UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended March 31, 2026

or

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

For the transition period from              to             

Commission file number: 001-38704 

STAR EQUITY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	59-3547281
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

53 Forest Avenue, Suite 101, Old Greenwich, CT 06870

(Address of principal executive offices) (Zip Code)

(203) 489-9500

(Registrant’s telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par value	STRR	The NASDAQ Stock Market LLC
Series A Preferred Stock, $0.001 par value	STRRP	The NASDAQ Stock Market LLC
Preferred Share Purchase Rights

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ☒    No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒     No  ☐

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 definition 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 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding on May 1, 2026
Common Stock - $0.001 par value	3,695,890

STAR EQUITY HOLDINGS, INC.

INDEX

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2026 and 2025	1
	Condensed Consolidated Statements of Other Comprehensive Income (Loss) - Three Months Ended March 31, 2026 and 2025	2
	Condensed Consolidated Balance Sheets – March 31, 2026 and December 31, 2025	3
	Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2026 and 2025	4
	Condensed Consolidated Statements of Stockholders’ Equity – Three Months Ended March 31, 2026 and 2025	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	53
Item 4.	Controls and Procedures	53
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	55
	Exhibit Index	55
	Signatures	56

PART I – FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

STAR EQUITY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited) 

	Three Months Ended March 31,
	2026		2025
Revenues:
Building Solutions	$	11,598	$	—
Business Services	35,005		31,866
Energy Services	3,458		—
Investments	—		—
Total revenues	50,061		31,866
Cost of revenues:
Building Solutions	9,957		—
Business Services	17,559		15,468
Energy Services	1,915		—
Investments	75		—
Total cost of revenues	29,506		15,468
Gross profit	20,555		16,398
Operating expenses:
Salaries and related	18,740		14,345
Office and general	4,597		2,564
Marketing and promotion	922		930
Depreciation and amortization	311		283
Total operating expenses	24,570		18,122
Operating loss	(4,015)		(1,724)
Non-operating income (expense):
Interest (expense) income, net	(13)		71
Other income / (expense), net	(31)		(71)
Loss before income taxes	(4,059)		(1,724)
(Benefit from) provision for income taxes	(266)		32
Net loss	(3,793)		(1,756)
Dividend on Series A perpetual preferred stock	(592)		—
Net loss attributable to common shareholders	$	(4,385)	$	(1,756)
Loss per share:
Basic	$	(1.01)	$	(0.59)
Diluted	$	(1.01)	$	(0.59)
Loss per share, attributable to common shareholders
Basic	$	(1.17)	$	(0.59)
Diluted	$	(1.17)	$	(0.59)
Weighted-average shares outstanding:
Basic	3,744		2,985
Diluted	3,744		2,985
Dividends declared per share of Series A perpetual preferred stock	$	0.25	$	—

See accompanying notes to Condensed Consolidated Financial Statements.

- 1 -

STAR EQUITY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended March 31,
	2026		2025
Comprehensive loss:
Net loss	$	(3,793)	$	(1,756)
Other comprehensive income (loss):
Foreign currency translation adjustment, net of income taxes	(83)		424
Total other comprehensive (loss) income, net of income taxes	(83)		424
Comprehensive loss	$	(3,876)	$	(1,332)

See accompanying notes to Condensed Consolidated Financial Statements.

- 2 -

STAR EQUITY HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)

	March 31, 2026		December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	8,093	$	10,269
Restricted cash, current	1,649		1,819
Investments in equity securities	4,157		3,767
Accounts receivable, less allowance for expected credit losses of $310 and $275, respectively	32,839		35,220
Inventories, net	7,072		6,988
Note receivable, current portion	256		256
Prepaid and other	3,992		4,168
Total current assets	58,058		62,487
Property and equipment, net of accumulated depreciation of $7,001 and $6,367, respectively	15,868		18,610
Operating lease right-of-use assets	14,078		11,675
Goodwill	5,913		5,944
Intangible assets, net of accumulated amortization of $4,949 and $4,795, respectively	1,526		1,688
Long-term investments	953		953
Notes receivable, net of current portion	8,766		8,629
Deferred tax assets, net	2,786		1,911
Restricted cash, non-current	553		1,322
Other assets	12		12
Total assets	$	108,513	$	113,231
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,514	$	4,769
Accrued salaries, commissions, and benefits	8,152		7,526
Accrued expenses and other current liabilities	6,681		6,907
Short-term debt	6,789		8,473
Deferred revenue	876		1,496
Operating lease obligations, current	745		655
Total current liabilities	27,757		29,826
Income tax payable	100		99
Operating lease obligations	13,624		11,235
Long-term debt, net of current portion	5,589		6,056
Other liabilities	441		308
Total liabilities	47,511		47,524
Commitments and contingencies
Stockholders’ equity:
Series A Preferred stock, $0.001 par value; 10,000 shares authorized: 2,691 shares issued and 2,370 shares outstanding for both periods	3		3
Common stock, $0.001 par value, 20,000 shares authorized; 5,389 and 5,366 shares issued; 3,707 and 3,755 shares outstanding, respectively	5		5
Additional paid-in capital	530,028		530,136
Accumulated deficit	(439,727)		(435,934)
Accumulated other comprehensive loss, net of applicable tax	(1,447)		(1,364)
Treasury stock, at cost: 1,682 and 1,611 common shares, respectively, and 321 preferred shares for both periods	(27,860)		(27,139)
Total stockholders’ equity	61,002		65,707
Total liabilities and stockholders’ equity	$	108,513	$	113,231

See accompanying notes to Condensed Consolidated Financial Statements.

- 3 -

STAR EQUITY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net loss	$	(3,793)	$	(1,756)
Adjustments to reconcile net loss to net cash used by operating activities:
Total Depreciation and amortization	942		283
Provision for expected credit losses	51		6
(Benefit from) provision for deferred income taxes	(884)		31
Stock-based compensation	484		386
Non-cash interest income	(211)		—
Gain on sale-leaseback of real estate	(37)		—
Realized gain on sale of investments	(181)		—
Unrealized loss on equity securities	21		—
Gross profit from sale of lost-in-hole equipment	(219)		—
Changes in operating assets and liabilities, net of effect of dispositions:
Accounts receivable	2,650		(1,199)
Inventories	(84)		—
Prepaid and other assets	293		(326)
Deferred revenue	(619)		(33)
Accounts payable, accrued expenses, and other liabilities	191		1,806
Net cash used in operating activities	(1,396)		(802)
Cash flows from investing activities:
Capital expenditures	(1,292)		(6)
Proceeds from sale-leaseback of real estate	3,211		—
Proceeds from sale of lost-in-hole equipment	159		—
Proceeds from sale of property and equipment	30		—
Purchases of equity securities	(691)		—
Proceeds from sales of equity securities	397		—
Repayment of note receivable	74		—
Net cash provided by (used in) investing activities	1,888		(6)
Cash flows from financing activities:
Proceeds from borrowings	10,795		—
Repayment of debt	(13,118)		—
Net borrowings under invoice finance credit facility	132		—
Preferred stock dividends paid	(592)		—
Purchase of treasury stock (including payment of tax withholdings)	(712)		—
Cash paid for net settlement of employee restricted stock units	(9)		(8)
Net cash used in financing activities	(3,504)		(8)
Effect of exchange rates on cash, cash equivalents, and restricted cash	(103)		363
Net decrease in cash, cash equivalents, and restricted cash	(3,115)		(453)
Cash, cash equivalents, and restricted cash, beginning of the period	13,410		17,667
Cash, cash equivalents, and restricted cash, end of the period	$	10,295	$	17,214
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	$	247	$	—
Cash received during the period for interest	$	22	$	71
Net cash payments during the period for income taxes	$	201	$	283
Cash paid for amounts included in operating lease liabilities	$	599	$	205
Supplemental non-cash disclosures:
Right-of-use assets obtained in exchange for operating lease liabilities	$	2,494	$	—

See accompanying notes to Condensed Consolidated Financial Statements. 

- 4 -

STAR EQUITY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

	Preferred Stock			Common stock			Additional paid-in capital		Accumulated deficit		Accumulated Other Comprehensive income (loss)		Treasury Stock			Total stockholders’ equity
	Shares	Amount		Shares	Amount								Shares	Amount
Balance at December 31, 2025	2,691	$	3	5,366	$	5	$	530,136	$	(435,934)	$	(1,364)	(1,611)	$	(27,139)	$	65,707
Stock-based compensation	—	—		23	—		484		—		—		—	—		484
Purchase of treasury stock  (including payment of tax withholdings)	—	—		—	—		—		—		—		(1)	(9)		(9)
Purchase of net settled restricted stock	—	—		—	—		—		—		—		(70)	(712)		(712)
Accumulated other comprehensive income	—	—		—	—		—		—		(83)		—	—		(83)
Dividends to holders of preferred stock ($0.250 per share)	—	—		—	—		(592)		—		—		—	—		(592)
Net loss	—	—		—	—		—		(3,793)		—		—	—		(3,793)
Balance at March 31, 2026	2,691	$	3	5,389	$	5	$	530,028	$	(439,727)	$	(1,447)	(1,682)	$	(27,860)	$	61,002

	Preferred Stock			Common stock			Additional paid-in capital		Accumulated deficit		Accumulated Other Comprehensive income (loss)		Treasury Stock			Total stockholders’ equity
	Shares	Amount		Shares	Amount								Shares	Amount
Balance at December 31, 2024	—	$	—	4,033	$	4	$	494,209	$	(430,017)	$	(2,717)	(1,283)	$	(21,051)	$	40,428
Stock-based compensation	—	—		2	—		386		—		—		—	—		386
Purchase of net settled restricted stock	—	—		—	—		—		—		—		(1)	(8)		(8)
Accumulated other comprehensive loss	—	—		—	—		—		—		424		—	—		424
Net income (loss)	—	—		—	—		—		(1,756)		—		—	—		(1,756)
Balance at March 31, 2025	—	$	—	4,035	$	4	$	494,595	$	(431,773)	$	(2,293)	(1,284)	$	(21,059)	$	39,474

See accompanying notes to Condensed Consolidated Financial Statements.

- 5 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

NOTE 1 – BASIS OF PRESENTATION

    These interim unaudited condensed consolidated financial statements have been prepared in accordance with United States of America (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting and should be read in conjunction with the consolidated financial statements and related notes of Star Equity Holdings, Inc. and its subsidiaries (the “Company”) filed in their respective Annual Reports on Form 10-K for the year ended December 31, 2025.

    The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of operating revenues and expenses. These estimates are based on management’s knowledge and judgments. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows at the dates and for the periods presented have been included. The results of operations for interim periods are not necessarily indicative of the results of operations for the full year. The condensed consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. Intra-entity balances and transactions between and among the Company and its subsidiaries have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current year presentation with no material impact on the condensed consolidated financial statements. For more information, see Note 2 to the Condensed Consolidated Financial Statements.

NOTE 2 – DESCRIPTION OF BUSINESS

Star Equity Holdings, Inc. (“Star Equity,” “Star”, the “Company,” “we,” or “our”) is a multi-industry diversified holding company with four divisions: Building Solutions, Business Services, Energy Services, and Investments. Our common stock and Series A preferred stock are listed on the NASDAQ Global Market exchange as “STRR” and “STRRP,” respectively.

AMENDMENT TO CERTIFICATE OF INCORPORATION

On September 4, 2025, Star Equity filed a certificate of amendment (the “Amendment”) to the Company’s Amended and Restated Certificate of Incorporation, as Amended (the “Charter”), to change the name of the Company from Hudson Global, Inc. to Star Equity Holdings, Inc. (the “Name Change”). The Name Change was approved by the Company’s Board of Directors (the “Board”) on September 2, 2025, and became effective at 12:01 a.m. (Eastern Time) on September 5, 2025.

MERGER

On August 22, 2025, Star Equity Holdings, Inc. ("Star", formerly known as Hudson Global, Inc. ("Hudson")), completed its previously announced acquisition of Star Operating Companies, Inc. ("SOC" or "Star Operating Companies", formerly known as Star Equity Holdings, Inc.) pursuant to the Agreement and Plan of Merger, dated as of May 21, 2025 (the “Merger Agreement”), by and among Star, SOC, and HSON Merger Sub, Inc., a wholly owned subsidiary of Star (“Merger Sub”). Upon the terms and subject to the conditions of the Merger Agreement, on August 22, 2025, at the effective time of the Merger (the “Effective Time”), Merger Sub merged with and into SOC, with SOC continuing as the surviving corporation of the Merger under the name “Star Operating Companies, Inc." as a wholly owned subsidiary of Star.

Pursuant to the terms of the Merger Agreement, at the Effective Time, (i) each share of common stock of SOC issued and outstanding immediately prior to the Effective Time (other than certain shares as set forth in the Merger Agreement) was automatically converted into the right to receive 0.23 shares of Star common stock (the "exchange ratio") and (ii) each share of preferred stock of SOC issued and outstanding immediately prior to the Effective Time (other than certain shares set forth in the Merger Agreement) was automatically converted into the right to receive one (1) share of Star 10% Series A Cumulative Perpetual preferred stock (“Preferred Stock”). As a result of the Merger, former SOC common stockholders received approximately 744,291 shares of Star common stock for their SOC common shares and former SOC preferred stock stockholders received approximately 2,690,637 shares of Star Preferred Stock. No fractional shares of Star common stock were issued in the Merger, and SOC stockholders became entitled to receive cash in lieu of fractional shares in accordance with the Merger Agreement.

- 6 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

In addition, pursuant to the terms of the Merger Agreement, at the Effective Time, each award of SOC restricted stock units (“RSUs”) outstanding immediately prior to the Effective Time was converted into Star RSUs issued under the Hudson Global, Inc. 2009 Incentive Stock and Awards Plan, as amended (the “Plan”), in accordance with the Merger Agreement.

The accompanying condensed consolidated financial statements include the financial results of SOC beginning on August 22, 2025 and reflect the post merger results of the Building Solutions, Energy Services, and Investments segments for the period from January 1, 2026 through March 31, 2026. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations. All significant intercompany accounts and transactions have been eliminated in consolidation.

SEGMENTS

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

Our Business Services segment delivers Recruitment Process Outsourcing (“RPO”) services consisting of recruitment and contracting solutions tailored to the individual needs of primarily mid-to-large multinational companies. The Company operates directly in eighteen countries organized into three geographic regions: the Americas, Asia Pacific, and Europe, Middle East, and Africa ("EMEA"). The Company’s RPO delivery teams utilize recruitment process methodologies and project management expertise to meet clients’ ongoing business needs. The Company’s RPO services include complete recruitment outsourcing, project-based outsourcing, contingent workforce solutions, and recruitment consulting for clients’ permanent staff hires. RPO services leverage the Company’s consultants, supported by the Company’s specialists, in the delivery of its proprietary methods to identify, select, and engage the best-fit talent for critical client roles. In addition, the Company provides RPO clients with a range of outsourced professional contract staffing services and managed service provider services offered sometimes on a standalone basis and sometimes as part of a blended total talent solution. These services draw upon a combination of specialized recruiting and project management competencies to deliver a wide range of solutions. Hudson RPO-employed professionals - either individually or as a team - are placed with client organizations for a defined period of time based on specific business needs of the client.

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

Our Investments segment holds and manages certain of our corporate-owned real estate, including a manufacturing facility in Maine that is leased to KBS and a manufacturing facility in Wisconsin that is leased to TT. The Investments division manages internally funded, concentrated minority investments in a small number of public companies. It also holds and manages a promissory note and a private equity stake in Catalyst MedTech LLC ("Catalyst"), a provider of medical imaging equipment and services. SOC acquired these interests in May 2023 as a result of the sale of Digirad Health. Our Investments division also holds an investment in Enservco Corporation consisting of an investment in Enservco Common Stock, an investment in Enservco Preferred Stock, and an investment in a call option, all of which were acquired in the third quarter of 2024 and which currently have a carrying value of zero.

See Note 17 to the Condensed Consolidated Financial Statements for further details regarding the Company’s reportable segments: Building Solutions, Business Services, Energy Services and Investments.

- 7 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

    ADOPTION OF ACCOUNTING POLICIES PURSUANT TO MERGER

The accounting policies of SOC have been conformed to those of the Company where necessary. No significant differences in accounting policies were identified. As a result of the acquisition, the Company adopted the following accounting policies that were not previously applicable to its operations:

Fair Value of Financial Instruments

The authoritative guidance for fair value measurements defines fair value for accounting purposes, establishes a framework for measuring fair value, and provides disclosure requirements regarding fair value measurements. The guidance defines fair value as an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlates to the level of pricing observability. Financial instruments primarily consist of cash equivalents, equity securities, accounts receivable, other current assets, restricted cash, and accounts payable. The carrying amount of short-term and long-term debt and notes payable approximates fair value because of the relative short maturity of these instruments and interest rates we could currently obtain.

The Company occasionally enters into derivative financial instruments to manage certain market risks. These derivative instruments are not designated as hedging instruments and accordingly, are recorded at fair value in the Condensed Consolidated Balance Sheets with changes in fair value recognized in cost of revenues in the Condensed Consolidated Statements of Operations.

Equity Securities

Securities consist of investments in equity securities that are publicly traded. These equity securities are measured at fair value on a trade date basis and changes in fair value are recognized in net income in other income (expense). Investments that are strategic in nature, with the intent to hold the investment over a several year period, are classified as long-term investments.

