, and/or we may incur substantial litigation costs in our attempts to
recover or restrict use of our intellectual property.
We do not have any pending
patent applications. We cannot assure investors that we will continue to innovate and file new patent applications, or that if filed any
future patent applications will result in granted patents. Further, we cannot predict how long it will take for such patents to issue,
if at all. It is possible that, for any of our patents that have issued or that may issue in the future, our competitors may design their
products around our patented technologies. Further, we cannot assure investors that other parties will not challenge any patents granted
to us, or that courts or regulatory agencies will hold our patents to be valid, enforceable, and/or infringed. We cannot guarantee investors
that we will be successful in defending challenges made against our patents and patent applications. Any successful third-party challenge
or challenges to our patents could result in the unenforceability or invalidity of such patents, or such patents being interpreted narrowly
and/or in a manner adverse to our interests. Our ability to establish or maintain a technological or competitive advantage over our competitors
and/or market entrants may be diminished because of these uncertainties. For these and other reasons, our intellectual property may not
provide us with any competitive advantage.
To the extent our intellectual
property offers inadequate protection, or is found to be invalid or unenforceable, we would be exposed to a greater risk of direct or
indirect competition. If our intellectual property does not provide adequate coverage of our competitors' products, our competitive
position could be adversely affected, as could our business.
The measures that we use to protect
the security of our intellectual property and other proprietary rights may not be adequate, which could result in the loss of legal protection
for, and thereby diminish the value of, such intellectual property and other rights or we may need to enter into costly license agreements
in the future.
Other than pursuing patents
on our technology, we also rely upon trademarks, trade secrets, copyrights and unfair competition laws, as well as license agreements
and other contractual provisions, to protect our intellectual property and other proprietary rights. Despite these measures, any of our
intellectual property rights could be challenged, invalidated, circumvented or misappropriated. In addition, we take steps to protect
our intellectual property and proprietary technology by entering into confidentiality agreements and intellectual property assignment
agreements with our employees, consultants, corporate partners and, when needed, our advisors. Such agreements may not be enforceable
or may not provide meaningful protection for our trade secrets and/or other proprietary information in the event of unauthorized use or
disclosure or other breaches of the agreements, and we may not be able to prevent such unauthorized disclosure. Moreover, if a party having
an agreement with us has an overlapping or conflicting obligation to a third party, our rights in and to certain intellectual property
could be undermined. Monitoring unauthorized and inadvertent disclosure is difficult, and we do not know whether the steps we have taken
to prevent such disclosure are, or will be, adequate. If we were to enforce a claim that a third party had illegally obtained and was
using our trade secrets, it would be expensive and time consuming, the outcome would be unpredictable, and any remedy may be inadequate.
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If we are sued for infringing intellectual
property rights of third parties, it would be costly and time consuming, and an unfavorable outcome in that litigation could have a material
adverse effect on our business.
Our success also depends on
our ability to develop, manufacture, market and sell our products and perform our services without infringing the proprietary rights of
third parties. Numerous U.S. issued patents and pending patent applications owned by third parties exist in the fields in which we are
developing products and services. As part of a business strategy to impede our successful commercialization and entry into new markets,
competitors may allege that our products and/or services infringe their intellectual property rights.
We could incur substantial
costs and divert the attention of our management and technical personnel in defending ourselves against claims of infringement made by
third parties. Any adverse ruling by a court or administrative body, or perception of an adverse ruling, may have a material adverse impact
on our ability to conduct our business and our finances. Moreover, third parties making claims against us may be able to obtain injunctive
relief against us, which could block our ability to offer one or more products or services and could result in a substantial award of
damages against us. Intellectual property litigation can be very expensive, and we may not have the financial means to defend ourselves.
Because patent applications
can take many years to issue, there may be pending applications, some of which are unknown to us, that may result in issued patents upon
which our products or proprietary technologies may infringe. Moreover, we may fail to identify issued patents of relevance or incorrectly
conclude that an issued patent is invalid or not infringed by our technology or any of our products.
Our issued patents could be found
invalid or unenforceable if challenged in court, at the USPTO or other administrative agency, or in other lawsuits which could have a
material adverse impact on our business.
Any patents we have obtained
or do obtain may be challenged by re-examination or otherwise invalidated or eventually found unenforceable. Both the patent application
process and the process of managing patent disputes can be time consuming and expensive. If we were to initiate legal proceedings against
a third party to enforce a patent related to one of our products or services, the defendant in such litigation could counterclaim that
our patent is invalid and/or unenforceable. Third parties may also raise similar claims before the USPTO even outside the context of litigation.
The outcome is unpredictable following legal assertions of invalidity and unenforceability. With respect to the validity question, for
example, we cannot be certain that no invalidating prior art existed of which we and the patent examiner were unaware during prosecution.
These assertions may also be based on information known to us or the USPTO. If a defendant or third party were to prevail on a legal assertion
of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the claims of the challenged patent. Such a loss
of patent protection would or could have a material adverse impact on our business.
Competitors may attempt to
challenge or invalidate our patents, or may be able to design alternative techniques or devices that avoid infringement of our patents
that have issued or that may issue in the future, or develop products with functionalities that are comparable to ours. In the event a
competitor infringes upon our patent or other intellectual property rights, litigation to enforce our intellectual property rights or
to defend our patents against challenge, even if successful, could be expensive and time consuming and could require significant time
and attention from our management. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents
against challenges from others.
An adverse result in any such
litigation proceedings could put one or more of our patents at risk of being invalidated, being found to be unenforceable, and/or being
interpreted narrowly and could impact the validity or enforceability positions of our other patents. Furthermore, because of the substantial
amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information
could be compromised by disclosure during this type of litigation. In addition, an adverse outcome in such litigation or proceedings may
expose us to loss of our proprietary position, expose us to significant liabilities, or require us to seek licenses that may not be available
on commercially acceptable terms, if at all.
We may make financial investments
in other businesses that may lose value.
As we look for the best ways
to deploy our capital and maximize our returns for our businesses and stockholders, we may make financial investments in other businesses
or processes for purposes of enhancing our supply chain, creating financial returns, strategic developments, or other purposes. These
investments may be speculative in nature, and there is no guarantee that we will experience a financial return and we may lose our entire
principal balance if not successful.
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Our goodwill and other long-lived
assets are subject to potential impairment that could negatively impact our earnings.
A significant portion of
our assets consists of goodwill and other long-lived assets, the carrying value of which may be reduced if we determine that those
assets are impaired. At September 30, 2021, goodwill and net intangible assets represented $24.9 million, or 33.3% of our total
assets, and at December 31, 2020, goodwill and net intangible assets represented $26.4 million, or 29.9% of our total assets. In
addition, net property and equipment assets totaled $9.1 million and $9.8 million, or 12.2% and 11.1%, respectively, of our total
assets at those dates. If actual results differ from the assumptions and estimates used in our goodwill and long-lived asset valuation
calculations, we could incur impairment charges, which could negatively impact our earnings.
We review our reporting units
for potential goodwill impairment annually or more often if events or circumstances indicate that it is more likely than not that the
fair value of a reporting unit is less than its carrying amount. In addition, we test the recoverability of long-lived assets if events
or circumstances indicate the carrying values may not be recoverable. Recoverability of long-lived assets is measured by comparison of
their carrying amounts to future undiscounted cash flows the assets are expected to generate. We conduct impairment testing based on our
current business strategy in light of present industry and economic conditions, as well as future expectations. There are numerous risks
that may cause the fair value of a reporting unit to fall below its carrying amount and/or the value of long-lived assets to not be recoverable,
which could lead to the measurement and recognition of goodwill and/or long-lived asset impairment. These risks include, but are not limited
to, significant negative variances between actual and expected financial results, lowered expectations of future financial results, failure
to realize anticipated synergies from acquisitions, adverse changes in the business climate, and the loss of key personnel. If we are
not able to achieve projected performance levels, future impairments could be possible, which could negatively impact our earnings.
If KBS is unable to maintain or establish
its relationships with independent dealers and contractors who sell its homes, KBS revenue could decline.
KBS sells residential homes
through a network of independent dealers and contractors. As is common in the modular home industry, KBS's independent dealers may
also sell homes produced by competing manufacturers and can cancel their relationships with KBS on short notice. In addition, these dealers
may not remain financially solvent, as they are subject to industry, economic, demographic and seasonal trends similar to those faced
by KBS. If KBS is not able to maintain good relationships with its dealers and contractors or establish relationships with new solvent
dealers or contractors, KBS's revenue could decline.
Due to the nature of our business,
many of our expenses are fixed costs and if there are decreases in demand for products, it may adversely affect operating results.
Many of our expenses, particularly
those relating to properties, capital equipment, and certain manufacturing overhead items, are fixed in the short term. Reduced demand
for products causes fixed production costs to be allocated across reduced production volumes, which may adversely affect gross margins
and profitability.
Due to the nature of the work we and
our subsidiaries perform, we may be subject to significant liability claims and disputes.
We and our wholly owned subsidiaries
engage in services that can result in substantial injury or damages that may expose us to legal proceedings, investigations and disputes.
For example, in the ordinary course of our business, we may be involved in legal disputes regarding personal injury and wrongful death
claims, employee or labor disputes, professional liability claims, and general commercial disputes, as well as other claims. Lone Star Value Management, LLC, now a liquidated entity, previously was an exempt reporting advisor and subject to certain regulations
which at times may prompt investigations by the SEC or other regulatory bodies into proper compliance therewith. An unfavorable
legal ruling against us or our subsidiaries could result in substantial monetary damages. Although we have adopted a range of insurance,
risk management, safety, and risk avoidance programs designed to reduce potential liabilities, there can be no assurance that such programs
will protect us fully from all risks and liabilities. If we sustain liabilities that exceed our insurance coverage or for which we are
not insured, it could have a material adverse impact on our results of operations and financial condition.
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Risks Related to our Indebtedness
On March 29, 2019, we
and certain of the Healthcare Subsidiaries entered into a Loan and Security Agreement with Sterling National Bank (the "SNB
Loan Agreement"). The SNB Loan Agreement is a five-year revolving credit facility (maturing in March 2024), which, as amended,
has a maximum credit amount of $20 million (the "SNB Credit Facility"). As of December 31, 2020, our floating rate under
this facility was 2.64%. On January 31, 2020, we and certain of our Real Estate and Investments Subsidiaries entered into a Loan and
Security Agreement with Gerber Finance Inc. (as amended, the "Star Loan Agreement"), which provides for a credit
facility with borrowing availability of up to $2.5 million, bearing interest at the prime rate plus 3.5% per annum, and matures on
January 1, 2025, unless terminated in accordance with the terms therein (the "Star Loan"). On January 31, 2020, we and
certain of our Construction Subsidiaries entered into a Loan and Security Agreement with Gerber (the "EdgeBuilder Loan
Agreement"), which provides for a credit facility with borrowing availability of up to $3.0 million, bearing interest at the
prime rate plus 2.75% per annum, and matures on January 1, 2022, subject to annual automatic extensions (the "EdgeBuilder
Loan"). The credit facility under the Loan and Security Agreement, dated February 23, 2016, by and among us, KBS, ATRM, and
Gerber (as amended, the "KBS Loan Agreement") provides for a revolving credit facility of up to $4.0 million, bearing
interest at the prime rate plus 2.75%, that matures on February 22, 2022, subject to automatic extension for an additional year
unless terminated. The SNB Loan Agreement, Star Loan Agreement, EdgeBuilder Loan Agreement and KBS Loan Agreement are collectively
referred to as the "Company Loan Agreements."
Our indebtedness could restrict our
operations and make us more vulnerable to adverse economic conditions.
Our indebtedness could have
important consequences for us and our stockholders. For example, the SNB Loan Agreement requires a balloon payment at the termination
of the facility in March 2024, which payment may require us to dedicate a substantial portion of our cash flow from operations to this
future payment if we feel we cannot be successful in our ability to refinance in the future, thereby reducing the availability of our
cash flow to fund working capital, capital expenditures, and acquisitions, and for other general corporate purposes. In addition, our
indebtedness could:
·
increase our vulnerability to adverse economic and competitive pressures in our industry;
·
place us at a competitive disadvantage compared to our competitors that have less debt;
·
limit our flexibility in planning for, or reacting to, changes in our business and our industry; and
·
limit our ability to borrow additional funds on terms that are acceptable to us or at all.
The Company Loan Agreements governing
our indebtedness contain restrictive covenants that restrict our operating flexibility and require that we maintain specified financial
ratios. If we cannot comply with these covenants, we may be in default under one or more of the Company Loan Agreements.
The Company Loan Agreements
governing our indebtedness contain restrictions and limitations on our ability to engage in activities that may be in our long-term best
interests. The Company Loan Agreements contain affirmative and negative covenants that limit and restrict, among other things, our ability
to:
·
incur additional debt;
·
sell assets;
·
incur liens or other encumbrances;
27
·
make certain restricted payments and investments;
·
acquire other businesses; and
·
merge or consolidate.
The SNB Loan Agreement limits
our ability to pay dividends and to redeem our equity securities if such dividend or redemption would result in our non-compliance with
the financial covenants in the SNB Loan Agreement, there is insufficient borrowing availability under the SNB Loan Agreement, or if there
is a default or event of default under the SNB Loan Agreement that has occurred and is continuing. In addition, the Company Loan Agreements
include explicit restrictions on the payment of dividends and distributions to us, which could limit our ability to pay dividends. We
may, therefore be required to reduce or eliminate our dividends, if any, including on our preferred stock (if any outstanding), and/or
may be unable to redeem shares of our preferred stock (if any outstanding) until compliance with such financial covenants can be met.
The Company Loan Agreements
contain various financial covenants that, going forward, we or our subsidiaries may not have the ability to meet. The Company Loan Agreements
also contain various other affirmative and negative covenants regarding, among other things, the performance of our business, capital
allocation decisions made by us and our subsidiaries, or events beyond our control.
Our failure to comply with
our covenants and other obligations under the Company Loan Agreements may result in an event of default thereunder. A default, if not
cured or waived, may permit acceleration of our indebtedness. If our indebtedness is accelerated, we cannot be certain that we will have
sufficient funds available to pay the accelerated indebtedness (together with accrued interest and fees), or that we will have the ability
to refinance the accelerated indebtedness on terms favorable to us or at all. This could have serious consequences to our financial condition,
operating results, and business, and could cause us to become insolvent or enter bankruptcy proceedings, and stockholders may lose all
or a portion of their investment because of the priority of the claims of our creditors on our assets.
Substantially all of our assets (including
the assets of our subsidiaries) have been pledged to lenders as security for our indebtedness under the Company Loan Agreements.
The Company Loan Agreements
are secured by a first-priority security interest in substantially all of the assets of us and our subsidiaries and a pledge of all shares
and equity interests of our subsidiaries. Upon the occurrence and during the continuation of an event of default under any Company Loan
Agreement, the applicable lender may, among other things, declare the loans and all other obligations thereunder immediately due and payable
and may, in certain instances, increase the interest rate at which loans and obligations bear interest. The exercise by a lender of remedies
provided under the applicable Company Loan Agreement in the event of a default thereunder may have a material adverse effect on the liquidity,
financial condition and results of operations of the applicable borrowers and/or us and could cause such borrowers and/or us to become
bankrupt or insolvent. Our obligations and the obligations of our various subsidiaries under the Company Loan Agreements are guaranteed
by our other subsidiaries and/or us directly. In the event of any bankruptcy, liquidation, dissolution, reorganization, or similar proceeding
against us, the assets that are pledged as collateral securing any unpaid amounts under the applicable Company Loan Agreement must first
be used to pay such amounts, as well as any other obligation secured by the pledged assets, in full, before making any distributions to
our stockholders. In the event of any of the foregoing, our stockholders could lose all or a part of their investment.
The inability of our company, KBS,
EdgeBuilder or any of our other subsidiaries to comply with applicable financial covenants under the Company Loan Agreements could have
a material adverse effect on our financial condition.
As of June 30, 2021, our last test date, KBS
                                                                                                          and EdgeBuilder were not in compliance with the bi-annual financial covenants under the KBS Loan Agreement and EdgeBuilder Loan
                                                                                                          Agreement, respectively, which required no net annual post-tax loss and certain minimum leverage ratios as of the test date. We
                                                                                                          obtained waivers from Gerber, our lender, for these financial covenant violations. In addition, we anticipate that we will need a
                                                                                                          waiver from Gerber for certain of these financial events for our December 31, 2021 test date. While Gerber has historically provided
                                                                                                          us with timely waivers, there can be no assurance that we will be able to receive waivers for any financial covenant violations for
                                                                                                          the December 31, 2021 test date or in the future, or that we will comply with all financial covenants in the future.
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If we or any of our subsidiaries
fail to comply with any applicable financial covenants under the Company Loan Agreements to which we are a party, or if there is otherwise
an event of default under the Company Loan Agreements by a borrower, the borrowers' obligations thereunder may (subject to any applicable
cure periods) become immediately due and payable and the applicable lender(s) may demand the repayment of the credit facilities amount
outstanding and any unpaid interest thereon.
If we are unable to generate or borrow
sufficient cash to make payments on our indebtedness, our financial condition would be materially harmed, our business could fail, and
stockholders may lose all of their investment.
Our ability to make scheduled
payments on or to refinance our obligations will depend on our financial and operating performance, which will be affected by economic,
financial, competitive, business, and other factors, some of which are beyond our control. We cannot assure you that our business will
generate sufficient cash flow from operations to service our indebtedness or to fund our other liquidity needs. If we are unable to meet
our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our indebtedness on
or before maturity or sell certain of our assets. We cannot assure you that we will be able to restructure or refinance any of our indebtedness
on commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing
of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict
our business operations.
Increases in interest rates could
adversely affect our results from operations and financial condition.
The SNB Loan Agreement and
Star Loan Agreement allow for amounts borrowed thereunder to be subject to a floating interest rate which may change with market interest
rates. An increase in prevailing interest rates would have an effect on the interest rates charged on our variable rate debt, which rise
and fall upon changes in interest rates. If prevailing interest rates or other factors result in higher interest rates, the increased
interest expense would adversely affect our cash flow and our ability to service our indebtedness.
Risks Related to our Common Stock
The market price of our common stock
may be volatile, and the value of your investment could decline significantly.
The market price of our common
stock has been, and we expect it to continue to be, volatile. The prices at which our shares of common stock trade depend upon a number
of factors, including our historical and anticipated operating results, our financial situation, announcements of new products by us or
our competitors, history of timely dividend payments, our ability or inability to raise the additional capital we may need and the terms
on which we raise it, and general market and economic conditions. Some of these factors are beyond our control. Broad market fluctuations
may lower the market price of our common stock and affect the volume of trading in our stock, regardless of our financial condition, results
of operations, business, or prospects. It is impossible to assure you that the market price of our shares of common stock will not fall
in the future.
Our common stock has a low trading
volume and shares available under our equity compensation plans could affect the trading price of our common stock.
Our common stock historically
has had a low trading volume. Any significant sales of our common stock may cause volatility in our stock price. We also have registered
shares of common stock that we may issue under our employee benefit plans or from our treasury stock. Accordingly, these shares can be
freely sold in the public market upon issuance, subject to restrictions under the securities laws. If any of these stockholders, or other
selling stockholders, cause a large number of securities to be sold in the public market without a corresponding demand, the sales could
reduce the trading price of our common stock. One or more stockholders holding a significant amount of our common stock might be able
to significantly influence matters requiring approval by our stockholders, possibly including the election of directors and the approval
of mergers or other business combination transactions.
