UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

___________________

SCHEDULE 14A

___________________

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

Filed by the Registrant		☒
Filed by a Party other than the Registrant		☐

Check the appropriate box:

☒		Preliminary Proxy Statement
☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☐		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material Under Rule 14a-12

Steel Connect, Inc.
(Name of Registrant as Specified in Its Charter)

_____________________________________________________________________________________________________

(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☐		No fee required.
☐		Fee paid previously with preliminary materials.
☒		Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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Preliminary Proxy Statement — Subject to Completion

STEEL CONNECT, INC.

2000 MIDWAY LANE
SMYRNA, TENNESSEE 37167

MERGER PROPOSAL — YOUR VOTE IS VERY IMPORTANT

, 2022

Dear Steel Connect, Inc. Stockholder:

You are cordially invited to attend the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of Steel Connect, Inc. (“Steel Connect” or the “Company”), which will be held (local time) on , 2022. The Annual Meeting will be held in a virtual-only meeting format. You will not be able to attend the Annual Meeting in person. You can virtually attend the Annual Meeting at www.virtualshareholdermeeting.com/STCN2021, where you will be able to vote electronically and submit questions during the Annual Meeting. For more information, see “Questions and Answers About the Annual Meeting and the Merger.”

At the Annual Meeting, you will be asked to consider and vote upon a proposal (the “Merger Proposal”) to adopt an Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated as of June 12, 2022, by and among the Company, Steel Partners Holdings L.P., a Delaware limited partnership (“Parent”), and SP Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub” and, together with Parent, the “Parent Parties”), pursuant to which Merger Sub will be merged with and into the Company, with the Company continuing as the surviving entity and becoming a wholly owned subsidiary of Parent (the “Merger”). At the effective time of the Merger (the “Effective Time”), each issued and outstanding share of common stock (“Common Stock”) (other than (i) shares owned by the Company or any of its wholly owned subsidiaries or by Parent or any of its wholly owned subsidiaries (collectively, “Excluded Shares”) and (ii) shares for which appraisal rights have been properly and validly perfected and not withdrawn or lost (“Dissenting Shares”)) will be converted into the right to receive (a) $1.35 in cash, without interest and subject to any withholding taxes (the “Per Share Cash Merger Consideration”), and (b) one contingent value right to receive, subject to the terms of the ModusLink CVR Agreement (as defined in the accompanying proxy statement), the ModusLink CVR Payment Amount as provided for in the Merger Agreement (such right, a “ModusLink CVR” and, together with the Per Share Cash Merger Consideration, the “Per Share Merger Consideration”). The Per Share Cash Merger Consideration represents (i) a premium of approximately 90.1% over the closing price of the shares of Common Stock of $0.71 on November 19, 2020, the last trading day prior to the public disclosure that Parent had delivered a non-binding expression of interest regarding a potential combination of the Company and Parent for consideration consisting of cash and units of Parent’s 6% Series A Preferred Units that would imply a value per share of Common Stock in the range of $0.65 to $0.72, (ii) a premium of approximately 11.6% over the closing price of the shares of Common Stock of $1.21 on June 10, 2022, the last trading day prior to the public announcement of the Merger, and (iii) a premium of approximately 9.3% over the 30 trading-day average closing price of the shares of Common Stock as of June 10, 2022, the last trading day prior to the public announcement of the Merger Agreement.

The Merger is a “going private” transaction under the rules of the Securities and Exchange Commission (the “SEC”). In connection with the Merger Agreement, the Company and certain stockholders of the Company entered into a Voting and Support Agreement, dated as of June 12, 2022 (the “Support Agreement”). Pursuant to the terms and conditions set forth in the Support Agreement, each stockholder signatory thereto has agreed to vote, or cause to be voted, all shares of Common Stock and Series C Preferred Stock, par value $0.01 per share, of the Company (“Series C Preferred Stock”) beneficially owned by such persons at the Annual Meeting, among other matters, for the approval and adoption of the Merger Agreement.

To assist in evaluating the fairness of the Merger to the Company and our stockholders other than the holders of Excluded Shares and any “affiliate” (within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of the holders of Excluded Shares (referred to collectively as the “Parent Group”),

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the board of directors of the Company (the “Board”) formed a special committee (the “Special Committee”) of independent and disinterested directors to consider and negotiate the terms and conditions of the Merger and to make a recommendation to the Board. The Special Committee unanimously (i) determined that the terms of the Merger Agreement and the transactions contemplated by the Merger Agreement (such transactions, including the Merger, collectively, the “Transactions”) are fair to and in the best interests of the Company and the holders of capital stock of the Company (other than holders of Excluded Shares), (ii) recommended to the Board that the Board adopt resolutions approving, adopting and declaring advisable the Merger Agreement and the Transactions and (iii) recommended to the Board that the Board recommend that holders of the capital stock entitled to vote, vote for the adoption of the Merger Agreement.

After carefully considering the unanimous recommendation of the Special Committee and other factors, the Board, acting on the unanimous recommendation of the Special Committee, approved the Merger Agreement and the Transactions and adopted resolutions (i) determining that the terms of the Merger Agreement and the Transactions are fair to and in the best interest of the Company and the holders of capital stock of the Company (other than holders of Excluded Shares), (ii) approving and declaring advisable the Merger Agreement and the Transactions and (iii) recommending that the holders of capital stock of the Company entitled to vote, vote for the adoption of the Merger Agreement.

At the Annual Meeting, Steel Connect stockholders will also be asked to vote on several other proposals, including the approval of an amendment to the Company’s Restated Certificate of Incorporation to clarify that the Merger and the Transactions do not constitute a “Liquidation Event” under the Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of the Company (the “Amendment Proposal”); the election of directors (the “Election Proposal”); the ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the current fiscal year (the “Auditor Ratification Proposal”); and the approval of a proposal to the adjourn or postpone the Annual Meeting in order to take such actions as the Board determines are necessary or appropriate, including to ensure that any necessary supplement or amendment to the proxy statement accompanying this notice is provided to the Company’s stockholders a reasonable amount of time in advance of the Annual Meeting or to solicit additional proxies if there are insufficient votes at the time of the Annual Meeting to approve the proposal to adopt the Merger Agreement (the “Adjournment Proposal”).

The Board unanimously recommends that you vote “FOR” the Merger Proposal, “FOR” the Amendment Proposal, “FOR” the Adjournment Proposal and “FOR” the other proposals to be submitted to the stockholders at the Annual Meeting.

The enclosed proxy statement describes the Merger Agreement, the Merger and related agreements, including the ModusLink CVR Agreement and the Support Agreement. It also provides specific information concerning the Annual Meeting. In addition, you may obtain information about us from documents filed with the SEC. You should read this entire proxy statement carefully and, whether or not you plan to virtually attend the Annual Meeting, to promptly submit a proxy: (a) by telephone or the Internet following the easy instructions on the enclosed proxy card; or (b) if you have requested or received a paper copy of the proxy materials, by signing, dating and returning in the enclosed postage-paid envelope the enclosed proxy card (if you are a stockholder of record) or voting instruction form (if you own shares of common stock in “street name,” i.e., through a bank, broker or other nominee).

Your vote is important to us, regardless of whether or not you plan to attend the Annual Meeting. The Merger cannot be completed unless the Merger Agreement is adopted by the affirmative vote of the holders of (i) a majority of the outstanding shares of Series C Preferred Stock, (ii) a majority in voting power of the outstanding shares of Common Stock and Series C Preferred Stock (voting on an as converted to shares of Common Stock basis), voting together as a single class, and (iii) a majority of the outstanding shares of Common Stock not owned, directly or indirectly, by the Parent Parties, any other officers or directors of the Company or any other person having any equity interest in, or any right to acquire any equity interest in, Merger Sub or any person of which Merger Sub is a direct or indirect subsidiary. If you fail to vote on the Merger Agreement, the effect will be the same as a vote against adoption of the Merger Agreement.

To be admitted to the Annual Meeting at the link provided above, you must enter the control number found on your proxy card (if you are a stockholder of record) or voting instruction form (if you own shares of Common Stock in street name). You may vote at the Annual Meeting by following the instructions available on the Annual Meeting website during the Annual Meeting. Whether or not you plan to virtually attend the Annual Meeting, we

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urge you to vote and submit your proxy in advance of the Annual Meeting by one of the methods described in the proxy materials for the Annual Meeting. Therefore, we encourage you to promptly submit your proxy to vote via the Internet, by telephone or, if you have requested or received a paper copy of the proxy materials, by signing, dating and returning the completed proxy card or voting instruction form as applicable. Voting by any of these methods will ensure your representation at the Annual Meeting.