Long-Term Investments

As a part of the sale of Digirad Health, Star Operating Companies received common equity in Insignia TTG Parent LLC (“Catalyst Parent”), the parent entity of Catalyst formerly known as TTG Imaging Solutions, LLC. In accounting for this investment, we have elected the measurement alternative under ASC 321 “Accounting for Investments in Equity Securities”. The measurement alternative election allows for equity securities that do not have readily determinable fair values to be recorded at cost, with adjustments for impairment and certain observable price changes reflected in earnings. Such securities are adjusted to fair value when an observable price change occurs or impairment is identified. Each reporting period, we perform a qualitative and quantitative assessment considering impairment indicators to evaluate whether the investment is impaired. Impairment indicators include, but are not limited to, significant deterioration in earnings performance, significant adverse changes in the regulatory or economic environment and working capital deficiencies. If an investment is determined to be impaired, we include an impairment loss as a component of other income (expense) equal to the difference between the fair value of the investment and its carrying amount. During the period ended March 31, 2026 we recognized no impairment loss on this investment.

- 8 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

On August 9, 2024, SOC completed an investment in Enservco Corporation (“Enservco”) (“Investment in Enservco”), which consisted of Enservco Common Stock, Enservco Preferred Stock, and certain other options reflected in the Share Exchange Agreement, and the Enservco Note Receivable (See Note 18, Supplementary Balance Sheet Information). The Investment in Enservco is required to be accounted for using the equity method of accounting under ASC 323, “Equity Method Investments and Joint Ventures”, as we are deemed to have significant influence over Enservco based upon GAAP rules. Pursuant to the guidance in ASC 323, we elected the fair value option pursuant to ASC 825-10-15, wherein the financial instrument is initially measured at estimated fair value as of the transaction issue date and then subsequently remeasured at estimated fair value as of each reporting period balance sheet date, with changes in the estimated fair value recognized as other income (expense) in the statement of operations. Enservco Common Stock is publicly traded, and the fair value is determined based on Enservco’s common stock close price as of the reporting date. The fair value of the Enservco Preferred Stock was based on the consideration of a number of objective and subjective factors, including third-party valuations and a company-specific economic outlook. To determine the fair value of the call option, the Company used the Black-Scholes option pricing model. The fair value of the Enservco Note was determined using a discounted cash flow model. Fair value assumptions are further described in Note 12, Fair Value Measurements. The Enservco Note was determined to be uncollectible as of December 31, 2024 and the value was reduced to $0. As described further in Note 18, Supplementary Balance Sheet Information, the value of the Enservco Note was fully collateralized and SOC called the collateral once it was determined that the note was in default.

Inventory

Inventories are valued using first-in, first-out, or the weighted-average inventory method; stated at the lower of cost or net realizable value. Finished goods and work-in-process inventory values include the cost of raw materials, labor, and manufacturing overhead. Inventory, when written down to net realizable value, establishes a new cost basis and its value is not subsequently increased based upon changes in underlying facts and circumstances. We also make adjustments to reduce the carrying amount of inventories for estimated excess or obsolete inventories. Factors influencing these adjustments include inventory on-hand compared with historical and estimated future sales and usage for new and existing products and assumptions about the likelihood of obsolescence.

Debt Issuance Costs

We incur debt issuance costs in connection with debt financings. Debt issuance costs for line of credit are presented in other assets and are amortized over the term of the revolving debt agreements using the straight-line method. Debt issuance costs for term debt are netted against the debt and are amortized over the term of the loan using the effective interest method. Amortization of debt issuance costs are included in interest expense. As of March 31, 2026 we have no unamortized debt issuance costs.

Shipping and Handling Fees and Costs

We record all shipping and handling costs billed to customers as revenue earned for the goods provided. Shipping and handling costs related to continuing operations are included in cost of revenues and totaled $815 for the period ended March 31, 2026.

Warranties

Within our Building Solutions division, KBS provides a limited assurance warranty on its residential homes that covers substantial defects in materials or workmanship for a period of 12 months after delivery to the owner. EBGL provides a limited warranty on the sale of its wood foundation products that covers leaks resulting from defects in workmanship for a period of 25 years. TT provides a limited warranty on glulam products for a period of 50 years. Estimated warranty costs are accrued in the period that the related revenue is recognized. See Note 18, Supplementary Balance Sheet Information, for further information.

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred. Total advertising and marketing costs for the three months ended March 31, 2026 and 2025 were $922 and $930, respectively.

- 9 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

NOTE 3 – ACCOUNTING PRONOUNCEMENTS

Adoption of New Accounting Pronouncements

In December 2023, the FASB issued ASU 2023‑09, Income Taxes (Topic 740): “Improvements to Income Tax Disclosures”, which enhances annual income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid. The standard is effective for the Company for annual periods beginning after January 1, 2025, and the Company adopted the guidance on a prospective basis, with prior periods not revised.

In July 2025, the FASB issued Accounting Standards Update (“ASU”) 2025‑05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU provides an optional practical expedient for estimating expected credit losses on current accounts receivable and contract assets arising from revenue transactions accounted for under ASC 606. The Company adopted ASU 2025‑05 on January 1, 2026, the beginning of its 2026 fiscal year, and elected the practical expedient for in‑scope current accounts receivable and contract assets. The adoption of ASU 2025‑05, including the election of the practical expedient, did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures.

Recent Accounting Standards Not Yet Adopted

In September 2025, the FASB issued ASU 2025-06, “Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”, ASU 2025-06 updates the accounting for internal-use software by removing the previous “project stage” model and requiring capitalization only when management authorizes and commits to funding a project that is probable of completion. The ASU also adds guidance on assessing development uncertainty, incorporates website development into Subtopic 350-40, and aligns presentation and disclosure requirements with ASC 360. The amendments are effective for annual periods beginning after December 15, 2027, and interim periods within those years, with early adoption permitted. Entities may apply the standard prospectively, modified-prospectively, or retrospectively. The Company is currently evaluating the impact of this guidance and does not expect the adoption to have a material effect on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024‑03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures” (Subtopic 220‑40): Disaggregation of Income Statement Expenses, which requires public entities to provide additional detail on specific expense categories in the notes to the financial statements on both an interim and annual basis. In January 2025, the FASB issued ASU 2025‑01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220‑40): Clarifying the Effective Date, to clarify the effective date of the new guidance. The guidance is effective for the Company for fiscal years beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027, and may be applied on either a retrospective or prospective basis, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its financial statement disclosures.

NOTE 4 – REVENUE RECOGNITION

Building Solutions Revenue Recognition. Within the Building Solutions division, we service residential and commercial construction projects by manufacturing modular housing units and other products, supplying general contractors with building materials and providing glue-laminated timber products (“glulam”) to distributors and end users. KBS manufactures modular buildings for both single-family residential homes and larger, commercial building projects. EdgeBuilder manufactures structural wall panels, permanent wood foundation systems, and other engineered wood products, and Glenbrook is a retail supplier of lumber and other building supplies. Retail sales at Glenbrook are recognized at the point of sale. TT manufactures glulam for various end markets and applications, including agriculture, industrial, infrastructure, and building construction (commercial and residential). For bill and hold sales, we determine when the customer obtains control of the product on a case-by-case basis to determine the amount of revenue to recognize each period. Revenue is generally recognized at point in time upon delivery of product or over time by measuring progress towards completion. There are no contracts as of March 31, 2026 that are subject to over time recognition.

- 10 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Business Services Revenue Recognition. We account for a contract when both parties to the contract have approved the contract, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Revenues are recognized over time or as services are delivered to customers, using an input or output method, as the control of the promised services is transferred to the client in an amount that reflects the consideration we expect to be entitled to in exchange for those services. The majority of our contracts are short-term in nature as they include termination clauses that allow either party to cancel within a short termination period, without cause. Revenue includes billable travel and other reimbursable costs and is reported net of sales or use taxes collected from clients and remitted to taxing authorities.

    We generally determine standalone selling prices based on the prices included in our client contracts, using expected cost plus profit, or other observable prices. The price as specified in our client contracts is generally considered the standalone selling price as it is an observable input that depicts the price as if sold to a similar client in similar circumstances. Certain client contracts have variable consideration, including usage-based fees that increase the transaction price and volume rebates or other similar items that generally reduce the transaction price. We estimate variable consideration using the expected value method based on the terms of the client contract and historical evidence. These amounts may be constrained and are only included in revenue to the extent we do not expect a significant reversal when the uncertainty associated with the variable consideration is resolved. Other than bonuses to be paid to contractors, on behalf of our clients, our estimated amounts of variable consideration subject to constraints are not material, and we do not believe that there will be significant changes to our estimates. Certain contract employees are entitled to performance bonuses at the sole discretion of the client and are constrained until approved. No bonuses were approved and paid to our contract employees in the three months ended March 31, 2026 and 2025.

    We record accounts receivable when our right to consideration becomes unconditional. Contract assets primarily relate to our rights to consideration for services provided that such rights to consideration are conditional on satisfaction of future performance obligations. A contract liability for deferred revenue is recorded when consideration is received, or is unconditionally due, from a client prior to transferring control of services to the client under the terms of a contract. Deferred revenue balances typically result from advance payments received from clients prior to transferring control of services. Other than deferred revenue, we do not have any material contract assets or liabilities as of and for the three months ended March 31, 2026 and 2025.

    Payment terms vary by client and the services being provided to the client. We consider payment terms that exceed one year to be extended payment terms. Substantially all of the Company’s contracts include payment terms of 90 days or less, and we do not extend payment terms beyond one year.

    We primarily record revenue on a gross basis in the Condensed Consolidated Statements of Operations and Comprehensive Income based upon the following key factors:

•We maintain the direct contractual relationship with the client and are responsible for fulfilling the service promised to the client.

•We maintain control over our contractors while the services to the client are being performed, including our contractors’ billing rates, and are ultimately responsible for paying them.

    RPO. We provide complete recruitment outsourcing, project-based outsourcing, and recruitment consulting services for clients’ permanent staff hires. We recognize revenue for our RPO over time in an amount that reflects the consideration we expect to be entitled to and have an enforceable right to payment in exchange for our services. The client simultaneously receives and consumes the benefits of the services as they are provided. The transaction prices contain both fixed fees and variable consideration. Variable consideration is constrained by candidates accepting offers of permanent employment. We recognize revenue on fixed fees as the performance obligations are satisfied and variable fees as the constraint is lifted. We do not incur incremental costs to obtain our RPO contracts. The costs to fulfill these contracts are expensed as incurred.

    We recognize permanent placement revenue when employment candidates accept offers of permanent employment. We have a substantial history of estimating the financial impact of permanent placement candidates who do not remain with our clients through a guarantee period. Fees to clients are generally calculated as a percentage of the new employee’s annual compensation. No fees for permanent placement services are charged to employment candidates.

- 11 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

    Contracting. We provide clients with a range of outsourced professional contract staffing services and managed service provider services, sometimes offered on a standalone basis and sometimes offered as part of a blended total talent solution. We recognize revenue for our contracting services over time as services are performed in an amount that reflects the consideration we expect to be entitled to and have an enforceable right to payment in exchange for our services, which is generally calculated as hours worked multiplied by the agreed-upon hourly bill rate. The client simultaneously receives and consumes the benefits of the services as they are provided. We do not incur incremental costs to obtain our contracts for outsourced professional contract staffing services and managed service provider services. The costs incurred to fulfill these contracts are expensed as incurred.

    Unsatisfied performance obligations. As a practical expedient, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an expected original duration of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Energy Services Revenue Recognition. ADT is principally engaged in the business of renting drilling tools. We also sell new drilling tools, drilling parts, supplies, and used rental tools. In addition, ADT offers repair services to support its customers. Tools purchased for sale are recorded as inventory. Tools intended for rental are recorded as part of fixed assets. Equipment rental revenue is recognized on a straight-line basis over the length of the rental contract. New tools, parts, and supplies sales are recognized as revenue upon transfer of control, which generally occurs when products are picked up by or delivered to the customer. Repair services revenues are recognized in the period the services are provided. Upon the sale of other rental tools from fixed assets, we recognize a gain or loss on the sale in other income / expense, net.

ADT’s equipment rental agreements generally contain provisions whereby should the rented tools or components provided to a customer be deemed to be irretrievably lost during drilling operations, commonly referred to as “lost-in-hole,” the Company has the right to receive reimbursement for such losses. Amounts billed to customers are at an agreed upon price relative to the specific piece of equipment, the revenue of which is recognized at the time the loss of the equipment is confirmed. The gross profit recognized from lost-in-hole transactions is normally calculated as the difference between the amounts billed to the customer and the net book value of the lost equipment. This gross profit is presented as a separate line item in the statement of cash flows under operating activities, and the cash received in connection with these activities is presented as an offset to cash purchases of property and equipment in the investing section of the statement of cash flows, to the extent it does not exceed the cash used for the purchases of the replacement equipment. Revenue recognized for the period ended March 31, 2026, totaled $290. No significant lost-in-hole reimbursements were outstanding or contingent as of the end of the first quarter.

Billings in excess of costs and estimated profit. We recognize billings in excess of costs and estimated profit on uncompleted contracts within current liabilities. Such amounts relate to fixed-price contracts recognized over time, and represents payments in advance of performing the related contract work. Billings in excess of costs and estimated profit on uncompleted contracts are not considered to be a significant financing component because they are generally used to meet working capital demands that can be higher in the early stages of a contract. Contract liabilities are reduced when the associated revenue from the contract is recognized, which is generally within one year. There are no liabilities associated with billings in excess of costs at March 31, 2026.

Contract Costs. We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. The Company applies a practical expedient to expense costs as incurred for these costs when the amortization period is one year or less. These costs primarily consist of internal sales commissions; under the terms of these programs these are generally earned and the costs are recognized at the time the associated revenue is recognized. As of March 31, 2026, there were no contract costs recognized.

- 12 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Deferred Revenue. Deferred revenue represents customer deposits and advanced payments for contracts that are subject to point-in-time recognition, or payments received prior to transferring control of services to customers. We have determined our contracts do not include a significant financing component.

Changes in deferred revenue for the three months ended March 31, 2026 are as follows:

Balance at December 31, 2025	$	1,496
Revenue recognized that was included in balance at beginning of the year	(1,129)
Deferred revenue, net, related to contracts entered into during the year	509
Balance at March 31, 2026	$	876

Disaggregation of Revenue

    The following tables present our revenue disaggregated by major source for the three months ended March 31, 2026 and 2025, respectively:

	Three Months Ended  March 31, 2026
	Building Solutions		Business Services		Energy Services		Total
Major Goods/Service Lines
Revenue from RPO Customers	$	—	$	16,824	$	—	$	16,824
Revenue from Contracting Customers	—		18,181		—		18,181
Revenue from Other Contracts with Customers	11,598		—		3,458		15,056
Total Revenues	$	11,598	$	35,005	$	3,458	$	50,061
Timing of Revenue Recognition
Services and goods transferred over time	$	—	$	24,303	$	2,684	$	26,987
Services and goods transferred at a point in time	11,598		10,702		774		23,074
Total Revenues	$	11,598	$	35,005	$	3,458	$	50,061

	Three Months Ended March 31, 2025
	Business Services
Major Goods/Service Lines
Revenue from RPO Customers	$	15,742
Revenue from Contracting Customers	16,124
Total Revenues	$	31,866
Timing of Revenue Recognition
Services and goods transferred over time	$	23,120
Services and goods transferred at a point in time	8,746
Total Revenues	$	31,866

- 13 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

NOTE 5 – ACQUISITIONS

Star Operating Companies

On August 22, 2025, the Company completed its previously announced acquisition of SOC pursuant to the Agreement and Plan of Merger, dated as of May 21, 2025 (the “Merger Agreement”). This resulted in a business combination pursuant to ASC 805, Business Combinations.

The terms of the Merger Agreement determined consideration for the purchase as follows: at the Effective Time, (i) each share of common stock of SOC issued and outstanding immediately prior to the Effective Time (other than certain shares as set forth in the Merger Agreement) were automatically converted into the right to receive 0.23 shares of Company common stock and (ii) each share of preferred stock of SOC issued and outstanding immediately prior to the Effective Time (other than certain shares set forth in the Merger Agreement) were automatically converted into the right to receive one (1) share of Star 10% Series A Cumulative Perpetual preferred stock (“Preferred Stock”). As a result of the Merger, former SOC common stockholders received approximately 744,291 shares of Star common stock for their SOC common shares and former SOC preferred stock stockholders received approximately 2,690,637 shares of Star Preferred Stock. No fractional shares of Star common stock were issued in the Merger, and SOC stockholders became entitled to receive cash in lieu of fractional shares in accordance with the Merger Agreement. The total consideration paid for SOC, which represents the fair value of the common and preferred stock, totaled approximately $32,174. Prior to the completion of the Merger Agreement, the Company determined that the Merger Agreement was in the best interests of the Company and for each of the Star and the SOC stockholders.

In accordance with ASC 805, Business Combinations, the Company accounted for this transaction as a business combination and recorded the acquired assets and assumed liabilities of SOC at their respective fair values as of the acquisition date. As of March 31, 2026, the purchase price allocation has been finalized, including the valuation of property and equipment, intangible assets, inventory, income taxes, and goodwill, among other items. The fair values of assets acquired and liabilities assumed were determined using valuation techniques consistent with ASC 820, Fair Value Measurement. These fair value measurements are considered nonrecurring and were determined as of the acquisition date. As noted in Note 2, Description of Business, SOC is reported as part of our Building Solutions, Energy Services, and Investments segments. The Company incurred transaction costs related to the SOC Acquisition of $1,600 that were expensed as part of “Office and general”.