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A possible "short squeeze" due to a sudden increase
in demand of our common stock that largely exceeds supply may lead to price volatility in our common stock.
Investors may purchase our common stock to hedge
existing exposure in our common stock or to speculate on the price of our common stock. Speculation on the price of our common stock may
involve long and short exposures. To the extent aggregate short exposure exceeds the number of shares of our common stock available for
purchase in the open market, investors with short exposure may have to pay a premium to repurchase our common stock for delivery to lenders
of our common stock. Those repurchases may in turn, dramatically increase the price of our common stock until investors with short exposure
are able to purchase additional common shares to cover their short position. This is often referred to as a "short squeeze."
A short squeeze could lead to volatile price movements in our common stock that are not directly correlated to the performance or prospects
of our company and once investors purchase the shares of common stock necessary to cover their short position the price of our common
stock may decline.
Payment of dividends on our common
stock is prohibited unless we have declared and paid (or set apart for payment) full accumulated dividends on the Series A Preferred Stock,
which also has a significant liquidation value.
Unless full cumulative dividends
on our preferred stock have been, or contemporaneously are, declared and paid or declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods, no dividends (other than a dividend in shares of common stock or other shares
of stock ranking junior to the Series A Preferred Stock (as defined herein) as to dividends and upon liquidation) may be declared and
paid or declared and set apart for payment on our common stock, nor may any shares of common stock be redeemed, purchased or otherwise
acquired for any consideration by us. To the extent dividends are not paid on our preferred stock, cumulative dividends accrue as part
of the liquidation value of our preferred stock, which has a liquidation value of $10.00 per share at issuance. Dividends on our preferred
stock are payable out of amounts legally available therefor at a rate equal to 10.0% per annum per $10.00 of stated liquidation preference
per share, or $1.00 per share of our preferred stock per year. Dividends on our preferred stock are only be payable in cash. As of December
29, 2021, there were 1,915,637 shares of our Series A Preferred Stock outstanding.
If we fail to pay dividends on our
Series A Preferred Stock for six or more consecutive quarters, holders of our Series A Preferred Stock will be entitled to elect two additional
directors to our board of directors.
To the extent dividends are
not paid on the Series A Preferred Stock in accordance with their terms, cumulative dividends will accrue as part of the liquidation value
of the Series A Preferred Stock. Whenever dividends on any shares of Series A Preferred Stock are in arrears for six or more consecutive
quarters, then the holders of those shares together with the holders of all other series of preferred stock equal in rank with the Series
A Preferred Stock upon which like voting rights have been conferred and are exercisable, will be entitled to vote separately as a class
for the election of a total of two additional directors to our board of directors. Holders of our common stock will not be entitled to
vote no such additional directors.
We may not be able to redeem our Series
A Preferred Stock upon a Change of Control Triggering Event.
Upon the occurrence of a Change
of Control Triggering Event (as such term is defined in the Certificate of Designations of our Series A Preferred Stock), unless we have
exercised our option to redeem our preferred stock after September 10, 2024, each holder of our preferred stock will have the right to
require us to redeem all or any part of such holder's preferred stock at a price equal to the liquidation preference of $10.00 per
share, plus an amount equal to any accumulated and unpaid dividends up to but excluding the date of payment, but without interest. If
we experience a Change of Control Triggering Event, there can be no assurance that we would have sufficient financial resources available
to satisfy our obligations to redeem our preferred stock and any indebtedness that may be required to be repaid or repurchased as a result
of such event. In addition, we may be unable to redeem our preferred stock upon a Change of Control Triggering Event if such redemption
would result in our non-compliance with the financial covenants in the Company Loan Agreements. Our failure to redeem our preferred stock
could have material adverse consequences for us and the holders of our preferred stock.
The protective amendment contained
in our Restated Certificate of Incorporation, which is intended to help preserve the value of certain income tax assets, primarily tax
net operating loss carryforwards, may have unintended negative effects.
Pursuant to Internal Revenue
Code Sections 382 and 383, use of our NOLs may be limited by an "ownership change" as defined under Section 382 of the Internal
Revenue Code and the Treasury Regulations thereunder. In order to protect our significant NOLs, we filed an amendment to our certificate
of incorporation (the "Restated Certificate of Incorporation") (as amended and extended, the "Protective Amendment")
with the Delaware Secretary of State on May 5, 2015. The Protective Amendment was approved by our stockholders at our 2021 Annual Meeting
of Stockholders held on October 21, 2021.
The Protective Amendment is
designed to assist us in protecting the long-term value of our accumulated NOLs by limiting certain transfers of our common stock. The
Protective Amendment's transfer restrictions generally restrict any direct or indirect transfers of the common stock if the effect
would be to increase the direct or indirect ownership of the common stock by any person from less than 4.99% to 4.99% or more of the common
stock, or increase the percentage of the common stock owned directly or indirectly by a person owning or deemed to own 4.99% or more of
the common stock. Any direct or indirect transfer attempted in violation of the Protective Amendment will be void as of the date of the
prohibited transfer as to the purported transferee.
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The Protective Amendment also
requires any person attempting to become a holder of 4.99% or more of our common stock to seek the approval of our board of directors.
This may have an unintended "anti-takeover" effect because our board of directors may be able to prevent any future takeover.
Similarly, any limits on the amount of stock that a stockholder may own could have the effect of making it more difficult for stockholders
to replace current management. Additionally, because the Protective Amendment may have the effect of restricting a stockholder's
ability to dispose of or acquire our common stock, the liquidity and market value of our common stock might suffer.
Our stockholder
rights plan, or "poison pill," includes terms and conditions which could discourage a takeover or other transaction that stockholders
may consider favorable.
On
June 2, 2021, stockholders of record at the close of business on that date received a dividend of one right (a "Right") for
each outstanding share of common stock. Each Right entitles the registered holder to purchase one one-thousandth of a share of our Series
C Participating Preferred Stock (the "Series C Preferred Stock"), at a price of $12.00 per one-thousandth of a share of Series
C Preferred Stock, subject to adjustment (the "Exercise Price"). The Rights are not exercisable until the Distribution Date
referred to below. The description and terms of the Rights are set forth in the Rights Agreement between the Company and American Stock
Transfer & Trust Company LLC, dated as of June 2, 2021 (the "Rights Agreement"), which has previously been filed as an
exhibit to our public reports
.
The
Rights Agreement imposes a significant penalty upon any person or group that acquires 4.99% or more (but less than 50%) of our then-outstanding
common stock without the prior approval of our board of directors. A person or group that acquires shares of our common stock in excess
of the applicable threshold, subject to certain limited exceptions, is called an "Acquiring Person." Any rights held by an
Acquiring Person are void and may not be exercised. The Rights will not be exercisable until the earlier of ten days after a public announcement
by us that a person or group has become an Acquiring Person and ten business days (or a later date determined by our board of directors)
after a person or group begins a tender or an exchange offer that, if completed, would result in that person or group becoming an acquiring
person. On the date (if any) that the Rights become exercisable (the "Distribution Date"), each Right would allow its holder
to purchase one one-thousandth of a share of Preferred Stock for a purchase price of $12.00. In addition, if a person or group becomes
an Acquiring Person after the Distribution Date or already is an Acquiring Person and acquires more shares after the Distribution Date,
all holders of Rights, except the Acquiring Person, may exercise their rights to purchase a number of shares of the common stock (in lieu
of Preferred Stock) with a market value of twice the Exercise Price, upon payment of the purchase price.
The
Rights will expire on the earliest of (i) June 2, 2024, or such earlier date as of which our board of directors determines that the Rights
Agreement is no longer necessary for the preservation of our tax assets, (ii) the time at which the rights are redeemed, (iii) the time
at which the rights are exchanged, (iv) the effective time of the repeal of Section 382 of the Code or any successor statute if our board
of directors determines that the Rights Agreement is no longer necessary for the preservation of our tax assets, and (v) the first day
of our taxable year in which our board determines that no NOLs or other tax assets may be carried forward.
The
Rights have certain anti-takeover effects, including potentially discouraging a takeover that stockholders may consider favorable. The
Rights will cause substantial dilution to a person or group that attempts to acquire us on terms not approved by the board of directors.
Anti-takeover provisions in our organizational
documents and Delaware law may prevent or delay removal of current management or a change in control.
Our Restated Certificate of
Incorporation and Bylaws contain provisions that may delay or prevent a change in control, discourage bids at a premium over the market
price of our common stock, and adversely affect the market price of our common stock and the voting and other rights of the holders of
our common stock. In addition, as a Delaware corporation, we are subject to Delaware corporate law, including Section 203 of the Delaware
General Corporation Law. In general, Section 203 prohibits a Delaware corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that the stockholder became an interested stockholder unless certain specific
requirements are met as set forth in Section 203. These provisions, alone or together, could have the effect of deterring or delaying
changes in incumbent management, proxy contests or changes in control.
31
Risks Related to Our Material Weakness in
Disclosure Controls
Material weakness in our internal
control over financial reporting could have a significant adverse effect on our business and the price of our common stock.
As a public reporting company,
we are subject to the rules and regulations established from time to time by the SEC. These rules and regulations require, among other
things, that we have, and periodically evaluate, disclosure controls and procedures that are designed to provide reasonable assurance
that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules, regulations and forms, and that such information is accumulated and communicated to our management,
including our executive chairman and chief financial officer, to allow decisions regarding required disclosure. Reporting obligations
as a public company are likely to continue to burden our financial and management systems, processes and controls, as well as our personnel.
As a public company, we are
required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that
our management can certify as to the effectiveness of our internal control over financial reporting.
Due to the existence of a material weakness described below, our executive chairman and chief financial officer concluded that our disclosure controls and procedures
were not effective as of September 30, 2021 and, as previously disclosed in our Annual Report on Form 10-K for the year ended December
31, 2020, management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2020 due
to a material weakness. A "material weakness" is a deficiency, or combination of deficiencies, in internal control over
financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements
will not be prevented or detected on a timely basis. We identified material errors in the accounting for debt classification which resulted
in the restatement of previously issued consolidated financial statements. These errors resulted from a material weakness related to ineffectively
designed controls over review of contracts for new debt agreements and the proper application of GAAP for such agreements. Although we
have developed and implemented a remediation plan which includes, but is not limited to, a more detailed review over debt contracts and
the proper application of GAAP, no assurance can be given that our disclosure controls and procedures will prevent or detect all errors
and fraud, which could have a significant adverse effect on our business and the price of our common stock.
32
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including
the sections entitled "Prospectus Summary," "Risk Factors" and "Use of Proceeds," as well as the information
we incorporate herein by reference contain forward-looking statements within the meaning of the federal securities laws. Forward-looking
statements include, but are not limited to, statements regarding expectations, intentions and strategies regarding the future. In addition,
any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying
assumptions, are forward-looking statements. The words "target," "anticipate," "believe," "continue,"
"could," "estimate," "expect," "intend," "may," "might," "plan,"
"possible," "potential," "predicts," "project," "should," "would,"
and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not
forward-looking.
The forward-looking statements
contained in this prospectus are based on current expectations and beliefs concerning future developments and their potential effects
on our company and its subsidiaries. There can be no assurance that future developments will be those that have been anticipated. Factors
that might cause such differences include, but are not limited to, those discussed in the section of this prospectus entitled "Risk
Factors." New risks and uncertainties emerge from time to time, and it is not possible for us to predict all the risks and uncertainties
that could have an impact on the forward-looking statements, including without limitation, risks and uncertainties relating to:
·
our financial performance, including our ability to generate revenue;
·
our recent conversion into a diversified holding company;
·
business interruptions resulting from health epidemics or pandemics or other contagious outbreaks, such
as the ongoing COVID-19 pandemic and its variants or geopolitical actions, including war and terrorism, and natural disasters;
·
ability of our products and services to achieve and/or maintain market success;
·
success in retaining or recruiting, or changes required in, our officers, key employees or directors;
·
potential ability to obtain additional financing when and if needed;
·
our ability to protect our intellectual property;
·
our ability to complete strategic acquisitions;
·
our ability to complete strategic divestitures;
·
our ability to manage growth and integrate acquired operations;
·
our ability or inability to pay dividends;
·
our ability to maintain compliance with The Nasdaq Stock Market LLC's listing maintenance standards;
·
potential liquidity and trading of our securities;
·
regulatory or operational risks;
·
downward revisions to, or withdrawals of, our credit ratings, if any, by third-party rating agencies;
and
·
our estimates regarding expenses, future revenue, capital requirements and needs for additional financing.
We cannot guarantee future
results, levels of activity or performance. You should not place undue reliance on these forward-looking statements, which speak only
as of the date of this prospectus. These cautionary statements should be considered with any written or oral forward-looking statements
that we may issue in the future. Except as required by applicable law, including the securities laws of the U.S., we do not intend to
update any of the forward-looking statements to conform these statements to reflect actual results, later events or circumstances or to
reflect the occurrence of unanticipated events. Our forward-looking statements do not reflect the potential impact of any future acquisitions,
mergers, dispositions, joint ventures or other investments or strategic transactions we may engage in.
33
USE OF PROCEEDS
We estimate that the net proceeds
to us from our issuance and sale of the common stock, pre-funded warrants and warrants in this offering will be $[•] million, based
on an assumed public offering price of $[•] per share and accompanying warrant, after deducting underwriting discounts and commissions
and estimated offering expenses. If the over-allotment option granted to the underwriter is exercised in full, we will receive additional
net proceeds of $[•] million, after deducting underwriting discounts and commissions and estimated offering expenses. We will only
receive additional proceeds from the exercise of the pre-funded warrants and/or the warrants issuable in this offering if such pre-funded
warrants and/or warrants are exercised at their respective exercise prices of $0.01 and $[•] per share of common stock and the holders
of such pre-funded warrants and warrants pay the exercise price of such pre-funded warrants and warrants in cash.
We intend to use the net proceeds
from this offering for the following purposes:
Purpose
Estimated
Amount
Estimated
Percentage of
Net Proceeds
Pursue organic growth initiatives
$
%
Funding of potential acquisitions
%
Working capital and general corporate purposes
%
Total
$
%
We currently intend to use
a significant portion of the net proceeds from the sale of the shares of our common stock and warrants to increase our balance sheet
liquidity in order to strengthen our direct sales and commercial partnership prospects in our construction operations. Our increased cash
position will provide us with the ability to more effectively compete in client bid proposals where net cash and bond requirements are required
or mandated by clients and commercial partners in order to participate in the bidding process for large, multi-year engagements.
We also plan to use a significant
portion of the net proceeds of this offering to finance the costs of acquiring or investing in competitive and complementary
businesses, products and technologies as a part of our growth strategy. We currently intend to focus on opportunities in the construction
business, including through the use of bolt-on acquisitions to expand our existing divisions. We have no commitments or agreements with
respect to any such acquisitions or investments.
We also intend to use the
net proceeds for working capital and other general corporate purposes, including continuing product development expenses, salaries,
professional fees, public reporting costs, office-related expenses and other corporate expenses, including interest and overhead.  Any
additional net proceeds received from the exercise of the over-allotment option will be used for working capital and general corporate
purposes.
The amount and timing of our
actual expenditures will depend on numerous factors, including the cash used in or generated by our operations, future acquisitions, if
any, the pace of the integration of any acquired businesses, and the level of our sales and marketing activities.
34
DIVIDEND POLICY
We have not declared or paid
any dividends on our common stock since our 2018 fiscal year. We currently intend to retain all available funds and any future earnings
for the operation and expansion of our business and, therefore, we do not anticipate declaring or paying dividends on our common stick
in the foreseeable future. In addition, pursuant to the Certificate of Designations, so long as any of our 10.0% Series A Cumulative Perpetual
Preferred Stock (the "Series A Preferred Stock") is outstanding, we are not permitted to directly or indirectly declare or
pay any dividend on our common stock as long as any dividends due on the Series A Preferred Stock remain unpaid. The payment of dividends
on our common stock will be at the discretion of our board of directors and will depend on our results of operations, capital requirements,
financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our future debt agreements,
and other factors that our board of directors may deem relevant.
35
CAPITALIZATION
The following table sets forth
our current liabilities and capitalization as of September 30, 2021 as follows:
·
on an actual basis;
·
on a pro forma basis, giving effect to the December 2021 Private Placement, as described under "Prospectus
Summary—Our Company; Recent Developments;" and
·
on a pro forma, as adjusted basis, reflecting the December 2021 Private Placement and the issuance of
[•] shares of common stock offered by this prospectus, based on an assumed offering price of $[•] per share, assuming net proceeds
of approximately $[•] million, after deducting underwriting discounts and commissions and estimated offering expenses payable by
us, but not giving effect to the exercise of the over-allotment option, and assuming no sale of any pre-funded warrants in this offering
and no exercise of any accompanying warrants or the underwriter's warrant.
The information below should
be read in conjunction with our unaudited condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for
the quarter ended September 30, 2021, which is incorporated in this prospectus by reference. These financial statements should also be
read with the "Management's Discussion and Analysis of Financial Condition and Results of Operations," which is included
in such Form 10-Q and incorporated herein by reference.
As of September 30, 2021
Actual
Pro Forma
Pro Forma,
as Adjusted
(unaudited)
(unaudited)
Current liabilities
$
29,599
$
[•]
$
[•]
Long-term debt, net of current portion
—
Deferred tax liabilities
$
85
$
[•]
$
[•]
Operating lease liabilities, net of current portion
2,700
[•]
[•]
Other liabilities
1,185
Total liabilities
33,569
[•]
[•]
Total capitalization
$
[•]
$
[•]
$
[•]
Preferred stock, $0.0001 par value: 10,000,000, shares authorized: 10% Series A Cumulative Perpetual Preferred Stock, 8,000,000 shares, liquidation preference ($10.00 per share), 1,915,637 shares issued or outstanding at September 30, 2021
21,979
[•]
[•]
Stockholders' equity:
Preferred stock, $0.0001 par value: 25,000 shares authorized; Series C Participating Preferred stock, no shares issued or outstanding
—
—
Common stock, $0.0001 par value: 30,000,000 shares authorized; 5,120,978 shares issued and outstanding (net of treasury shares), actual; [•] shares issued and outstanding, pro forma
—
—
[•]
Treasury stock, at cost; 258,849 shares at September 30, 2021
(5,728)
[•]
[•]
Additional paid-in capital
148,618
[•]
[•]
Accumulated other comprehensive loss
—
[•]
[•]
Accumulated deficit
(123,551)
[•]
[•]
Total stockholders' equity
19,339
[•]
[•]
Total liabilities, mezzanine equity and stockholders' equity
$
74,887
36
The table above is
based on 5,120,978 shares of common stock outstanding as of September 30, 2021, and excludes, as of such date:
·
26,517 shares of common stock reserved for issuance pursuant to grants outstanding under our 2011 Inducement
Award Plan;
·
40,620 shares of common stock reserved for issuance pursuant to grants outstanding under our 2014 Equity
Incentive Award Plan;
·
62,849 shares of common stock reserved for future issuance under our 2018 Equity Incentive Award Plan;
·
729,770 shares of common stock issuable upon the exercise of the warrants (including the underwriter's
warrants) issued in connection with the public offering that we completed in May 2020;
·
[•] shares of common stock issuable upon the exercise of the warrants offered hereby; and
·
[•] shares of common stock issuable upon the exercise of the warrant we expect to grant to the underwriter
in connection with this offering.
Except as otherwise noted,
all information in this prospectus reflects and assumes (i) no sale of pre-funded warrants in this offering, which, if sold, would reduce
the number of shares that we are offering on a one-for-one basis, (ii) no exercise of outstanding options issued under our equity incentive
plans and (iii) no exercise of the accompanying warrants and the underwriter's warrant described above.