Sincerely,

/s/ Warren G. Lichtenstein

Warren G. Lichtenstein

Interim Chief Executive Officer and

Executive Chairman of the Board

Neither the SEC nor any state securities regulatory agency has approved or disapproved the Merger, passed upon the merits or fairness of the Merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

This proxy statement is dated , 2022 and, together with the enclosed form of proxy, is first being mailed to stockholders on or about , 2022.

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PRELIMINARY PROXY STATEMENT — SUBJECT TO COMPLETION

STEEL CONNECT, INC.

2000 MIDWAY LANE
SMYRNA, TENNESSEE 37167

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON , 2022

To the Stockholders of Steel Connect, Inc.:

NOTICE IS HEREBY GIVEN that the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of Steel Connect, Inc. (the “Company”) will be held on , at Eastern Time. The Annual Meeting will be held in a virtual-only meeting format. You will not be able to attend the Annual Meeting in person. You can virtually attend the Annual Meeting at www.virtualshareholdermeeting.com/STCN2021, where you will be able to vote electronically and submit questions during the Annual Meeting. For more information, see “Questions and Answers About the Annual Meeting and the Merger.”

The Annual Meeting will be held for the following purposes:

1. The Merger Proposal: to consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of June 12, 2022 (as it may be amended from time to time, the “Merger Agreement”), by and among the Company, Steel Partners Holdings L.P., a Delaware limited partnership (“Parent”), and SP Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub” and, together with Parent, the “Parent Parties”);

2. The Amendment Proposal: to approve an amendment to the Company’s Restated Certificate of Incorporation (the “Certificate of Incorporation”) by inserting a new section into the Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of the Corporation filed with the Secretary of State of the State of Delaware on December 15, 2017 (the “Certificate of Designations”) to clarify that the Merger and the transactions contemplated by the Merger do not constitute a “Liquidation Event” under the Certificate of Designations;

3. The Election Proposal: to elect two directors to serve in Class I until the 2024 Annual Meeting of Stockholders (to be held after the fiscal year ending July 31, 2024) and until their respective successors are duly elected and qualified;

4. The Say-on-Pay Proposal: to approve, on an advisory basis, the compensation of our Named Executive Officers (as defined by Item 402 of Regulation S-K);

5. The Auditor Ratification Proposal: to ratify the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the current fiscal year;

6. The Adjournment Proposal: to approve the adjournment of the Annual Meeting, if necessary, to ensure that any necessary supplement or amendment to the proxy statement accompanying this notice is provided to the Company’s stockholders a reasonable amount of time in advance of the Annual Meeting or to solicit additional proxies if there are insufficient votes at the time of the Annual Meeting to approve adoption of the Merger Agreement; and

7. to transact such other business that may properly come before the Annual Meeting or any adjournment or postponement thereof.

The board of directors of the Company (the “Board”), acting on the unanimous recommendation of the special committee of the Board (the “Special Committee”), has approved the Merger Agreement and the transactions contemplated by the Merger Agreement (such transactions collectively, the “Transactions”) and has determined that the Merger Agreement and the Merger and the Transactions are advisable, fair to and in the best interest of the Company and the holders of capital stock of the Company (other than the Parent Parties and any “affiliate” (within

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the meaning of Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of any of the Parent Parties (referred to collectively as the “Parent Group”)). The Board unanimously recommends that you vote “FOR” the Merger Proposal, “FOR” the Amendment Proposal “FOR” the Adjournment Proposal, and “FOR” the other proposals to be submitted to the stockholders at the Annual Meeting.

Your vote is very important, regardless of the number of shares of common stock of the Company (“Common Stock”), that you own, or whether or not you plan to attend the Annual Meeting. The Merger cannot be completed unless the Merger Agreement is adopted by the affirmative vote of the holders of (i) a majority of the outstanding shares of Series C Preferred Stock, (ii) a majority in voting power of the outstanding shares of Common Stock and Series C Preferred Stock (voting on an as converted to shares of Common Stock basis), voting together as a single class, and (iii) a majority of the outstanding shares of Common Stock not owned, directly or indirectly, by the Parent Parties, any other officers or directors of the Company or any other person having any equity interest in, or any right to acquire any equity interest in, Merger Sub or any person of which Merger Sub is a direct or indirect subsidiary. If you fail to vote on the Merger Agreement, the effect will be the same as a vote against adoption of the Merger Agreement.

The Merger is described in the accompanying proxy statement, which we encourage you to read carefully. A copy of the Merger Agreement is included as Annex A to the accompanying proxy statement.

Stockholders who do not vote in favor of the Merger Proposal and who object in writing to the Merger prior to the Annual Meeting and comply with all of the applicable requirements of Delaware law, which are summarized in the section entitled “Special Factors — Rights of Appraisal” in the accompanying proxy statement and reproduced in its entirety as Annex E to this proxy statement, will be entitled to rights of appraisal to obtain the fair value of their shares of Common Stock.

We encourage you to participate in the Annual Meeting, either by attending virtually and voting electronically at the Annual Meeting or by voting online or by telephone or, if you have received or requested a paper copy of the proxy materials, by completing, dating, signing and promptly returning the enclosed proxy card (if you are a stockholder of record) or voting instruction card (if you own shares of Common Stock in “street name,” i.e., through a bank, broker or other nominee) in the enclosed postage-paid envelope before the Annual Meeting. This will ensure that your shares are represented at the Annual Meeting.

A list of the names of stockholders entitled to vote at the Annual Meeting will be available during the Annual Meeting for examination by any stockholder at www.virtualshareholdermeeting.com/STCN2021.

		By Order of the Board of Directors,
Smyrna, Tennessee , 2022
		/s/ Warren G. Lichtenstein
		Warren G. Lichtenstein Interim Chief Executive Officer and Executive Chairman of the Board

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ABOUT THIS PROXY STATEMENT

This document constitutes the proxy statement of Steel Connect, Inc., a Delaware corporation (“Steel Connect” or the “Company”), under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, it constitutes a notice of meeting with respect to the annual meeting of the stockholders of the Company to be held at Eastern Time on , 2022, in a virtual-only format.

The Company has entered into an Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated as of June 12, 2022, by and among the Company, Steel Partners Holdings L.P., a Delaware limited partnership (“Parent”), and SP Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub” and, together with Parent, the “Parent Parties”), pursuant to which Merger Sub will be merged with and into the Company, with the Company continuing as the surviving entity and becoming a wholly owned subsidiary of Parent (the “Merger”). Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of common stock of the Company (“Common Stock”) (other than (i) shares owned by the Company or any of its wholly owned subsidiaries or by Parent or any of its wholly owned subsidiaries (collectively, “Excluded Shares”) and (ii) shares for which appraisal rights have been properly and validly perfected and not withdrawn or lost (“Dissenting Shares”)) will be converted into the right to receive (a) $1.35 in cash , without interest and subject to any withholding taxes (the “Per Share Cash Merger Consideration”), and (b) one contingent value right to receive, subject to the terms of the ModusLink CVR Agreement ( as defined in the accompanying proxy statement), the ModusLink CVR Payment Amount as provided in the Merger Agreement (such contingent right, a “ModusLink CVR” and, together with the Per Share Cash Merger Consideration, the “Per Share Merger Consideration”). Accordingly, unless otherwise expressly stated herein, all discussions in this proxy statement concerning the Merger, the Merger Agreement, and all transaction documentation, including all discussions concerning the events leading thereto, the applicable proceedings of the Special Committee of the Board of Directors (the “Board”) of the Company, the fairness opinion of the financial advisor to the Special Committee, and all other considerations, all relate to the Merger Agreement and the Transactions, including the Merger.

You should rely only on the information contained in or incorporated by reference into this proxy statement. No one has been authorized to provide you with information that is different from that contained in or incorporated by reference into this proxy statement. This proxy statement is dated , 2022 and, together with the enclosed form of proxy, is first being mailed to stockholders on or about , 2022. You should not assume that the information contained in this proxy statement is accurate as of any date other than that date or, in the case of information in a document incorporated by reference, as of the date of such document, unless the information specifically indicates that another date applies. The mailing of this proxy statement to stockholders will not create any implication to the contrary.