- 14 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

The following table sets forth the purchase price allocation of SOC to the estimated fair value of assets acquired as of the acquisition date:

	Fair Value
Assets Acquired:
Cash and cash equivalents	$	4,641
Restricted cash, current	597
Investments in equity securities	2,561
Accounts receivable	11,463
Inventories, net	9,101
Note receivable, current portion	269
Prepaid and other	1,246
Property and equipment, net	17,959
Operating lease right-of-use assets	8,608
Long term investments	953
Notes receivable, net of current portion	8,473
Restricted cash, non-current	1,729
Assets Acquired	$	67,600
Liabilities Assumed:
Current payables	3,203
Accrued salaries, commissions and benefits	2,165
Accrued expenses and other current liabilities	5,162
Short-term debt	6,042
Deferred revenue	3,609
Operating lease liabilities, current portion	228
Long-term debt, net of current portion	6,630
Operating lease liabilities, net of current portion	8,387
Liabilities Assumed	$	35,426
Fair value of consideration transferred	$	32,174

The revenue and net loss of SOC for the three months ended March 31, 2026 totaled $15,056 and $2,249, respectively.

- 15 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

The following represents certain information from the unaudited pro forma Condensed Consolidated Statement of Operations as if SOC had been included in the consolidated results of the Company for the three months ending March 31, 2025:

	Three Months Ended  March 31,
Pro-forma	2025
Revenue	$	44,790
Gross Profit	$	19,534
Net loss	$	(2,932)

Alpha Consulting Group Acquisition

On July 23, 2025, the Company announced that it had acquired Alpha Consulting Group (“ACG”) (“Seller”), a Japan-based provider of recruitment services. The acquisition of ACG represents the Company’s entry into the Japanese market as part of its localization strategy for its Business Services segment. In connection with the acquisition, the seller received total cash consideration of $146, subject to certain adjustments at closing.

There were no earn-out payment arrangements associated with the transaction. The ACG acquisition was accounted for as a business combination under the acquisition method of accounting. The total purchase price of $146 consisted of $200 paid in cash, net of cash acquired of $14, and a working capital adjustment of negative $68. The purchase price was allocated to the net tangible and intangible assets and liabilities based on their estimated fair values as of the acquisition date, with the excess recorded as goodwill. The Company incurred $11 of transaction costs related to the ACG Acquisition, which were expensed as part of “Office and general.”

The Company’s Consolidated Statements of Operations for the three months ended March 31, 2026, included revenue of $228 and net loss of $83 from ACG.

Below is a summary of the fair value of the net assets acquired on the acquisition date:

	Fair Value
Assets Acquired:
Cash and cash equivalents	$	10
Accounts receivable	29
Prepaid and other	5
Intangible assets	95
Goodwill	242
Restricted cash, non-current	4
Assets Acquired	$	385
Liabilities Assumed:
Current payables	$	77
Accrued salaries, commissions and benefits	3
Accrued expenses and other current liabilities	126
Deferred tax liabilities	33
Liabilities Assumed	$	239
Fair value of consideration transferred	$	146

- 16 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

NOTE 6 – STOCK-BASED COMPENSATION

Incentive Compensation Plan

    The Company maintains the Hudson Global, Inc. 2009 Incentive Stock and Awards Plan, as amended and restated on May 24, 2016 and further amended on September 14, 2020, May 17, 2022, and August 22, 2025 (the “ISAP”), pursuant to which it can issue equity-based compensation incentives to eligible participants. The ISAP permits the granting of stock options, restricted stock, restricted stock units, and other types of equity-based awards. The Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) will establish such conditions as it deems appropriate for the granting or vesting of stock options, restricted stock, restricted stock units and other types of equity-based awards. As determined by the Compensation Committee, equity awards may also be subject to immediate vesting upon the occurrence of certain events including death, disability, retirement or a change in control of the Company. When we make grants of restricted stock or restricted stock units to our executive officers, including the named executive officers, we enter into Restricted Stock Agreements and Restricted Stock Unit Agreements with such executive officers that contain provisions that are triggered upon a termination of an executive officer or a change in control of our Company. For awards of restricted stock granted beginning on November 6, 2015, effective upon a change in control of our Company, if the executive is employed by us or an affiliate of ours immediately prior to the date of such change in control and is subsequently terminated within 12 months following the date of such change in control, the shares of restricted stock will fully vest and the restrictions imposed upon the restricted stock will be immediately deemed to have lapsed. For awards of restricted stock units granted beginning on March 10, 2016, effective upon a change in control of our Company, if the executive is employed by us or an affiliate of ours immediately prior to the date of such change in control and is subsequently terminated within 12 months following the date of such change in control, the restricted stock units will fully vest and the restrictions imposed upon the restricted stock units will be immediately deemed to have lapsed. The Company primarily grants restricted stock and restricted stock units to its employees. A restricted stock unit is equivalent to one share of the Company’s common stock and is payable only in common stock of the Company issued under the ISAP.

    The Compensation Committee administers the ISAP and may designate any of the following as a participant under the ISAP: any officer or other employee of the Company or its affiliates or individuals engaged to become an officer or employee, consultants or other independent contractors who provide services to the Company or its affiliates, and non-employee directors of the Company. On August 21, 2025, the Company’s stockholders at the 2025 Annual Meeting of Stockholders approved amendments to the ISAP to, among other things, increase the number of shares of the Company’s common stock that are reserved for issuance by 400,000 shares and to permit the issuance of 175,000 shares of the Company’s preferred stock. As of March 31, 2026, there were 109,951 shares of the Company’s common stock available for future issuance under the ISAP.

All share issuances related to stock compensation plans are issued from the aforementioned stock available for future issuance under stockholder approved compensation plan.

In February 2026, the Compensation Committee approved the Company’s 2026 long‑term incentive program (the “2026 LTIP”) under the ISAP. The 2026 LTIP is intended to incent long‑term shareholder value creation over a three‑year performance period from January 1, 2026 through December 31, 2028 and provides for awards in the form of restricted stock units (“RSUs”) that may be earned based on the achievement of pre‑established performance goals and continued service. Awards under the 2026 LTIP are currently denominated in the Company’s common stock; no preferred stock has been issued in connection with the 2026 LTIP.

For the three months ended March 31, 2026, the Company granted a total of 251,694 RSUs to employees, comprised of: (i) 105,818 performance-based RSUs subject to performance conditions; (ii) 140,173 performance-based RSUs granted under the 2026 LTIP for the three-year period; and (iii) 5,703 time-vested RSUs not subject to performance conditions. The 5,703 time-vested RSUs vest on the first anniversary of the grant date, with each RSU representing the right to receive one share of the Company's common stock upon settlement.

For the three months ended March 31, 2025, the Company granted 46,688 restricted stock units subject to performance vesting conditions for the year ended December 31, 2025. In connection with the merger completed on August 22, 2025, the Company converted unvested RSU awards previously granted under SOC’s equity incentive plans using an exchange ratio of 0.23 shares of the Company’s common stock for each SOC share. As of the merger date, the assumed awards consisted of 22,717 performance-based RSUs and 6,046 time-based RSUs. These assumed awards remain subject to their original vesting terms and conditions and are recognized as part of the Company’s ongoing stock-based compensation expense.

- 17 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

A summary of the quantity and vesting conditions for stock-based units granted to the Company’s employees for the three months ended March 31, 2026 was as follows:

Vesting conditions	Number of Restricted Stock Units Granted
Performance and service conditions - Type 1 (1) (3)	10,695
Performance and service conditions - Type 1 (2) (3)	235,296
Service conditions only - Type 2 (4)	5,703
Total shares of stock award granted	251,694

1.The performance conditions with respect to restricted stock units may be satisfied as follows: 

a.For grants to Corporate office employees subject to 2025 performance conditions, 100% of the restricted stock units may be earned on the basis of performance as measured by a group adjusted EBITDA.

2.The performance conditions with respect to restricted stock units may be satisfied as follows: 

a.For grants to Corporate office employees subject to 2026 performance conditions, 100% of the restricted stock units may be earned on the basis of performance as measured by a group adjusted EBITDA, corporate costs, and other qualitative factors.

3.To the extent restricted stock units are earned, such restricted stock units will vest on the basis of service as follows:

a.33% for Type 1 of the restricted stock units will vest on the first anniversary of the grant date;

b.33% for Type 1 of the restricted stock units will vest on the second anniversary of the grant date; and

c.34% for Type 1 of the restricted stock units will vest on the third anniversary of the grant date; provided that, in each case, the employee remains employed by the Company from the grant date through the applicable service vesting date.

4.To the extent restricted stock units are earned, such restricted stock units will vest on the basis of service as follows

a.100% for Type 2 of the restricted stock units will vest on the first anniversary of the grant date.

The Company also maintains the Director Deferred Share Plan (the “Director Plan”) as part of the ISAP pursuant to which it can issue restricted stock units to its non-employee directors. A restricted stock unit is equivalent to one share of the Company’s common stock, and prior to the acquisition of SOC were payable in common stock issued under the ISAP upon a director ceasing service as a member of the Company’s Board. Restricted stock units granted to directors vest over one year. Restricted stock units issued under the Director Plan contain the right to a dividend equivalent award in the form of additional restricted stock units. The dividend equivalent award is calculated using the same rate as the cash dividend paid on a share of the Company’s common stock, and then divided by the closing price of the Company’s common stock on the date the dividend is paid to determine the number of additional restricted stock units to grant. Dividend equivalent awards have the same vesting terms as the underlying awards. During the three months ended March 31, 2025, the Company granted a total of 3,836 RSUs to its non-employee directors.

As of March 31, 2026, 12,169 restricted stock units are deferred under the Company’s ISAP.

For the three months ended March 31, 2026 and 2025, the Company’s stock-based compensation expense related to restricted stock units and restricted shares of common stock were as follows:

	Three Months Ended  March 31,
	2026		2025
Restricted stock units	484		386
Total	$	484	$	386

- 18 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Restricted Stock Units

    As of March 31, 2026, the Company had $3,705 of unrecognized stock-based compensation expense related to outstanding unvested restricted stock units. The Company expects to recognize that cost over a weighted average service period of 1.1 years. Restricted stock units have no voting or dividend rights until the awards are vested.

    Changes in the Company’s restricted stock units for the three months ended March 31, 2026 and 2025 were as follows:

	Three Months Ended March 31, 2026
	Performance-based			Time-based/Director			Total
	Number of Shares of Restricted Stock Units	Weighted Average Grant-Date Fair Value		Number of Shares of Restricted Stock Units	Weighted Average Grant-Date Fair Value		Number of Shares of Restricted Stock Units	Weighted Average Grant-Date Fair Value
Unvested restricted stock units at January 1, 2026	62,266	$	13.64	197,485	$	11.75	259,751	$	12.20
Granted	245,991	$	9.92	5,703	$	10.96	251,694	$	9.94
Vested	(16,328)	$	13.03	(3,186)	$	13.14	(19,514)	$	13.05
Forfeited	(23,508)	$	13.16	—	$	—	(23,508)	$	13.16
Unvested restricted stock units at March 31, 2026	268,421	$	10.31	200,002	$	11.71	468,423	$	10.91

 (a)    The number of shares earned above target are based on the performance target established by the Compensation Committee at the initial grant date.

	Three Months Ended March 31, 2025
	Performance-based			Time-based/Director			Total
	Number of Shares of Restricted Stock Units	Weighted Average Grant-Date Fair Value		Number of Shares of Restricted Stock Units	Weighted Average Grant-Date Fair Value		Number of Shares of Restricted Stock Units	Weighted Average Grant-Date Fair Value
Unvested restricted stock units at January 1, 2025	55,591	$	17.58	128,474	$	14.96	184,065	$	15.75
Granted	46,688	$	13.28	3,836	$	10.30	50,524	$	13.05
Vested	(3,373)	$	30.00	(4,249)	$	10.71	(7,622)	$	19.24
Forfeited	(47,647)	$	14.51	(340)	$	38.77	(47,987)	$	14.69
Unvested restricted stock units at March 31, 2025	51,259	$	15.70	127,721	$	14.90	178,980	$	15.13

 (a)    The number of shares earned above target are based on the performance target established by the

NOTE 7 – INCOME TAXES

Income Tax Provision

    Under ASC 270, “Interim Reporting”, and ASC 740-270, “Income Taxes – Interim Reporting”, the Company is required to adjust its effective tax rate for each quarter to be consistent with the estimated annual effective tax rate. Jurisdictions with a projected loss for the full year where no tax benefit can be recognized are excluded from the calculation of the estimated annual effective tax rate. Applying the provisions of ASC 270 and ASC 740-270 could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections.

Effective Tax Rate

    The benefit from income taxes for the three months ended March 31, 2026 was $266 on a pre-tax loss of $4,059, compared to a provision for income taxes of $32 on pre-tax loss of $1,724 for the same period in 2025. The Company’s effective income tax rate ("ETR") was 7% and negative 2% for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026, the effective tax rates differed from the U.S. Federal statutory rate of 21%

- 19 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

primarily due to pretax losses for which no tax benefit can be recognized, foreign tax rate differences, and non-deductible expenses. For the three months ended March 31, 2025, the effective tax rates differed from the U.S. Federal statutory rate of 21% primarily due to pretax losses for which no tax benefit can be recognized, foreign tax rate differences, and non-deductible expenses. The current year-to-date effective tax rate differs significantly from the prior period effective tax rate primarily due to the interaction of rate reconciliation items, including changes in valuation allowance.

Uncertain Tax Positions 

    As of both March 31, 2026 and December 31, 2025, the Company had $60, respectively, of unrecognized tax benefits, excluding interest and penalties, which, if recognized in the future, would lower the Company’s effective income tax rate.

     The Company recognizes accrued interest and penalties related to unrecognized tax benefits as part of the provision for income taxes. As of March 31, 2026 and December 31, 2025, the Company had $40 and $39, respectively, of accrued interest and penalties associated with unrecognized tax benefits.

In many cases, the Company’s unrecognized tax benefits are related to tax years that remain subject to examination by the relevant tax authorities. Tax years with net operating losses (“NOLs”) remain open until such losses expire or until the statutes of limitations for those years when the NOLs are used expire. As of March 31, 2026, the Company’s open tax years, which remain subject to examination by the relevant tax authorities, are between 2016 and 2026 depending on the jurisdiction.

    The Company believes that its unrecognized tax benefits as of March 31, 2026 are appropriately reflected for all years subject to examination above.

Net Operating Losses (“NOLs”), Capital Losses, and Valuation Allowance

The Company recorded a valuation allowance against all of our consolidated US deferred tax assets for NOLs and Capital Losses as of March 31, 2026 and December 31, 2025. We intend to continue maintaining a full valuation allowance on our deferred tax assets for NOLs until there is sufficient evidence to support the reversal of all or some portion of these allowances in the future.

NOTE 8 – ACCOUNTS RECEIVABLE, NET

Within our Building Solutions and Energy Services segments, accounts receivable consist principally of trade receivables from customers. These are recorded at the invoiced amount and are generally unsecured and due within 30 days. Trade receivables do not bear interest. We use an expected loss methodology. This methodology includes information about past events, current economic conditions and reasonable and supportable forecasts that impact the collectibility of the reported amounts of the receivables over their lifetime. Within the Current Expected Credit Losses (“CECL”) guidelines, we utilize a “probability of default” methodology to determine expected credit losses under the CECL model. Account balances are charged off against the allowance when we believe it is probable the receivable will not be recovered. Our “probability of default” methodology principally entails evaluating the collectability of our trade receivables and providing reserves for doubtful accounts based on our historical experience rate, known collectability issues and disputes, and our bad debt write-off history. Within our Business Services segment, accounts receivable balances are composed of trade and unbilled receivables. Unbilled accounts receivable represent revenue recorded in advance of processing formal invoices pursuant to the completion of contract provisions and, generally, become billable at contractually specified dates.

Our estimates of collectability could be impacted by material amounts due to changed circumstances, such as a higher number of defaults or material adverse changes in a payor’s ability to meet its obligations. Expected credit losses related to trade accounts receivable are recorded as an allowance for doubtful accounts within accounts receivable, net in the Condensed Consolidated Balance Sheets, and the related provision for doubtful accounts is charged to office and general expenses. We do not have any off-balance sheet credit exposure related to our customers.

Unbilled receivables of $7,449 and $6,960 as of March 31, 2026 and December 31, 2025, respectively, are expected to be invoiced and collected within one year. The Company records accounts receivable when its right to consideration becomes unconditional. Contract assets primarily relate to our rights to consideration for services provided that are conditioned on satisfaction of future performance obligations. Accounts receivable, net, are stated at the amount the Company expects to collect, which is net of estimated losses resulting from the inability of its customers to make required payments.