37
DILUTION
If you purchase our common
stock and/or pre-funded warrants in this offering, you may experience dilution to the extent of the difference between the public offering
price per share or pre-funded warrant, as applicable in this offering and our as adjusted net tangible book value per share immediately
after this offering. Net tangible book value per share is equal to the amount of our total tangible assets, less total liabilities, divided
by the number of outstanding shares of our common stock. As of September 30, 2021, our net tangible book value was approximately $[•]
million, or approximately $[•] per share and our pro forma tangible net book value was approximately $[•] million, or approximately
$[•] per share.
After giving effect to the
assumed sale by us of [•] shares of our common stock in this offering at an assumed  public offering price of $[•] per
share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us and assuming
no sale of any pre-funded warrants in this offering and no exercise of the accompanying warrants or the underwriter's warrant),
our pro forma, as adjusted net tangible book value as of September 30, 2021 would have been approximately $[•] million, or approximately
$[•] per share. This represents an immediate decrease in net tangible book value of $[•] per share to existing stockholders
and an immediate increase in net tangible book value of $[•] per share to new investors purchasing shares of our common stock in
this offering. The following table illustrates this per share dilution:
Amount
Public offering price per share of common stock
$
[•]
Pro forma net tangible book value (deficit) before offering
[•]
Increase in pro forma net tangible book value attributable to new investors
[•]
Pro forma as adjusted net tangible book value after offering
[•]
Dilution in pro forma net tangible book value to new investors
$
[•]
The discussion and table
above (i) assumes no exercise of the underwriters' option to purchase up to an additional [•] shares of common stock,
(ii) assumes no exercise of the warrant to be issued to the underwriter in connection with this offering, and (iii) assumes no sale
of any pre-funded warrants in this offering and no exercise of the accompanying warrants or the underwriter's warrant.
The foregoing discussion and
table do not take into account further dilution to new investors that could occur upon the exercise of outstanding options or warrants
having a per share exercise price less than the public offering price per share of common stock sold in this offering. In addition, we
may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds
for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt
securities, the issuance of these securities could result in further dilution to our stockholders.
The table above is based on
5,120,978 shares of common stock outstanding as of September 30, 2021, and excludes, as of such date:
·
26,517 shares of common stock reserved for issuance pursuant to grants outstanding under our 2011 Inducement
Award Plan;
·
40,620 shares of common stock reserved for issuance pursuant to grants outstanding under our 2014 Equity
Incentive Award Plan;
·
62,849 shares of common stock reserved for future issuance under our 2018 Equity Incentive Award Plan;
38
·
729,770 shares of common stock issuable upon the exercise of the warrants (including the underwriter's
warrants) issued in connection with the public offering that we completed in May 2020; and
·
[•] shares of common stock issuable upon the exercise of the warrants offered hereby; and
·
[•] shares of common stock issuable upon the exercise of the warrant we expect to grant to the underwriter
in connection with this offering.
Except as otherwise noted,
all information in this prospectus reflects and assumes (i) no sale of pre-funded warrants in this offering, which, if sold, would reduce
the number of shares that we are offering on a one-for-one basis, (ii) no exercise of outstanding options issued under our equity incentive
plans and (iii) no exercise of the accompanying warrants or underwriter's warrant described above.
39
DESCRIPTION OF OUR CAPITAL
STOCK AND SECURITIES WE ARE OFFERING
The following description
summarizes important terms of our capital stock. For a complete description, you should refer to our Restated Certificate of Incorporation
and Bylaws, as amended, copies of which are incorporated by reference to the exhibits to the registration statement of which this prospectus
is a part, as well as the relevant portions of the Delaware corporate law.
We are offering (i) up
to [•] shares of common stock, (ii) up to [•] pre-funded warrants, each exercisable for one share of common stock, and
(iii) warrants to purchase common stock accompanying each share of common stock and pre-funded warrant, with each accompanying
warrant exercisable for 0.5 of a share of common stock. For each pre-funded warrant we sell, the number of shares of common stock we
are offering will be decreased on a one-for-one basis.
The following description
summarizes certain terms of our capital stock, the warrants and pre-funded warrants we are offering and certain provisions of our Restated
Certificate of Incorporation and Bylaws. This summary does not purport to be complete and is qualified in its entirety by the form of
the warrant, the form of the pre-funded warrant and the provisions of our Restated Certificate of Incorporation and Bylaws and to the
applicable provisions of Delaware corporate law.
Authorized and Outstanding Capital Stock
Our Restated Certificate of
Incorporation authorizes the issuance of 40,000,000 shares of capital stock, consisting of 30,000,000 shares of common stock and 10,000,000
shares of preferred stock, each with a par value of $0.0001 per share. Of our authorized preferred stock, 8,000,000 shares are designated
as Series A Preferred Stock and 25,000 shares are designated as Series C Preferred Stock. 500,000 shares of preferred stock were previously
designated as Series B Participating Preferred Stock. As of December 29, 2021, there were 5,805,916 shares of our common stock
outstanding, held of record by 159 holders, and 1,915,637 shares of our Series A Preferred Stock outstanding.
Common Stock
Voting Rights
Holders of our common stock
are entitled to one vote per share on all matters to be voted upon by our stockholders. The holders of our common stock are not entitled
to cumulate voting rights with respect to the election of directors, which means that the holders of a majority of the shares voted can
elect all of the directors then standing for election.
Dividends
Subject to limitations under
Delaware corporate law and preferences that may apply to any outstanding shares of our preferred stock, holders of our common stock are
entitled to receive ratably such dividends or other distribution, if any, as may be declared by our board of directors out of funds legally
available therefor. Pursuant to the terms of the Series A Preferred Stock (as described below), until we pay all dividends that are due
and payable on the Series A Preferred Stock, we will be unable to pay dividends on our common stock.
Liquidation
In the event of our liquidation,
dissolution or winding up, holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities,
subject to the liquidation preference of any of our outstanding shares of preferred stock.
Rights and Preferences
Our common stock has no preemptive,
conversion or other rights to subscribe for additional securities. There are no redemption or sinking fund provisions applicable to our
common stock. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by,
the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.
40
Fully Paid and Nonassessable
All outstanding shares of
our common stock are validly issued, fully paid and nonassessable.
Nasdaq Global Market Listing
Our common stock is listed
for trading on The Nasdaq Global Market under the symbol "STRR."
Transfer Agent
The transfer agent for our
common stock is American Stock Transfer & Trust Company. Its address is 6201 15th Avenue, Brooklyn, New York 11219, and its telephone
number is (718) 921-8200.
Series A Preferred Stock
Our board of directors is
authorized, subject to limitations prescribed by Delaware corporate law, to issue preferred stock in one or more series, to establish
from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the
shares and any of its qualifications, limitations or restrictions, in each case without further vote or action by our stockholders. Our
board of directors can also increase (but not above the total number of authorized shares of the class) or decrease (but not below the
number of shares then outstanding) the number of shares of any series of preferred stock, without any further vote or action by our stockholders.
Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the
voting power or other rights of the holders of our common stock or other series of preferred stock. The issuance of preferred stock, while
providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, have
the effect of delaying, deferring or preventing a change in control of our company.
The following summary of the
terms and provisions of the Series A Preferred Stock does not purport to be complete and is qualified in its entirety by reference to
the pertinent sections of our Restated Certificate of Incorporation including the Certificate of Designations for the Series A Preferred
Stock, which supplements our Restated Certificate of Incorporation by classifying the Series A Preferred Stock.
We have authorized 8,000,000
shares of Series A Preferred Stock, of which 1,915,637 shares are currently outstanding. Our board of directors may, without the approval of holders of the Series A Preferred
Stock or common stock, designate additional series of authorized preferred stock ranking junior to the Series A Preferred Stock or designate
additional shares of the Series A Preferred Stock and authorize the issuance of such shares. Designation of preferred stock ranking senior
to the Series A Preferred Stock requires approval of the holders of Series A Preferred Stock, as described below in "Voting Rights."
No Sinking Fund
The Series A Preferred Stock
is not subject to any sinking fund.
Dividends
Holders of shares of the Series
A Preferred Stock are entitled to receive, when, as and if, authorized by our board of directors (or a duly authorized committee of our
board of directors) and declared by us, out of funds legally available for the payment of dividends, preferential cumulative cash dividends
at the rate of 10.0% per annum of the liquidation preference of $10.00 per share (equivalent to a fixed annual amount of $1.00 per share).
41
Dividends are payable quarterly,
in arrears, on the last calendar day of March, June, September and December (each a "dividend payment date"); provided that
if any dividend payment date is not a business day, then the dividend that would otherwise have been payable on that dividend payment
date may be paid on the next succeeding business day and no interest, additional dividends or other sums will accrue on the amount so
payable for the period from and after that dividend payment date to that next succeeding business day. To the extent that dividends are
not paid on the Series A Preferred Stock, cumulative dividends will accrue as part of the liquidation value of the Series A Preferred
Stock.
Dividends are payable to holders
of record as they appear in our stock records for the Series A Preferred Stock at the close of business on the corresponding record date,
which is the first day of each month in which a quarterly dividend is to be paid, whether or not a business day (each, a "dividend
record date"). As a result, holders of shares of Series A Preferred Stock are not entitled to receive dividends on a dividend payment
date if such shares were not issued and outstanding on the applicable dividend record date. Our board of directors may not authorize,
declare, pay or set apart for payment any dividends on shares of Series A Preferred Stock at any time that the terms and provisions of
any of our agreements, including any agreement relating to our indebtedness, prohibits that action or provides that the authorization,
declaration, payment or setting apart for payment of those dividends would constitute a breach of or a default under any such agreement,
or if such action is restricted or prohibited by law.
Notwithstanding the foregoing,
dividends on the Series A Preferred Stock accumulate whether or not restrictions exist in respect thereof, whether or not we have earnings,
whether or not there are funds legally available for the payment of such dividends and whether or not we declare such dividends. Accumulated
but unpaid dividends on the Series A Preferred Stock do not bear interest, and holders of the Series A Preferred Stock are not entitled
to any distributions in excess of full cumulative dividends described above. Except as stated in the two paragraphs below, no dividends
may be declared and paid or set apart for payment on any common stock or any series or class of equity securities ranking junior to the
Series A Preferred Stock (other than a dividend in shares of common stock or in shares of any other class of stock ranking junior to the
Series A Preferred Stock as to dividends and upon liquidation) for any period unless full cumulative dividends have been or contemporaneously
are declared and paid (or declared and a sum sufficient for the payment of those dividends is set apart for such payment) on the Series
A Preferred Stock for all past dividend periods.
If we do not declare and either
pay or set apart for payment the full cumulative dividends on the Series A Preferred Stock and all shares of capital stock that are equal
in rank with Series A Preferred Stock, the amount which we have declared will be allocated ratably to the Series A Preferred Stock and
to each series of shares of capital stock equal in rank so that the amount declared for each share of Series A Preferred Stock and for
each share of each series of capital stock equal in rank is proportionate to the accrued and unpaid dividends on those shares.
Except as provided in the
immediately preceding paragraph, unless full cumulative dividends on the Series A Preferred Stock have been or contemporaneously are declared
and paid (or declared and a sum sufficient for the payment is set apart for payment) for all past dividend periods, no dividends (other
than in shares of common stock or other shares of capital stock ranking junior to the Series A Preferred Stock as to dividends and upon
liquidation) may be declared and paid or declared and set apart for payment nor may any other distribution be declared and made upon our
common stock, or any of our other capital stock ranking junior to or equal with the Series A Preferred Stock as to dividends or upon liquidation,
nor may we redeem, purchase or otherwise acquire for any consideration (or pay or make any monies available for a sinking fund for the
redemption of any such shares) any shares of common stock, or any other shares of our capital stock ranking junior to or equal with the
Series A Preferred Stock as to dividends or upon liquidation.
Holders of shares of the Series
A Preferred Stock are not entitled to any distribution, whether payable in cash, property or shares of capital stock, in excess of full
cumulative dividends on the Series A Preferred Stock as described above. Any dividend payment made on the Series A Preferred Stock is
first credited against the earliest accumulated but unpaid dividends on the Series A Preferred Stock.
42
Redemption
No Mandatory Redemption
.
The Series A Preferred Stock is perpetual preferred stock, and we are not required to provide for the mandatory redemption of the Series
A Preferred Stock at any time, other than upon a Change of Control Triggering Event as described below.
Optional Redemption
.
The Series A Preferred Stock is not redeemable prior to September 10, 2024. On and after September 10, 2024, at our sole option upon not
less than 30 nor more than 60 days' written notice, we may redeem shares of the Series A Preferred Stock, in whole or in part, at
any time or from time to time, for cash at a redemption price of $10.00 per share, plus an amount equal to all accumulated and unpaid
dividends thereon to, but excluding, the date fixed for redemption, without interest. Holders of Series A Preferred Stock to be redeemed
must then surrender such Series A Preferred Stock at the place designated in the notice. Upon surrender of the Series A Preferred Stock,
the holders are entitled to the redemption price thereon to, but excluding the date fixed for redemption, without interest. If notice
of redemption of any shares of Series A Preferred Stock has been given and if we have deposited the funds necessary for such redemption
with the paying agent for the benefit of the holders of any of the shares of Series A Preferred Stock to be redeemed, then from and after
the date of such deposit dividends will cease to accumulate on those shares of Series A Preferred Stock, those shares of Series A Preferred
Stock will no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the
redemption price. If less than all of the outstanding Series A Preferred Stock is to be redeemed, the Series A Preferred Stock to be redeemed
will be selected ratably by lot or by any other fair and equitable method that our board of directors may choose.
Unless full cumulative dividends
for all applicable past dividend periods on all shares of Series A Preferred Stock and any shares of stock that rank on parity with regard
to dividends and upon liquidation have been or contemporaneously are declared and paid (or declared and a sum sufficient for payment set
apart for payment for all past dividend periods), no shares of Series A Preferred Stock may be redeemed. In such event, we also may not
purchase or otherwise acquire directly or indirectly any shares of Series A Preferred Stock (except by exchange for our capital stock
ranking junior to the Series A Preferred Stock as to dividends and upon liquidation). However, the foregoing will not prevent us from
purchasing shares pursuant to our Restated Certificate of Incorporation or from acquiring shares of Series A Preferred Stock pursuant
to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series A Preferred Stock and any shares
of stock that rank on parity with regard to dividends and upon liquidation. So long as no dividends are in arrears, we are entitled at
any time and from time to time to repurchase shares of Series A Preferred Stock in open-market transactions duly authorized by our board
of directors and effected in compliance with applicable laws.
We will deliver a notice of
redemption, by overnight delivery, by first class mail, postage prepaid or electronically to holders thereof, or request our agent, on
behalf of our company, to promptly do so by overnight delivery, by first class mail, postage prepaid or electronically. The notice must
be provided not less than 30 nor more than 60 days prior to the date fixed for redemption in such notice. Each such notice must state:
(A) the date for redemption; (B) the number of Series A Preferred Stock to be redeemed; (C) the CUSIP number for the Series A Preferred
Stock; (D) the applicable redemption price on a per share basis; (E) if applicable, the place or places where the certificate(s) for such
shares are to be surrendered for payment of the price for redemption; (F) that dividends on the Series A Preferred Stock to be redeemed
will cease to accumulate from and after such date of redemption; and (G) the applicable provisions of our charter under which such redemption
is to be made. If fewer than all shares held by any holder are to be redeemed, the notice delivered to such holder must also specify the
number of Series A Preferred Stock to be redeemed from such holder or the method of determining such number. We may provide in any such
notice that such redemption is subject to one or more conditions precedent and that we are not required to effect such redemption unless
each such condition has been satisfied at the time or times and in the manner specified in such notice. No defect in the notice or delivery
thereof shall affect the validity of redemption proceedings, except as required by applicable law.
If a redemption date falls
after a record date and prior to the corresponding dividend payment date, however, each holder of Series A Preferred Stock at the close
of business on that record date is entitled to the dividend payable on such shares on the corresponding dividend payment date notwithstanding
the redemption of such shares before the dividend payment date.
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Change of Control
If a Change of Control Triggering
Event occurs with respect to the Series A Preferred Stock, unless we have exercised our option to redeem such Series A Preferred Stock
as described above, holders of our preferred stock have the right to require us to redeem (a "Change of Control Redemption")
the Series A Preferred Stock at a price equal to the liquidation preference of $10.00 per share, plus an amount equal to any accumulated
and unpaid dividends up to but excluding the date of payment, but without interest (a "Change of Control Payment"). Within
30 days following any Change of Control Triggering Event or, at our option, prior to any Change of Control Triggering Event, but after
public announcement of the transaction that constitutes or may constitute the Change of Control Triggering Event, we must mail a notice
to holders of Series A Preferred Stock, describing the transaction that constitutes or may constitute the Change of Control Triggering
Event and offer to redeem such Series A Preferred Stock on the date specified in the applicable notice, which date may be no earlier than
30 days and no later than 60 days from the date such notice is mailed (a "Change of Control Payment Date"). The notice must,
if mailed prior to the date of consummation of the Change of Control Triggering Event, state that the Change of Control Redemption is
conditioned on the Change of Control Triggering Event occurring on or prior to the applicable Change of Control Payment Date.
On each Change of Control
Payment Date, we are required to (to the extent lawful):
·
redeem all Series A Preferred Stock or portions of Series A Preferred Stock properly tendered pursuant
to the applicable Change of Control Redemption;
·
deposit with the paying agent an amount equal to the Change of Control Payment in respect of all our preferred
stock properly tendered; and
·
deliver or cause to be delivered to the paying agent the Series A Preferred Stock properly accepted together
with an officers' certificate stating the Series A Preferred Stock being redeemed.
We are not required to make
a Change of Control Redemption upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the
manner, at the times and otherwise in compliance with the requirements for an offer made by us and the third party redeems all Series
A Preferred Stock properly tendered and not withdrawn under its offer.
We will comply with the requirements
of Rule 14e-1 under the Exchange Act, and any other securities laws and regulations thereunder to the extent those laws and regulations
are applicable in connection with the redemption of the Series A Preferred Stock as a result of a Change of Control Triggering Event.
To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Redemption provisions
of the Series A Preferred Stock, we must comply with those securities laws and regulations and would not be deemed to have breached our
obligations under the Change of Control Redemption provisions of the Series A Preferred Stock by virtue of any such conflict.
For purposes of the foregoing
discussion of the redemption of the Series A Preferred Stock at the option of the holders, the following definitions are applicable.
"Change of Control Triggering
Event" means the occurrence of any of the following: (1) the direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or more series of related transactions, of all or substantially all of our assets
and the assets of our subsidiaries, taken as a whole, to any Person, other than us or one of our subsidiaries; (2) the consummation of
any transaction (including, without limitation, any merger or consolidation) the result of which is that any Person becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of our outstanding Voting
Stock or other Voting Stock into which our Voting Stock is reclassified, consolidated, exchanged or changed, measured by voting power
rather than number of shares; (3) we consolidate with, or merge with or into, any Person, or any Person consolidates with, or merges with
or into, us,
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in any such
event pursuant to a transaction in which any of our outstanding Voting Stock or the Voting Stock of such other Person is converted into
or exchanged for cash, securities or other property, other than any such transaction where the shares of our Voting Stock outstanding
immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving
Person or any direct or indirect parent company of the surviving Person immediately after giving effect to such transaction; (4) the
first day on which a majority of the members of our board of directors are not Continuing Directors; or (5) the adoption of a plan relating
to our liquidation or dissolution. Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control Triggering
Event under clause (2) above if (i) we become a direct or indirect wholly-owned subsidiary of a holding company and (ii)(A) the direct
or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as
the holders of our Voting Stock immediately prior to that transaction or (B) immediately following that transaction no Person (other
than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly, of more than 50%
of the Voting Stock of such holding company.