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the Merger, passed upon the merits or fairness of the Merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

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TABLE OF CONTENTS

		Page
SUMMARY TERM SHEET RELATING TO THE MERGER		1
The Parties to the Merger		1
The Merger Proposal		2
Conditions to the Merger		2
When the Merger Will be Completed		3
Purposes and Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger		3
Opinion of Houlihan Lokey Capital, Inc., Financial Advisor to the Special Committee		4
The Parent Group Members’ Purposes and Reasons for the Merger		4
Position of the Parent Group as to Fairness of the Merger		4
Certain Effects of the Merger		4
Treatment of Steel Connect Equity Awards in the Merger		5
Form of Contingent Value Rights Agreement		5
Treatment of Series C Preferred Stock		5
Treatment of the SPHG Note		5
Interests of Steel Connect’s Directors and Executive Officers in the Merger		5
Regulatory Matters		6
Termination		6
Expense Reimbursement and Termination Fee Provisions		7
Go-Shop Period		7
Specific Performance		8
Financing		8
Material U.S. Federal Income Tax Consequences of the Merger		8
The Annual Meeting		8
Record Date and Quorum		8
Required Votes		9
Litigation		9
Rights of Appraisal		9
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THE MERGER		10
SPECIAL FACTORS		17
Background of the Merger		17
Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger		26
Opinion of Houlihan Lokey Capital, Inc., Financial Advisor to the Special Committee		34
The Parent Group Members’ Purposes and Reasons for the Merger		42
Position of the Parent Group as to Fairness of the Merger		43
Plans for Steel Connect After the Merger		46
Certain Effects of the Merger		47
Projected Financial Information		48
Financing		52
Interests of Steel Connect’s Directors and Executive Officers in the Merger		53
Material U.S. Federal Income Tax Consequences of the Merger		55
Regulatory Approvals		59
Delisting and Deregistration of Common Stock		59
Fees and Expenses		59
Anticipated Accounting Treatment of the Merger		60
Rights of Appraisal		60
Litigation		64

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		Page
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION		65
THE PARTIES TO THE MERGER		66
Steel Connect, Inc.		66
Steel Partners Holdings L.P.		66
SP Merger Sub, Inc.		66
IMPORTANT INFORMATION REGARDING THE PARENT GROUP MEMBERS		67
Executive Officers and Directors of Steel Partners Holdings GP, Inc.		69
Executive Officers and Directors of Merger Sub		70
Executive Officers and Directors of Handy & Harman Ltd.		71
Executive Officers and Directors of WHX CS Corp.		71
Executive Officers and Directors of Steel Partners, Ltd.		72
Executive Officers and Directors of SPH Group LLC		72
Executive Officers and Directors of SPH Group Holdings LLC		72
Executive Officers and Directors of Steel Excel Inc.		72
Past Transactions of the Parent Group		73
THE ANNUAL MEETING		75
PROPOSAL NO. 1: THE MERGER PROPOSAL		78
Vote Required		78
The Merger Agreement		78
Support Agreement		91
Form of Contingent Value Rights Agreement		91
PROPOSAL NO. 2: THE CERTIFICATE OF DESIGNATIONS AMENDMENT PROPOSAL		97
Vote Required		97
PROPOSAL NO. 3: THE ELECTION PROPOSAL		98
Vote Required		98
Information Concerning the Directors and the Board’s Nominees		98
Corporate Governance and Board Matters		101
PROPOSAL NO. 4: THE SAY-ON-PAY PROPOSAL		108
Vote Required		108
PROPOSAL NO. 5: THE AUDITOR RATIFICATION PROPOSAL		109
Independent Registered Public Accounting Firm Fees		109
Audit Committee Pre-Approval Policies and Procedures		109
Vote Required		109
PROPOSAL NO. 6: THE ADJOURNMENT PROPOSAL		110
Vote Required		110
IMPORTANT ADDITIONAL INFORMATION REGARDING STEEL CONNECT		111
Company Background		111
Selected Historical Consolidated Financial Information		111
Book Value per Share		113
Market Price of Our Common Stock		113
Dividends		114
Prior Public Offerings		114
Prior Stock Purchases		114
Security Ownership of Certain Beneficial Owners and Management		114
Transactions in Common Stock		116
Transactions between Steel Connect and the Parent Group Members		116
Executive Officers and Directors		116
Executive Compensation		117
Director Compensation		120
Audit Committee Report		123

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		Page
Audit Committee		123
OTHER INFORMATION		124
Delinquent Section 16(a) Reports		124
2021 Annual Report		124
Householding of Annual Meeting Materials		124
Manner and Cost of Proxy Solicitation		124
Other Matters		124
Provisions for Unaffiliated Stockholders		124
Future Stockholder Proposals		124
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE		126
WHERE YOU CAN FIND ADDITIONAL INFORMATION		127
ANNEX A: Agreement and Plan of Merger		A-1
ANNEX B: Opinion of Houlihan Lokey Capital, Inc.		B-1
ANNEX C: Voting and Support Agreement		C-1
ANNEX D: Form of Contingent Value Rights Agreement		D-1
ANNEX E: Section 262 of the General Corporation Law of the State of Delaware		E-1
ANNEX F: Certificate of Amendment to the Restated Certificate of Incorporation of Steel Connect, Inc.		F-1

iii

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SUMMARY TERM SHEET RELATING TO THE MERGER

This Summary Term Sheet discusses the material information regarding the Merger contained in this proxy statement, but does not contain all of the information in this proxy statement that is important to your voting decision with respect to the adoption of the Merger Agreement or the other matters being considered at the Annual Meeting. We encourage you to read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement, as this Summary Term Sheet may not contain all of the information that may be important to you. The items in this Summary Term Sheet include page references directing you to a more complete description of that topic in this proxy statement.

Throughout this proxy statement we refer to:

• Steel Partners Holdings L.P. as “Parent”;

• Parent and Merger Sub as the “Parent Parties”;

• the Parent and any “affiliate” (within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934, as amended, referred to as the “Exchange Act”) of any of the Parent Parties as the “Parent Group” or the “Parent Group Members”;

• the shares of Common Stock, collectively, which are not owned by the Parent Parties, as the “subject shares”;

• the holders of Common Stock other than the Parent Group Members and the affiliates of the Company, including its officers and directors, as “unaffiliated stockholders”; and

• the Board’s recommendation that the stockholders of Company approve the adoption of the Merger Agreement as the “Board Recommendation.”

The Parties to the Merger (Page 66)

Steel Connect, Inc.

2000 Midway Lane
Smyrna, Tennessee 37167
United States of America
Telephone: (914) 461-1276

Steel Connect, Inc., a Delaware corporation (referred to herein as the “Company.” “Steel Connect,” “we,” “our” or “us”), is a holding company which operates through its wholly owned subsidiary, ModusLink Corporation (“ModusLink”), which serves the supply chain management market.

ModusLink provides digital and physical supply chain solutions to many of the world’s leading brands across a diverse range of industries, including consumer electronics, telecommunications, computing and storage, software and content, consumer packaged goods, medical devices, retail and luxury and connected devices. These solutions are delivered through a combination of industry expertise, innovative service solutions, and integrated operations, proven business processes, an expansive global footprint and world-class technology. With a global footprint spanning North America, Europe and the Asia Pacific, the Company’s solutions and services are designed to improve end-to-end supply chains in order to drive growth, lower costs, and improve profitability.

Our executive offices are located at 2000 Midway Lane, Smyrna, Tennessee 37167, and our telephone number is (914) 461-1276.

Additional information about Steel Connect is contained in its public filings, which are incorporated by reference herein. See “Incorporation of Certain Documents by Reference” beginning on page 126 and “Where You Can Find Additional Information” beginning on page 127.

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Steel Partners Holdings L.P.

590 Madison Ave.
New York, New York 10022
Telephone: (212) 520-2300

Steel Partners Holdings L.P. (referred to herein as “Parent”) is a Delaware limited partnership. Parent, together with its subsidiaries and affiliates, is a diversified global holding company that owns and operates businesses and has significant interests in leading companies in various industries, including diversified industrial products, energy, defense, supply chain management and logistics, banking and youth sports.