- 20 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

The following table summarizes the components of “Accounts receivable, net” as presented on the Condensed Consolidated Balance Sheets:

	March 31,		December 31,
Accounts Receivable:	2026		2025
Billed receivables	$	25,700	$	28,535
Unbilled receivables	7,449		6,960
Accounts Receivable, Gross	33,149		35,495
Allowance for expected credit losses	(310)		(275)
Accounts Receivable, Net	$	32,839	$	35,220

The following table summarizes the total provision for expected credit losses and write-offs:

	Three Months Ended  March 31,
	2026		2025
Beginning balance	$	275	$	391
Provision for expected credit losses	51		6
Write-offs	(16)		(170)
Ending Balance	$	310	$	227

- 21 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

NOTE 9 – DEBT

A summary of debt outstanding as of March 31, 2026 and December 31, 2025 is as follows:

	March 31, 2026			December 31, 2025
	Amount		Weighted-Average Interest Rate	Amount		Weighted-Average Interest Rate
Revolving Credit Facility - KeyBank KBS	$	207	6.68%	$	—	—%
Revolving Credit Facility - Premier EBGL	2,368		7.25%	3,969		7.25%
Revolving Credit Facility - Austin ADT	743		9.25%	1,205		9.25%
Revolving Credit Facility - NAB	1,557		7.61%	1,385		7.36%
Total Short-term Revolving Credit Facilities	4,875		7.65%	6,559		7.64%
Austin - ADT Term Loan	160		9.25%	160		9.25%
Term Loan Secured by Mortgage	354		7.50%	354		7.50%
Bridgewater - TT Term Loan	1,400		7.85%	1,400		7.85%
Total Short-term Debt	6,789		7.72%	8,473		7.70%
Austin - ADT Term Loan, net of current portion	319		9.25%	359		9.25%
Term Loan Secured by Mortgage, net of current portion	2,243		7.50%	2,320		7.50%
Bridgewater - TT Term Loan, net of current portion	3,027		7.85%	3,377		7.85%
Long Term Debt, net of current portion	5,589		7.79%	6,056		7.80%
Total Debt	$	12,378	7.75%	$	14,529	7.74%

Austin Loan Agreement

On March 3, 2025, ADT entered into a Loan and Security Agreement (the “Austin Loan Agreement”) with Austin Financial Services, Inc. (“Austin” or "AFS") providing ADT with a working capital line of credit of up to $3,000 and a term loan originally proposed of up to $800, subject to the conditions and procedures set forth in the Austin Loan Agreement. Availability under the Austin Loan Agreement is based on a formula tied to ADT’s eligible accounts receivable, inventory, and equipment, and borrowings bear interest at the prime rate plus 1.75%, with interest payable monthly and the outstanding principal balance payable March 3, 2028 (the “Maturity Date”). Based on AFS’s appraisal of ADT’s machinery and equipment, AFS reduced the term loan commitment to $638. The Austin Loan Agreement also provides for certain fees payable to Austin during its term. The term loan payment is approximately $13 per month. The loan is secured by substantially all of the assets of ADT and is subject to certain covenants. Under the terms of the AFS loan agreement, the Company is required to provide various financial and collateral reports to the lender on a regular basis. These reports include weekly availability and cash activity summaries, monthly accounts receivable and accounts payable agings, inventory reports, balance sheets, and income statements, as well as annual financial statements reviewed by an independent CPA, if requested. The Company must also provide any additional financial or operational information upon the lender’s request.

There are no specific financial covenants related to ratios, thresholds, or performance metrics under the AFS facility. However, failure to timely submit the required financial reports constitutes an event of default under the loan agreement.

- 22 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Premier Facility

On August 16, 2023, EdgeBuilder and Glenbrook (referred to herein as the “EBGL Borrowers”), entered into a Revolving Credit Loan Agreement with Premier Bank (“Premier”), which was subsequently amended on December 5, 2023 to provide the EBGL Borrowers with a working capital line of credit of up to $6,000 (the “Premier Loan Agreement”). Availability under the Premier Loan Agreement is based on a formula tied to the EBGL Borrowers’ eligible accounts receivable, inventory, and equipment. Borrowings under the Premier Loan Agreement bear interest at the prime rate plus 0.50% (and a minimum interest rate of 6.75%), with interest payable monthly and the outstanding principal balance payable upon expiration of the term of the Premier Loan Agreement. The Premier Loan Agreement also provides for certain fees payable to Premier during its term. The initial term of the Premier Loan Agreement expired on December 5, 2024 but may be extended from time to time at the request of the EBGL Borrowers, subject to approval by Premier. The term of the Premier Loan Agreement has been extended to December 5, 2026. The EBGL Borrowers’ obligations under the Premier Loan Agreement are guaranteed by the Company and secured by all of their inventory, equipment, accounts receivable, and other intangibles. As of March 31, 2026, availability under the Premier Loan Agreement was approximately $2,141. Premier holds $600 of restricted cash associated with the Premier Facility.

Financial covenants associated with the Premier Loan Agreement require that at the end of each calendar year the EBGL Borrowers maintain (a) a debt service coverage ratio for any calendar year of greater than 1.25; (b) a debt-to-equity ratio of less than 1.65; (c) a fixed charge coverage ratio of greater than 1.10; (d) working capital of at least $2 million; and (e) a current ratio of at least 1.50. As of December 31, 2025 the EBGL Borrowers were in compliance with the Premier Loan Agreement covenants.

KeyBank Facility

On April 24, 2024, KBS entered into a Loan and Security Agreement (the “KeyBank Loan Agreement”) with KeyBank National Association (“KeyBank”) providing KBS with a working capital line of credit of up to $4.0 million, subject to the conditions and procedures set forth in the KeyBank Loan Agreement. All borrowings under the KeyBank Loan Agreement bear interest at the Adjusted Daily SOFR Rate (as defined in the KeyBank Loan Agreement) plus 3%, with interest payable monthly and the outstanding principal balance payable on April 30, 2025 (the “Maturity Date”). The KeyBank Loan Agreement expires on the Maturity Date but may be extended from time to time at the request of KBS, subject to approval by KeyBank. SOC signed an extension on July 29, 2025 extending the Maturity Date to July 29, 2026. The KeyBank Loan Agreement also provides for certain fees payable to KeyBank. KBS’ obligations under the KeyBank Loan Agreement are guaranteed by SOC and secured by all of KBS’ inventory, equipment, accounts and other intangibles, if applicable, and all proceeds of the foregoing. Simultaneous with the execution of the KeyBank Loan Agreement, SOC entered into that certain Guaranty, dated April 24, 2024 (the “Guaranty”), pursuant to which SOC agreed to guarantee all amounts borrowed by KBS under the KeyBank Loan Agreement.

A financial covenant associated with KeyBank Loan Agreement requires that KBS maintains a ratio of its Operating Cash Flow to its Total Fixed Charges of at least 1.25 to 1.00 measured quarterly (the "FCCR Covenant"). As of March 31, 2026, KBS was in compliance with the FCCR covenant. The availability under the line was $3,793 as of March 31, 2026.

Term Loan Secured by Mortgage

On June 28, 2024, in connection with SOC's acquisition of substantially all of the assets used in the business of Timber Technologies, Inc. which closed on May 17, 2024, Timber Properties, LLC (“Timber Properties”), an affiliate of the Seller, sold to 106 Bremer, LLC, a wholly owned subsidiary of the Company (“106 Bremer”), all of Timber Properties’ Owned Real Property pursuant to a Real Estate Sales Agreement for $3,000 plus closing costs.

In connection with the purchase of the Owned Real Property, on June 28, 2024, 106 Bremer issued a Promissory Note in the principal amount of $3,000 (the “TT Property Note”) secured by a Mortgage (the “TT Property Mortgage”) on the Owned Real Property to Timber Properties. All borrowings under the TT Property Note bear interest at 7.50%, with interest payable quarterly and the outstanding principal balance payable on June 29, 2034.

- 23 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Bridgewater Facility

In connection with the completion of the TT Acquisition, on May 17, 2024, Timber Technologies Solutions, Inc., a wholly owned subsidiary of SOC, (the “Borrower”), entered into a Loan Agreement (the “Bridgewater Loan Agreement”) with Bridgewater Bank (“Bridgewater”) and issued a Term Promissory Note to Bridgewater in the amount of $7,000 thereunder (the “Facility”). All borrowings under the Facility bear interest at 7.85%, with interest payable monthly and the outstanding principal balance payable on May 20, 2029 (the “Maturity Date”). The Bridgewater Loan Agreement also provides for certain fees payable to Bridgewater during its term. The Borrower’s obligations under the Facility are guaranteed by the Company and secured by all of the Borrower’s inventory, equipment, accounts receivable, and other intangibles.

In connection with the Bridgewater Loan agreement, an amount of $1,000 was required to be deposited with Bridgewater and be under the sole dominion and control of Bridgewater, and SOC shall not have any control over the use of, or any right to withdraw any amount of the restricted deposit. In the event that SOC maintains compliance with all of the financial covenants set forth in the Bridgewater Loan Agreement for four consecutive measurement dates, Bridgewater shall release a portion of the deposit. As of March 31, 2026 Bridgewater released $500. The remaining $500 deposit is recorded in Restricted cash, non current in the Condensed Consolidated Balance Sheets.

Financial covenants require that TT maintain (i) a ratio of Cash Flow to Total Fixed Charges of not less than 1.30 to 1.00 as measured on each applicable Measurement Date on a trailing twelve (12) month basis; (ii) maintain a ratio of Senior Funded Debt to trailing twelve (12) month Adjusted EBITDA not to exceed 3.00 to 1.00 as measured on each applicable Measurement Date for a Measurement Period; (iii) maintain a ratio of Total Funded Debt to trailing twelve (12) month adjusted EBITDA not to exceed 4.00 to 1.00 as measured on each applicable Measurement Date for a Measurement Period. TT was in compliance with its covenants as of March 31, 2026.

Invoice Finance Credit Facility

    On April 8, 2019, the Company’s Australian subsidiary (“Australian Borrower”) entered into an invoice finance credit facility agreement (the “NAB Facility Agreement”) with National Australia Bank Limited (“NAB”). The NAB Facility Agreement provides the Australian Borrower with the ability to borrow funds based on a percentage of eligible trade receivables up to a maximum of 4 million Australian dollars. No receivables have terms greater than 90 days, and any risk of loss is retained by the Australian Borrower. The interest rate is calculated as the variable receivable finance indicator rate, plus a margin of 1.60% per annum. Borrowings under this facility are secured by substantially all of the assets of the Australian Borrower. The NAB Facility Agreement does not have a stated maturity date and can be terminated by either the Australian Borrower or NAB upon 90 days written notice. As of March 31, 2026, there was $1,557 outstanding under the NAB Facility Agreement. Interest expense and fees incurred on the NAB Facility Agreement were $29 and $4 for the three months ended March 31, 2026 and 2025, respectively.

    The NAB Facility Agreement contains various restrictions and covenants for the Australian Borrower including (1) that EBITDA must be at least two times total interest paid on debt on a 12-month rolling basis; (2) minimum tangible net worth must be at least 2.5 million Australian dollars and be equal to at least 25% of total tangible assets on June 30 and December 31 (as defined in the NAB Facility Agreement); and (3) additional periodic reporting requirements to NAB. The Australian Borrower was in compliance with all financial covenants under the NAB Facility Agreement as of March 31, 2026.

    Amounts borrowed from the NAB Facility may be large, contain short maturities and have quick turnovers. Amounts borrowed and repaid are presented on a net basis on the Condensed Consolidated Statements of Cash Flows.

- 24 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

NOTE 10 – LEASES

Lessee

We have operating and finance leases for corporate offices, vehicles, and certain equipment. Our leases have remaining lease terms of 1 year to 20 years. Some of the leases include options to extend the leases and some include options to terminate the lease within 1 year. Operating leases and finance leases are included separately in the Condensed Consolidated Balance Sheets.

On December 16, 2025, ADT entered into three purchase and sale agreements with Custom Capital Strategies, Inc. (“Custom Capital”), pursuant to which the parties agreed to consummate three sale and leaseback transaction of three different properties in Texas, Utah, and Wyoming.

On February 27, 2026, the property located at 101-107 Pasture Drive, Evanston, Wyoming, was sold for a total purchase price of $1.7 million, subject to adjustment for taxes and other charges and assessments. Thereafter, Custom Capital assigned their rights to buy the property to their affiliate, Pasture Drive Holdings, LLC (the “ADT Wyoming Buyer”).

On March 27, 2026 the property located at 3601 N County Rd 1148, Midland, Texas, was sold for a total purchase price of $1.1 million, and the property located at 1377 East 1500 South, Vernal, Utah was sold for a total purchase price of $0.6 million. Both purchase prices are subject to adjustment for taxes and other charges and assessments. Immediately prior to the closings Custom Capital assigned their rights to buy the property to, Alliance Texas and Utah, LLC (the “ADT Property Buyer”).

Simultaneously with the consummation of the above sales, ADT entered into three commercial single-tenant triple net leases with the ADT Wyoming Buyer and the ADT Property Buyer, guaranteed by the Company, pursuant to which ADT leased back from the ADT Wyoming Buyer and the ADT Property Buyer the above properties sold for terms commencing on February 27, 2026 and on March 27, 2026, respectively, and ending on the 20th anniversaries thereof, unless earlier terminated or extended for four additional five year periods. Pursuant to the terms of the lease agreements, ADT will be responsible for rent and all monthly expenses related to the properties, including insurance premiums, taxes, utilities, and other expenses.

These sale leasebacks meet the qualification of operating leases under ASC 842, “Leases” in that (i) they do not automatically transfer title to the lessee at the end of the lease term; (ii) they do not contain a bargain purchase option; (iii) the lease term is not for a major part of the estimated remaining useful life of the asset; (iv) the present value of the lease payments does not represent substantially all of the fair value of the underlying assets; and (v) the underlying assets are not of such a specialized nature that are assumed to have no alternative use to the lessor at the end of the lease term. Accordingly, the Company recognized the resulting gain on sale of $37 in full in “Other income (expense), net” in the period in which the buyer obtained control of the assets, representing the excess of the aggregate sale proceeds of $3,211 net of closing fees over the aggregate carrying value of the properties of $3,174, and no portion of the gain was deferred. The related right‑of‑use assets and lease liabilities arising from the sale leasebacks are accounted for in accordance with ASC 842 and are presented within operating lease right‑of‑use assets and operating lease liabilities on the Condensed Consolidated Balance Sheets.

We used our incremental borrowing rate as the discount rate for these sale leaseback transactions, as the rate implicit in the lease is not readily determinable. We estimated our incremental borrowing rate based on our Company credit rating, adjusted for the lease’s term and the collateralized nature of the lease obligations. Lease extensions are not reasonably certain of being exercised. As such, we have not included such extensions in determining our incremental borrowing rate or in our initial valuation of the lease assets and liabilities.

- 25 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

The components of lease expense are as follows:

	Three Months Ended  March 31,
	2026		2025
Operating lease cost	$	712	$	284
Finance lease cost:
Amortization of finance lease assets	$	10	$	—
Interest on finance lease liabilities	—		—
Total finance lease cost	$	10	$	—

Supplemental cash flow information related to leases was as follows:

	Three Months Ended March 31,
	2026		2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	599	$	205
Operating cash flows from finance leases	$	—	N/A
Financing cash flows from finance leases	$	5	N/A
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	2,494	$	—

Supplemental balance sheet information related to leases was as follows:

	March 31, 2026		December 31, 2025
Weighted average remaining lease term (in years)
Operating leases	14.8		13.8
Finance leases	0.8		0.9
Weighted average discount rate
Operating leases	12.81	%	12.80	%
Finance leases	5.74	%	5.76	%

We are committed to making future cash payments on non-cancelable operating leases and finance leases (including interest). The future minimum lease payments due under both non-cancelable operating leases and finance leases having initial or remaining lease terms in excess of one year as of March 31, 2026 were as follows:

	Operating Leases		Finance Leases
2026 (for the remainder of the year)	$	1,846	$	11
2027	2,363		3
2028	2,109		—
2029	2,113		—
2030	1,924		—
2031 and thereafter	24,855		—
Total future minimum lease payments	35,210		14
Less amounts representing interest	(20,854)		(1)
Present value of lease obligations	$	14,356	$	13

- 26 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

NOTE 11– GOODWILL AND INTANGIBLE ASSETS

Goodwill

For the three months ended March 31, 2026 and the twelve months ended December 31, 2025, the changes in carrying amount of goodwill were as follows:

	Carrying Value
	2026
Goodwill, January 1,	$	5,944
Currency translation	(31)
Goodwill, March 31, 2026	$	5,913

	Carrying Value
	2025
Goodwill, January 1,	$	5,703
Acquisitions	242
Currency translation	(1)
Goodwill, December 31, 2025	$	5,944

Intangible Assets

The Company’s intangible assets consisted of the following components as of March 31, 2026 and December 31, 2025:

March 31, 2026	Weighted Average Remaining Amortization Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Non-compete agreements	1.6	$	145	$	(129)	$	16
Trade name	5.2	1,659		(969)		690
Customer lists	2.5	4,014		(3,194)		820
Developed technology	—	657		(657)		—
		$	6,475	$	(4,949)	$	1,526

December 31, 2025	Weighted Average Remaining Amortization Useful Lives (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Non-compete agreements	2.7	$	147	$	(133)	$	14
Trade name	5.4	1,662		(933)		729
Customer lists	1.8	4,017		(3,072)		945
Developed technology	—	657		(657)		—
		$	6,483	$	(4,795)	$	1,688

Amortization expense for the three months ended March 31, 2026 and 2025 was $159 and $238, respectively. Intangible assets are amortized on a straight-line basis over their estimated useful lives. No impairment in the value of amortizable intangible assets was recognized during the three months ended March 31, 2026 and 2025.