"Continuing Directors"
means, as of any date of determination, any member of our board of directors who (A) was a member of such board of directors on the date
the Series A Preferred Stock was issued or (B) was nominated for election, elected or appointed to such board of directors with the approval
of a majority of the continuing directors who were members of such board of directors at the time of such nomination, election or appointment
(either by a specific vote or by approval of a proxy statement in which such member was named as a nominee for election as a director,
without objection to such nomination).
"Voting Stock"
means, with respect to any specified Person that is a corporation as of any date, the Capital Stock of such Person that is at the time
entitled to vote generally in the election of the board of directors of such Person.
Liquidation Preference
In the event of our voluntary
or involuntary liquidation, dissolution or winding up, the holders of shares of Series A Preferred Stock are entitled to be paid, out
of our assets legally available for distribution to our stockholders, a liquidation preference of $10.00 per share, plus an amount equal
to any accumulated and unpaid dividends to, but excluding, the date of payment, but without interest, before any distribution of assets
is made to holders of our common stock or any other class or series of our capital stock that ranks junior to the Series A Preferred Stock
as to liquidation rights. If our assets legally available for distribution to stockholders are insufficient to pay in full the liquidation
preference on the Series A Preferred Stock and the liquidation preference on any shares of preferred stock equal in rank with the Series
A Preferred Stock, all assets distributed to the holders of the Series A Preferred Stock and any other series of preferred stock equal
in rank with the Series A Preferred Stock will be distributed ratably so that the amount of assets distributed per share of Series A Preferred
Stock and such other series of preferred stock equal in rank with the Series A Preferred Stock will in all cases bear to each other the
same ratio that the liquidation preference per share on the Series A Preferred Stock and on such other series of preferred stock bear
to each other. Written notice of any such liquidation, dissolution or winding up of our company, stating the payment date or dates when,
and the place or places where, the amounts distributable in such circumstances are payable, will be given by first class mail, postage
pre-paid, not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of the Series A Preferred
Stock at the respective addresses of such holders as the same appear on our stock transfer records. After payment of the full amount of
the liquidation preference, plus any accumulated and unpaid dividends to which they are entitled, the holders of Series A Preferred Stock
have no right or claim to any of our remaining assets. If we convert into or consolidate or merge with or into any other corporation,
trust or entity, effect a statutory share exchange or sell, lease, transfer or convey all or substantially all of our property or business,
we will not be deemed to have liquidated, dissolved or wound up.
Ranking
The Series A Preferred Stock
ranks, with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding
up:
·
senior to all classes or series of our common stock and to all other equity securities issued by us other
than equity securities referred to in the next two bullet points below;
45
·
on parity with all equity securities issued by us with terms specifically providing that those equity
securities rank on a parity with the Series A Preferred Stock with respect to rights to the payment of dividends and the distribution
of assets upon our liquidation, dissolution or winding up;
·
junior to all equity securities issued by us with terms specifically providing for ranking senior to the
Series A Preferred Stock with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution
or winding up (see "Voting Rights" below); and
·
effectively junior to all of our existing and future indebtedness (including indebtedness convertible
to our common stock or preferred stock) and to any indebtedness and other liabilities of (as well as any preferred equity interests held
by others in) our existing subsidiaries.
Voting Rights
Holders of the Series A Preferred
Stock do not have any voting rights, except as described below or otherwise required by law.
Whenever dividends on any
shares of Series A Preferred Stock are in arrears for six or more consecutive quarters, then the holders of those shares together with
the holders of all other series of preferred stock equal in rank with the Series A Preferred Stock upon which like voting rights have
been conferred and are exercisable, are entitled to vote separately as a class for the election of a total of two additional directors
to our board of directors.
The election of these directors
will take place at a special meeting called upon the written request of the holders of record of at least 20% of the Series A Preferred
Stock and the holders of record of at least 20% of any class or series of preferred stock equal in rank with the Series A Preferred Stock
which like voting rights have been conferred and are exercisable (unless such request is received less than 90 days before the date fixed
for the next annual or special meeting of our stockholders in which case, such vote will be held at the earlier of the next annual or
special meeting of our stockholders) or at the next annual meeting of our stockholders, and at each subsequent annual or special meeting
until all dividends accumulated from past dividend periods and the then current dividend period have been paid (or declared and a sum
sufficient for payment set apart). A quorum for any such meeting will exist if at least a majority of the total outstanding shares of
Series A Preferred Stock and shares of preferred stock equal in rank with the Series A Preferred Stock entitled to like voting rights
are represented in person or by proxy at that meeting. The directors elected as described above will be elected upon the affirmative vote
of a plurality of the votes cast by the holders of shares of Series A Preferred Stock and preferred stock equal in rank with the Series
A Preferred Stock voting separately as a single class, present and voting in person or by proxy at a duly called and held meeting at which
a quorum is present. If and when all accumulated dividends and the dividend for the then current dividend period on the Series A Preferred
Stock have been paid in full or declared or set apart for payment in full, the holders of the Series A Preferred Stock will be divested
of the right to elect directors and, if all dividend arrearages have been paid in full or declared and set apart for payment in full on
all series of preferred stock entitled to like voting rights, the term of office of each director so elected will terminate. Any director
so elected may be removed at any time with or without cause by, and will not be removed otherwise than by the vote of, the holders of
record of a majority of the outstanding shares of the Series A Preferred Stock having the voting rights described above, voting separately
as a single class with all classes or series of preferred stock entitled to like voting rights. So long as a dividend arrearage continues,
any vacancy in the office of a director elected as described above may be filled by written consent of the director elected as described
above who remains in office, or if none remains in office, by a vote of the holders of record of a majority of the outstanding shares
of Series A Preferred Stock when they have the voting rights described above, voting separately as a single class with all classes or
series of preferred stock entitled to like voting rights. These directors will each be entitled to one vote per director on any matter.
If a special meeting is not
called by us within 30 days after request from the holders of Series A Preferred Stock, then the holders of record of at least 20% of
the outstanding our preferred stock may designate a holder to call the meeting at the expense of our company and such meeting may be called
by the holder so designated upon notice similar to that required for annual meetings of stockholders and will be held at the place designated
by the holder calling such meeting. We must pay all costs and expenses of calling and holding any meeting and of electing directors as
described above, including, without limitation, the cost of preparing, reproducing and mailing the notice of such meeting, the cost of
renting a room for such meeting to be held, and the cost of collecting and tabulating votes.
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So long as any shares of Series
A Preferred Stock remain outstanding, we may not, without the affirmative vote or consent of the holders of at least a majority of the
shares of the Series A Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting
separately as a class), amend, alter or repeal the provisions of our charter, including the articles supplementary designating the Series
A Preferred Stock, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege
or voting power of the Series A Preferred Stock. However, with respect to the occurrence of any event listed above, so long as the Series
A Preferred Stock remains outstanding (or shares issued by a surviving entity in substitution for the Series A Preferred Stock) with its
terms materially unchanged, taking into account that upon the occurrence of such an event, we may not be the surviving entity, the occurrence
of any such event will not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders
of the Series A Preferred Stock. In addition (i) any increase in the number of authorized shares of Series A Preferred Stock, (ii) any
increase in the number of authorized preferred stock or the creation or issuance of any other class or series of preferred stock, or (iii)
any increase in the number of authorized shares of such class or series, in each case ranking equal with or junior to the Series A Preferred
Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, will not be deemed
to materially and adversely affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions
do not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required to be effected, all
outstanding shares of Series A Preferred Stock will have been redeemed or called for redemption upon proper notice and sufficient funds
shall have been deposited in trust to effect such redemption.
Conversion
The Series A Preferred Stock
is not convertible into or exchangeable for any of our other property or securities.
Information Rights
During any period in which
we are not subject to Section 13 or 15(d) of the Exchange Act and any shares of our preferred stock are outstanding, we agreed to use
our best efforts to (i) make available on our corporate investor webpage, copies of the Annual Reports on Form 10-K and Quarterly Reports
on Form 10-Q that we would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were subject
thereto (other than any exhibits that would have been required) and (ii) promptly, upon request, supply copies of such reports to any
holders of Series A Preferred Stock. We agreed to use our best effort to provide the information to the holders of the Series A Preferred
Stock within 15 days after the respective dates by which a periodic report on Form 10-K or Form 10-Q, as the case may be, in respect of
such information would have been required to be filed with the SEC, if we were subject to Section 13 or 15(d) of the Exchange Act, in
each case, based on the dates on which we would be required to file such periodic reports if we were a "non-accelerated filer"
within the meaning of the Exchange Act.
No Preemptive Rights
Holders of our Series A Preferred
Stock do not have any preemptive rights to purchase or subscribe for our common stock or any other security.
Listing
The Series A Preferred Stock
is listed for trading on The Nasdaq Global Market under the symbol "STRRP."
47
Transfer Agent and Dividend Paying Agent
American Stock Transfer &
Trust Company acts as the transfer agent and dividend payment agent for the Series A Preferred Stock.
Series
C Participating Preferred Stock
On June 2, 2021, in connection with entering into the Rights Agreement described under "Prospectus
Summary - Our Company; Recent Developments," we filed with the Delaware Secretary of State a Certificate of Designation of Series
C Participating Preferred Stock (the "Series C Preferred Stock") to create our Series C Preferred Stock. If the rights issuable
under the Rights Agreement become exercisable, each right would allow its holder to purchase from us one one-thousandth of a share of
our Series C Preferred Stock for a purchase price of $12.00. Each fractional share of Series C Preferred Stock would give the stockholder
approximately the same dividend, voting and liquidation rights as does one share of our common stock. The shares of Series C Preferred
Stock rank, with respect to the payment of dividends and the distribution of assets, junior to all other series of our preferred stock
and rank senior to our common stock as to such matters. Prior to exercise, however, a right does not give its holder any dividend, voting
or liquidation rights. The rights will not be exercisable until the earlier of ten days after a public announcement by us that a person
or group has become an acquiring person and ten business days (or a later date determined by our board) after a person or group begins
a tender or an exchange offer that, if completed, would result in that person or group becoming an acquiring person. No shares of Series
C Preferred Stock have been issued or are outstanding.
Pre-Funded Warrants
The following description
of our pre-funded warrants we are offering is a summary and is qualified in its entirety by reference to the provisions of the pre-funded
warrant, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part.
Duration and Exercise Price
Each pre-funded warrant offered
hereby will have an initial exercise price equal to $0.01 per share. The pre-funded warrants will be immediately exercisable and may be
exercised at any time until the pre-funded warrants are exercised in full. The exercise price and number of shares of common stock issuable
upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting
our shares of common stock and the exercise price. The pre-funded warrants will be issued in certificate form.
Exercisability
The pre-funded warrants will
be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly-executed exercise notice accompanied by
payment in full for the number of shares of common stock purchased upon such exercise (except in the case of a cashless exercise as discussed
below). Purchasers of the pre-funded warrants in this offering may elect to deliver their exercise notice following the pricing of the
offering and prior to the issuance of the pre-funded warrants at closing to have their pre-funded warrants exercised immediately upon
issuance and receive shares of common stock underlying the pre-funded warrants upon closing of this offering. A holder (together with
its affiliates) may not exercise any portion of the pre-funded warrant to the extent that the holder would own more than 4.99% of the
outstanding shares of common stock immediately after exercise. However, any exercise of the pre-funded warrants which would result in
a holder beneficially owning more than 4.99% of the outstanding shares of our common stock will be subject to our consent, provided that
any beneficial ownership in excess of the 4.99% threshold will not take effect until 61 days following notice to, and approval by, us.
We may, in our sole discretion, waive the 4.99% ownership limitation in connection with this offering with respect to one or more potential
purchasers. No fractional shares of common stock will be issued in connection with the exercise of a pre-funded warrant. In lieu of fractional
shares, we will round up to the nearest whole share.
Cashless Exercise
If at the time of exercise
there is no effective registration statement registering the shares of common stock underlying the pre-funded warrants, or the prospectus
contained therein is not available for the issuance of such shares then the holders of the pre-funded warrants may exercise the pre-funded
warrants, in whole or in part, by means of a "cashless exercise" in lieu of making the cash payment otherwise contemplated
to be made to us upon such exercise and receive the net number of the shares of common stock determined according to a formula set forth
in the pre-funded warrants.
Transferability
Subject to applicable laws,
a pre-funded warrant may be transferred at the option of the holder upon surrender of the pre-funded warrant to us together with the appropriate
instruments of transfer.
No Trading Market
There is no trading market
available for the pre-funded warrants on any securities exchange or nationally recognized trading system. We do not intend to list the
pre-funded warrants on any securities exchange or nationally recognized trading system.
48
Rights as a Stockholder
Except as otherwise provided
in the pre-funded warrants or by virtue of such holder's ownership of our shares of common stock, the holders of the pre-funded
warrants do not have the rights or privileges of holders of our shares of common stock, including any voting rights, until they exercise
their pre-funded warrants. However, during such time as the warrant is outstanding, if we declare or make any dividend or other distribution of our assets (or rights
to acquire our assets) to all or substantially all of holders of shares of our common stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction), at any time after the issuance of the
warrant, then, in each such case, the holder will be entitled to participate in such distribution to the same extent that the holder would
have participated if the holder had held the number of shares of common stock acquirable upon complete exercise of the warrant (without
regard to any limitations on exercise hereof, including without limitation, the beneficial ownership limitation) immediately before the
date of which a record is taken for such distribution.
Fundamental Transaction
In the event of a fundamental
transaction, as described in the pre-funded warrants and generally including any reorganization, recapitalization or reclassification
of our shares of common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation
or merger with or into another person, the acquisition of more than 50% of the outstanding shares of our common stock, or any person or
group becoming the beneficial owner of 50% of the voting power represented by the outstanding shares of our common stock, then the successor
entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise and will assume all of
our obligations under the pre-funded warrants with the same effect as if such successor entity had been named in the pre-funded warrant
itself. If holders of our common stock are given a choice as to the securities, cash or property to be received in a fundamental transaction,
then the holder shall be given the same choice as to the consideration it receives upon any exercise of the pre-funded warrant following
such fundamental transaction.
Offering Warrants
The following summary of certain
terms and provisions of the warrants offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions
of the warrant agent agreement between us and American Stock Transfer & Trust Company, as warrant agent, and the form of warrant,
both of which are filed as exhibits to the registration statement of which this prospectus is a part. Prospective investors should carefully
review the terms and provisions set forth in the warrant agent agreement, including the annexes thereto, and form of warrant.
Form
Pursuant to a warrant agent
agreement between us and American Stock Transfer & Trust Company, as warrant agent, the warrants will be issued in book-entry form
and will initially be represented only by one or more global warrants deposited with the warrant agent, as custodian on behalf of The
Depository Trust Company, or DTC, and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.
Exercisability
The warrants are exercisable
at any time after their original issuance, expected to be [•], 2022, and at any time up to the date that is five years after their
original issuance. The warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed
exercise notice and, at any time a registration statement registering the issuance of the shares of common stock underlying the warrants
under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the Securities
Act is available for the issuance of such shares, by payment in full in immediately available funds for the number of shares of common
stock purchased upon such exercise. No fractional shares of common stock will be issued in connection with the exercise of a warrant.
In lieu of fractional shares, we will round up to the nearest whole share.
Exercise Limitation
A holder will not have the
right to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of
the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is
determined in accordance with the terms of the warrants. However, any exercise of the warrants which would result in a holder beneficially
owning more than 4.99% of the outstanding shares of our common stock will be subject to our consent, provided that any beneficial ownership
in excess of the 4.99% threshold will not take effect until 61 days following notice to, and approval by, us. We may, in our sole discretion,
waive the 4.99% ownership limitation in connection with this offering with respect to one or more potential purchasers.
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Exercise Price
The warrants will have an
exercise price of $[•] per share, which will be at least 100%, and up to 125%, of the public offering price per share of our common
stock in this offering. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting our common stock and also upon any distributions of assets,
including cash, stock or other property to our stockholders.
Cashless Exercise
If at the time of exercise
there is no effective registration statement registering the shares of common stock underlying the warrants, or the prospectus contained
therein is not available for the issuance of such shares then the holders of the warrants may exercise the warrants, in whole or in part,
by means of a "cashless exercise" in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise
and receive the net number of the shares of common stock determined according to a formula set forth in the warrants.
Transferability
Subject to applicable laws,
the warrants may be offered for sale, sold, transferred or assigned without our consent.
No Trading Market
There is no established trading
market for the warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the warrants
on any national securities exchange or other trading market. Without an active trading market, the liquidity of the warrants will be limited.
Fundamental Transactions
If a fundamental transaction
occurs, then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that we may exercise
and will assume all of our obligations under the warrants with the same effect as if such successor entity had been named in the warrant
itself. If holders of our common stock are given a choice as to the securities, cash or property to be received in a fundamental transaction,
then the holder will be given the same choice as to the consideration it receives upon any exercise of the warrant following such fundamental
transaction.
Rights as a Stockholder
Except as otherwise provided
in the warrants or by virtue of such holder's ownership of shares of our common stock, the holder of a warrant does not have the
rights or privileges of a holder of our common stock, including any voting rights, until the holder exercises the warrant. However, during such time as the warrant is outstanding, if we declare or make any dividend or other distribution of our assets (or rights
to acquire our assets) to all or substantially all of holders of shares of our common stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction), at any time after the issuance of the
warrant, then, in each such case, the holder will be entitled to participate in such distribution to the same extent that the holder would
have participated if the holder had held the number of shares of common stock acquirable upon complete exercise of the warrant (without
regard to any limitations on exercise hereof, including without limitation, the beneficial ownership limitation) immediately before the
date of which a record is taken for such distribution.
Warrant Agent
The warrant agent for our
warrants is American Stock Transfer & Trust Company. Its address is 6201 15th Avenue, Brooklyn, New York 11219, and its telephone
number is (718) 921-8200.
May 2020
Common Stock Purchase Warrants
As part of our
registered underwritten public offering of common stock in May 2020, we issued warrants to purchase up to 1,112,500 shares of our
common stock pursuant to a warrant agent agreement between us and American Stock Transfer & Trust Company, as warrant agent. The
warrants are exercisable at any time up to May 28, 2025, which is five years after their original issuance. The warrants have an
exercise price of $2.25 per share (subject to appropriate adjustment in the event of certain stock dividends and distributions,
stock splits, stock combinations, reclassifications or similar events affecting our common stock). A holder will not have the right
to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the
number of shares of our common stock outstanding immediately after giving effect to the exercise. However, any exercise of the
warrants which would result in a holder beneficially owning more than 4.99% of our outstanding shares of common stock will be
subject to our consent, provided that any beneficial ownership in excess of the 4.99% threshold will not take effect until 61 days
following notice to, and approval by, us. If at the time of exercise there is no effective registration statement registering the
shares of common stock underlying the warrants, or the prospectus contained therein is not available for the issuance of such
shares, then the holders of the warrants may exercise the warrants by means of a "cashless exercise" in lieu of making
the cash payment otherwise contemplated to be made to us upon such exercise and receive the net number of the shares of common stock
determined according to a formula set forth in the warrants. Except as otherwise provided in the warrants or by virtue of such
holder's ownership of shares of our common stock, the holder of a warrant does not have the rights or privileges of a holder of our
common stock, including any voting rights, until the holder exercises the warrant; however, during such time as the warrant is outstanding, if we declare or make any cash or stock dividend or other distribution of our
assets to all or substantially all of our common shareholders, a warrant holder will be entitled to participate in such distribution to
the same extent that the holder would have participated if the holder had held the number of shares of our common stock acquirable upon
complete exercise of the warrant. There is no established trading market for these
warrants. There are 702,270 shares of our common stock currently issuable upon the exercise of the warrants (including the
underwriter's warrants having substantially similar terms) issued in connection with our May 2020 public offering.