SP Merger Sub, Inc.

c/o Steel Partners Holdings L.P.
590 Madison Ave.
New York, New York 10022
Telephone: (212) 520-2300

SP Merger Sub, Inc. (referred to herein as “Merger Sub”) is a Delaware corporation formed by Parent solely for the purposes of effecting the Merger. Merger Sub is a wholly owned subsidiary of Parent. Merger Sub has not engaged in any business other than in connection with the Merger and the transactions contemplated thereby (such transactions, collectively, the “Transactions”).

The Merger Proposal (Page 78)

You are being asked to consider and vote upon the proposal to adopt the Merger Agreement. The Merger Agreement provides that Merger Sub will be merged with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of Parent, and each outstanding share of Common Stock (other than (i) shares owned by the Company or any of its wholly owned subsidiaries or by Parent or any of its wholly owned subsidiaries (collectively, “Excluded Shares”) and (ii) shares for which appraisal rights have been properly and validly perfected and not withdrawn or lost (“Dissenting Shares”)) will be converted into the right to receive (a) $1.35 in cash, without interest and subject to any withholding taxes (the “Per Share Cash Merger Consideration”) and (b) one contingent value right to receive, subject to the terms of the ModusLink CVR Agreement (defined below), the ModusLink CVR Payment Amount as provided in the Merger Agreement (such right, a “ModusLink CVR” and, together with the Per Share Cash Merger Consideration, the “Per Share Merger Consideration”).

If the Merger is consummated, Steel Connect will become a wholly owned subsidiary of Parent.

Conditions to the Merger (Page 88)

The obligations of Steel Connect, on the one hand, and the Parent Parties, on the other hand, to consummate the Merger are subject to the satisfaction or waiver on or before the date of the closing of the Merger (the “Closing Date”), of the following conditions:

• the adoption of the Merger Agreement by the affirmative vote of (a) a majority of the outstanding shares of Series C Preferred Stock and (b) the holders of a majority in voting power of the outstanding shares of Common Stock and Series C Preferred Stock (voting on an as converted to shares of Common Stock basis), voting together as a single class (the “Requisite Company Vote”);

• the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock not owned, directly or indirectly, by the Parent Parties any other officers or directors of the Company, or any other person having any equity interest in, or any right to acquire any equity interest in, Merger Sub or any person of which Merger Sub is a direct or indirect subsidiary (the “Unaffiliated Stockholder Approval”); and

• no governmental entity shall have enacted, issued, promulgated, enforced or entered any laws or orders (whether temporary, preliminary or permanent) that restrain, enjoin or otherwise prohibit consummation of the Transactions, and no governmental entity shall have instituted any proceeding seeking any such laws or orders.

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The obligation of Steel Connect to effect the Merger is subject to the satisfaction or waiver by Steel Connect, on or before the closing date of the Merger (the “Closing Date”), of the following conditions:

• the representations and warranties of each of the Parent Parties shall be true and correct as though made on and as of the Closing Date, except for representations or warranties made as of a specified date, the accuracy of which shall be determined as of that specified date, except where the failure of any such representation or warranty to be so true and correct would not, individually or in the aggregate, prevent, materially impede or materially delay the consummation of the Transactions or the payment of the Per Share Merger Consideration; and

• that each of the Parent Parties shall have in all material respects performed all obligations required by the Merger Agreement to be performed by it at or prior to the closing of the Merger.

The obligation of the Parent Parties to effect the Merger is subject to the satisfaction or waiver by the Parent Parties, on or before the Closing Date, of the following conditions:

• the continued accuracy of (i) the representations and warranties of the Company shall be true and correct as though made on and as of the Closing Date, except for representations or warranties made as of a specified date, the accuracy of which shall be determined as of that specified date, except where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, does not constitute a Company Material Adverse Effect (as defined herein), and (ii) the representations and warranties with respect to the absence of a Company Material Adverse Effect shall be true and correct in all respects as though made on and as of the Closing Date; and

• that the Company shall have performed in all material respects all obligations required by the Merger Agreement to be performed by it at or prior to the Closing Date.

When the Merger Will be Completed

We anticipate completing the Merger in the second half of 2022, subject to adoption of the Merger Agreement by Steel Connect’s stockholders as specified in this proxy statement and the satisfaction or waiver of the other closing conditions.

Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger (Page 26)

Based in part on the unanimous recommendation of the members of a committee of independent and disinterested directors that was established by the Board (referred to as the “Special Committee”) to, among other things, evaluate and negotiate a potential transaction with the Parent Group, the Board unanimously determined that the Merger Agreement and the Transactions, including the Merger, are advisable and fair to, and in the best interests of, the Company and its stockholders, other than the Parent Group. The Board unanimously recommends that the stockholders of the Company vote “FOR” the proposal to adopt the Merger Agreement (the “Merger Proposal”) and “FOR” the proposal to adjourn the Annual Meeting, if necessary, to ensure that any necessary supplement or amendment to the proxy statement accompanying this notice is provided to the Company’s stockholders a reasonable amount of time in advance of the Annual Meeting or to solicit additional proxies if there are insufficient votes at the time of the Annual Meeting to approve adoption of the Merger Agreement (the “Adjournment Proposal”). For a description of the reasons considered by the Special Committee and the Board for their recommendations, see “Special Factors — Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 26. For descriptions of the fairness determinations made by the Special Committee, the Board and the Parent Group, see “Special Factors — Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 26 and “Special Factors — Position of the Parent Group as to Fairness of the Merger” beginning on page 43.

The purpose of the Merger for the Company is to enable its stockholders to realize the value of their investment in the Company through their receipt of the $1.35 in cash and the potential additional payment for the ModusLink CVR. The Per Share Cash Merger Consideration represents (i) a premium of approximately 90.1% over the closing price of the shares of Common Stock of $0.71 on November 19, 2020, the last trading day prior to the public disclosure that Parent had delivered a non-binding expression of interest regarding a potential combination of the Company and

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Parent for consideration consisting of cash and units of Parent’s 6% Series A Preferred Units that would imply a value per share of Common Stock in the range of $0.65 to $0.72, (ii) a premium of 11.6% over the closing price of the shares of Common Stock of $1.21 on June 10, 2022, the last trading day prior to the public announcement of the Merger, and (iii) a premium of approximately 9.3% over the 30 trading-day average closing price of the shares of Common Stock as of June 10, 2022, the last trading day prior to the public announcement of the Merger Agreement.

Opinion of Houlihan Lokey Capital, Inc., Financial Advisor to the Special Committee (See Page 34 and Annex B)

On June 12, 2022, Houlihan Lokey Capital, Inc., which we refer to as Houlihan Lokey, orally rendered its opinion to the Special Committee (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the Special Committee dated June 12, 2022), as to the fairness, from a financial point of view and as of such date, of the Merger Consideration to be received by the Unaffiliated Stockholders (as defined in Houlihan Lokey’s written opinion included as Annex B hereto) in the Merger pursuant to the Merger Agreement, which opinion was based on and subject to the various procedures followed, assumptions made, qualifications and limitations on the review undertaken and the other matters considered by Houlihan Lokey in connection with the preparation of its opinion.

Houlihan Lokey’s opinion was directed to the Special Committee (in its capacity as such) and only addressed the fairness, from a financial point of view and as of such date, of the Merger Consideration be received by Unaffiliated Stockholders in the Merger pursuant to the Merger Agreement and did not address any other aspect or implication of the Merger or any other agreement, arrangement or understanding. The summary of Houlihan Lokey’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex B to this proxy statement and describes certain of the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not constitute, advice or a recommendation to the Special Committee, the Board, the Company, any security holder or any other person as to how to act or vote with respect to any matter relating to the Merger or otherwise. See “Special Factors — Opinion of Houlihan Lokey Capital, Inc., Financial Advisor to the Special Committee.”

The Parent Group Members’ Purposes and Reasons for the Merger (Page 42)

The Parent Group Members believe that as a wholly owned subsidiary of Parent, Steel Connect will have greater operational and business flexibility, and the Company’s management will have the ability to more effectively concentrate on operational matters and long-term growth. Moreover, Steel Connect will not be subject to certain obligations and constraints, and related costs, associated with having publicly traded equity securities, which instead will be handled by Parent.