- 27 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Estimated future amortization expense for intangible assets for the remainder of the fiscal year ending December 31, 2026, and for each of the next fiscal years are as follows:

2026	$	509
2027	575
2028	130
2029	110
2030	110
Thereafter	92
	$	1,526

The change in the book value of amortizable intangible assets is as follows:

	January 1, 2026 Beginning Balance		Acquisition		Amortization		Translation and Other		March 31, 2026 Ending Balance
Non-compete agreements	$	14	$	—	$	(1)	$	3	$	16
Trade name	729		—		(37)		(2)		690
Customer lists	945		—		(121)		(4)		820
	$	1,688	$	—	$	(159)	$	(3)	$	1,526

NOTE 12 – FAIR VALUE MEASUREMENTS

The Financial Accounting Standards Board’s authoritative guidance for fair value measurements establishes a three-level hierarchy based upon the inputs to the valuation model of an asset or liability. Assets and liabilities presented at fair value in our Condensed Consolidated Balance Sheets are generally categorized as follows:

Level 1:Quoted prices in active markets for identical assets or liabilities.

Level 2:Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3:Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Such assets and liabilities may have values determined using pricing models, discounted cash flow methodologies, or similar techniques, and include instruments for which the determination of fair value requires significant management judgment or estimation.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels. The following table sets forth by level within the fair value hierarchy our assets and liabilities that were recorded at fair value as of March 31, 2026:

- 28 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

	Fair Value as of March 31, 2026
	Level 1		Level 2		Level 3		Total
Assets (Liabilities):
Equity securities	$	4,157	$	—	$	—	$	4,157
Total	$	4,157	$	—	$	—	$	4,157

The table below presents a reconciliation for Level 3 liabilities for the period ended December 31, 2025. The Level 3 liabilities consist of an earnout liability associated with SOC's acquisition of Big Lake Lumber (“BLL”) in 2023. The change in the Level 3 liability during the period was primarily due to net payments.

	2025
Acquisition value at August 22, 2025	$	201
Net reductions (payments)	(201)
Balance as at December 31, 2025	$	—

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

Certain assets acquired and liabilities assumed in connection with the SOC acquisition were measured at fair value on a nonrecurring basis as of the acquisition date.

Additional information regarding the valuation methodologies and assumptions used in determining these fair values is included in Note 5 – Acquisitions, which presents the allocation of purchase consideration and related fair value measurements required under ASC 805, Business Combinations.

No other assets or liabilities were measured at fair value on a nonrecurring basis during the period.

Equity Securities

The investment in equity securities consists of common stock of publicly traded companies. The fair value of these securities is based on the closing prices observed on March 31, 2026, and is recorded in “Investments in equity securities” in the Condensed Consolidated Balance Sheets.

Gains and losses from investments in equity securities are recorded in other income (expense) in the Condensed Consolidated Statements of Operations and included the following for the period ended March 31, 2026.

	Three Months Ended March 31,
	2026
Unrealized loss on equity securities	$	(277)
Unrealized gain on equity securities	255
Realized gain on equity securities	180
Total loss on equity securities	$	158

Lumber Derivative Contracts

We may enter into lumber derivative contracts in order to protect our gross profit margins from fluctuations caused by lumber price volatility. Such contracts, which are generally entered into to protect the gross margins on our wall panel contracts at EdgeBuilder and Glenbrook Building Supply, Inc. (“Glenbrook” and referred to jointly with EdgeBuilder as “EBGL”), are recorded within current assets or liabilities in the Condensed Consolidated Balance Sheets. As of March 31, 2026, we did not have any lumber derivatives contracts open.

- 29 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Gains and losses from lumber derivative contracts are recorded in the cost of revenues in the Condensed Consolidated Statements of Operations. There were no unrealized or realized gains or losses on lumber derivatives for the three months ended March 31, 2026.

NOTE 13 – NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

    Basic loss per share is computed by dividing the Company’s net loss attributable to common shareholders by the weighted average number of shares outstanding during the period. When the effects are not anti-dilutive, diluted loss per share is computed by dividing the Company’s net loss attributable to common shareholders by the weighted average number of shares outstanding and the impact of all dilutive potential common shares, primarily stock options “in-the-money”, unvested restricted stock, and unvested restricted stock units. We have not allocated net income (loss) attributable to warrants because the holders of our warrants are not contractually obligated to share in our income (loss). The dilutive impact of stock options, unvested restricted stock, and unvested restricted stock units is determined by applying the “treasury stock” method. Performance-based restricted stock awards are included in the computation of diluted loss per share only to the extent that the underlying performance conditions: (i) are satisfied prior to the end of the reporting period; or (ii) would be satisfied if the end of the reporting period were the end of the related performance period and the result would be dilutive under the treasury stock method. Stock awards subject to vesting or exercisability based on the achievement of market conditions are included in the computation of diluted earnings per share only when the market conditions are met.

    A reconciliation of the numerators and denominators of the basic and diluted loss per share calculations for the three months ended March 31, 2026 and 2025 were as follows:

	Three Months Ended  March 31,
	2026		2025
Loss per share attributable to common shareholders (“EPS”):
Basic	$	(1.17)	$	(0.59)
Diluted	$	(1.17)	$	(0.59)
EPS numerator - basic and diluted:
Net loss attributable to common shareholders	$	(4,385)	$	(1,756)
EPS denominator (in thousands):
Weighted average common stock outstanding - basic	3,744		2,985
Common stock equivalents: restricted stock units and restricted shares of common stock (a)	—		—
Weighted average number of common stock outstanding - diluted	3,744		2,985

(a)    The diluted weighted average number of shares of common stock outstanding did not differ from the basic weighted average number of shares of common stock outstanding because the effects of any potential common stock equivalents (see Note 6 to the Condensed Consolidated Financial Statements for further details on unvested restricted stock units) were anti-dilutive and therefore not included in the calculation of the denominator of dilutive earnings per share.

NOTE 14 – STOCKHOLDERS’ EQUITY

Common Stock

On August 8, 2023, the Company’s Board of Directors authorized a share repurchase program for up to $5,000 of the Company’s outstanding common stock. The Company continues to view share repurchases as an attractive use of capital and may repurchase shares from time to time, as market conditions warrant, through open market purchases, privately negotiated transactions, block trades, or other methods, in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”).

In the third quarter of 2025, the Company completed its $5,000 share repurchase program authorized on August 8, 2023. On September 10, 2025, the Board of Directors authorized a new common stock repurchase program under which the

- 30 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Company may repurchase up to $3,000 of its outstanding common stock. During the three months ended March 31, 2026, the Company repurchased on the open market a total of 70,424 shares of its common stock for an aggregate cost of $0.7 million under these authorizations. As of March 31, 2026, under the July 30, 2015, August 8, 2023 and September 10, 2025 authorizations combined, the Company had repurchased an aggregate of 1,018,806 shares for a total cost of $16.2 million, completing the August 8, 2023 authorization and leaving $1.8 million available for purchase under the September 10, 2025 authorization. During the three months ended March 31, 2025, no repurchases of shares were made by the Company under this authorization.

The Company cannot predict when or if it will repurchase any shares of common stock as such stock repurchase program will depend on a number of factors, including constraints specified in any Rule 10b5-1 trading plans, price, general business and market conditions, and alternative investment opportunities. Information regarding share repurchases will be available in the Company’s periodic reports on Form 10-Q and 10-K filed with the Securities and Exchange Commission as required by the applicable rules of the Exchange Act.

NOTE 15 – PERPETUAL PREFERRED STOCK

Holders of shares of our Series A Preferred Stock are entitled to receive, when, as, and if, authorized by the Company’s board of directors (or a duly authorized committee of the Company’s board of directors) and declared by the Company out of funds legally available for the payment of dividends, preferential cumulative cash dividends at the rate of 10% per annum of the liquidation preference of $10 per share. Dividends are payable quarterly, in arrears, by the last calendar day of March, June, September and December to holders of record at the close of business on the first day of each payment month. The Series A Preferred Stock is not convertible and does not have any voting rights, except when dividends are in arrears for 6 or more consecutive quarters, then the holders of those shares together with holders of all other series of preferred stock equal in rank would be entitled to vote separately as a class for the election of 2 additional directors to board of directors, until all dividends accumulated on such shares of Series A Preferred Stock for the past dividend periods and the dividend for the current dividend period shall have been fully paid or declared and a sum sufficient for the payment thereof set apart for payment. The Series A Preferred Stock is not subject to redemption by the Company.

On February 13, 2026, Star announced that its Board of Directors declared a cash dividend to holders of the Company’s Preferred Stock of $0.25 per share. The record date for this dividend was March 1, 2026, and the payment date was March 10, 2026. As of March 31, 2026, we are current on our preferred dividend payments.

NOTE 16 – STOCKHOLDER RIGHTS PLAN

    On October 15, 2018, the Company’s Board of Directors declared a dividend to the Company’s stockholders of record as of the close of business on October 25, 2018 (the “Record Date”), for each outstanding share of the Company’s common stock, of one right (a “Right”) to purchase one one-hundredth of a share of a new series of participating preferred stock of the Company. The terms of the Rights are set forth in the Rights Agreement, dated as of October 15, 2018 (as amended, the “Rights Agreement”), by and between the Company and Computershare Trust Company, N.A., as rights agent (the “Rights Agent”). The Company’s stockholders approved the Rights Agreement at the Company’s 2019 Annual Meeting of Stockholders held on May 6, 2019. On September 28, 2021, the Company and the Rights Agent entered into a First Amendment to Rights Agreement (the “Amendment”) that amended the Rights Agreement to extend its term through October 15, 2024. The amendment was approved by the Board on September 28, 2021, subject to stockholder approval, and the Company’s stockholders approved the Amendment at the Company’s 2022 Annual Meeting of Stockholders held on May 17, 2022. The Board of Directors has taken further action to amend the Original Rights Agreement, as amended by the First Amendment, to extend the expiration of the Rights Agreement to October 15, 2027, as contemplated in the Second Amendment to Rights Agreement (the “Second Amendment”). The Second Amendment was approved by the Board on June 13, 2024, subject to stockholder approval, and the Company’s stockholders approved the Amendment at the Company’s 2024 Annual Meeting of Stockholders held on July 31, 2024.

The Company also has a provision in its Amended and Restated Certificate of Incorporation which generally prohibits transfers of its common stock that could result in an ownership change.

Each Right allows its holder to purchase from the Company one one-hundredth of a share of the Company’s Series B Junior Participating Preferred Stock (“Series B Preferred Stock”) for a purchase price of $3.50. Each fractional share of Series

- 31 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

B Preferred Stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of common stock. Prior to exercise, however, a Right does not give its holder any dividend, voting or liquidation rights.

    The Board entered into the Rights Agreement in an effort to preserve the value of the Company’s significant U.S. NOLs and other tax benefits. The Company’s ability to utilize its NOLs may be substantially limited if the Company experiences an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). In general, an “ownership change” would occur if the percentage of the Company’s ownership by one or more “5-percent shareholders” (as defined in the Code) increases by more than 50 percent over the lowest percentage owned by such stockholders at any time during the prior three years. The Rights Agreement is designed to preserve the Company’s tax benefits by deterring transfers of common stock that could result in an “ownership change” under Section 382 of the Code. In general terms, the Rights Agreement imposes a significant penalty upon any person or group that acquires beneficial ownership (as defined under the Rights Agreement) of 4.99% or more of the outstanding common stock without the prior approval of the Board (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 (i) 10 days after a public announcement by the Company that a person or group has become an Acquiring Person; and (ii) 10 business days (or a later date determined by the 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.

    Until the date that the Rights become exercisable (the “Distribution Date”), common stock certificates will also evidence the Rights and will contain a notation to that effect. Any transfer of shares of common stock prior to the Distribution Date will constitute a transfer of the associated Rights. After the Distribution Date, the Rights will separate from the common stock and be evidenced by Right certificates, which the Company will mail to all holders of Rights that have not become void. After the Distribution Date, if a person or group already is or becomes an Acquiring Person, all holders of Rights, except the Acquiring Person, may exercise their Rights upon payment of the purchase price to purchase shares of common stock (or other securities or assets as determined by the Board) with a market value of two times the purchase price (a “Flip-in Event”). After the Distribution Date, if a Flip-in Event has already occurred and the Company is acquired in a merger or similar transaction, all holders of Rights, except the Acquiring Person, may exercise their Rights upon payment of the purchase price, to purchase shares of the acquiring or other appropriate entity with a market value of two times the purchase price of the Rights. Rights may be exercised to purchase Series B Preferred Stock only after the Distribution Date occurs and prior to the occurrence of a Flip-in Event as described above. A Distribution Date resulting from the commencement of a tender offer or an exchange offer as described in the second bullet point above could precede the occurrence of a Flip-in Event, in which case the Rights could be exercised to purchase Series B Preferred Stock. A Distribution Date resulting from any occurrence described in the first bullet point above would necessarily follow the occurrence of a Flip-in Event, in which case the Rights could be exercised to purchase shares of common stock (or other securities or assets) as described above.

    The Rights will expire on the earliest of (i) the close of business on October 15, 2027, or such earlier date as of which the Board determines that this Agreement is no longer necessary for the preservation of Tax Benefits, (ii) the time at which the Rights are redeemed as provided in Section 23, (iii) the time at which all exercisable Rights are exchanged as provided in Section 24, (iv) the close of business on the effective date of the repeal of Section 382 of the Code or any successor or replacement provision if the Board determines that this Agreement is no longer necessary for the preservation of Tax Benefits, and (v) the Close of Business on the first day of a taxable year of the Company to which the Board determines that no Tax Benefits may be carried forward.

    The Board may redeem all (but not less than all) of the Rights for a redemption price of $0.001 per Right at any time before the later of the Distribution Date and the date of the first public announcement or disclosure by the Company that a person or group has become an Acquiring Person. Once the Rights are redeemed, the right to exercise the Rights will terminate, and the only right of the holders of such Rights will be to receive the redemption price.

    The Board may adjust the purchase price of the Series B Preferred Stock, the number of shares of Series B Preferred Stock issuable and the number of outstanding Rights to prevent dilution that may occur as a result of certain events, including, among others, a stock dividend, a stock split or a reclassification of the Series B Preferred Stock or common stock.

    Before the time the Rights cease to be redeemable, the Board may amend or supplement the Rights Agreement without the consent of the holders of the Rights, except that no amendment may decrease the redemption price below $0.001 per Right.

- 32 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

NOTE 17 – SEGMENT AND GEOGRAPHIC DATA

Segment Reporting

Corporate expenses are reported separately for the four reportable segments and pertain to certain functions, such as executive management, corporate governance, investor relations, legal, accounting, tax, and treasury. A portion of these expenses are attributed to the reportable segments for providing the above services to them, and have been allocated to the segments as management service expenses, and are included in the segments’ non-operating other income (expense). We have disclosed for each reportable segment the significant expense that is reviewed by CODM in the tables below with no additional significant expenses beyond those presented. Segment information is presented in accordance with ASC 280, “Segment Reporting.” This standard is based on a management approach that requires segmentation based upon the Company’s internal organization and disclosure of revenue and certain expenses based upon internal accounting methods. The Company’s financial reporting systems present various data for management to run the business, including internal profit and loss statements prepared on a basis not consistent with U.S. GAAP. Accounts receivable and long-lived assets are the only significant assets separated by segment for internal reporting purposes.

Our reportable segments are based upon our internal organizational structure, the manner in which our operations are managed, the criteria used by our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), to evaluate segment performance, the availability of separate financial information, and overall materiality considerations. Effective as of the acquisition of SOC on August 22, 2025, our business divisions are organized into the following four reportable segments, reflecting the manner in which our CODM assesses performance and allocates resources:

1.Building Solutions

2.Business Services

3.Energy Services

4.Investments

Our reporting segments have been determined based on the nature of the products and services offered to customers or the nature of their function in the organization. We evaluate performance based on gross profit and operating income (loss). Our operating costs included in our shared service functions primarily consist of senior executive officers, finance, human resources, legal, and information technology. Star Equity shared service corporate costs have been separated from the reportable segments. Prior period presentation previously disclosed conforms to current year presentation.