50
Certain Anti-Takeover Provisions of Our Restated Certificate of
Incorporation and Bylaws
Delaware Takeover Statute
We are subject to Section
203 of the Delaware General Corporation Law. This statute regulating corporate takeovers prohibits a Delaware corporation from engaging
in any business combination with any interested stockholder for three years following the date that the stockholder became an interested
stockholder, unless:
·
prior to the date of the transaction, the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an interested stockholder;
·
the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who
are directors and also officers and (b) shares owned by employee stock plans in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
·
on or subsequent to the date of the transaction, the business combination is approved by the board and
authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds
of the outstanding voting stock which is not owned by the interested stockholder.
Section 203 defines
a business combination to include:
·
any merger or consolidation involving the corporation and the interested stockholder;
·
any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of
the assets of the corporation;
·
subject to exceptions, any transaction that results in the issuance or transfer by the corporation of
any stock of the corporation to the interested stockholder; or
·
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or
other financial benefits provided by or through the corporation.
In general, Section 203 defines
an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and
any entity or person affiliated with or controlling or controlled by the entity or person.
Restated Certificate of Incorporation and Bylaw
Provisions
Provisions of our Restated
Certificate of Incorporation and Bylaws may have the effect of making it more difficult for a third party to acquire, or discourage a
third party from attempting to acquire, control of us by means of a tender offer, a proxy contest or otherwise. These provisions may also
make the removal of incumbent officers and directors more difficult. These provisions are intended to discourage certain types of coercive
takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us.
These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock. These
provisions may make it more difficult for our stockholders to take specific corporate actions and could have the effect of delaying or
preventing a change in control of us. The amendment of any of these anti-takeover provisions would require approval by holders of at least
two-thirds of our outstanding common stock entitled to vote.
In particular, our Restated
Certificate of Incorporation and Bylaws provide for the following:
51
No Written Consent of Stockholders
Any action to be taken by
our stockholders must be taken and given effect at a duly called annual or special meeting and may not be taken or given effect by written
consent.
Special Meetings of Stockholders
Special meetings of our stockholders
may be called only by the president, chief executive officer, chairman of our board of directors, a majority of the members of our board
of directors or our stockholders holding not less than 20% of the total number of votes to be cast at such a meeting.
Advance Notice Requirement
Stockholder proposals to be
brought before an annual meeting of our stockholders must comply with advance notice procedures. These advance notice procedures require
timely notice and apply in several situations, including stockholder proposals relating to the nominations of persons for election to
the board of directors. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days or more
than 120 days prior to the first anniversary date of the annual meeting for the preceding year.
Amendment of Restated Certificate of Incorporation
and Bylaws
The approval of not less than
two-thirds of the outstanding shares of our capital stock entitled to vote is required to amend the provisions of our Bylaws by stockholder
action, or to amend the provisions of our Restated Certificate of Incorporation that are described in this section or certain other terms
as specified in our Bylaws. These provisions will make it more difficult to circumvent the anti-takeover provisions of our Restated Certificate
of Incorporation and our Bylaws.
Issuance of Undesignated Preferred Stock
Our board of directors is
authorized to issue, without further action by the stockholders, up to a further 1,500,000 shares of undesignated preferred stock with
rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but
unissued shares of preferred stock enables our board of directors to render more difficult or to discourage an attempt to obtain control
of us by means of a merger, tender offer, proxy contest or otherwise.
Protective Amendment
Our Restated Certificate of
Incorporation contains a protective provision (the "Protective Amendment") to protect our significant net operating losses
("NOLs"). The Protective Amendment was approved by our stockholders at our 2021 Annual Meeting of Stockholders held on October
21, 2021. The Protective Amendment is designed to assist us in protecting the long-term value of our accumulated NOLs by limiting certain
transfers of our common stock. The Protective Amendment's transfer provisions generally restrict any direct or indirect transfers
of the common stock if the effect would be to increase the direct or indirect ownership of the common stock by any person from less than
4.99% to 4.99% or more of the outstanding number of shares of our common stock, or increase the percentage of the common stock owned directly
or indirectly by a person owning or deemed to own 4.99% or more of the outstanding number of shares of our common stock. Any direct or
indirect transfer attempted in violation of the Protective Amendment will be void as of the date of the prohibited transfer as to the
purported transferee. The Protective Amendment also requires any person attempting to become a holder of 4.99% or more of the outstanding
number of shares of our common stock to seek the approval of our board of directors. This may have an unintended "anti-takeover"
effect because our board of directors may be able to prevent any future takeover. Similarly, any limits on the number of shares of our
common stock that a stockholder may own could have the effect of making it more difficult for our stockholders to replace our management.
Because the Protective Amendment may have the effect of restricting a stockholder's ability to dispose of or acquire our common
stock, the liquidity and market value of our common stock might suffer.
52
Repurchases
Under a stock repurchase program
approved by our board of directors, we may purchase shares of our common stock through various means, including open market transactions
in compliance with Rule 10b-18 under the Exchange Act, privately negotiated transactions, tender offers or any combination thereof. The
number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, stock price,
trading volume and general market conditions, along with our working capital requirements, general business conditions and other factors.
The stock repurchase program has no time limit and may be modified, suspended or terminated at any time by our board of directors. Repurchases
under the stock repurchase program will be funded from our existing cash and cash equivalents or future cash flow and equity or debt financings.
As of the date of this prospectus, we have not repurchased any shares of our common stock under the repurchase program approved in 2018.
53
MATERIAL U.S. FEDERAL INCOME
TAX CONSEQUENCES TO HOLDERS OF COMMON STOCK, PRE-FUNDED WARRANTS AND WARRANTS
The following is a summary
of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of our common stock and pre-funded
warrants, and the acquisition, ownership, exercise, expiration or disposition of the warrants (together with our common stock and pre-funded
warrants, the "Securities"). This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury Regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof.
These authorities may be changed or subject to differing interpretations, possibly with retroactive effect, so as to result in U.S. federal
income tax consequences different from those set forth below. We have not sought and will not seek any ruling from the Internal Revenue
Service (the "IRS"), with respect to the statements made and the conclusions reached in the following summary, and there can
be no assurance that the IRS or a court will agree with such statements and conclusions.
This summary does not purport
to be a complete analysis of all the potential tax considerations relating to the Securities. In addition, this summary does not address
the tax considerations arising under the laws of any U.S. state or local or any non-U.S. jurisdiction, estate or gift tax, the 3.8% Medicare
tax on net investment income or any alternative minimum tax consequences. In addition, this discussion does not address tax considerations
applicable to a holder's particular circumstances or to a holder that may be subject to special tax rules, including, without limitation:
·
banks, insurance companies or other financial institutions;
·
tax-exempt entities, tax-exempt or government organizations;
·
brokers or dealers in securities or currencies;
·
traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;
·
persons that own, or are deemed to own, more than 5% of our capital stock;
·
certain U.S. expatriates, citizens or former long-term residents of the United States;
·
U.S. Holders (as defined below) of any Security whose "functional currency" is not the U.S.
dollar;
·
persons who hold any Security as a position in a hedging transaction, "straddle," "conversion
transaction," synthetic security, other integrated investment or other risk reduction transaction;
·
persons who do not hold any Security as a capital asset within the meaning of Section 1221 of the Code
(generally, for investment purposes);
·
persons deemed to sell any Security under the constructive sale provisions of the Code;
·
pension plans;
·
foreign or domestic partnerships, or other entities or arrangements treated as partnerships for U.S. federal
income tax purposes, or investors in any such entities;
·
real estate investment trusts or regulated investment companies;
·
personal holding companies or grantor trusts;
·
persons for whom our stock constitutes "qualified small business stock" within the meaning
of Section 1202 of the Code;
·
integral parts or controlled entities of foreign sovereigns;
·
controlled foreign corporations;
·
passive foreign investment companies and corporations that accumulate earnings to avoid U.S. federal income
tax; and
·
persons that acquire any Security as compensation for services.
54
In addition, if a partnership,
including any entity or arrangement classified as a partnership for U.S. federal income tax purposes, holds any Security, the tax treatment
of a partner generally will depend on the status of the partner, the activities of the partnership and certain determinations made at
the partner level. Accordingly, partnerships that hold any Security, and partners in such partnerships, should consult their tax advisors
regarding the U.S. federal income tax consequences to them of the acquisition, ownership, exercise, expiration and disposition of any
Security, as the case may be.
You are urged to consult your
tax advisor with respect to the application of the U.S. federal income tax laws to your particular situation, as well as any tax consequences
of the acquisition, ownership, exercise, expiration and disposition of any Security, as the case may be, arising under the U.S. federal
estate or gift tax rules or under the laws of any U.S. state or local or any non-U.S. or other taxing jurisdiction or under any applicable
tax treaty.
Definition of a U.S. Holder
As used herein, the term "U.S.
Holder" means a beneficial owner of any Security that is, for U.S. federal income tax purposes:
·
an individual who is a citizen or resident of the United States;
·
a corporation, or an entity treated as a corporation for U.S. federal income tax purposes, created or
organized in the United States or under the laws of the United States or of any state thereof or the District of Columbia;
·
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
·
a trust if (1) a U.S. court is able to exercise primary supervision over the trust's administration
and one or more U.S. persons have the authority to control all of the trust's substantial decisions or (2) the trust has a valid
election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.
Treatment of Pre-funded Warrants
Although it is not entirely
free from doubt, a pre-funded warrant should be treated as a share of our common stock for U.S. federal income tax purposes and a holder
of pre-funded warrants should generally be taxed in the same manner as a holder of our common stock, as described below. Accordingly,
no gain or loss should be recognized upon the exercise of a pre-funded warrant and, upon exercise, the holding period of a pre-funded
warrants should carry over to the share of common stock received. Similarly, the tax basis of the pre-funded warrant should carry over
to the share of common stock received upon exercise, increased by the exercise price of $0.01. Each holder should consult his, her or
its own tax advisor regarding the risks associated with the acquisition of pre-funded warrants pursuant to this offering (including potential
alternative characterizations). The balance of this discussion generally assumes that the characterization described above is respected
for U.S. federal income tax purposes and, any references to our common stock in the balance of this discussion, shall incorporate by reference
and include the pre-funded warrants.
Allocation of Purchase Price
For U.S. federal income tax
purposes, a purchase of our common stock together with a warrant should be treated as an investment unit. The purchase price for each
investment unit must be allocated between the Securities making up the investment unit, in proportion to their relative fair market values
at the time of purchase. This allocation of the purchase price for each investment unit will establish your initial tax basis in each
Security for U.S. federal income tax purposes. The separation of common stock and the warrant included in each investment unit should
not be a taxable event for U.S. federal income tax purposes. You should consult your own tax advisor regarding the allocation of the purchase
price for an investment unit.
55
Tax Consequences to U.S. Holders
Distributions on Common Stock
As discussed above under "Dividend
Policy," we do not currently expect to make distributions on our common stock. In the event that we do make distributions of cash
or other property, distributions paid on our common stock, other than certain pro rata distributions of common stock, will be treated
as a dividend to the extent paid out of our current or accumulated earnings and profits and will be includible in income by the U.S. Holder
and taxable as ordinary income when received. If a distribution exceeds our current and accumulated earnings and profits, the excess will
be first treated as a tax-free return of the U.S. Holder's investment, up to the U.S. Holder's tax basis in the common stock.
Any remaining excess will be treated as a capital gain. Subject to applicable limitations, dividends paid to certain non-corporate U.S.
Holders may be eligible for taxation as "qualified dividend income" and therefore may be taxable at rates applicable to long-term
capital gains. U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate on dividends in their
particular circumstances. Dividends received by a corporate U.S. Holder will be eligible for the dividends-received deduction if the U.S.
Holder meets certain holding period and other applicable requirements.
Constructive Dividends on Warrants
Under Section 305 of the Code,
an adjustment to the number of shares of common stock that will be issued on the exercise of the warrants, or an adjustment to the exercise
price of the warrants, may be treated as a constructive distribution to a U.S. Holder of the warrants if, and to the extent that, such
adjustment has the effect of increasing such U.S. Holder's proportionate interest in our "earnings and profits" or assets,
depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash or other
property to our stockholders). Adjustments to the number of shares of common stock that will be issued on the exercise of a warrant or
adjustments to the exercise price of a warrant made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing
dilution of the interest of the holders of the warrants should generally not result in a constructive distribution. Any constructive distributions
would generally be subject to the tax treatment described above under "–Distributions on Common Stock."
Sale or Other Disposition of Common Stock
For U.S. federal income tax
purposes, gain or loss realized on the sale or other disposition of common stock will be capital gain or loss, and will be long-term capital
gain or loss if the U.S. Holder held the common stock for more than one year. The amount of the gain or loss will equal the difference
between the U.S. Holder's tax basis in the common stock disposed of and the amount realized on the disposition. Long-term capital
gains recognized by non-corporate U.S. Holders will be subject to reduced tax rates. The deductibility of capital losses is subject to
limitations.
Sale or Other Disposition, Exercise or Expiration of Warrants
For U.S. federal income tax
purposes, gain or loss realized on the sale or other disposition of a warrant (other than by exercise) will be capital gain or loss and
will be long-term capital gain or loss if the U.S. Holder held the warrant for more than one year at the time of the sale or other disposition.
The amount of the gain or loss will equal the difference between the U.S. Holder's tax basis in the warrant disposed of and the
amount realized on the disposition.
In general, a U.S. Holder
will not be required to recognize income, gain or loss upon the exercise of a warrant by payment of the exercise price, except to the
extent of cash paid in lieu of a fractional share. A U.S. Holder's tax basis in a share of common stock received upon exercise will
be equal to the sum of (1) the U.S. Holder's tax basis in the warrant and (2) the exercise price of the warrant. A U.S. Holder's
holding period in the stock received upon exercise will commence on the day or the day after such U.S. Holder exercises the warrant. No
discussion is provided herein regarding the U.S. federal income tax treatment on the exercise of a warrant on a cashless basis, and U.S.
Holders are urged to consult their tax advisors as to the exercise of a warrant on a cashless basis.
56
If a warrant expires without
being exercised, a U.S. Holder will recognize a capital loss in an amount equal to such U.S. Holder's tax basis in the warrant.
This loss will be long-term capital loss if, at the time of the expiration, the U.S. Holder's holding period in the warrant is more
than one year. The deductibility of capital losses is subject to limitations.
Redemption of Common Stock
In the event that a U.S. Holder's
common stock is redeemed or if we purchase a U.S. Holder's common stock in an open market transaction, the treatment of the transaction
for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of the common stock under Section 302 of
the Code. If the redemption qualifies as a sale of common stock, the U.S. Holder will be treated as described under "–Sale
or Other Disposition of Common Stock" above. If the redemption does not qualify as a sale of common stock, the U.S. Holder will
be treated as receiving a corporate distribution with the tax consequences described above under "—–Distributions on
Common Stock." Whether a redemption qualifies for sale treatment will depend largely on the total number of shares of our stock
treated as held by the U.S. Holder relative to all of our shares outstanding both before and after the redemption. The redemption of common
stock generally will be treated as a sale of the common stock (rather than as a corporate distribution) if the redemption (1) is "substantially
disproportionate" with respect to the U.S. Holder, (2) results in a "complete termination" of the U.S. Holder's
interest in us or (3) is "not essentially equivalent to a dividend" with respect to the U.S. Holder. These tests are explained
more fully below.
In determining whether any
of the foregoing tests are satisfied, a U.S. Holder takes into account not only stock actually owned by the U.S. Holder, but also shares
of our stock that are constructively owned by it. A U.S. Holder may constructively own, in addition to stock owned directly, stock owned
by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as
well as any stock the U.S. Holder has a right to acquire by exercise of an option (i.e. pre-funded warrants and warrants). In order to
meet the substantially disproportionate test, the percentage of our outstanding voting stock actually and constructively owned by the
U.S. Holder immediately following the redemption of common stock must, among other requirements, be less than 80% of the percentage of
our outstanding voting stock actually and constructively owned by the U.S. Holder immediately before the redemption. There will be a complete
termination of a U.S. Holder's interest if either (1) all of the shares of our stock actually and constructively owned by the U.S.
Holder are redeemed or (2) all of the shares of our stock actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible
to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S.
Holder does not constructively own any other shares of our stock. The redemption of the common stock will not be essentially equivalent
to a dividend if the redemption results in a "meaningful reduction" of the U.S. Holder's proportionate interest in us.
Whether the redemption will result in a meaningful reduction in a U.S. Holder's proportionate interest in us will depend on the
particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate
interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute
such a "meaningful reduction." A U.S. Holder should consult with its own tax advisors as to the tax consequences of a redemption.
If none of the foregoing tests
is satisfied, then the redemption will be treated as a corporate distribution and the tax effects will be as described under "–Distributions
on Common Stock," above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed common
stock will be added to the U.S. Holder's adjusted tax basis in its remaining stock.
Tax Consequences to Non-U.S. Holders
The following is a general
discussion of the material U.S. federal income tax considerations applicable to "Non-U.S. Holders" (as defined herein) with
respect to their ownership and disposition of any Security issued pursuant to this offering. All prospective Non-U.S. Holders of any Security
should consult their tax advisors with respect to the U.S. federal, state, local and non-U.S. tax consequences of the acquisition, ownership,
exercise, expiration and disposition of any Security, as the case may be. In general, a Non-U.S. Holder means a beneficial owner of any
Security (other than a partnership or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) that is
not, for U.S. federal income tax purposes:
57
·
an individual who is a citizen or resident of the United States;
·
a corporation, or an entity treated as a corporation for U.S. federal income tax purposes, created or
organized in the United States or under the laws of the United States or of any state thereof or the District of Columbia;
·
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
·
a trust if (1) a U.S. court can exercise primary supervision over the trust's administration and
one or more U.S. persons have the authority to control all of the trust's substantial decisions or (2) the trust has a valid election
in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.
Distributions on Common Stock
As discussed above under "Dividend
Policy," we do not currently expect to make distributions on our common stock. In the event that we do make a distribution on our
common stock, those payments will constitute dividends for U.S. federal income tax purposes to the extent we have current or accumulated
earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed both our current
and our accumulated earnings and profits, they will constitute a return of capital and will first reduce a Non-U.S. Holder's basis
in our common stock, as applicable, but not below zero. Any excess will be treated as capital gain and will be treated as described below
under "–Sale or Other Disposition of Securities." Any such distributions would be subject to the discussions below regarding
back-up withholding and the Foreign Account Tax Compliance Act ("FATCA").
Subject to the discussion
below on effectively connected income, any dividend paid to a Non-U.S. Holder generally will be subject to U.S. withholding tax either
at a rate of 30% of the gross amount of the dividend or such lower rate as may be specified by an applicable income tax treaty. To receive
a reduced treaty rate, a Non-U.S. Holder must provide us or our agent with an IRS Form W-8BEN, IRS Form W-8 BEN-E or another appropriate
version of IRS Form W-8 (or a successor form), which must be updated periodically, and which, in each case, must certify qualification
for the reduced rate. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under any applicable
income tax treaty.