Position of the Parent Group as to Fairness of the Merger (Page 43)

The Board of Directors of Steel Partners Holdings GP, Inc., the general partner of the Company, has approved the Merger Agreement and the Transactions. Each of the Parent Group Members believes that the Merger is substantively and procedurally fair to Steel Connect’s unaffiliated stockholders. Their belief is based on the factors described in “Special Factors — Position of the Parent Group as to Fairness of the Merger” beginning on page 43.

Certain Effects of the Merger (Page 47)

If the conditions to the closing of the Merger are either satisfied or, to the extent permitted, waived, Merger Sub will be merged with and into Steel Connect, the separate corporate existence of Merger Sub will cease and Steel Connect will continue its corporate existence under Delaware law as the surviving corporation in the Merger, with all of its rights, privileges, immunities, powers and franchises continuing unaffected by the Merger. Upon completion of the Merger, all issued and outstanding shares of Common Stock immediately prior to the Effective Time, other than Excluded Shares and Dissenting Shares, will be converted into the right to receive the Per Share Merger Consideration. Following the completion of the Merger, the shares of Common Stock will no longer be publicly traded, and stockholders (other than the unitholders of Parent through their interests in Parent) will cease to have any ownership interest in Steel Connect.

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Treatment of Steel Connect Equity Awards in the Merger (Page 53)

At the Effective Time, each share of restricted stock (each a “Restricted Share”) issued by the Company pursuant to, or otherwise governed by, any Company equity investment plan that is outstanding immediately before the Effective Time, shall be vested and all restrictions thereon shall lapse in full as of immediately before the Effective Time, and each such Restricted Share shall be cancelled and converted into the right to receive the Per Share Merger Consideration.

Form of Contingent Value Rights Agreement (Page 91)

In connection with the Merger Agreement, at or prior to the closing of the Merger, the Company, Parent, a rights agent to be determined thereunder (“Rights Agent”) and a shareholder representative to be designated therein will enter into a Contingent Value Rights Agreement (the “ModusLink CVR Agreement”), substantially in the form attached to the Merger Agreement and included as Annex D hereto. In accordance with the ModusLink CVR Agreement, holders of Common Stock issued and outstanding immediately prior to the Effective Time (other than Excluded Shares and Dissenting Shares) will receive in respect of each such share one ModusLink CVR, which represents the right to receive each such holder’s pro rata share of net proceeds if ModusLink is sold during the two-year period following the completion of the Merger to the extent such net proceeds exceed $80 million plus certain related costs and expenses.

The ModusLink CVRs represent a contractual right only and will not be transferable except in the limited circumstances specified in the ModusLink CVR Agreement. The ModusLink CVRs will not be evidenced by certificates or any other instruments and will not be registered with the SEC. The ModusLink CVRs will not have any voting or dividend rights, and interest shall not accrue on any amounts payable on the ModusLink CVRs to any holder. In addition, the ModusLink CVRs shall not represent any equity or ownership interest in Parent, the Company or any of their affiliates.

Treatment of Series C Preferred Stock (Page 79)

At the effective time of the Merger (the “Effective Time”), each share of Series C Preferred Stock issued and outstanding immediately prior to the Effective Time will remain issued and outstanding.

Treatment of the SPHG Note (Page 80)

At the Effective Time, the Company’s 7.50% Convertible Senior Note due March 1, 2024 issued by the Company to SPH Group Holdings LLC (the “SPHG Note”), as in effect immediately prior to the Effective Time, will remain outstanding.

Interests of Steel Connect’s Directors and Executive Officers in the Merger (Page 53)

In considering the recommendations of the Special Committee and the Board with respect to the Merger Agreement, you should be aware that, in addition to the interests of the Parent Group as stockholders of the Company, Steel Connect’s directors and executive officers have interests in the Merger that may be different from, or in addition to, those of other stockholders of Steel Connect generally. Interests of executive officers and directors that may be different from or in addition to the interests of Steel Connect’s stockholders include:

• Steel Connect’s executive officers as of the Effective Time will become the initial executive officers of the surviving corporation.

• Steel Connect’s directors and executive officers are entitled to continued indemnification and insurance coverage under the Merger Agreement, and Steel Connect’s directors are entitled to continued indemnification and insurance coverage under indemnification agreements.

• Members of the Special Committee are receiving compensation for their service on the Special Committee.

The Special Committee and the Board were aware of the different or additional interests described in this proxy statement and considered those interests along with other matters in recommending or approving, as applicable, the Merger Agreement and the Transactions.

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Regulatory Approvals (Page 59)

No material federal or state regulatory approvals, filings or notices are required in connection with the Merger other than the filing of this proxy statement and the related SEC Rule 13e-3 transaction statement on Schedule 13E-3 (the “Schedule 13E-3”) and the filing of a certificate of merger with the Secretary of State of the State of Delaware by the Company and Merger Sub to effect the Merger.

Termination (Page 89)

Steel Connect and Parent may terminate the Merger Agreement by mutual written consent at any time before the Effective Time, whether prior to or after receipt of the Requisite Company Vote. In addition, either Steel Connect or Parent (as applicable) may terminate the Merger Agreement, subject to various exceptions described under “The Merger Agreement — Termination,” if:

• the Merger has not been completed by December 9, 2022 (the “Outside Date”), subject to certain exceptions;

• any laws effected after the date of the Merger Agreement prohibit consummation of the Merger;

• (i) any orders issued by a court of competent jurisdiction restrain, enjoin or otherwise prohibit consummation of the Merger and (ii) such orders shall have become final and non-appealable; or

• the Requisite Company Vote shall not have been obtained at the Annual Meeting (or at any adjournment or postponement thereof).

Parent may terminate the Merger Agreement at any time prior to the Effective Time if:

• prior to obtaining the Requisite Company Vote, the Board (acting upon the recommendation of the Special Committee) fails to make, withdraws, modifies or amends in any manner adverse to Parent, the Board Recommendation;

• (i) the Special Committee or the Board (acting upon the recommendation of the Special Committee) approves, endorses or recommends a Superior Proposal (as defined herein), (ii) a tender offer or exchange offer for any outstanding shares of capital stock of the Company is commenced and the Special Committee or the Board (acting upon the recommendation of the Special Committee) fails to recommend against acceptance of such tender offer or exchange offer by its stockholders (for purposes hereof, taking of no position with respect to the acceptance of such tender offer or exchange offer by its stockholders shall constitute a failure to recommend against acceptance of such tender offer or exchange offer) or (iii) the Company (acting upon the recommendation of the Special Committee), the Special Committee or the Board (acting upon the recommendation of the Special Committee) publicly announces its intention to do any of the foregoing; or

• the Special Committee or the Board (acting upon the recommendation of the Special Committee) exempts any Person (as defined in the Merger Agreement) other than Parent or any of its affiliates from the provisions of Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”); or

• the Company has breached any of its representations, warranties, covenants or agreements contained in the Merger Agreement, which breach (i) would give rise to the failure of the conditions to the Parent Parties’ obligations to complete the Merger and (ii) has not been cured by the Company within 30 business days after the Company’s receipt of written notice of such breach from Parent; provided that Parent shall not have a right to terminate the Merger Agreement for this reason if Parent or Merger Sub is then in material breach of any representation, warranty, agreement or covenant contained in the Merger Agreement.

Steel Connect may terminate the Merger Agreement prior to obtaining the Requisite Company Vote if:

• the Board authorizes the Company to enter into an agreement, arrangement or understanding providing for the implementation of a Superior Proposal (an “Alternative Acquisition Agreement”) in compliance with the terms of the Merger Agreement; or

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• the Special Committee determines that Parent has breached any of its representations, warranties, covenants or agreements contained in the Merger Agreement, which breach (i) would give rise to the failure of a condition of the Company to complete the Merger and (ii) has not been cured by Parent within 30 business days after Parent’s receipt of written notice of such breach from the Company; provided that the Company shall not have a right to terminate the Merger Agreement for this reason if the Company is then in material breach of any representation, warranty, agreement or covenant contained in the Merger Agreement.