- 33 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Segment information for the three months ended March 31, 2026 and 2025, respectively, is as follows:

	Building Solutions		Business Services		Energy Services		Investments		Corporate and Intersegment eliminations		Total
For The Three Months Ended March 31, 2026
Revenues	$	11,598	$	35,005	$	3,458	$	159	$	(159)	$	50,061
Cost of revenues	9,957		17,559		1,915		75		—		29,506
Gross profit (a)	1,641		17,446		1,543		84		(159)		20,555
Salaries and related	(1,592)		(15,092)		(683)		—		(1,373)		(18,740)
Office and general	(1,167)		(2,129)		(378)		(92)		(831)		(4,597)
Marketing and promotion	(12)		(897)		(13)		—		—		(922)
Operating expenses depreciation and amortization	(90)		(192)		(19)		—		(10)		(311)
Operating income (loss)	$	(1,220)	$	(864)	$	450	$	(8)	$	(2,373)	$	(4,015)
EBITDA (loss) (b)	$	(1,354)	$	(1,015)	$	848	$	47	$	(1,630)	$	(3,104)
Total depreciation and amortization	(264)		(192)		(401)		(75)		(10)		(942)
Interest income (expense), net	(126)		(158)		(43)		173		141		(13)
Provision for income tax	—		766		—		—		(500)		266
Net income (loss)	$	(1,744)	$	(599)	$	404	$	145	$	(1,999)	$	(3,793)
As of March 31, 2026
Accounts receivable, net	$	6,455	$	22,606	$	4,004	$	—	$	(226)	$	32,839
Long-lived assets, net of accumulated depreciation and amortization (c)	$	4,187	$	7,774	$	4,678	$	6,511	$	157	$	23,307
Total assets	$	30,790	$	43,021	$	12,401	$	20,894	$	1,407	$	108,513

	Business Services		Corporate and Intersegment eliminations		Total
For The Three Months Ended March 31, 2025
Revenues	$	31,866	$	—	$	31,866
Cost of revenues	15,468		—		15,468
Gross profit (a)	16,398		—		16,398
Salaries and related	(13,894)		(451)		(14,345)
Office and general	(1,638)		(926)		(2,564)
Marketing and promotion	(930)		—		(930)
Operating expenses depreciation and amortization	(280)		(3)		(283)
Operating income (loss)	$	(344)	$	(1,380)	$	(1,724)
EBITDA (loss) (b)	$	(496)	$	(1,016)	$	(1,512)
Depreciation and amortization	(280)		(3)		(283)
Interest income (expense), net	(121)		192		71
Provision for income taxes	(76)		44		(32)
Net loss	$	(973)	$	(783)	$	(1,756)

- 34 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

As of December 31, 2025	Building Solutions		Business Services		Energy Services		Investments		Corporate and Intersegment eliminations		Total
Accounts receivable, net	$	8,671	$	22,398	$	4,045	$	—	$	106	$	35,220
Long-lived assets, net of accumulated depreciation and amortization (c)	$	4,320	$	7,934	$	7,235	$	6,586	$	167	$	26,242
Total assets	$	34,105	$	43,418	$	12,526	$	21,689	$	1,493	$	113,231

(a)Gross profit in the Business Services segment includes the direct staffing costs of salaries, payroll taxes, employee benefits, travel expenses, and insurance costs for the Company’s contractors and reimbursed out-of-pocket expenses and other direct costs. The region where services are provided, the mix of RPO and contracting, and the functional nature of the staffing services provided can affect operating income and EBITDA. The salaries, commissions, payroll taxes, and employee benefits related to recruitment professionals are included under the caption “Salaries and related” in the Condensed Consolidated Statements of Operations.

(b)SEC Regulation S-K Item 229.10(e)1(ii)(A) defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is presented to provide additional information to investors about the Company’s operations on a basis consistent with the measures that the Company uses to manage its operations and evaluate its performance. Management also uses this measurement to evaluate working capital requirements. EBITDA should not be considered in isolation or as a substitute for operating income and net income prepared in accordance with U.S. GAAP or as a measure of the Company’s profitability.

(c)Comprised of property and equipment, intangible assets and goodwill, net of accumulated depreciation and amortization.

Geographic Data Reporting

A summary of revenues for the three months ended March 31, 2026 and 2025 and net assets by geographic area as of March 31, 2026 and December 31, 2025, were as follows:

	Australia		United States		United Kingdom		Other		Total
For The Three Months Ended March 31, 2026
Revenue (a)	$	17,426	$	22,417	$	4,799	$	5,419	$	50,061
For The Three Months Ended March 31, 2025
Revenue (a)	$	14,862	$	6,510	$	5,294	$	5,200	$	31,866
As of March 31, 2026
Long-lived assets, net of accumulated depreciation and amortization (b)	$	46	$	21,239	$	52	$	1,970	$	23,307
Net assets	$	2,501	$	44,351	$	1,730	$	12,420	$	61,002
As of December 31, 2025
Long-lived assets, net of accumulated depreciation and amortization (b)	$	32	$	24,160	$	35	$	2,015	$	26,242
Net assets	$	3,855	$	47,524	$	1,475	$	12,853	$	65,707

(a) Revenue by geographic region disclosed above is net of any inter-segment revenue and, therefore, represents only revenue from external customers according to the location of the operating subsidiary.

(b) Comprised of property and equipment, intangible assets and goodwill, net of accumulated depreciation and amortization.

- 35 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

NOTE 18 – SUPPLEMENTARY BALANCE SHEET INFORMATION

Inventories

The components of inventories are as follows:

	March 31, 2026		December 31, 2025
Raw materials	$	3,515	$	4,122
Work-in-process	339		536
Finished goods	3,218		2,330
Total inventories, net	$	7,072	6,988

ADT's inventory, amounting to $1,111 as of March 31, 2026, consists of component equipment, parts and supplies which are classified as raw materials using the weighted average cost method.

Property and Equipment

Property and equipment consists of the following:

	March 31, 2026		December 31, 2025
Land	$	795	$	1,134
Buildings and leasehold improvements	7,114		9,070
Transportation	2,181		2,023
Machinery and equipment	12,779		12,750
Gross property and equipment	22,869		24,977
Accumulated depreciation	(7,001)		(6,367)
Total property and equipment, net	$	15,868	$	18,610

Depreciation expense for the three months ended March 31, 2026 and March 31, 2025 was $783 and $46 respectively.

As of March 31, 2026, we held non-operating land and a building in Oxford, Maine for investment and potential future use which had a carrying value of $1,715 and was included within property and equipment on the Condensed Consolidated Balance Sheets.

Included in machinery and equipment in the above table is rental equipment with a net book value of approximately $5,721 as of March 31, 2026, related to our Energy Services segment.

Warranty Reserves

Within our Building Solutions division, KBS provides a limited assurance warranty on its residential homes that covers substantial defects in materials or workmanship for a period of 12 months after delivery to the owner. EdgeBuilder provides a limited warranty on the sale of its wood foundation products that covers leaks resulting from defects in workmanship for a period of twenty-five years. TT provides a fifty-year limited warranty to the original buyer of its products, qualified by the original buyer’s obligation to ensure that the products are properly handled, stored, and installed. Historical losses related to the Timber Technologies warranty have been insignificant and therefore no reserve has been established. Estimated future warranty costs are accrued and charged to cost of goods sold in the period that the related revenue is recognized. Within our Energy Services division, we do not provide warranties on our products.

Notes Receivable

- 36 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

Notes receivable consists of the following principal and interest balances as of March 31, 2026 and December 31, 2025:

	March 31, 2026		December 31, 2025
	Principal and interest		Principal and interest
Catalyst Note	$	8,468	$	8,257
MDOS Note	522		596
KBS Customer Note	32		32
Total note receivable	9,022		8,885
Less current portion	256		256
Note receivable, net of current portion	$	8,766	$	8,629

As a part of the sale of Digirad Health in May 2023, SOC entered into a $7,000 promissory note (the “Catalyst Note”) which represents an unsecured note receivable on our balance sheet. The note has a maturity date of May 3, 2029 with payment-in-kind (non-cash) interest on the outstanding principal balance hereof to accrue at the Interest Rate. The full balance is scheduled to be paid at the maturity date. The Interest Rate is defined as (i) during the period from the date of issuance of the note through the third anniversary of the date of issuance of the note, a per annum rate equal to the sum of (x) 5.0% per annum plus (y) the greater of 5.0% per annum and the weighted average term SOFR-based interest rate of outstanding loans under the Senior Loan Agreement (as defined in the Purchase Agreement) during such period, and (ii) during the period following the third anniversary of the date of issuance of the note, a per annum rate equal to the sum of (x) 5.0% per annum plus (y) the greater of 7.0% per annum and the weighted average term SOFR-based interest rate of outstanding loans under the Senior Loan Agreement during such period.

In 2021, SOC completed the sale of MD Office Solutions in exchange for a secured promissory note (the “MDOS Note”). This note, the principal of which is approximately $522 at March 31, 2026, is included in “Notes receivable, current portion” and “Notes receivable” in our Condensed Consolidated Balance Sheets at March 31, 2026 for $223 and $299, respectively. The MDOS Note requires quarterly installments of $74 and incurs interest at a fixed rate of 5.0% through maturity in 2028.

In 2023, KBS issued a promissory note to a customer, incurring 12% interest per annum (the “KBS Customer Note”). The KBS Customer Note is included in “Notes receivable, current portion” in the Condensed Consolidated Balance Sheets at March 31, 2026.

The Company evaluates its notes receivable portfolio under the Current Expected Credit Loss (“CECL”) model.

Long Term Investments

Below are the components of our Long Term Investments as of March 31, 2026:

	Method of Accounting	March 31, 2026		December 31, 2025
Investment in Catalyst	Cost Method	$	953	$	953
Total		$	953	$	953

Investment in Catalyst

As a part of the sale of Digirad Health, SOC received common equity of Catalyst Parent, which is held in our Investments Segment at a fair value of $953 at March 31, 2026. We have elected the measurement alternative under ASC 321, Investments-Equity Securities. The measurement alternative election allows for equity securities that do not have readily determinable fair values to be recorded at cost, with adjustments for impairment and certain observable price changes reflected in earnings. Such securities are adjusted to fair value when an observable price change occurs or impairment is identified.

Investment in Enservco

- 37 -

STAR EQUITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(unaudited)

On August 9, 2024, SOC entered into an investment in Enservco pursuant to a Share Exchange Agreement in which SOC agreed to issue to Enservco 250,000 shares of 10% Series A Cumulative Perpetual Preferred Stock representing $2,600 of value in exchange for 9,023,035 Enservco Common Shares, representing 19.9% of the equity interests of Enservco, and 3.5 million Enservco Preferred Shares and certain options included in the Share Exchange Agreement. We also issued a $1,000 note to Enservco to facilitate Enservco’s acquisition of Buckshot Trucking, LLC. The investment in Enservco had a value of zero at March 31, 2026.

NOTE 19 – CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

    Cash, cash equivalents, and restricted cash as reported within the accompanying Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 was as follows: 

	March 31, 2026		December 31, 2025
Cash and cash equivalents	$	8,093	$	10,269
Restricted cash, current	1,649		1,819
Restricted cash, non-current	553		1,322
Total cash, cash equivalents, and restricted cash	$	10,295	$	13,410

    Restricted cash primarily includes lease and collateral deposits, as well as bank guarantees for licensing.

NOTE 20 – COMMITMENTS AND CONTINGENCIES

Litigation and Complaints

    The Company is subject, from time to time, to various claims, lawsuits, contracts disputes, and other complaints from, for example, clients, candidates, suppliers, landlords for both leased and subleased properties, former and current employees, and regulators or tax authorities arising in the ordinary course of business. The Company routinely monitors claims such as these, and records provisions for losses when the claim becomes probable and the amount due is estimable. Although the outcome of these claims cannot be determined, the Company believes that the final resolution of these matters will not have a material adverse effect on the Company’s financial condition, results of operations or liquidity.

    For matters that reach the threshold of probable and estimable, the Company establishes reserves for legal, regulatory, and other contingent liabilities. The Company had $0.2 million of legal reserves as of both March 31, 2026 and December 31, 2025.

In the normal course of business, we have been and will likely continue to be subject to litigation or administrative proceedings incidental to our business, such as claims related to compliance with regulatory standards, customer disputes, employment practices, wage and hour disputes, product liability, professional liability, malpractice liability, commercial disputes, licensure restrictions or denials, and warranty or patent infringement. Responding to litigation or administrative proceedings, regardless of whether they have merit, can be expensive and disruptive to normal business operations. We are not able to predict the timing or outcome of these matters but currently do not expect that the resolution of these matters will have a material adverse effect on our financial position or results of operations.

The outcome of litigation and the amount or range of potential loss at particular points in time may be difficult to ascertain. Among other things, uncertainties can include how trial and appellate courts will apply the law and interpret facts, as well as the contractual and statutory obligations of other indemnifying and insuring parties. The estimated range of reasonably possible losses, and their effect on our financial position is based on currently available information and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties.

- 38 -

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

    This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto, included in Part I of this Form 10-Q. The reader should also refer to the Condensed Consolidated Financial Statements and notes of Star Equity Holdings, Inc. and its subsidiaries (the “Company”) filed in its Annual Report on Form 10-K for the year ended December 31, 2025. This MD&A contains forward-looking statements. Please see “FORWARD-LOOKING STATEMENTS” for a discussion of the uncertainties, risks and assumptions associated with these statements. This MD&A also uses the non-generally accepted accounting principle measure of earnings before interest, taxes, depreciation and amortization (“EBITDA”). See Note 17 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for EBITDA segment reconciliation information. The tables and information in this MD&A were derived from exact numbers and may have immaterial rounding differences.

This MD&A includes the following sections:

•Executive Overview

•Results of Operations

•Liquidity and Capital Resources

•Contingencies

•Recent Accounting Pronouncements

•Critical Accounting Estimates

•Forward-Looking Statements

Executive Overview

Star Equity Holdings, Inc. (“Star,” the “Company,” “we,” “our”, formerly known as Hudson Global, Inc. ("Hudson")) is a diversified multi-industry holding company with four divisions. Our Building Solutions division operates in the construction industry. Our Business Services division delivers Recruitment Process Outsourcing (“RPO”) services consisting of recruitment and contracting solutions tailored to the individual needs of primarily mid-to-large multinational companies. Our Energy Services division consists of Alliance Drilling Tools, Inc. (“ADT’). In addition, we have an Investments segment, which holds and manages certain of our corporate-owned real estate, and manages internally-funded, concentrated minority investments in a small number of public companies.

Amendment to Certificate of Incorporation

On September 4, 2025, Star filed a certificate of amendment (the “Amendment”) to the Company’s Amended and Restated Certificate of Incorporation, as Amended (the “Charter”), to change the name of the Company from Hudson Global, Inc. to Star Equity Holdings, Inc. (the “Name Change”). The Name Change was approved by the Company’s Board of Directors (the “Board”) on September 2, 2025, and became effective at 12:01 a.m. (Eastern Time) on September 5, 2025.

Merger

On August 22, 2025, Star completed its previously announced acquisition of Star Operating Companies, Inc. ("SOC" or "Star Operating Companies", formerly known as Star Equity Holdings, Inc.) pursuant to the Agreement and Plan of Merger, dated as of May 21, 2025 (the “Merger Agreement”), by and among Star, SOC and HSON Merger Sub, Inc., a wholly owned subsidiary of Star (“Merger Sub”). Upon the terms and subject to the conditions of the Merger Agreement, on August 22, 2025, at the effective time of the Merger (the “Effective Time”), Merger Sub merged with and into SOC, with SOC continuing as the surviving corporation of the Merger under the name “Star Operating Companies, Inc." as a wholly owned subsidiary of Star. Capitalized terms used herein but not defined have the meanings set forth in the Merger Agreement.

Pursuant to the terms of the Merger Agreement, at the Effective Time, (i) each share of common stock of SOC issued and outstanding immediately prior to the Effective Time (other than certain shares as set forth in the Merger Agreement) were automatically converted into the right to receive 0.23 shares of Star common stock and (ii) each share of preferred stock of SOC issued and outstanding immediately prior to the Effective Time (other than certain shares set forth in the Merger Agreement) were automatically converted into the right to receive one (1) share of Star 10% Series A Cumulative Perpetual preferred stock (“Preferred Stock”). As a result of the Merger, former SOC common stockholders received approximately 744,291 shares of Star common stock for their SOC common shares and former SOC preferred stock stockholders received approximately

- 39 -

2,690,637 shares of Star Preferred Stock. No fractional shares of Star common stock were issued in the Merger, and SOC stockholders became entitled to receive cash in lieu of fractional shares in accordance with the Merger Agreement.

In addition, pursuant to the terms of the Merger Agreement, at the Effective Time, each award of SOC restricted stock units (“RSUs”) outstanding immediately prior to the Effective Time was converted into Star RSUs issued under the Hudson Global, Inc. 2009 Incentive Stock and Awards Plan, as amended (the “Plan”), in accordance with the Merger Agreement.

Segments

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

Our Business Services segment delivers Recruitment Process Outsourcing (“RPO”) services consisting of recruitment and contracting solutions tailored to the individual needs of primarily mid-to-large multinational companies. The Company operates directly in eighteen countries with three reportable geographic business segments: the Americas, Asia Pacific, and Europe, Middle East, and Africa ("EMEA"). The Company’s RPO delivery teams utilize recruitment process methodologies and project management expertise to meet clients’ ongoing business needs. The Company’s RPO services include complete recruitment outsourcing, project-based outsourcing, contingent workforce solutions, and recruitment consulting for clients’ permanent staff hires. RPO services leverage the Company’s consultants, supported by the Company’s specialists, in the delivery of its proprietary methods to identify, select, and engage the best-fit talent for critical client roles. In addition, RPO clients receive a range of outsourced professional contract staffing services and managed service provider services offered sometimes on a standalone basis and sometimes as part of a blended total talent solution. These services draw upon a combination of specialized recruiting and project management competencies to deliver a wide range of solutions. Hudson RPO-employed professionals - either individually or as a team - are placed with client organizations for a defined period of time based on specific business needs of the client. With direct operations in eighteen countries and relationships with specialized professionals and organizations around the globe, Business Services brings a strong ability to match talent with opportunities by assessing, recruiting, developing, and engaging highly successful people for client support.

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

Our Investments segment holds and manages certain of our corporate-owned real estate, including a manufacturing facility in Maine that is leased to KBS and a manufacturing facility in Wisconsin that is leased to TT. The Investments division manages internally-funded, concentrated minority investments in a small number of public companies. It also holds and manages a promissory note and a private equity stake in Catalyst. SOC acquired these interests in May 2023 as a result of the sale of Digirad Health. Our Investments division also holds an investment in Enservco Corporation consisting of an investment in Enservco Common Stock, an investment in Enservco Preferred Stock, and an investment in a call option, all of which were acquired in the third quarter of 2024 and which is discussed in Note 18, Supplementary Balance Sheet Information to the notes to our accompanying condensed consolidated financial statements.