Dividends paid to a Non-U.S.
Holder that are effectively connected with the Non-U.S. Holder's conduct of a trade or business within the United States and that
are not eligible for relief from U.S. (net basis) income tax under an applicable income tax treaty generally are exempt from the (gross
basis) withholding tax described above. To obtain this exemption from withholding tax, the Non-U.S. Holder must provide the applicable
withholding agent with an IRS Form W-8ECI or successor form or other applicable IRS Form W-8 certifying that the dividends are effectively
connected with the Non-U.S. Holder's conduct of a trade or business within the United States. Such effectively connected dividends,
if not eligible for relief under an income tax treaty, would not be subject to a withholding tax, but would be taxed at the same graduated
rates applicable to U.S. persons, net of certain deductions and credits and if, in addition, the Non-U.S. Holder is a corporation, may
also be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty).
If you are eligible for a
reduced rate of withholding tax pursuant to an income tax treaty, you may be able to obtain a refund of any excess amounts withheld if
you timely file an appropriate claim for a refund with the IRS.
Constructive Dividends on Warrants
See the discussion of the
rules applicable to constructive distributions on a warrant under "–Tax Consequences to U.S. Holders –Constructive Dividends
on Warrants" above. Any constructive distributions would generally be subject to the tax treatment described above under "–Distributions
on Common Stock."
Exercise or Expiration of Warrants
In general, a Non-U.S. Holder
will not be required to recognize income, gain or loss upon the exercise of a warrant by payment of the exercise price, except possibly
to the extent of cash paid in lieu of a fractional share. However, no discussion is provided herein regarding the U.S. federal income
tax treatment on the exercise of a warrant on a cashless basis, and Non-U.S. Holders are urged to consult their tax advisors as to the
exercise of a warrant on a cashless basis.
58
If a warrant expires without
being exercised, a Non-U.S. Holder that is engaged in a U.S. trade or business to which any income from the warrant would be effectively
connected or who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which
the expiration occurs (and certain other conditions are met) will recognize a capital loss in an amount equal to such Non-U.S. Holder's
tax basis in the warrant.
Sale or Other Disposition of Securities
Subject to the discussion
below regarding backup withholding and FATCA, a Non-U.S. Holder generally will not be required to pay U.S. federal income tax on any gain
realized upon the sale or other disposition of any Security unless:
·
the gain is effectively connected with the Non-U.S. Holder's conduct of a trade or business within
the United States and not eligible for relief under an applicable income tax treaty, in which case the Non-U.S. Holder will be required
to pay tax on the net gain derived from the sale under regular graduated U.S. federal income tax rates, and for a Non-U.S. Holder that
is a corporation, such Non-U.S. Holder may be subject to the branch profits tax at a 30% rate (or such lower rate as may be specified
by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items;
·
the Non-U.S. Holder is an individual who is present in the United States for a period or periods aggregating
183 days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met, in which case
the Non-U.S. Holder will be required to pay a flat 30% tax on the gain derived from the sale, which tax may be offset by U.S. source capital
losses (even though the Non-U.S. Holder is not considered a resident of the United States) (subject to applicable income tax or other
treaties); or
·
we are a "U.S. real property holding corporation" for U.S. federal income tax purposes, or
a U.S. personal holding company ("USPHC"), at any time within the shorter of the five-year period preceding the disposition
or the Non-U.S. Holder's holding period for any Security. We believe we are not currently and do not anticipate becoming a USPHC.
However, because the determination of whether we are a USPHC depends on the fair market value of our United States real property interests
relative to the fair market value of our other business assets, there can be no assurance that we will not become a USPHC in the future.
Even if we become a USPHC, a Non-U.S. Holder may qualify for an exemption from U.S federal income tax based on our status as a USPHC.
If no exemption is available and we are a USPHC, a Non-U.S. Holder's proceeds received on the disposition any Security will generally
be subject to withholding at a rate of 15% and such Non-U.S. Holder will generally be taxed on any gain in the same manner as gain that
is effectively connected with the conduct of a U.S. trade or business, except that the branch profits tax generally will not apply. Non-U.S.
Holders should consult with their tax advisors on the availability of any such exemption in the event of we become a USPHC.
Redemption of Our Common Stock
The characterization for U.S.
federal income tax purposes of the redemption of a Non-U.S. Holder's common stock generally will correspond to the U.S. federal
income tax characterization of such a redemption of a U.S. Holder's common stock, as described under "Tax Consequences to
U.S. Holders—Redemption of Common Stock" above, and the consequences of the redemption to the Non-U.S. Holder will be as described
above under "—Distributions of Common Stock" and "—Sale or Other Disposition of Securities," as applicable.
59
Backup Withholding and Information Reporting
Information returns may be
filed with the IRS in connection with distributions on our common stock or constructive dividends on the warrants, and the proceeds of
a sale or other disposition of any Security. A non-exempt U.S. Holder may be subject to U.S. backup withholding on these payments if it
fails to provide its taxpayer identification number to the withholding agent and comply with certification procedures or otherwise establish
an exemption from backup withholding.
A Non-U.S. Holder may be subject
to U.S. information reporting and backup withholding on these payments unless the Non-U.S. Holder complies with certification procedures
to establish that it is not a U.S. person (as defined in the Code). The certification requirements generally will be satisfied if the
Non-U.S. Holder provides the applicable withholding agent with a statement on the applicable IRS Form W-8BEN or IRS Form W-8BEN-E (or
suitable substitute or successor form), together with all appropriate attachments, signed under penalties of perjury, stating, among other
things, that such Non-U.S. Holder is not a U.S. person. Applicable Treasury Regulations provide alternative methods for satisfying this
requirement. In addition, the amount of distributions on common stock or constructive dividends on warrants paid to a Non-U.S. Holder,
and the amount of any U.S. federal income tax withheld therefrom, must be reported annually to the IRS and the holder. This information
may be made available by the IRS under the provisions of an applicable tax treaty or agreement to the tax authorities of the country in
which the Non-U.S. Holder resides.
Payment of the proceeds of
the sale or other disposition of any Security to or through a non-U.S. office of a U.S. broker or of a non-U.S. broker with certain specified
U.S. connections generally will be subject to information reporting requirements, but not backup withholding, unless the Non-U.S. Holder
certifies under penalties of perjury that it is not a U.S. person or an exemption otherwise applies. Payments of the proceeds of a sale
or other disposition of any Security to or through a U.S. office of a broker generally will be subject to information reporting and backup
withholding, unless the Non-U.S. Holder certifies under penalties of perjury that it is not a U.S. person or otherwise establishes an
exemption.
Backup withholding is not
an additional tax. The amount of any backup withholding from a payment generally will be allowed as a credit against the holder's
U.S. federal income tax liability and may entitle the holder to a refund, provided that the required information is timely furnished to
the IRS.
Foreign Account Tax Compliance Act
FATCA imposes withholding
tax on certain types of payments made to foreign financial institutions and certain other non-U.S. entities. The legislation imposes a
30% withholding tax on dividends on, or, subject to the discussion of certain proposed Treasury Regulations below, gross proceeds from
the sale or other disposition of any Security paid to a "foreign financial institution" or to certain "non-financial
foreign entities" (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting
obligations, (2) the non-financial foreign entity either certifies it does not have any "substantial United States owners"
(as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial
institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial
institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an agreement with the U.S. Treasury
requiring, among other things, that it undertakes to identify accounts held by "specified United States persons" or "United
States-owned foreign entities" (each as defined in the Code), annually report certain information about such accounts, and withhold
30% on payments to account holders whose actions prevent it from complying with these reporting and other requirements. If the country
in which a payee is resident has entered into an "intergovernmental agreement" with the United States regarding FATCA, that
agreement may permit the payee to report to that country rather than to the U.S. Department of the Treasury. The U.S. Treasury recently
released proposed Treasury Regulations which, if finalized in their present form, would eliminate the federal withholding tax of 30% applicable
to the gross proceeds of a sale or other disposition of any Security. In its preamble to such proposed Treasury Regulations, the U.S.
Treasury stated that taxpayers may generally rely on the proposed regulations until final regulations are issued. Prospective investors
should consult their own tax advisors regarding the possible impact of these rules on their investment in any Security, and the possible
impact of these rules on the entities through which they hold any Security, including, without limitation, the process and deadlines for
meeting the applicable requirements to prevent the imposition of this 30% withholding tax under FATCA.
60
THE PRECEDING DISCUSSION IS FOR GENERAL INFORMATION
ONLY. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX
CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF ANY SECURITIY, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.
61
UNDERWRITING
Maxim Group LLC ("Maxim")
is acting as sole book-runner and as representative of the underwriters (the "Representative"). Subject to the terms and conditions
of an underwriting agreement between us and the Representative, we have agreed to sell to each underwriter named below, and each underwriter
named below has severally agreed to purchase, at the public offering price less the underwriting discounts set forth on the cover page
of this prospectus, the number of shares of common stock, pre-funded warrants and warrants, listed next to its name in the following table:
Name of Underwriter
Number
of shares
Number
of pre-funded warrants
Number
of accompanying warrants
Maxim Group LLC
Total
The underwriters are
committed to purchase all the shares of common stock and/or pre-funded warrants, and warrants, offered by this prospectus if they
purchase any shares of common stock, pre-funded warrants and warrants. The underwriting agreement also provides that if an
underwriter defaults, the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.
The underwriters are not obligated to purchase the shares of common stock and/or warrants, covered by the
underwriters' over-allotment option described below. The underwriters are offering the shares of common stock, pre-funded
warrants and warrants, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters
by their counsel, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of
officer's certificates and a legal opinion. The underwriters reserve the right to withdraw, cancel or modify offers to the
public and to reject orders in whole or in part.
Over-Allotment Option
We have granted to the underwriters
an option, exercisable no later than 45 calendar days after the date of the underwriting agreement, to purchase up to an additional [•]
shares of common stock and/or up to an additional [•] warrants, in each case, at the public offering price
listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option only
to cover over-allotments, if any, made in connection with this offering and may exercise this option to purchase additional shares  and/or warrants. To the extent the option is exercised and the conditions of the underwriting agreement are satisfied,
we will be obligated to sell to the underwriters, and the underwriters will be obligated to purchase, these additional shares of common
stock and/or warrants.
Discounts and Commissions
We have agreed to pay the
underwriters a cash fee equal to 7.0% of the aggregate gross proceeds from the sale of the common stock and pre-funded warrants and warrants.
The Representative has advised
us that the underwriters propose to offer the shares, pre-funded warrants and warrants, directly to the public at the public offering
price set forth on the cover of this prospectus. In addition, the representative may offer some of the shares and/or pre-funded warrants
and/or warrants, to other securities dealers at such price less a concession of up to $[•] per share of our common stock or pre-funded
warrant. After the offering to the public, the offering price and other selling terms may be changed by the Representative without changing
our proceeds from the underwriters' purchase of the shares and/or pre-funded warrants and warrants.
The following table summarizes
the public offering price, underwriting commissions and proceeds before expenses to us assuming both no exercise and full exercise of
the underwriters' option to purchase additional shares of common stock and/or warrants. The underwriting
commissions are equal to the public offering price per share, pre-funded warrant and warrant, less the amount per share the underwriters
pay us for the shares of common stock, pre-funded warrants and warrants.
62
Per share
    and accompanying warrant
Per pre-funded
    warrant and accompanying warrant
Total
(No Exercise)
Total
(Full Exercise)
Public offering price
$
$
$
$
Underwriting discounts and commissions
$
$
$
$
Proceeds, before expenses, to us
$
$
$
$
We have agreed to reimburse
Maxim for its out-of-pocket accountable expenses, including Maxim's legal fees up to a maximum of $90,000, in connection with the
offering. We have paid $25,000 to Maxim as an advance to be applied towards reasonable out-of-pocket expenses, or the Advance. Any portion
of the Advance shall be returned back to us to the extent not actually incurred. We estimate that the total expenses of the offering,
including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding underwriting discounts
and commissions, will be approximately $[•], all of which are payable by us.
Jeffrey E. Eberwein, our
Executive Chairman, has indicated to us his intention to purchase up to $[•] of our common stock and warrants in this offering.
Several other officers and board members of our company may also purchase shares of our common stock and warrants in this offering.
However, because indications of interest are not binding agreements or commitments to purchase, there can be no assurance that the
underwriter will determine to sell our shares and warrants in this offering to any of these persons, or that any of these persons
will determine to purchase these securities in this offering. Any securities sold to our officers and board members will be at the
same public offering price and on the same terms as the securities sold to other investors in this offering. The underwriter will
receive the same underwriting discount on any securities purchased by these persons as it will on any other securities sold to the
public in this offering. The shares being purchased by our officers and board members will be restricted from sale for a limited
period of time under the terms of lock-up agreements.
Underwriter's Warrant
We have agreed to issue to
the underwriters, an Underwriter's Warrant to purchase shares of our common stock which represents 2.5% of the number of shares
of common stock and/or pre-funded warrants sold in this offering. The Underwriter's Warrant will have a term of five years from the effective date of this prospectus and an exercise price per share equal
to 110% of the public offering per share price and may be exercised on a cashless basis. The Underwriter's Warrants are exercisable commencing
six months after the effective date of the registration statement related to this offering, and will expire five years after the effective
date of such registration statement. The Underwriter's Warrants are not redeemable by us. The Underwriter's Warrants provide for unlimited
"piggyback" registration rights at our expense with respect to the underlying common stock for a period of seven-year commencing
from the effective date of the registration statement related to this offering. The Underwriter's Warrants and the common stock underlying
the Underwriter's Warrants, have been deemed compensation by the Financial Industry Regulatory Authority, or FINRA, and are therefore
subject to a 180-day lock-up pursuant to Rule 5110(e)(1) of FINRA. The underwriters (or permitted assignees under the Rule) may not sell,
transfer, assign, pledge or hypothecate the Underwriter's Warrants or the securities underlying the Underwriter's Warrants, nor will they
engage in any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the
Underwriter's Warrants or the underlying securities for a period of six months from the effective date of this offering, except to any
FINRA member participating in the offering and their bona fide officers or partners. The Underwriter's Warrants will provide for adjustment
in the number and price of such Underwriter's Warrants (and the common stock underlying such Underwriter's Warrants) to prevent dilution
in the event of a forward or reverse stock split, stock dividend or similar recapitalization.
Warrant Solicitation Fee
We have agreed to pay Maxim
a warrant solicitation fee of 6.0% of the gross proceeds received by us from the exercise of any warrant sold in this offering that has
been solicited by Maxim at our request.
Lock-Up Agreements
We and each of our officers
and directors have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for
the sale of or otherwise dispose of any shares of our common stock or other securities convertible into or exercisable or exchangeable
for shares of our common stock for a period of ninety (90) days after this offering is completed without the prior written consent of Maxim.
Maxim may in its sole discretion
and at any time without notice release some or all of the shares subject to lock-up agreements prior to the expiration of the lock-up
period. When determining whether or not to release shares from the lock-up agreements, the representative will consider, among other factors,
the security holder's reasons for requesting the release, the number of shares for which the release is being requested and market
conditions at the time.
63
Right of First Refusal; Tail
We have granted the
Representative a right of first refusal, for a period of nine (9) months from the commencement of sales of this offering, to act as
sole underwriter and sole book running manager and/or sole placement agent for any and all public and private equity, equity-linked,
convertible or debt offerings of us.
In addition, if within six
months following the closing of this offering, we complete any financing of equity, equity-linked, convertible or debt or other capital
raising activity (other than the exercise by any person or entity of any options, warrants or other convertible securities) with any of
the investors contacted by the underwriters during this offering, then we will pay to Maxim upon the closing of such other financing a
cash fee equal to 7.0% of the aggregate gross proceeds of such financing and a warrant to purchase securities which represent 2.5% of
the number of securities sold in such financing exercisable at a price equal to 110% of the offering price.
Indemnification
We have agreed to indemnify
the underwriters against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters
may be required to make for these liabilities.
Price Stabilization, Short Positions, and Penalty Bids
In connection with this offering,
the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock, warrants or pre-funded
warrants. Specifically, the underwriters may over-allot in connection with this offering by selling more shares or pre-funded warrants
and/or warrants than are set forth on the cover page of this prospectus. This creates a short position in our common stock for its own
account. The short position may be either a covered short position or a naked short position. In a covered short position, the number
of shares of common stock or pre-funded warrants over-allotted by the underwriters is not greater than the number of shares of common
stock or pre-funded warrants that they may purchase in the over-allotment option. In a naked short position, the number of shares of common
stock or pre-funded warrants involved is greater than the number of shares of common stock or pre-funded warrants in the over-allotment
option. To close out a short position, the underwriters may elect to exercise all or part of the over-allotment option. The underwriters
may also elect to stabilize the price of our common stock or pre-funded warrants or reduce any short position by bidding for, and purchasing,
common stock or pre-funded warrants in the open market.
The underwriters may also
impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing a
security in this offering because the underwriter repurchases that security in stabilizing or short covering transactions.
Finally, the underwriters
may bid for, and purchase, shares of our common stock or pre-funded warrants in market making transactions, including "passive"
market making transactions as described below.
These activities may stabilize
or maintain the market price of our common stock or pre-funded warrants at a price that is higher than the price that might otherwise
exist in the absence of these activities. The underwriters are not required to engage in these activities, and may discontinue any of
these activities at any time without notice.
In connection with this offering,
the underwriters and selling group members, if any, or their affiliates may engage in passive market making transactions in our common
stock or pre-funded warrants immediately prior to the commencement of sales in this offering, in accordance with Rule 103 of Regulation
M under the Exchange Act. Rule 103 generally provides that:
·
a passive market maker may not effect transactions or display bids for our common stock or pre-funded
warrants in excess of the highest independent bid price by persons who are not passive market makers;
·
net purchases by a passive market maker on each day are generally limited to 30% of the passive market
maker's average daily trading volume in our common stock or pre-funded warrants during a specified two-month prior period or 200
shares, whichever is greater, and must be discontinued when that limit is reached; and
·
passive market making bids must be identified as such.
64
Electronic Distribution
A prospectus in electronic
format may be made available on a website maintained by the representatives of the underwriters and may also be made available on a website
maintained by other underwriters. The underwriters may agree to allocate a number of shares or pre-funded warrants to underwriters for
sale to their online brokerage account holders. Internet distributions will be allocated by the representatives of the underwriters to
underwriters that may make internet distributions on the same basis as other allocations. In connection with the offering, the underwriters
or syndicate members may distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable
as Adobe® PDF will be used in connection with this offering.
The underwriters have informed
us that they do not expect to confirm sales of shares or pre-funded warrants offered by this prospectus to accounts over which they exercise
discretionary authority.
Other than the prospectus
in electronic format, the information on any underwriter's website and any information contained in any other website maintained
by an underwriter is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved
and/or endorsed by us or any underwriter in its capacity as underwriter and should not be relied upon by investors.
Maxim has acted in the past,
and may act from time to time in the future, as our investment banking firm. Maxim served as the sole book-running manager of our underwritten
public offering of securities in May 2020.
65
LEGAL MATTERS
The validity of the securities
being offered hereby will be passed upon for us by our counsel Olshan Frome Wolosky LLP, New York, New York. Loeb & Loeb LLP, New
York, New York is representing the underwriter in this offering.