Expense Reimbursement and Termination Fee Provisions (Page 90)

Steel Connect is required to pay Parent the Expense Reimbursement (an amount up to a maximum of $1.0 million) and the Termination Fee (an amount equal to $1.5 million) if the Merger Agreement is terminated in the following circumstances:

• by the Company, upon the Board authorizing the Company to enter into an Alternative Acquisition Agreement; provided that the Company shall only be required to pay the Expense Reimbursement and not the Termination Fee if such termination occurs during the Go-Shop Period or after the Go-Shop Period to enter into an Alternative Acquisition Agreement with an Excluded Party (as defined in the Merger Agreement);

• by the Parent, if prior to the time the Requisite Company Vote is obtained, the Board (acting upon the recommendation of the Special Committee) fails to make, withdraws, modifies or amends in any manner adverse to Parent, the Company Board Recommendation;

• by the Parent, if the Special Committee or the Board (acting upon the recommendation of the Special Committee) approves, endorses or recommends a Superior Proposal, (ii) a tender offer or exchange offer for any outstanding shares of capital stock of the Company is commenced and the Special Committee or the Board (acting upon the recommendation of the Special Committee) fails to recommend against acceptance of such tender offer or exchange offer by its stockholders (for purposes hereof, taking of no position with respect to the acceptance of such tender offer or exchange offer by its stockholders shall constitute a failure to recommend against acceptance of such tender offer or exchange offer) or (iii) the Company (acting upon the recommendation of the Special Committee), the Special Committee or the Board (acting upon the recommendation of the Special Committee) publicly announces its intention to do any of the foregoing;

• by the Parent, if the Special Committee or the Board (acting upon the recommendation of the Special Committee) exempts any person other than the Parent or any of its affiliates from the provisions of Section 203 of the DGCL; or

• (i) a Takeover Proposal has been made or proposed to Steel Connect or its stockholders or publicly announced (whether or not conditional and whether or not withdrawn) prior to the valid termination of the Merger Agreement; (ii) the Merger Agreement is validly terminated by either Parent or Steel Connect, as applicable, if the Merger has not been consummated by the Outside Date or if the Requisite Company Vote has not been obtained at the Annual Meeting (or any adjournment or postponement thereof); and (iii) within twelve (12) months of the date of such termination, Steel Connect or any of its subsidiaries enters into a binding contract providing for the implementation of the Takeover Proposal that was publicly announced prior to the termination of the Merger Agreement.

Go-Shop Period (Page 85)

During the period beginning on June 12, 2022 and continuing until 11:59 p.m. Eastern Time on July 12, 2022, the Company and its representatives have the right to (subject to the terms of the Merger Agreement):

• solicit, initiate, propose, induce the making or submission of, encourage or facilitate in any way any offer or proposal that constitutes, or could reasonably be expected to lead to, a Takeover Proposal, including by providing information (including non-public information and data) relating to Steel Connect and affording access to the businesses, properties, assets, books, records or other non-public information,

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or to any personnel, of Steel Connect to any person that has entered into an acceptable confidentiality agreement; provided that Steel Connect provide the Parent Group with access to any information or data that is provided to any person given such access that was not previously made available (whether prior to or after the execution of the Merger Agreement) to the Parent Group substantially concurrently with the time it is provided to such person; and

• continue, enter into, engage in or otherwise participate in any discussions or negotiations with any person (and their respective representatives, including potential financing sources of such person) regarding any Takeover Proposals (or inquiries, offers or proposals or any other effort or attempt that could reasonably be expected to lead to a Takeover Proposal), and cooperate with or assist or participate in, or facilitate in any way, any such inquiries, offers, proposals, discussions or negotiations or any effort or attempt to make any Takeover Proposals or other proposals that could reasonably be expected to lead to Takeover Proposals, including by granting a waiver, amendment or release under any pre-existing “standstill” or other similar provision to the extent necessary to allow for a Takeover Proposal or amendment to a Takeover Proposal to be made confidentially to the Company, the Special Committee or the Board. Steel Connect is required to notify Parent that it has entered into an acceptable confidentiality agreement within 24 hours after the execution thereof.

Specific Performance (Page 91)

Under certain circumstances, Steel Connect and the Parent Parties are entitled to specific performance of the terms of the Merger Agreement, in addition to any other remedy at law or equity.

Financing (Page 52)

Steel Connect and the Parent Parties estimate that the total amount of funds required to complete the Merger and the Transactions and pay related fees and expenses will be approximately $63.3 million. The Merger is not subject to any financing condition and the Parent Parties intend to fund this amount from cash on hand (as further described in “Special Factors — Financing”).

Material U.S. Federal Income Tax Consequences of the Merger (Page 55)

If you are a U.S. Holder (as defined below), the receipt of merger consideration in exchange for Common Stock pursuant to the Merger will generally be a taxable transaction for U.S. federal income tax purposes. You are encouraged to consult your own tax advisors regarding the particular tax consequences to you of the exchange of Common Stock for the merger consideration pursuant to the Merger in light of your particular circumstances (including the application and effect of any state, local or foreign income and other tax laws).

The Annual Meeting (Page 75)

The Annual meeting will be held on , 2022 at Eastern Time and accessible only through the Internet at www.virtualshareholdermeeting.com/STCN2021.

Record Date and Quorum (Page 75)

The holders of record of shares of Common Stock and Series C Preferred Stock as of the close of business on , 2022 (the record date for determination of stockholders entitled to notice of and to vote at the Annual Meeting (the “Record Date”)) are entitled to receive notice of and to vote at the Annual Meeting.

The presence, in person or by proxy, of holders of a majority of the shares of capital stock of the Company issued and outstanding and entitled to vote at the Annual Meeting will constitute a quorum. Because the Merger Proposal requires a separate vote of holders of Series C Preferred Stock, the presence, in person or by proxy, of holders of a majority of the shares of Series C Preferred Stock is also required with respect to that proposal.

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Required Votes (Page 75)

Each share of Common Stock (and each share into which a share of Series C Preferred Stock, voting on an as converted basis) entitles the holder thereof as of the Record Date to cast one vote on the following matters submitted for a vote of the stockholders at the Annual Meeting:

• The Merger Proposal: Approval of the Merger Proposal requires the affirmative vote of the holders of (i) a majority of the outstanding shares of Series C Preferred Stock and (ii) a majority in voting power of the outstanding shares of Common Stock and Series C Preferred Stock (voting on an as converted to shares of Common Stock basis), voting together as a single class. Such stockholder approval will also satisfy the requirements of the DGCL. In addition, the Merger Proposal requires the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock not owned, directly or indirectly, by the Parent Parties, any other officers or directors of the Company or any other person having any equity interest in, or any right to acquire any equity interest in, Merger Sub or any person of which Merger Sub is a direct or indirect subsidiary.

• The Election Proposal: Pursuant to our Fourth Amended and Restated Bylaws (the “Bylaws”) of the Company, the election of a member of the board of directors requires a plurality vote. Thus, with respect to the Election Proposal, the two director nominees receiving the highest vote totals will be elected as Class I Directors of the Company.

• The Amendment Proposal: The Amendment Proposal requires the affirmative vote from holders of (i) a majority in voting power of the outstanding shares of Common Stock and Series C Preferred Stock (voting on an as converted to shares of Common Stock basis), voting together as a single class, and (ii) a majority of the outstanding shares of Series C Preferred Stock.

• The Say-on-Pay Proposal and the Auditor Ratification Proposal: Pursuant to the Bylaws, approval of each of these proposals requires the affirmative vote of the holders of a majority of the stock which has voting power present in person or represented by proxy and which has actually voted.

• The Adjournment Proposal: Pursuant to the Bylaws, the holders of a majority of the shares present or represented by proxy and entitled to vote at the Annual Meeting may vote to adjourn the meeting to another time, or to another time and place, without notice other than announcement of adjournment at the Annual Meeting.

Litigation (Page 64)

As of the date of this proxy statement, the Company is not aware of any pending litigation against the Company and/or the Board relating to the Merger.

Rights of Appraisal (Page 60 and Annex E)

If the Merger is consummated, Company stockholders who do not vote their shares of Common Stock in favor of the adoption of the Merger Agreement, who continuously hold such shares of Common Stock from the date they make the demand through the Effective Time and who properly perfect appraisal of their shares of Common Stock will be entitled to appraisal rights in connection with the Merger under Section 262 of the DGCL if certain conditions set forth in Section 262(g) of the DGCL are met. This means that such stockholders would be entitled to have their shares of Common Stock appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of Common Stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the court (subject, in the case of interest payments, to any voluntary cash payments made by the surviving corporation pursuant to subsection (h) of Section 262 of the DGCL). Due to the complexity of the appraisal process, stockholders who wish to seek appraisal of their shares of Common Stock are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights. Stockholders considering seeking appraisal should be aware that the fair value of their shares of Common Stock as determined pursuant to Section 262 of the DGCL could be more than, the same as or less than the value of the consideration that they would receive pursuant to the Merger Agreement if they did not seek appraisal of their shares of Common Stock. For more information, please see the section of this proxy statement captioned “Special Factors — Rights of Appraisal.”