    We continue to explore all strategic alternatives to maximize value for the Company’s stockholders, including without limitation, improving the market position and profitability of our services in the marketplace, and enhancing our valuation. We may pursue our goals through organic growth, strategic initiatives, or other alternatives. Additionally, we will continue to monitor capital markets for opportunities to repurchase shares, and consider other actions designed to enhance value to our stockholders, as well as review information regarding potential acquisitions or combinations, and provide information to third parties regarding potential dispositions of assets or business lines, from time to time.

    This MD&A discusses the results of the Company’s business for the three months ended March 31, 2026 and 2025.

- 40 -

Strategy

Star Equity Holdings, Inc.

We believe our diversified multi-industry holding company structure allows Star management to focus on capital allocation, strategic leadership, mergers and acquisitions, capital markets, and investor relations, as well as management of our Investments division. Our structure frees up our operating company management teams to focus on their respective businesses, look for organic and bolt-on growth opportunities, and improve operations with less distraction and administrative burden associated with running a public company.

We continue to explore strategic alternatives to improve our market position and the profitability of our product offerings, generate additional liquidity, and enhance our common stock valuation. We may pursue our goals through organic growth and through strategic alternatives, such as selective acquisitions of businesses, divestitures of assets or businesses, equity offerings, debt financings, or corporate restructuring.

Operating Business

We believe that our operating companies 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 in order to leverage the personnel, infrastructure, and brand recognition we have in these areas.

•Introduction of new services. In the Building Solutions division, we will consider opportunities to augment our service offerings to better serve our customer base. We have done this in the New England market with our entry into the commercial multi-family segment. Other areas might include logistics, on-site installation, and manufacturing of sub-components.

•Acquisition of complementary businesses. We plan to continue to look at complementary businesses that meet our acquisition growth criteria. We believe there are many potential small public and private targets that can be acquired over time and integrated into our platform. We will also look at larger, more transformational mergers and acquisitions if we believe the appropriate mix of value, risk, and return is present for our stockholders. The timing of these potential transactions will always depend on market conditions, available capital, and valuation. 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.

Current Market Conditions and Trends

The target customers for our Building Solutions segment include professional home builders, general contractors, project owners, developers, and design firms. Despite a higher interest rate environment, we continue to experience meaningful demand for our products; however, certain projects have been delayed as customers secure and finalize financing. We have benefited from implementing both price increases and margin protection language in our contracts, and these changes have had a positive effect on our profitability. Although we have experienced slower business activity and lower revenues this quarter, we believe this slowdown is temporary. Our sales pipelines continue to indicate strong potential demand for our services, but we can give no assurances as to our ability to compete for these opportunities, or the periods during which successfully negotiated projects will be completed.

The Modular Building Institute has estimated that permanent modular construction increased as a percentage of the construction industry from 2.14% in 2015 to 6.64% as of the end of 2023. In turn, in our Building Solutions division, we continue to see a greater acceptance of offsite or prefab construction in single-family and multi-family residential building projects in our target markets. Our modular units and structural wall panels offer builders a number of benefits over traditional onsite or “stick built” construction. These include shorter time to market, higher quality, reduced waste, and potential cost savings. Additionally, technological advancements including 3D modeling software and developments in engineered wood products offer greater design flexibility for higher-end applications. The need for more affordable housing solutions also presents opportunities for the continued growth of factory-built housing.

- 41 -

In our Business Services segment, our clients’ demands for RPO and contracting services largely depend on the market conditions and the strength of the labor markets in the countries where we operate. In 2026, the market conditions remained challenging due to persistent inflation, market uncertainty related to trade disruptions, and decreased demand for labor in certain markets. We anticipate that these challenging market conditions will continue into 2026.

In our Energy Services segment, demand for our products is closely tied to oil prices, as customer drilling activity and capital spending are influenced by prevailing market conditions. Higher and stable oil prices generally support increased drilling and tool utilization, while lower or volatile prices may reduce activity and negatively impact our revenues and operating results. The demand for our Energy Services offerings is tied in part to oil and gas prices, drilling activity, and capital expenditures by E&P companies. In June 2025, Baker Hughes reported that the total U.S. rig count was down 4% year-over-year. During 2026, improved oil prices contributed to increased customer activity, and the segment delivered strong performance.

Economic conditions in many of the world’s major markets remained uncertain throughout 2026. While inflationary pressures moderated in certain regions, elevated interest rates and tighter credit conditions continued to impact market activity. These conditions contributed to wage pressures, higher operating costs, staffing challenges, fluctuating consumer confidence, and constrained access to capital markets, each of which affected our business. In connection with this environment, some customers reduced demand for our services, and certain others temporarily deferred or permanently discontinued engagements. Ongoing macroeconomic uncertainty, including the potential for renewed inflationary pressures or changes in interest rate policy, could have material adverse effects on various aspects of our business in future periods.

Risks arising from global economic instability and conflicts, wars, and health crises could impact our business. In addition, the inflation caused by such events may impact demand for our products and services and our cost to provide products and services. Economic uncertainty has also continued to contribute to volatility in global currency markets. Fluctuations in foreign exchange rates relative to the U.S. dollar during reporting periods impact the translation of our foreign operations’ results into U.S. dollars and may affect comparability of reported results.

We continue to explore all strategic alternatives to maximize value for the Company’s stockholders, including without limitation, improving the market position and profitability of our services in the marketplace, and enhancing our valuation. We may pursue our goals through organic growth, strategic initiatives, or other alternatives. Additionally, we will continue to monitor capital markets for opportunities to repurchase shares, and consider other actions designed to enhance value to our stockholders, as well as review information regarding potential acquisitions or combinations, and provide information to third parties regarding potential dispositions of assets or business lines, from time to time.

Summary of Financial Performance Highlights For The Three Months Ended March 31, 2026

•    Revenue was $50.1 million for the three months ended March 31, 2026, compared to $31.9 million for the same period in 2025, an increase of $18.2 million, or 57.1%. The increase in revenue was principally driven by the inclusion of revenues from the Star Operating Companies acquisition, which contributed 47 percentage points to the revenue growth.

•    Gross profit was $20.6 million for the three months ended March 31, 2026, compared to $16.4 million for the same period in 2025, an increase of $4.2 million, or 25.4%. The increase in gross profit was driven by the acquisition of Star Operating Companies, which increased gross profit growth by 19 percentage points.

•    Selling, general and administrative expenses (including salaries and related expenses) and other non-operating income (expense) (“SG&A and Non-Op”) was $24.3 million for the three months ended March 31, 2026, compared to 17.9 million for the same period in 2025, an increase of 6.4 million, or 35.6%. The acquisitions of our Building Solutions, Energy Services, and Investments segments collectively contributed 24 percentage points to the increase in SG&A and Non-Op.

•    Net loss was $3.8 million for the three months ended March 31, 2026, compared to net loss of $1.8 million for the same period in 2025, an increase in net loss of $2.0 million.

•    EBITDA loss was $3.1 million for the three months ended March 31, 2026, compared to EBITDA loss of $1.5 million for the same period in 2025, an increase in EBITDA loss of $1.6 million.

- 42 -

Use of EBITDA (Non-GAAP Financial Measure)

    Management believes EBITDA is a meaningful indicator of the Company’s performance that provides useful information to investors regarding the Company’s financial condition and results of operations. Management considers EBITDA to be the best indicator of operating performance and most comparable measure across the regions in which the Company operates. Management uses this measure to evaluate capital needs and working capital requirements. EBITDA should not be considered in isolation or as a substitute for operating income, or net income prepared in accordance with U.S. GAAP or as a measure of the Company’s profitability. EBITDA is derived from net income adjusted for the provision for (benefit from) income taxes, interest expense (income), and depreciation and amortization.

    The reconciliation of EBITDA to the most directly comparable GAAP financial measure is provided in the table below:

	Three Months Ended
	March 31,
$ in thousands	2026		2025
Net loss attributable to common shareholders	$	(4,385)	$	(1,756)
Dividends on Series A perpetual preferred stock	592		—
Net loss	(3,793)		(1,756)
Adjustments to Net loss
Provision for income taxes	(266)		32
Interest (expense) income, net	13		(71)
Depreciation and amortization expense-within cost of revenues	631		—
Depreciation and amortization expense -within selling, general and administrative expense	311		283
Total adjustments from net loss to EBITDA	689		244
EBITDA (loss)	$	(3,104)	$	(1,512)

- 43 -

Results of Operations

Building Solutions

Revenue - Building Solutions

	Three Months Ended  March 31,
	2026		2025		Change in amount		Change in %
$ in millions	As reported		As reported
Building Solutions
Revenue	$	11.6	$	—	$	11.6	N/A

For the three months ended March 31, 2026, Building Solutions contributed $11.6 million to the Company's revenue. The segment faced several headwinds during the quarter that constrained revenue generation. Weather-related disruptions and seasonal road restrictions limited the ability to execute on scheduled projects in certain geographies. Additionally, project timing delays resulted in deferred revenue recognition as customer-driven scheduling shifts pushed work into subsequent quarters. The quarter was also characterized by challenging macroeconomic conditions that weighed on customer demand and decision-making. Broader economic uncertainty resulted in extended sales cycles as customers delayed capital spending commitments.

Gross Profit - Building Solutions

	Three Months Ended  March 31,
	2026		2025		Change in amount		Change in %
$ in millions	As reported		As reported
Building Solutions
Gross profit	$	1.6	$	—	$	1.6	N/A

For the three months ended March 31, 2026, Building Solutions contributed $1.6 million to the Company's gross profit. Reduced operational activity resulted in unfavorable fixed cost absorption, putting pressure on overall profitability despite maintaining underlying pricing discipline.

SG&A and Non-Op - Building Solutions

	Three Months Ended  March 31,
	2026			2025		Change in amount		Change in %
$ in millions	As reported			As reported
Building Solutions
SG&A and Non-Op	$	3.2		$	—	$	3.2	N/A
SG&A and Non-Op as a percentage of revenue	27		%	N/A		N/A		N/A

For the three months ended March 31, 2026, Building Solutions SG&A and Non-OP expenses were $3.2 million or 27% of revenue. The segment demonstrated effective cost management during the quarter, controlling discretionary spending and maintaining operational efficiency despite the challenging revenue environment. The focus on expense discipline helped partially offset the impact of lower sales volumes on overall profitability.

- 44 -

Operating (Loss) Income and EBITDA - Building Solutions

	Three Months Ended  March 31,
	2026			2025		Change in amount		Change in %
$ in millions	As reported			As reported
Building Solutions
Operating income (loss)	$	(1.2)		$	—	$	(1.2)	N/A
EBITDA (loss)	$	(1.4)		$	—	$	(1.4)	N/A
EBITDA (loss) as a percentage of revenue	(12)		%	N/A		N/A		N/A

For the three months ended March 31, 2026, Building Solutions generated operating loss of $1.2 million and EBITDA loss of $1.4 million or 12% of revenue. The quarter's profitability was primarily impacted by lower volume, which compressed gross margins through unfavorable fixed cost absorption. While the segment demonstrated effective cost management and expense discipline on the SG&A side, the revenue shortfall and resulting margin pressure were the primary drivers of the negative EBITDA performance.

Business Services

Revenue - Business Services

	Three Months Ended  March 31,
	2026		2025		Change in amount		Change in %
$ in millions	As reported		As reported
Business Services
Revenue	$	35.0	$	31.9	$	3.1	10	%

For the three months ended March 31, 2026, RPO revenue increased $1.1 million, or 7%, while contracting revenue increased $2.1 million, or 13% compared to 2025.

    In the Americas, revenue increased $1.0 million, or 14%, for the three months ended March 31, 2026, compared to the same period in 2025. The increase was primarily driven by RPO revenue, which increased $1.5 million, or 27%, driven by higher demand from existing clients, while contracting revenue decreased $0.6 million, or 50%, due to reduced demand from existing clients.

    In Asia Pacific, revenue increased $2.5 million, or 13%, for the three months ended March 31, 2026, compared to the same period in 2025. Contracting revenue increased $3.2 million, or 26%, due to higher demand from existing clients, partly offset by a decline in RPO revenue of $0.7 million, or 10%, due to a reduction in demand from existing clients.

In EMEA, revenue decreased $0.3 million, or 6%, for the three months ended March 31, 2026, compared to the same period in 2025, driven by a decline in contracting revenue of $0.6 million, or 22%, partially offset by an increase in RPO revenue of $0.2 million, or 7%.

Gross Profit - Business Services

	Three Months Ended  March 31,
	2026		2025		Change in amount		Change in %
$ in millions	As reported		As reported
Business Services
Gross Profit	$	17.4	$	16.4	$	1.0	6	%

For the three months ended March 31, 2026, gross profit increased $1.0 million, or 6%, driven by an increase in RPO gross profit of $1.2 million, compared to the same period in 2025.

- 45 -

    In Americas, gross profit increased by $1.3 million, or 21%, for the three months ended March 31, 2026, compared to the same period in 2025. The growth was primarily driven by an increase of $1.5 million, or 26%, in RPO gross profit, partially offset by a decrease in contracting gross profit of $0.2 million, or 88%, compared to 2025.

    In Asia Pacific, gross profit decreased by $0.6 million, or 8%, for the three months ended March 31, 2026, compared to the same period in 2025, driven by lower RPO gross profit of $0.6 million, coupled with higher contracting gross profit of $0.1 million.

In EMEA, gross profit increased by $0.3 million, or 11%, for the three months ended March 31, 2026, compared to the same period in 2025, driven by primarily by higher RPO gross profit of $0.4 million.

SG&A and Non-Op - Business Services

	Three Months Ended  March 31,
	2026			2025			Change in amount		Change in %
$ in millions	As reported			As reported
Business Services
SG&A and Non-Op	$	18.5		$	16.9		$	1.6	9	%
SG&A and Non-Op as a percentage of revenue	53		%	53		%	N/A		N/A

For the three months ended March 31, 2026, SG&A and Non-Op increased $1.6 million, or 9%, compared to the same period in 2025, while SG&A and Non-Op as a percentage of revenue was even with the prior year. The increase in SG&A and Non-Op was primarily due to higher compensation costs.

Operating Income and EBITDA - Business Services

	Three Months Ended  March 31,
	2026			2025			Change in amount		Change in %
$ in millions	As reported			As reported
Business Services
Operating income (loss)	$	(0.9)		$	(0.3)		$	(0.5)	151	%
EBITDA (loss)	$	(1.0)		$	(0.5)		$	(0.5)	105	%
EBITDA (loss) as a percentage of revenue	(3)		%	(2)		%	N/A		N/A

For the three months ended March 31, 2026, operating loss was $0.9 million, compared to operating loss of $0.3 million in 2025, and EBITDA loss was $1.0 million, or 3% of revenue, compared to EBITDA loss of $0.5 million, or 2% of revenue, in 2025.

Energy Services

Revenue - Energy Services

	Three Months Ended  March 31,
	2026		2025		Change in amount		Change in %
$ in millions	As reported		As reported
Energy Services
Revenue	$	3.5	$	—	$	3.5	N/A

    For the three months ended March 31, 2026, Energy Services contributed $3.5 million in revenue, reflecting a gradual recovery in drilling activity across key markets. The segment demonstrated positive momentum during the quarter, with activity levels accelerating as the division continued to capture market share through strong customer relationships and successful new

- 46 -

customer wins. Revenue performance was supported by demand diversification, with non-oil-and-gas applications complementing core energy sector activity.

Gross Profit - Energy Services

	Three Months Ended  March 31,
	2026		2025		Change in amount		Change in %
$ in millions	As reported		As reported
Energy Services
Gross Profit	$	1.5	$	—	$	1.5	N/A

For the three months ended March 31, 2026, the contribution of Energy Services to the Company's Gross Profit was $1.5 million. The segment delivered strong margin performance during the quarter. The combination of increased activity levels and improved cost absorption supported profitability as the segment executed on opportunities across both traditional energy markets and diversified non-oil-and-gas applications.

SG&A and Non-Op - Energy Services

	Three Months Ended  March 31,
	2026			2025		Change in amount		Change in %
$ in millions	As reported			As reported
Energy Services
SG&A and Non-Op	$	1.1		$	—	$	1.1	N/A
SG&A and Non-Op as a percentage of revenue	31		%	N/A		N/A		N/A

For the three months ended March 31, 2026, Energy Services’ SG&A and non-operating expenses totaled $1.1 million or 31% of revenue. Expenses were generally in line with normal operating levels, with a slight increase in sales commissions reflecting efforts to expand market share during the period.

Operating Income and EBITDA - Energy Services

	Three Months Ended  March 31,
	2026			2025		Change in amount		Change in %
$ in millions	As reported			As reported
Energy Services
Operating income (loss)	$	0.5		$	—	$	0.5	N/M
EBITDA (loss)	$	0.8		$	—	$	0.8	N/M
EBITDA (loss) as a percentage of revenue	25		%	N/A		N/A		N/A

N/M = not meaningful

    For the three months ended March 31, 2026, Energy Services reported an operating income of $0.5 million and an EBITDA gain of $0.8 million or 25% of revenue. The segment's profitability reflects the positive momentum established during the quarter, with strong margin performance and increased activity levels driving EBITDA generation.

- 47 -

Investments

Revenue-Investments

	Three Months Ended  March 31,
	2026		2025		Change in amount		Change in %
$ in millions	As reported		As reported
Investments
Revenue	$	0.2	$	—	$	0.2	N/A

For the three months ended March 31, 2026, Investments contributed $0.2 million to the Company’s revenue, reflecting rental income from owned properties.