EXPERTS
The consolidated financial
statements as of December 31, 2020 and 2019 and for the years then ended incorporated by reference in this prospectus and in the registration
statement have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated
herein by reference, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE
INFORMATION
This prospectus constitutes
a part of a registration statement on Form S-1 filed by us with the SEC under the Securities Act with respect to our common stock, warrants
and pre-funded warrants offered by this prospectus. This prospectus does not contain all of the information included in the registration
statement. We have omitted certain parts of the registration statement, as allowed by the rules and regulations of the SEC. You may wish
to inspect the registration statement and the exhibits to that registration statement for further information with respect to us and our
common stock, warrants and pre-funded warrants offered by this prospectus. Copies of the registration statement and the exhibits to such
registration statement are on file at the offices of the SEC and may be obtained upon payment of the prescribed fee or may be examined
without charge at the public reference facilities of the SEC described below. Statements contained or incorporated by reference in this
prospectus concerning the provisions of certain documents are necessarily summaries of the material provisions of such documents, and
each statement is qualified in its entirety by reference to the copy of the applicable document filed with the SEC.
We file annual reports, quarterly
and current reports, proxy statements and other information with the SEC. The public may read and copy any materials that we file with
the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, DC 20549. You may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet website that contains reports, proxy
and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
We maintain an Internet website
at www.starequity.com. All of our reports filed with the SEC (including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and proxy statements) are accessible through the Investor Relations section of our website, free of charge, as soon
as reasonably practicable after electronic filing. The reference to our website in this prospectus is an inactive textual reference only
and is not a hyperlink. The contents of our website are not part of this prospectus, and you should not consider the contents of our website
in making an investment decision with respect to our securities.
INCORPORATION OF INFORMATION
BY REFERENCE
The SEC allows us to "incorporate
by reference" into this prospectus information contained in documents that we file with it. This means that we can disclose important
information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus.
The documents we are incorporating by reference as of their respective dates of filing are:
·
our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 29, 2021;
·
our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 filed with the SEC on May 14,
2021, June 30, 2021 filed with the SEC on August 10, 2021, and September 30, 2021 filed with the SEC on November 12, 2021;
66
·
our Current Reports on Form 8-K filed with the SEC on March 9, 2021, March 9, 2021, March 29, 2021, April
1, 2021, April 6, 2021, May 14, 2021, June 1, 2021, June 2, 2021, August 6, 2021, August 10, 2021, August 16, 2021, October 25, 2021,
November 12, 2021, November 22, 2021,  December 13, 2021, and December 22, 2021; and
·
the description of our common stock contained in our Registration Statement on Form 8-A filed with the
SEC on June 3, 2004, including any amendments and reports filed for the purpose of updating such description.
Any statement incorporated
by reference in this prospectus from an earlier dated document that is inconsistent with a statement contained in this prospectus or in
any other document filed after the date of the earlier dated document, but prior to the date hereof, which also is incorporated by reference
into this prospectus, shall be deemed to be modified or superseded for purposes of this prospectus by such statement contained in this
prospectus or in any other document filed after the date of the earlier dated document, but prior to the date hereof, which also is incorporated
by reference into this prospectus.
Any person, including any
beneficial owner, to whom this prospectus is delivered may request copies of this prospectus and any of the documents incorporated by
reference into this prospectus, without charge, by written request directed to Star Equity Holdings, Inc., 53 Forest Avenue, Suite 101,
Old Greenwich, Connecticut 06870, or via the investor relation's section of our website at http://starequity.com/investor-relations,
or from the SEC through the SEC's internet website at the address provided under "Where You Can Find More Information."
Documents incorporated by reference into this prospectus are available without charge, excluding any exhibits to those documents unless
the exhibit is specifically incorporated by reference into those documents.
Except as expressly provided
above, no other information, including none of the information on our website, is incorporated by reference into this prospectus.
DISCLOSURE OF COMMISSION
POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our directors and officers
are indemnified as provided by Section 145 of the Delaware General Corporation Law and our Bylaws. We have agreed to indemnify each of
our directors and certain officers against certain liabilities, including liabilities under the Securities Act. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions
described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
67
Star Equity Holdings, Inc.
[•] Shares of Common Stock
[•] Pre-funded Warrants (each Pre-funded
Warrant to purchase one Share of Common Stock)
[•] Shares of Common Stock underlying the
Pre-funded Warrants
Warrants to Purchase up to [•] Shares of
Common Stock
[•] Shares of Common Stock underlying the
Common Warrants
_______________
PROSPECTUS
_______________
Sole Book-Running Manager
Maxim Group LLC
[•], 2022
68
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses payable
by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions)
will be as follows:
SEC Registration Fee
$
2,642.47
FINRA filing fee
4,775.84
Accounting fees and expenses
[•]
Nasdaq listing fees
[•]
Printing and engraving expenses
[•]
Legal fees and expenses
[•]
Total
$
[•]
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our Restated Certificate of
Incorporation provides that, to the fullest extent permitted by law, a director of Star Equity Holdings, Inc. (the "Corporation")
shall not be personally liable to the Corporation or to its stockholders for monetary damages for any breach of fiduciary duty as a director.
Article V of our Restated
Certificate of Incorporation also provides:
"(A) EXCULPATION. A director of the
Corporation (each, a "Director" and collectively, the "Directors") shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a Director, except for liability (i) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which
the Director derived any improper personal benefit. If the Delaware General Corporation Law is hereafter amended to further reduce or
to authorize, with the approval of the Corporation's stockholders, further reductions in the liability of the Directors for breach
of fiduciary duty, then a Director shall not be liable for any such breach to the fullest extent permitted by the Delaware General Corporation
Law as so amended.
(B) INDEMNIFICATION. To the extent permitted
by applicable law, the Corporation is also authorized to provide indemnification of (and advancement of expenses to) such agents (and
any other persons to which Delaware law permits the Corporation to provide indemnification) through bylaw provisions, agreements with
such agents or other persons, vote of stockholders or disinterested Directors or otherwise, in excess of the indemnification and advancement
otherwise permitted by Section 145 of the Delaware General Corporation Law, subject only to limits created by applicable Delaware law
(statutory or non-statutory), with respect to actions for breach of duty to the Corporation, its stockholders and others.
(C) EFFECT OF REPEAL OR MODIFICATION. Any
repeal or modification of any of the foregoing provisions of this Article V shall be prospective and shall not adversely affect any right
or protection of a Director, officer, agent or other person existing at the time of, or increase the liability of any Director with respect
to any acts or omissions of such Director occurring prior to, such repeal or modification."
Furthermore, our bylaws provide
(A) for indemnification of Directors as set forth above, and (B) indemnification of officers of the Corporation to the fullest extent
permitted by the Delaware General Corporation Law.
II-
1
Section 145 of the Delaware
General Corporation Law also provides for indemnification of officers, directors, employees, and agents of Delaware corporations. It is
set forth below:
"Section 145. Indemnification of officers,
directors, employees and agents; insurance.
(a)       A
corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right
of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct
was unlawful.
(b)       A
corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person
is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person
acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem
proper.
(c)       To
the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in
connection therewith.
(d)       Any
indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper
in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section.
Such determination shall be made, with respect to a person who is a director or officer of the corporation at the time of such determination:
(1)       By
a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum; or
(2)       By
a committee of such directors designated by majority vote of such directors, even though less than a quorum; or
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(3)       If
there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or
(4)       By
the stockholders.
(e)       Expenses
(including attorneys' fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative
or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys'
fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request
of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise
may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f)       The
indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the
certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or the
bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action,
suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such
act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
(g)       A
corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by
such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the
power to indemnify such person against such liability under this section.
(h)       For
purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position
under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation
if its separate existence had continued.
(i)       For
purposes of this section, references to "other enterprises" shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants
or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
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(j)       The
indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized
or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k)       The
Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance expenses (including attorneys' fees).
We have entered into, and
intend to continue to enter into, separate indemnification agreements with our directors, executive officers, and other key employees,
in addition to the indemnification provided for in our Restated Certificate of Incorporation and bylaws. We also have directors and officers
insurance which includes insurance for claims against these persons brought under securities laws.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On September 10, 2019, we
issued 300,000 shares of our Series A Preferred Stock in a private placement (the "Series A Private Placement") to Lone Star Value Investors, LP for a price of $10 per share for total proceeds to us of $3 million. The Private Placement was made pursuant to the terms of
a Stock Purchase Agreement, dated as of September 10, 2019 (the "SPA"). We used the proceeds from the Private Placement for
the repayment of debt owed by a wholly-owned subsidiary.
On December 10, 2021, we entered
into a securities purchase agreement (the "Purchase Agreement") with Mr. Eberwein, relating to the issuance and sale of 650,000
shares of our common stock at a purchase price of $3.25 per share pursuant to a private placement (the "Common Stock Private Placement"
and, together with the Series A Private Placement, the "Private Placements"). The Common Stock Private Placement was approved
by a Special Committee of our board of directors made up of independent directors and by the Audit Committee of our board of directors.
No placement agent or other
financial intermediary was engaged or compensated in connection with the Private Placements. The issuances of shares of Series A Preferred
Stock and common stock in the Private Placements were exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as
amended (the "Act"), as sales by an issuer not involving a public offering. The foregoing issuances were not registered under
the Act, or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section
4(a)(2) and corresponding provisions of state securities laws, which exempts transactions by an issuer not involving any public offering.
In each case, the issuance was made, without any general solicitation or advertising, to a limited number of sophisticated investors with
knowledge and experience of financial and business matters related to an investment in our securities. In addition, the securities issued
in the foregoing issuances are restricted securities bearing transfer restrictions and the recipient acquired such securities for its
own account without a view to resell or distribute them. Such securities may not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirements and certificates evidencing such shares contain a legend stating the same.
Accordingly, the foregoing issuances were subject to the private placement exemption from registration provided by Section 4(a)(2) of
the Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)       The
following exhibits are filed as part of this Registration Statement:
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EXHIBIT INDEX
Exhibit
Number
Description
1.1**
Underwriting Agreement.
2.1
Agreement of Merger and Plan of Reorganization, dated March 5, 2015 by and between Digirad Corporation, Maleah Incorporated, MD Office Solutions and the Stockholders party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on March 6, 2015). Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementary copies of any of the omitted schedules or exhibits upon request by the Commission.
2.2
Stock Purchase Agreement dated as of October 13, 2015, by and among Digirad Corporation, Project Rendezvous Holding Corporation, the stockholders of Project Rendezvous Holding Corporation, and Platinum Equity Advisors, LLC as the stockholder representative (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Commission on January 7, 2016). Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementary copies of any of the omitted schedules or exhibits upon request by the Commission.
2.3
Amendment to Stock Purchase Agreement dated as of December 31, 2015, by and between Digirad Corporation and Platinum Equity Advisors, LLC as the stockholder representative (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed with the Commission on January 7, 2016).
2.4
Second Amendment to Stock Purchase Agreement dated as of June 7, 2016, by and between Digirad Corporation and Platinum Equity Advisors, LLC as the stockholder representative (incorporated by reference to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 1, 2016).
2.5
Asset Purchase Agreement by and between DMS Health Technologies, Inc., as Seller, and Philips North America LLC, as Buyer dated as of December 22, 2017 (incorporated by reference to Exhibit 2.8 to the Company's Annual Report on Form 10-K filed with the Commission on February 28, 2018). Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementary copies of any of the omitted schedules or exhibits upon request by the Commission.
2.6
Agreement and Plan of Merger, dated as of July 3, 2019, by and among Digirad Corporation, ATRM Holdings, Inc. and Digirad Acquisition Corporation (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Commission on July 3, 2019).
3.1
Restated
Certificate of Incorporation of Digirad Corporation (incorporated by reference to Exhibit 10.2 to the Company's Current Report
on Form 8-K filed with the Commission on May 3, 2006).
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3.2
Certificate of Designation of Rights, Preferences and Privileges of Series B Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on May 24, 2013).
3.3
Certificate of Amendment of the Restated Certificate of Incorporation of Digirad Corporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on May 5, 2015).
3.4
Certificate of Amendment of the Restated Certificate of Incorporation of Digirad Corporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on May 1, 2018).
3.5
Amended and Restated Bylaws of Digirad Corporation dated May 4, 2007 and Amendment No. 1 to the Amended and Restated Bylaws of Digirad Corporation dated April 5, 2017 (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 1, 2017).
3.6
Certificate of Amendment of the Restated Certificate of Incorporation of Digirad Corporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on May 31, 2019).
3.7
Certificate of Designations, Rights and Preferences of 10% Series A Cumulative Perpetual Preferred Stock of Digirad Corporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on September 11, 2019).
3.8
Certificate of Amendment of the Restated Certificate of Incorporation of Digirad Corporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on December 28, 2020.
3.9
Certificate of Designation of Series C Participating Preferred Stock of Star Equity Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on June 2, 2021).
3.10
Certificate of Amendment of the Restated Certificate of Incorporation of Star Equity Holdings, Inc. (incorporated by reference to Annex B to the Company's Definitive Proxy Statement filed with the Commission on September 22, 2021).
4.1
Form of Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1 (File No. 333-113760) filed with the Commission on March 19, 2004).
4.2
Preferred Stock Rights Agreement, by and between Digirad Corporation and American Stock Transfer and Trust Company, dated November 22, 2005 (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form 8-A filed with the Commission on November 29, 2005).
4.3
Tax Benefit Preservation Plan by and between Digirad Corporation and American Stock Transfer & Trust Company, dated as of May 23, 2013 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Company with the Commission on May 24, 2013).
4.4
Tax Benefit Preservation Plan Amendment, dated November 11, 2013, by and between the Company and American Stock Transfer & Trust Company, LLC (incorporated by reference to Exhibit 10.26 to the Company's Annual Report on Form 10-K filed with the Commission on March 20, 2014).
4.5
First Amendment to Preferred Stock Rights Agreement, dated as of March 5, 2015, by and between the Company and American Stock Transfer & Trust Company, LLC (incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 10-K filed with the Commission on March 6, 2015).
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4.6
Promissory Note, dated January 12, 2018, made by ATRM Holdings, Inc. for the benefit of Lone Star Value Co-Invest I, LP (incorporated by reference to Exhibit 4.1 to ATRM Holdings, Inc.'s Current Report on Form 8-K filed with the Commission on January 19, 2018).
4.7
Promissory Note, dated June 1, 2018, made by ATRM Holdings, Inc. for the benefit of Lone Star Value Co-Invest I, LP (incorporated by reference to Exhibit 4.1 to ATRM Holdings, Inc.'s Current Report on Form 8-K filed with the Commission on June 7, 2018).
4.8
Promissory Note, dated December 17, 2018, made by ATRM Holdings, Inc. for the benefit of Lone Star Value Management, LLC (incorporated by reference to Exhibit 4.2 to ATRM Holdings, Inc.'s Current Report on Form 8-K filed with the Commission on December 18, 2018).
4.9
Description of Registrant's Securities (incorporated by reference to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 13, 2020).
4.10
Form of Maxim Warrant (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Commission on May 29, 2020, referencing Exhibit 1.1 (Underwriting Agreement) to the same Current Report on Form 8-K).
4.11
Form of Warrant (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the Commission on May 29, 2020).
4.12
Warrant Agent Agreement, dated May 28, 2020, between Digirad Corporation and American Stock Transfer & Trust Company, LLC (incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed with the Commission on May 29, 2020).
4.13
Rights Agreement, dated as of June 2, 2021, by and between Star Equity Holdings, Inc. and American Stock Transfer & Trust Company, LLC, as Rights Agent (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Commission on June 2, 2021).
4.14
Tax Benefit Preservation Plan by and between Star Equity Holdings, Inc. and American Stock Transfer & Trust Company, dated as of June 2, 2021 (incorporated by reference to Annex A to the Company's Definitive Proxy Statement filed with the Commission on September 22, 2021).
4.15*
Form of Pre-Funded Common Stock Purchase Warrant to be issued in this offering.
4.16*
Form of Common Stock Purchase Warrant to be issued in this offering.
4.17*
Warrant Agent Agreement, dated [•], 2022, between Star Equity Holdings, Inc. and American Stock Transfer & Trust Company, LLC.
4.18**
Underwriter's Warrant (Included in Exhibit 1.1).
5.1**
Opinion of Olshan Frome Wolosky LLP (and Consent).
10.1#
Digirad Corporation 2004 Stock Incentive Plan, as Amended and Restated on August 2, 2007 (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 7, 2007).
10.2#
Form of Notice of Stock Option Award and Stock Option Award Agreement for 2004 Stock Incentive Plan (incorporated by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K filed with the Commission on March 3, 2005).
10.3#
2004
Non-Employee Director Option Program (incorporated by reference to Exhibit 10.19 to the Company's Amended Registration Statement
on Form S-1/A (File No. 333-113760) filed with the Commission on May 24, 2004).
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10.4#
Form of Notice of Non-Qualified Stock Option Award and Stock Option Award Agreement for 2004 Non-Employee Director Option Program (incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K filed with the Commission on March 3, 2005).
10.5#
Form of Indemnification Agreement (incorporated by reference to Exhibits 10.20 to the Registration Statement on Form S-1/A (File No. 333-113760) filed with the Commission on April 29, 2004).
10.6#
Employment Agreement, dated as of May 1, 2007, as amended on September 30, 2010, by and between the Company and Matthew G. Molchan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on March 5, 2013).
10.7#
Form of 2011 Inducement Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on July 29, 2011).
10.8#
Form of 2011 Inducement Stock Incentive Plan Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on July 29, 2011).
10.9#
Form of 2011 Inducement Stock Incentive Plan Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Commission on July 29, 2011).
10.10#
Digirad Corporation 2014 Equity Incentive Award Plan (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8 filed with the Commission on June 6, 2014).
10.11#
Form Indemnification Agreement of the Company for directors and officers (incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K filed with the Commission on March 6, 2015).
10.12
Registration Rights Agreement, dated March 5, 2015, by and among the Company, Keenan - Thornton Family Trust, David Keenan and Samia Arram (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 1, 2015).
10.13
Consolidated Agreements, dated April 1, 2014, between DMS Health Technologies, Inc. and Philips Healthcare, a Division of Philips Electronics North America Corporation (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 3, 2017).
10.14
Amendment, dated June 9, 2015, to the Consolidated Agreements between DMS Health Technologies, Inc. and Philips Healthcare, a Division of Philips Electronics North America Corporation (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 10-Q filed with the Commission on November 3, 2017).
10.15#
Digirad Corporation 2018 Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on May 1, 2018).
10.16#
Form of 2018 Incentive Plan Restricted Stock Unit Agreement (incorporated by reference to Exhibit 99.2 to the Company's Registration Statement on Form S-8 filed with the Commission on November 6, 2018).
10.17#
Form
of 2018 Incentive Plan Restricted Stock Unit Agreement (Performance Based) (incorporated by reference to Exhibit 99.3 to the Company's
Registration Statement on Form S-8 filed with the Commission on November 6, 2018).
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10.18#
Employment Agreement, by and between Digirad Corporation and David Noble, dated October 31, 2018 (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 5, 2018).
10.19#
Indemnification Agreement, by and between Digirad Corporation and David Noble, dated October 25, 2018 (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 5, 2018).
10.20
Limited Liability Company Agreement for Star Procurement, LLC, dated December 14, 2018, by and among Star Procurement LLC, Digirad Corporation and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.31 to the Company's Annual Report on Form 10-K filed with the Commission on March 1, 2019).