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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the Annual Meeting, the Merger Agreement and the Merger. These questions and answers may not address all questions that may be important to you as a stockholder of Steel Connect. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

Q: Why am I receiving these materials?

A: On June 12, 2022, Steel Connect entered into the Merger Agreement pursuant to which, among other things, Merger Sub, a direct wholly owned subsidiary of Parent, will merge with and into Steel Connect, with Steel Connect continuing as the surviving corporation and a wholly owned subsidiary of Parent. At the Annual Meeting, stockholders will be asked to consider and cast a vote on various matters described in the Notice of Annual Meeting, including the Merger Proposal and the Adjournment Proposal. The Board does not know of any matters to be brought before the Annual Meeting other than as set forth in the Notice of Annual Meeting. If any other matters properly come before the Annual Meeting, the persons named in the enclosed form of proxy or their substitutes will vote in accordance with their best judgment on such matters.

Q: Who is entitled to vote at the Annual Meeting?

A: Only holders of record of Common Stock and holders of record of Series C Preferred Stock, as of the close of business on , 2022 (the “Record Date”), are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, 60,514,370 shares of Common Stock and 35,000 shares of Series C Preferred Stock were outstanding. Each share of Common Stock entitles the holder thereof to one vote on each matter brought before the Annual Meeting. As of the Record Date, the outstanding shares of Series C Preferred Stock were convertible into 17,857,143 shares of Common Stock and the holder thereof is entitled to vote their Series C Preferred Stock on each matter brought before the Annual Meeting on an as-converted basis together with the holders of Common Stock (i.e., the 35,000 shares of Series C Preferred Stock will have the same voting power as 17,857,143 shares of Common Stock), as well as separately as a class.

All shares of Series C Preferred Stock are held by SPH Group Holdings LLC (“SPHG Holdings”) and indirectly held by Parent. As of the Record Date, Parent, directly and indirectly, owned approximately 30.0% of our outstanding shares of Common Stock, and, when combined with its affiliated entities and individuals who are members of a Section 13(d) group with Parent and its affiliated entities, 34.2%, of our outstanding Common Stock. Each of Warren Lichtenstein, our Interim Chief Executive Officer, Director and the Executive Chairman of our Board, and Jack Howard, a member of our Board, is a member of this Section 13(d) group. Additionally, as of the Record Date, assuming conversion of the 17,857,143 shares of Common Stock underlying the Series C Preferred Stock (which vote on an as-converted basis together with the holders of Common Stock and separately as its own class), Parent owned approximately 46.0%, and, when combined with such affiliated entities and individuals, approximately 51.6%, of the outstanding shares of Common Stock. For more information, see “Security Ownership of Certain Beneficial Owners and Management” and “Transactions between Steel Connect and the Parent Group Members.”

All references in this proxy statement to quorum, voting requirements, Common Stock and holders of Common Stock, are, unless the context requires otherwise, deemed to include Series C Preferred Stock and holders of Series C Preferred Stock (as appropriate).

Q: When and where is the Annual Meeting?

A: This year’s Annual Meeting will be held on , 2022 at Eastern Time and accessible only through the Internet at www.virtualshareholdermeeting.com/STCN2021. There will be no physical meeting location for the Annual Meeting. We believe the virtual format of the Annual Meeting will enhance accessibility to our Annual Meeting for all of our stockholders, who may participate from any geographic location with Internet connectivity.

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Q: How can I attend and participate in the Annual Meeting?

A: Any stockholder can attend the Annual Meeting live online at www.virtualshareholdermeeting.com/STCN2021.

• Log-in Instructions: To access the Annual Meeting, you must go to the meeting website at www.virtualshareholdermeeting.com/STCN2021 and enter the unique control number found on the proxy card if you are a stockholder of record. If you hold your shares in street name, you should contact the bank, broker or other institution where you hold your account if you have questions about obtaining your control number. Online access to the webcast will open approximately 30 minutes prior to the start of the Annual Meeting to allow time for you to log in and test your computer audio system. We encourage you to access the Annual Meeting prior to the start time.

• Voting and Submission of Questions at the Annual Meeting: Once online access to the Annual Meeting is open, stockholders may vote and submit questions at the Annual Meeting. You are entitled to vote in the Annual Meeting if, as of the close of business on the Record Date, you were a stockholder of record. If, as of the close of business on the Record Date, you owned your shares in “street name” (i.e., through a bank, broker or other nominee), you are invited to attend and submit questions at the Annual Meeting, but may vote there only if you hold a “legal proxy” from your bank, broker or other nominee for the Annual Meeting. Follow the instructions from your broker or bank included with these proxy materials or contact your broker or bank to request a proxy form. Questions pertinent to meeting matters will be answered during the Annual Meeting, subject to time constraints.

• Other Information: Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/STCN2021. Assistance with questions regarding how to attend and participate via the Internet will be provided at www.virtualshareholdermeeting.com/STCN2021 on the day of the Annual Meeting. We also will post a replay of the Annual Meeting on our investor relations website, which will be available following the meeting. Additional information regarding the rules and procedures for participating in the Annual Meeting will be set forth in our Annual Meeting rules of conduct, which stockholders can view during the Annual Meeting at www.virtualshareholdermeeting.com/STCN2021.

Q: What if I have technical or logistical difficulties accessing the virtual Annual Meeting?

A: We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting webcast log-in page.

Q: What if I lost my control number but would like to attend the Annual Meeting?

A: You will be able to log in as a guest. To view the Annual Meeting webcast, visit www.virtualshareholdermeeting.com/STCN2021 and register as a guest. However, if you log in as a guest, you will not be able to vote your shares or submit questions during the meeting.

Q: How do I vote my shares?

A: Your vote is very important. Whether or not you plan to virtually attend the Annual Meeting, we urge you to submit your proxy to vote your shares before the Annual Meeting as soon as possible after you receive the Proxy Materials. Where available, we encourage all stockholders with Internet access to record their votes by Internet, or alternatively, by telephone.

If you are a holder of record of Common Stock or Series C Preferred Stock:

If you are a holder of record of Common Stock or Series C Preferred Stock (meaning your shares are held in your own name through our transfer agent, American Stock Transfer & Trust Company, LLC or you are in possession of stock certificates), there are four ways you may vote, as set forth below.

• Online During the Annual Meeting. You may vote during the Annual Meeting by visiting www.virtualshareholdermeeting.com/STCN2021, entering the control number included in your proxy card and following the on-screen instructions.

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• Mail. You may vote using a proxy card that may be delivered to you (to the extent you received a paper copy of the proxy materials). Simply complete, sign and date the proxy card where indicated and return it promptly in the envelope provided. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity, you must indicate your name and title or capacity. Your signed proxy card must be received by , 2022.

• Online Prior to the Annual Meeting. To vote through the Internet, go to www.proxyvote.com and follow the instructions on how to complete an electronic proxy card. You will be asked to provide the 16-digit control number included in your proxy card. Your Internet vote must be received by , Eastern Time, on , 2022 to be counted.

• Telephone. To vote over the telephone, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the control number included in your proxy card. Your telephone vote must be received by , Eastern Time, on , 2022 to be counted.

If you later decide to virtually attend the Annual Meeting and vote live electronically, that vote will automatically revoke any previously submitted proxy. For more information on revoking or changing your vote, see “Can I revoke or change my vote after I submit my proxy?”

If you hold your shares of Common Stock in street name:

If you hold your shares in street name, you should have received a Notice of Annual Meeting containing voting instructions from your broker, bank or other nominee (“custodian”) rather than from the Company. Simply follow the voting instructions in the Notice of Annual Meeting to ensure that your vote is counted. As discussed above, to vote at the Annual Meeting, you must obtain a valid “legal proxy” from your custodian. Follow the instructions from your custodian included with these proxy materials or contact your custodian to request a proxy form.

Q: How does the Board recommend that I vote?