Gross Profit - Investments

	Three Months Ended  March 31,
	2026		2025		Change in amount		Change in %
$ in millions	As reported		As reported
Investments
Gross profit	$	0.1	$	—	$	0.1	N/A

For the three months ended March 31, 2026, Investments contributed $0.1 million to the Company's gross profit, reflecting rental income after accounting for property depreciation.

SG&A and Non-Op - Investments

	Three Months Ended  March 31,
	2026			2025		Change in amount		Change in %
$ in millions	As reported			As reported
Investments
SG&A and Non-Op	$	0.1		$	—	$	0.1	N/A
SG&A and Non-Op as a percentage of revenue	71		%	N/A		N/A		N/A

For the three months ended March 31, 2026, Investments SG&A and Non-Op was $0.1 million.

Operating (Loss) Income and EBITDA - Investments

	Three Months Ended  March 31,
	2026			2025		Change in amount		Change in %
$ in millions	As reported			As reported
Investments
Operating income (loss)	$	—		$	—	$	—	N/A
EBITDA (loss)	$	—		$	—	$	—	N/A
EBITDA (loss) as a percentage of revenue	29		%	N/A		N/A		N/A

For the three months ended March 31, 2026, Investments operating loss was 0.01 million, and EBITDA income was $0.05 million, or 29% of revenue.

- 48 -

Corporate Expenses, Net of Corporate Management Expense Allocations

Corporate expenses were $1.6 million for the three months ended March 31, 2026 as compared to $1.0 million for the same period in 2025, representing an increase of $0.6 million. The increase in corporate expenses was primarily driven by higher compensation costs, reflecting increased salaries and related expenses associated with the acquisition of Star Operating Companies.

Depreciation and Amortization Expense

Depreciation and amortization expense included in operating expenses was $0.3 million for the three months ended March 31, 2026, compared to $0.3 million for the same period in 2025. Depreciation and amortization expense included in cost of revenues was $0.6 million for the three months ended March 31, 2026.

Interest (expense) income, Net

Interest expense, net was $0.0 million for the three months ended March 31, 2026, compared to net interest income of $0.1 million for the same period in 2025.

Other Income (expense), Net

Net other expense was $0.0 million for the three months ended March 31, 2026, compared to net other expense of $0.1 million for the same period in 2025.

Provision for Income Taxes

The benefit from income taxes for the three months ended March 31, 2026 was $0.3 million on $4.1 million of pre-tax loss, compared to a provision for income tax of $0.0 million on $1.7 million of pre-tax loss for the same period in 2025. The effective tax rates for the three months ended March 31, 2026 and 2025 were 7% and negative 2%, respectively. For the three months ended March 31, 2026, the effective tax rates differed from the U.S. Federal statutory rate of 21% primarily due to pretax losses for which no tax benefit can be recognized, foreign tax rate differences, and non-deductible expenses. For the three months ended March 31, 2025, the effective tax rates differed from the U.S. Federal statutory rate of 21% primarily due to pretax losses for which no tax benefit can be recognized, foreign tax rate differences, and non-deductible expenses. The current year-to-date effective tax rate differs significantly from the prior period effective tax rate primarily due to the interaction of rate reconciliation items, including changes in valuation allowance.

Net Loss

Net loss attributable to common shareholders was $4.4 million for the three months ended March 31, 2026, compared to net loss of $1.8 million for the three months ended March 31, 2025, an increase in net loss of $2.6 million. Basic and diluted loss per share were both $1.17 for the three months ended March 31, 2026, compared to basic and diluted loss per share of $0.59 for the same period in 2025.

Liquidity and Capital Resources 

    As of March 31, 2026, cash and cash equivalents and restricted cash totaled $10.3 million, compared to $13.4 million as of December 31, 2025. The following table summarizes the Company’s cash flow activities for the three months ended March 31, 2026 and 2025:

	For the Three Months Ended March 31,
$ in millions	2026		2025*
Net cash used in operating activities	$	(1.4)	$	(0.8)
Net cash provided by investing activities	1.9		—
Net cash used in financing activities	(3.5)		—
Effect of exchange rates on cash, cash equivalents, and restricted cash	(0.1)		0.4
Net decrease in cash, cash equivalents, and restricted cash*	$	(3.1)	$	(0.5)

 *2025 does not sum due to rounding

- 49 -

Cash Flows from Operating Activities

    For the three months ended March 31, 2026, net cash used in operating activities was $1.4 million, compared to $0.8 million during the same period in 2025, resulting in a $0.6 million increase in net cash used. The decline was driven by the Company's increase in net loss in the first quarter of 2026 compared to 2025, partly offset by more favorable working capital comparisons to the prior year.

Cash Flows from Investing Activities

    For the three months ended March 31, 2026, net cash provided by investing activities was $1.9 million compared to $0.0 million of net cash provided by investing activities in 2025. Net cash used in investing activities in the first quarter of 2026 primarily reflects cash received in connection with sales-leaseback transactions of $3.2 million, partly offset by capital expenditures of $1.3 million.

Cash Flows from Financing Activities

    For the three months ended March 31, 2026, net cash used in financing activities was $3.5 million, compared to net cash used in financing activities of $0.0 million in 2025. Net cash used in financing activities primarily reflects net cash paid from borrowings of $2.2 million, as well as repurchases of shares of common stock of $0.7 million, and preferred stock dividends paid of $0.6 million in the current year.

Credit Facilities

See Note 9, Debt, in the accompanying notes to the condensed consolidated financial statements for further details.

Liquidity and Capital Resources Outlook

    As of March 31, 2026, the Company had cash and cash equivalents on hand of $8.1 million, as well as our lines of credit and other debt instruments. Other than as described above, the Company has no financial guarantees, outstanding debt or other lease agreements or arrangements that could trigger a requirement for an early payment or that could change the value of our assets. The Company believes that it has sufficient liquidity to satisfy its needs through at least the next 12 months, based on the Company’s financial position as of March 31, 2026. The Company’s near-term cash requirements during 2026 are primarily related to the funding of the Company’s operations.

    As of March 31, 2026, $4.6 million of the Company’s cash and cash equivalents noted above were held in the U.S. and the remainder were held outside the U.S., primarily in Singapore ($0.9 million), Hong Kong ($0.8 million), the U.K. ($0.6 million), India ($0.3 million), the Philippines ($0.3 million), and China ($0.2 million). The majority of the Company’s offshore cash is available to it as a source of funds, net of any tax obligations or assessments.

Off-Balance Sheet Arrangements

    As of March 31, 2026, the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Contingencies

    From time to time in the ordinary course of business, the Company is subject to compliance audits by U.S. federal, state, local, and foreign government regulatory, tax, and other authorities relating to a variety of regulations, including wage and hour laws, unemployment taxes, workers' compensation, immigration, and income, value-added, and sales taxes. The Company is also subject to, from time to time in the ordinary course of business, various claims, lawsuits, and other complaints from, for example, clients, candidates, suppliers, landlords for both leased and subleased properties, former and current employees, and regulators or tax authorities. Periodic events and management actions such as business reorganization initiatives can change the number and types of audits, claims, lawsuits, contract disputes, or complaints asserted against the Company. Such events can also change the likelihood of assertion and the behavior of third parties to reach resolution regarding such matters.

    The economic conditions in the recent past have given rise to many news reports and bulletins from clients, tax authorities, and other parties about changes in their procedures for audits, payment, plans to challenge existing contracts, and other such matters aimed at being more aggressive in the resolution of such matters in their own favor. The Company believes

- 50 -

that it has appropriate procedures in place for identifying and communicating any matters of this type, whether asserted or likely to be asserted, and it evaluates its liabilities in light of the prevailing circumstances. Changes in the behavior of third parties could cause the Company to change its view of the likelihood of a claim and what might constitute a trend. Employment laws vary in the markets in which we operate, and in some cases, employees and former employees have extended periods during which they may bring claims against the Company.

    For matters that reach the threshold of probable and estimable, the Company establishes reserves for legal, regulatory, and other contingent liabilities. The Company had $0.2 million of legal reserves as of both March 31, 2026 and December 31, 2025. Although the outcome of these matters cannot be determined, the Company believes that none of the currently pending matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, results of operations or liquidity.

Recent Accounting Pronouncements

    See Note 3 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for a full description of relevant accounting pronouncements, including the respective expected dates of adoption.

Critical Accounting Policies and Estimates

    See “Critical Accounting Estimates” under Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 20, 2026 and incorporated by reference herein. There were no changes to the Company’s critical accounting policies or estimates during the three months ended March 31, 2026.

- 51 -

FORWARD-LOOKING STATEMENTS

    This Form 10-Q contains statements that the Company believes to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Form 10-Q, including statements regarding the Company’s future financial condition, results of operations, business operations and business prospects, are forward-looking statements. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “predict,” “believe,” and similar words, expressions, and variations of these words and expressions are intended to identify forward-looking statements. All forward-looking statements are subject to important factors, risks, uncertainties, and assumptions, including industry and economic conditions that could cause actual results to differ materially from those described in the forward-looking statements. Such factors, risks, uncertainties, and assumptions include, but are not limited to, (1) global economic fluctuations, (2) changes in the cost and availability of commodities, materials, and equipment, (3) risks related to providing uninterrupted service to clients, (4) the ability of clients to terminate their relationship with the Company at any time, (5) risks associated with real estate ownership, (6) the Company’s ability to successfully achieve its strategic initiatives, (7) risks related to fluctuations in the Company’s operating results from quarter to quarter, (8) risks related to potential acquisitions or dispositions of businesses by the Company, (9) our profitability and growth being tied to the success of our operating businesses, (10) risks associated with our financial investments in other businesses, (11) our ability to improve existing products and services and develop, introduce, and market new products and services successfully, (12) the loss of or material reduction in our business with any of the Company’s largest customers, (13) competition in the Company’s markets, (14) risks related to potential decreases in demand for products, (15) our ability to maintain costs at an acceptable level, (16) the negative cash flows and operating losses that may recur in the future, (17) risks related to international operations, including foreign currency fluctuations, political events, trade wars, natural disasters or health crises, including the Russia-Ukraine war and conflict in the Middle East, (18) risks relating to how future credit facilities may affect or restrict our operating flexibility, (19) our ability to generate or borrow sufficient cash to make payments on our indebtedness, (20) risks related to indebtedness, (21) risks associated with the Company’s investment strategy, (22) the Company’s dependence on key management personnel, (23) the Company’s ability to attract and retain highly skilled professionals, management, and advisors, (24) the Company’s ability to collect accounts receivable, (25) the Company’s exposure to legal proceedings, investigations and disputes, and limits on related insurance coverage, (26) the Company’s ability to utilize net operating loss carryforwards, (27) the potential for goodwill impairment, (28) volatility of the Company’s stock price, (29) risks related to our historically low trading volume, (30) risks related to securities or industry analysts, (31) the Company’s ability to declare dividends, (32) risks associated with failure to pay dividends on our Series A Preferred Stock, (33) our history of annual net losses, (34) risks related to our international operations, (35) risks related to compliance with federal and state laws, regulations, and other rules, (36) our exposure to employment-related claims, legal liability, and costs from clients, employees, and regulatory authorities, (37) risks related to the imposition of licensing or tax requirements or new regulations, (38) the effect of Anti-takeover provisions in our organizational documents, (39) the effect of the protective amendment contained in our Restated Certificate of Incorporation, (40) the impact of our stockholder rights plan, or “poison pill,” on stockholder decision making, (41) risks related to our scaled disclosure requirements as a smaller reporting company, (42) the Company’s heavy reliance on information systems and the impact of potentially losing or failing to develop technology, (43) the adverse impacts of cybersecurity threats and attacks, and (44) risks related to the use of new and evolving technologies. The foregoing list should not be construed to be exhaustive. Actual results could differ materially from the forward-looking statements contained in this Form 10-Q. In view of these uncertainties, you should not place undue reliance on any forward-looking statements, which are based on our current expectations. These forward-looking statements speak only as of the date of this Form 10-Q. The Company assumes no obligation, and expressly disclaims any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.

- 52 -

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this Item.

ITEM 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures 

    The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the design and operation of the Company’s disclosure controls and procedures, as such term is defined under Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2026. However, such controls and procedures are designed only to provide reasonable assurance. There is no complete assurance that these controls and procedures will operate effectively under all circumstances.

Management has determined that the effectiveness of ADT’s controls will be assessed in 2026.

Changes in Internal Control Over Financial Reporting 

There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, except as noted below.    

On August 22, 2025 we completed the merger with Star Operating Companies ("SOC"). As a result of this transaction, we have begun integrating the operations, systems, and internal controls of SOC into our existing processes. This integration is ongoing and includes aligning accounting policies, consolidating financial reporting systems, and implementing our internal control framework across the combined entity. These activities represent a change to our internal control over financial reporting. While we do not believe these changes have materially affected our internal control over financial reporting at this time, the integration process may result in additional changes in future periods.

- 53 -

PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

    The Company is subject, from time to time, to various legal proceedings that are incidental to the conduct of its business. The Company is not involved in any pending legal proceeding that it believes would reasonably be expected to have a material adverse effect on its financial condition or results of operations. See Note 20, Commitments and Contingencies within the notes to our Condensed Consolidated Financial Statements for a summary of legal proceedings.

ITEM 1A.    RISK FACTORS

    In evaluating us and our securities, we urge you to carefully consider the risks and other information in this Quarterly Report on Form 10-Q, the Risk Factors disclosed in Item 1A. of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as well as additional risks and uncertainties not currently known to us or that we currently deem immaterial, that could materially and adversely affect our results of operations or financial condition.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Repurchases of Shares

    The following table summarizes purchases of common stock by the Company during the quarter ended March 31, 2026.

Period	Total Number  of Shares  Purchased	Average Price Paid per Share		Total Number of Shares  Purchased as Part of Publicly Announced  Plans or Programs	Approximate Dollar  Value of Shares that May Yet Be Purchased Under the Plans or Programs (a)
January 1, 2026 - January 31, 2026	9,791	$	10.54	9,791	$	2,377,607
February 1, 2026 - February 28, 2026	27,009	$	10.10	27,009	$	2,104,816
March 1, 2026 - March 31, 2026	33,624	$	9.97	33,624	$	1,769,715
Total	70,424	$	10.10	70,424

(a)On August 8, 2023, the Company’s Board of Directors authorized a share repurchase program for up to $5 million of the Company’s outstanding common stock. The Company continues to view share repurchases as an attractive use of capital and may repurchase shares from time to time, as market conditions warrant, through open market purchases, privately negotiated transactions, block trades, or other methods, in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”).

In the third quarter of 2025, the Company completed its $5 million share repurchase program authorized on August 8, 2023. On September 10, 2025, the Board of Directors authorized a new common stock repurchase program under which the Company may repurchase up to $3 million of its outstanding common stock. During the three months ended March 31, 2026, the Company repurchased on the open market a total of 70,424 shares of its common stock for an aggregate cost of $0.7 million under these authorizations. As of March 31, 2026, under the July 30, 2015, August 8, 2023 and September 10, 2025 authorizations combined, the Company had repurchased an aggregate of 1,018,806 shares for a total cost of $16.2 million, completing the August 8, 2023 authorization and leaving $1.8 million available for purchase under the September 10, 2025 authorization. During the three months ended March 31, 2025, no repurchases of shares were made by the Company under this authorization.

On December 31, 2025, we adopted a Rule 10b-18 and 10b5-1 trading plan (the "10b5-1 Plan") which allows the Company to purchase shares of our common stock under our announced repurchase programs during certain restricted blackout periods. The 10b5-1 Plan allows for the purchase of up to an aggregate of the lower of (i) common stock totaling a combined $2,000,000 purchase price, excluding commissions; or (ii) 350,000 shares of common stock. Shares of common stock purchased pursuant to the 10b5-1 Plan may only be purchased in accordance with trading requirements adopted by the Company and there can be no assurance as to how many shares of common stock, if any, will be purchased pursuant to the 10b5-1 Plan or at what price any such shares of common stock will be purchased.

- 54 -

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.    OTHER INFORMATION

None of the Company’s directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended March 31, 2026, as such terms are defined under Item 408(a) or Regulation S-K.

ITEM 6.    EXHIBITS

STAR EQUITY HOLDINGS, INC.

FORM 10-Q

EXHIBIT INDEX

The exhibits to this Form 10-Q are listed in the following Exhibit Index:

Exhibit No.	Description
31.1*	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2*	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1**	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2**	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101*	The following materials from Star Equity Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 are filed herewith, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025, (ii) the Condensed Consolidated Statements of Other Comprehensive Income (Loss) for the three months ended March 31, 2026 and 2025, (iii) the Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025, (iv) the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025, (v) the Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025, and (vi) Notes to Condensed Consolidated Financial Statements.
104*	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in iXBRL and contained in Exhibit 101.

*Filed herewith.

** Furnished, not filed.

- 55 -

SIGNATURES

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

		STAR EQUITY HOLDINGS, INC.
		(Registrant)
Dated:	May 12, 2026	By:	/s/ JEFFREY E. EBERWEIN
			Jeffrey E. Eberwein
			Chief Executive Officer
			(Principal Executive Officer)
Dated:	May 12, 2026	By:	/s/ MATTHEW K. DIAMOND
			Matthew K. Diamond
			Chief Accounting Officer
			(Principal Financial Officer)

- 56 -