10.21
Purchase and Sale Agreement, dated March 27, 2019, by and between RJF – Keiser Real Estate, LLC and 56 Mechanic Falls Road, LLC (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.
10.22
Purchase and Sale Agreement, dated April 3, 2019, by and between KBS Builders, Inc. and 947 Waterford Road, LLC (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.
10.23
Purchase and Sale Agreement, dated April 3, 2019, by and between KBS Builders, Inc. and 300 Park Street, LLC (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.
10.24
Lease Agreement, dated April 3, 2019, by and between KBS Builders, Inc. and 947 Waterford Road, LLC (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.
10.25
Lease Agreement, dated April 3, 2019, by and between KBS Builders, Inc. and 300 Park Street, LLC (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.
10.26
Lease Agreement, dated April 3, 2019, by and between KBS Builders, Inc. and 56 Mechanic Falls Road, LLC (incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 8, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.
10.27
First Amendment to Lease, dated April 18, 2019, by and between 56 Mechanic Falls Road, LLC and KBS Builders, Inc. (incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 8, 2019).
10.28
Loan
and Security Agreement, dated March 29, 2019, by and among Digirad Corporation, certain subsidiaries of the Digirad Corporation identified
on the signature pages thereto, and Sterling National Bank (incorporated by reference to Exhibit 10.6 to the Company's Current
Report on Form 8-K filed with the Commission on April 3, 2019). The schedules and exhibits to this Exhibit have been omitted. The Company
agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.
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10.29
Stock Purchase Agreement, dated as of September 10, 2019, by and between Digirad Corporation and Lone Star Value Investors, LP (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on September 11, 2019).
10.30
Registration Rights Agreement, dated as of September 10, 2019, by and between Digirad Corporation and Lone Star Value Investors, LP (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on September 11, 2019).
10.31
Put Option Purchase Agreement, dated as of September 10, 2019, by and between Digirad Corporation and Jeffrey Eberwein (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Commission on September 11, 2019).
10.32
Consent and Acknowledgment Agreement and Twelfth Amendment to Loan Agreement, dated as of September 10, 2019, by and among Gerber Finance Inc., KBS Builders, Inc., ATRM Holdings, Inc. and Digirad Corporation. (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed with the Commission on September 11, 2019).
10.33
Waiver of Promissory, Note dated July 17, 2019, by Lone Star Value Co-Invest I, LP to Promissory Note dated January 12, 2018, made by ATRM Holdings, Inc. in favor of Lone Star Value Co-Invest I, LP (incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 14, 2019).
10.34
Waiver of Promissory Note, dated July 17, 2019, by Lone Star Value Co-Invest I, LP to Promissory Note dated June 1, 2018, made by ATRM Holdings, Inc. in favor of Lone Star Value Co-Invest I, LP (incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 14, 2019).
10.35
Waiver of Promissory Note, dated July 17, 2019, by Lone Star Value Management, LLC to Promissory Note dated December 17, 2018, made by ATRM Holdings, Inc. in favor of Lone Star Value Management, LLC (incorporated by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 14, 2019).
10.36
Extension/Revision Agreement of Note dated October 1, 2019, by Premier Bank to Promissory Note dated June 30, 2017, made by Glenbrook Building Supply, Inc. and EdgeBuilder, Inc. in favor of Premier Bank (incorporated by reference to Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 14, 2019).
10.37
Extension/Revision Agreement of Note dated November 1, 2019, by Premier Bank to Promissory Note dated June 30, 2017, made by Glenbrook Building Supply, Inc. and EdgeBuilder, Inc. in favor of Premier Bank (incorporated by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 14, 2019).
10.38
Loan and Security Agreement, dated as of February 23, 2016, by and among Gerber Finance Inc., KBS Builders, Inc., Maine Modular Haulers, Inc., and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.1 to ATRM Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the Commission on May 16, 2016).
10.39
Third
Agreement of Amendment to the Loan and Security Agreement, dated as of September 29, 2017, by and among Gerber Finance, Inc., KBS Builders,
Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.3 to ATRM Holdings, Inc.'s Quarterly Report on Form 10-Q
filed with the Commission on April 16, 2019).
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10.40
Revolving Credit Loan Agreement, dated as of June 30, 2017, by and between Glenbrook Building Supply, Inc., EdgeBuilder, Inc. and Premier Bank (incorporated by reference to Exhibit 10.3 to ATRM Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the Commission on April 16, 2019).
10.41
Fourth Agreement of Amendment to Loan and Security Agreement, dated as of July 20, 2017, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.1 to ATRM Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the Commission on April 16, 2019).
10.42
Fifth Agreement of Amendment to Loan and Security Agreement, dated as of September 29, 2017, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit10.2 to ATRM Holdings, Inc.'s Quarterly Report on Form 10-Q filed with the Commission on April 16, 2019).
10.43
Sixth Agreement of Amendment to Loan and Security Agreement, dated as of December 22, 2017, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit10.22 to ATRM Holdings, Inc.'s Annual Report on Form 10-K filed with the Commission on April 30, 2019).
10.44
Securities Purchase Agreement, dated as of January 12, 2018, by and between ATRM Holdings, Inc. and Lone Star Co-Invest I, LP (incorporated by reference to Exhibit 10.1 to ATRM Holdings, Inc.'s Current Report on Form 8-K filed with the Commission on January 19, 2018).
10.45
Securities Purchase Agreement, dated as of June 1, 2018, by and between ATRM Holdings, Inc. and Lone Star Co-Invest I, LP (incorporated by reference to Exhibit 10.1 to ATRM Holdings, Inc.'s Current Report on Form 8-K filed with the Commission on June 7, 2018).
10.46
Eighth Agreement of Amendment to Loan and Security Agreement, dated as of October 1, 2018, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.25 to ATRM Holdings, Inc.'s Annual Report on Form 10-K filed with the Commission on April 30, 2019).
10.47
Securities Purchase Agreement, dated as of December 17, 2018, by and between ATRM Holdings, Inc. and Lone Star Value Management, LLC (incorporated by reference to Exhibit 10.1 to ATRM Holdings, Inc.'s Current Report on Form 8-K filed with the Commission on December 18, 2018).
10.48
Ninth Agreement of Amendment to Loan and Security Agreement, dated as of February 22, 2019, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.29 to ATRM Holdings, Inc.'s Annual Report on Form 10-K filed with the Commission on April 30, 2019).
10.49
Tenth Agreement of Amendment to Loan and Security Agreement, dated as of April 1, 2019, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.30 to ATRM Holdings, Inc.'s Annual Report on Form 10-K filed with the Commission on April 30, 2019).
10.50
Fifth
Agreement of Amendment to Loan and Security Agreement, dated as of April 1, 2019, by and among Gerber Finance Inc., Edgebuilder, Inc.,
Glenbrook Building Supply Inc., ATRM Holdings, Inc. and KBS Builders, Inc. (incorporated by reference to Exhibit 10.31 to ATRM Holdings,
Inc.'s Annual Report on Form 10-K filed with the Commission on April 30, 2019).
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10.51
Membership Interest Purchase Agreement, dated as of April 1, 2019, by and among ATRM Holdings, Inc., Lone Star Value Management, LLC and Jeffrey E. Eberwein (incorporated by reference to Exhibit 10.3 to ATRM Holdings, Inc.'s Current Report on Form 8-K filed with the Commission on April 26, 2019).
10.52
Eleventh Agreement of Amendment to Loan and Security Agreement, dated as of April 15, 2019, by and among Gerber Finance Inc., KBS Builders, Inc. and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.39 to ATRM Holdings, Inc.'s Annual Report on Form 10-K filed with the Commission on April 30, 2019).
10.53
Agreement, dated as of May 15, 2019, by and between Digirad Corporation and ATRM Holdings, Inc. (incorporated by reference to Exhibit 10.39 to ATRM Holdings, Inc.'s Annual Report on Form 10-K filed with the Commission on June 26, 2019).
10.54
Loan and Security Agreement, dated January 31, 2020, by and among Star Real Estate Holdings USA, Inc., 300 Park Street, LLC, 947 Waterford Road, LLC, 56 Mechanic Falls Road, LLC, ATRM Holdings, Inc., EdgeBuilder, Inc., Glenbrook Building Supply, Inc., KBS Builders, Inc., Digirad Corporation, and Gerber Finance Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on February 6, 2020). Schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.
10.55
Loan and Security Agreement, dated January 31, 2020, by and among EdgeBuilder, Inc., Glenbrook Building Supply, Inc., Star Real Estate Holdings USA, Inc., 300 Park Street, LLC, 947 Waterford Road, LLC, 56 Mechanic Falls Road, LLC, ATRM Holdings, Inc., KBS Builders, Inc., Digirad Corporation, and Gerber Finance Inc. (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on February 6, 2020). Schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request.
10.56
Extension and Modification Agreement, dated January 31, 2020, by and among EdgeBuilder, Inc., Glenbrook Building Supply, Inc. and Premier Bank (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Commission on February 6, 2020).
10.57
Thirteenth Amendment to Loan and Security Agreement, dated January 31, 2020, by and among Gerber Finance Inc., KBS Builders, Inc. ATRM Holdings, Inc., and Digirad Corporation (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed with the Commission on February 6, 2020).
10.58
First Amendment to Loan and Security Agreement, dated February 20, 2020, by and among Star Real Estate Holdings USA, Inc., 300 Park Street, LLC, 947 Waterford Road, LLC, 56 Mechanic Falls Road, LLC and Gerber Finance Inc. (incorporated by reference to Exhibit 10.63 to the Company's Annual Report on Form 10-K filed with the Commission on March 9, 2020).
10.59
First Amendment to Loan and Security Agreement Dated January 31, 2020, dated as of March 5, 2020, by and among Gerber Finance Inc., EdgeBuilder, Inc. and Glenbrook Building Supply, Inc.; and Consent and as a Fourteenth Amendment to Loan and Security Agreement Dated February 23, 2016, by and among Gerber Finance Inc., KBS Builders, Inc., ATRM Holdings, Inc. and Digirad Corporation (incorporated by reference to Exhibit 10.64 to the Company's Annual Report on Form 10-K filed with the Commission on March 9, 2020).
10.60
Severance
Agreement, dated January 28, 2014, between Digirad Corporation and Martin B. Shirley (incorporated by reference to Exhibit 10.65 to the
Company's Amendment No. 1 to Annual Report on Form 10-K/A filed with the Commission on April 17, 2020).
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10.61
Note, dated April 30, 2020, made by KBS Builders, Inc. in favor of Bremer Bank (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on May 6, 2020).
10.62
Note, dated April 30, 2020, made by EdgeBuilder, Inc. in favor of Bremer Bank (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on May 6, 2020).
10.63
Note, dated April 30, 2020, made by Glenbrook Building Supply Inc. in favor of Bremer Bank (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Commission on May 6, 2020).
10.64
Second Amendment to Loan and Security Agreement, dated April 30, 2020, by and among Star Real Estate Holdings USA, Inc., 300 Park Street, LLC, 947 Waterford Road, LLC, 56 Mechanic Falls Road, LLC and Gerber Finance Inc. (incorporated by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).
10.65
Fifteenth Amendment to Loan and Security Agreement dated April 1, 2020, between KBS Builders, Inc. and Gerber Finance Inc. (incorporated by reference to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).
10.66
Promissory Note, dated May 5, 2020, made by DMS Imaging, Inc. in favor of Sterling National Bank (incorporated by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).
10.67
Promissory Note, dated May 5, 2020, made by Digirad Imaging Solutions, Inc. in favor of Sterling National Bank (incorporated by reference to Exhibit 10.13 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).
10.68
Promissory Note, dated May 7, 2020, made by DMS Health Technologies, Inc. in favor of Sterling National Bank (incorporated by reference to Exhibit 10.14 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).
10.69
Promissory Note, dated May 7, 2020, made by Digirad Corporation in favor of Sterling National Bank (incorporated by reference to Exhibit 10.15 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020).
10.70
Second Amendment to Loan and Security Agreement, dated July 1, 2020, by and among Gerber Finance Inc., EdgeBuilder, Inc., and Glenbrook Building Supply, Inc. (incorporated by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 13, 2020).
10.71
2018 Incentive Plan, as amended July 31, 2020 (incorporated by reference to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 13, 2020).
10.72
First Amendment to Loan and Security Agreement, Consent and Release, dated February 1, 2021, by and among Digirad Health, Inc., Digirad Imaging Solutions, Inc., MD Office Solutions, DMS Health Technologies, Inc., DMS Imaging, Inc., DMS Health Technologies-Canada, Inc., Project Rendezvous Holding Corporation, Project Rendezvous Acquisition Corporation, Digirad Diagnostic Imaging, Inc., Star Equity Holdings, Inc., and Sterling National Bank (incorporated by reference to Exhibit 10.72 to the Company's Annual Report on Form 10-K filed with the Commission on March 29, 2021).
10.73
Sixteenth
Amendment to Loan and Security Agreement, dated January 5, 2021, by and among Gerber Finance Inc., KBS Builders, Inc., ATRM Holdings,
Inc., and Star Equity Holdings, Inc. (incorporated by reference to Exhibit 10.73 to the Company's Annual Report on Form 10-K filed
with the Commission on March 29, 2021).
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10.74
Seventeenth Amendment to Loan and Security Agreement, dated February 26, 2021, by and among Gerber Finance Inc., KBS Builders, Inc., ATRM Holdings, Inc., and Star Equity Holdings, Inc. (incorporated by reference to Exhibit 10.74 to the Company's Annual Report on Form 10-K filed with the Commission on March 29, 2021).
10.75
Third Amendment to Loan and Security Agreement, dated January 31, 2020, by and among Gerber Finance Inc., Star Real Estate Holdings USA, Inc., 300 Park Street, LLC, 947 Waterford Road, LLC, and 56 Mechanic Falls Road, LLC (incorporated by reference to Exhibit 10.75 to the Company's Annual Report on Form 10-K filed with the Commission on March 29, 2021).
10.76
Third Amendment to Loan and Security Agreement, dated January 31, 2020, by and among Gerber Finance Inc., EdgeBuilder, Inc., and Glenbrook Building Supply, Inc. (incorporated by reference to Exhibit 10.76 to the Company's Annual Report on Form 10-K filed with the Commission on March 29, 2021).
10.77
Stock Purchase Agreement, dated October 30, 2020, by and among Knob Creek Acquisition Corp., Digirad Corporation, Project Rendezvous Acquisition Corporation and DMS Health Technologies, Inc. The schedules and exhibits to this exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Commission on a supplemental basis upon its request (incorporated by reference to Exhibit 10.77 to the Company's Annual Report on Form 10-K filed with the Commission on March 29, 2021).
10.78
Amendment to Stock Purchase Agreement dated as of March 26, 2021, by and between Project Rendezvous Acquisition Corporation and Knob Creek Acquisition Corp. (incorporated by reference to Exhibit 10.78 to the Company's Annual Report on Form 10-K filed with the Commission on March 29, 2021).
10.79
Second Amendment to Loan and Security Agreement, Consent and Release, dated March 31, 2021, by and among Digirad Health, Inc., Digirad Imaging Solutions, Inc., DMS Health Technologies, Inc., DMS Imaging, Inc., DMS Health Technologies-Canada, Inc., Project Rendezvous Holding Corporation, Project Rendezvous Acquisition Corporation, Digirad Diagnostic Imaging, Inc., Star Equity Holdings, Inc., and Sterling National Bank (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on April 1, 2021).
10.80
Waterford Sale Agreement, dated June 9, 2021, by and between 947 Waterford Road, LLC, and Barnum Holdings, LLC (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).
10.81
Gerber KBS Eighteenth Amendment to Loan and Security Agreement, dated July 30, 2021, by and among Gerber Finance Inc., KBS Builders, Inc., ATRM Holdings, Inc., and Star Equity Holdings, Inc. (incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).
10.82
Star Real Estate Holdings USA, Inc. Subordination Agreement, dated July 30, 2021, among Star Real Estate Holdings USA, Inc., and Gerber Finance Inc. (incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).
10.83
Star Equity Holdings Inc. Amended and Restated Subordination Agreement, dated July 30, 2021, by and among Star Equity Holdings, Inc., and Gerber Finance Inc. (incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).
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10.84
Gerber EBGL Fourth Amendment to Loan and Security Agreement, dated July 30, 2021, by and among Gerber Finance Inc., EdgeBuilder, Inc., and Glenbrook Building Supply, Inc. (incorporated by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).
10.85
Gerber EBGL Amended and Restated Promissory Note, dated July 30, 2021, by and among EdgeBuilder, Inc., and Glenbrook Building Supply, Inc. (incorporated by reference to Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 10, 2021).
10.86
Gerber EBGL Fifth Amendment to Loan and Security Agreement, dated October 21, 2021, by and among Gerber Finance Inc., EdgeBuilder, Inc., and Glenbrook Building Supply, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 12, 2021).
10.87
Securities Purchase Agreement, dated December 10, 2021, between Star Equity Holdings, Inc. and the purchaser signatory thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on December 13, 2021).
10.88
Lock-Up Agreement, dated December 10, 2021, between Star Equity Holdings, Inc. and the purchaser signatory thereto (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on December 13, 2021).
21.1
Subsidiaries of Star Equity Holdings, Inc. (incorporated by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K filed with the Commission on March 29, 2021).
23.1*
Consent of BDO USA, LLP, Independent Registered Public Accounting Firm.
23.2**
Consent of Olshan Frome Wolosky LLP (included in Exhibit 5.1).
24.1*
Power of Attorney (set forth on the signature page of this registration statement).
#
Indicates management contract or compensatory plan.
*
Filed herewith.
**
To be filed by amendment.
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ITEM 17. UNDERTAKINGS.
(a)
The undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this
registration statement:
(i)
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective registration statement;
(iii)
To include any material information with respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (i), (ii) and
(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports
filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that
is part of the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(A)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing
the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of
sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective date.
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(5)
That for the purpose of determining any liability under the Securities Act of 1933 in a primary offering
of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications,
the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required
to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant
or used or referred to by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information
about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b)
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
(d)
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from
the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed
by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Old Greenwich, Connecticut on the 30th  day of December 2021.
STAR EQUITY HOLDINGS, INC.
By:
/s/ Jeffrey E. Eberwein
Name:
Jeffrey E. Eberwein
Title:
Executive Chairman
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE
PRESENTS, each director and officer whose signature appears below constitutes and appoints each of Jeffrey E. Eberwein and David J. Noble,
his true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, to sign in any and all capacities
any and all amendments or post-effective amendments to this registration statement on Form S-1, and to sign any and all additional registration
statements relating to the same offering of securities of the Registration Statement that are filed pursuant to Rule 462(b) of the Securities
Act, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission,
granting such attorney-in-fact and agent full power and authority to do all such other acts and execute all such other documents as he
may deem necessary or desirable in connection with the foregoing, as fully as the undersigned may or could do in person, hereby ratifying
and confirming all that such attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates
indicated.
Name
Position
Date
/s/ Jeffrey E. Eberwein
Jeffrey E. Eberwein
Executive Chairman of the Board of Directors (Principal Executive Officer)
December 30, 2021
/s/ David J. Noble
David J. Noble
Chief Financial Officer (Principal Financial and Accounting Officer)
December 30, 2021
/s/ Mitchell I. Quain
Mitchell I. Quain
Director
December 30, 2021
/s/ Michael A. Cunnion
Michael A. Cunnion
Director
December 30, 2021
/s/ John W. Sayward
John W. Sayward
Director
December 30, 2021
/s/ John W. Gildea
John W. Gildea
Director
December 30, 2021