A: Based in part on the unanimous recommendation of the Special Committee, the Board recommends that our stockholders vote:

• “FOR” the Merger Proposal;

• “FOR” the Amendment Proposal;

• “FOR” the Election Proposal;

• “FOR” the Say-on-Pay Proposal;

• “FOR” the Auditor Ratification Proposal; and

• “FOR” the Adjournment Proposal.

See “Special Factors — Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 26 for a discussion of the factors that the Special Committee and the Board considered in deciding to recommend and/or approve, as applicable, the Merger Agreement. See also “Special Factors — Interests of Steel Connect’s Directors and Executive Officers in the Merger” beginning on page 53.

Q: How many shares must be present to hold the Annual Meeting?

A: The presence of a majority of the issued and outstanding shares of the capital stock of the Company represented in person or by proxy and entitled to vote at the Annual Meeting will constitute a quorum.

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Q: How many votes are required to approve each proposal and how are votes counted?

A: Each share of Common Stock and each share of Series C Preferred Stock (on an as-converted to shares of Common Stock basis) entitles the holder thereof as of the Record Date to cast one vote on the following matters submitted for a vote of the stockholders at the Annual Meeting:

• The Amendment Proposal. The Amendment Proposal requires the affirmative vote from holders of (i) a majority of the outstanding shares of Series C Preferred Stock and (ii) a majority in voting power of the outstanding shares of Common Stock and Series C Preferred Stock (voting on an as converted to shares of Common Stock basis), voting together as a single class.

• The Election Proposal: Pursuant to our Fourth Amended and Restated Bylaws (the “Bylaws”), the election of a member of the board of directors requires a plurality vote. Thus, with respect to the Election Proposal, the two director nominees receiving the highest vote totals will be elected as Class I Directors of the Company.

• The Adjournment Proposal: Pursuant to the Bylaws, the holders of a majority of the shares present or represented by proxy and entitled to vote at the Annual Meeting may vote to adjourn the Annual Meeting to another time, or to another time and place, without notice other than announcement of adjournment at the Annual Meeting.

Q: What will I receive in the Merger?

A: If the Merger is completed and you do not properly exercise your appraisal rights, each holder of Common Stock immediately prior to the Effective Time (other than holders of Excluded Shares) will be entitled to receive, for each share of Common Stock held: (a) $1.35 in cash, without interest and subject to any withholding taxes, and (b) one ModusLink CVR as provided for in the Merger Agreement. You will not be entitled to receive shares in the surviving corporation or Parent.

Q: What effects will the Merger have on Steel Connect?

A: Our Common Stock is currently registered under the Exchange Act and listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “STCN.” As a result of the Merger, Steel Connect will cease to be a publicly traded company and will be delisted from Nasdaq and will be wholly owned by Parent.

Following the consummation of the Merger, the registration of the shares of Common Stock and our reporting obligations with respect to the shares of Common Stock under the Exchange Act will be terminated upon filings with the SEC. In addition, upon the consummation of the Merger, the shares of Common Stock will no longer be listed on any stock exchange.

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Q: What will happen if the Merger is not consummated?

A: If the Merger is not consummated for any reason, Steel Connect’s stockholders will not receive any payment for their shares of Common Stock in connection with the Merger. Instead, Steel Connect will remain a public company and the shares of Common Stock will continue to be listed and traded on Nasdaq. Steel Connect will be required to pay Parent the Expense Reimbursement, which is an amount of up to a maximum of $1 million, and a Termination Fee equal to $1.5 million if the Merger Agreement is terminated under certain specified circumstances.

Q: May the Annual Meeting be adjourned?

A: If a quorum is not present to transact business at the Annual Meeting, it may be adjourned to another time and place by the affirmative vote of the holders of a majority of the outstanding shares of capital stock present or represented by proxy and entitled to vote thereat and with the direction of the chairman of the Annual Meeting. If the Annual Meeting is postponed or adjourned, a stockholder’s proxy may remain valid and may be voted at the postponed or adjourned meeting. A stockholder still will be able to revoke the stockholder’s proxy until it is voted.

Q: What will be the result if, as a stockholder of record, I submit my signed proxy card, but do not make specific instructions?

A: By submitting a proxy, you are legally authorizing another person to vote your shares on your behalf. If you submit your executed proxy card, but you do not indicate how your shares are to be voted, then your shares will be voted in accordance with the Board’s recommendations as set forth in this proxy statement. In addition, if any other matters are brought before the Annual Meeting (other than the proposals contained in this proxy statement), then the individuals listed on the proxy card will have the authority to vote your shares on those other matters in accordance with their discretion and judgment.

Q: What is a “broker non-vote” and how does it affect voting on each proposal?

A: If your hold your shares in street name, your custodian is required to vote your shares on your behalf in accordance with your instructions. If you do not give instructions to your custodian, under applicable rules, your custodian will still be able to vote your shares with respect to certain “routine” items, but will not be allowed to vote your shares with respect to certain “non-routine” items. The ratification of the appointment of our independent registered public accounting firm (the Auditor Ratification Proposal) is a “routine” item on which a custodian has discretionary authority to vote. The approval of the Merger Agreement (the Merger Proposal), approval of an amendment to the Company’s Restated Certificate of Incorporation to clarify that the Merger and the Transactions do not constitute a “Liquidation Event” under the Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of the Company (the Amendment Proposal), the election of director nominees (the Election Proposal) and the advisory vote on the compensation of our Named Executive Officers (the Say-on-Pay Proposal) are “non-routine” items on which a custodian does not have discretionary authority to vote. Accordingly, if you do not give instructions to your custodian with respect to such proposals, or if your custodian does not exercise its discretionary authority with respect to such proposals, your shares will be treated as “broker non-votes” on these particular matters. In other words, broker non-votes are shares with respect to which a custodian does not receive voting instructions from the beneficial holder and does not have or exercise discretionary authority in voting on a proposal. For more information on the effect of a broker non-vote, see “What are the effects of abstentions and broker non-votes?”

Q: Is there a list of stockholders entitled to vote at the Annual Meeting?

A: The complete list of stockholders of record entitled to vote at the Annual Meeting will be available during the Annual Meeting at www.virtualshareholdermeeting.com/STCN2021. The list will also be available for 10 days prior to the Annual Meeting, between the hours of 9:00 a.m. and 4:30 p.m. Eastern Time, at our principal executive offices at 2000 Midway Lane, Smyrna, Tennessee 37167. If you are interested, please contact Jennifer Golembeske at investorrelations@steelconnectinc.com or (914) 461-1276.

We encourage you to give instructions promptly to your custodian to vote “FOR” the Merger Proposal and the other recommended proposals by using the voting instruction card provided to you by your custodian.

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Q: What are the effects of abstentions and broker non-votes?

A: Abstentions and broker non-votes will be considered shares present and entitled to vote for the purpose of determining whether a quorum exists.

• With respect to the Merger Proposal and the Amendment Proposal, abstentions and broker non-votes have the same effect as a vote “AGAINST” the proposal.

• With respect to the Election Proposal and the Say-on-Pay abstentions and broker non-votes will be disregarded and have no effect on the outcome of the vote.

• With respect to the Auditor Ratification Proposal, abstentions will be disregarded and have no effect on the outcome of the vote, and there will no broker non-votes.

• With respect to the Adjournment Proposal abstentions will have the same effect as a vote “AGAINST” the proposal and broker non-votes will be disregarded and have no effect on the outcome of the vote.

Q: Can I revoke or change my vote after I submit my proxy?

A: Your proxy is revocable. The procedure you must follow to revoke your proxy depends on how you hold your shares.

If you are a stockholder of record, you may revoke a previously submitted proxy by submitting another valid proxy (whether by phone, the Internet or mail to the address set forth above) or by providing a signed letter of revocation to the Legal Department of the Company, at the principal executive offices of the Company, 2000 Midway Lane, Smyrna, Tennessee 37167, which must be received before the closing of the polls at the Annual Meeting on , 2022 at Eastern Time. Only the latest-dated validly executed proxy will count. You also may revoke any previously submitted proxy by virtually attending the Annual Meeting and electronically voting your shares. Note that simply attending the Annual Meeting without taking one of the above actions will not revoke your proxy.

If you hold shares in street name, in general, you may revoke a previously submitted voting instruction by submitting to your custodian another valid voting instruction (whether over the Internet, by phone or by mail) or a signed letter of revocation. Please contact your custodian for detailed instructions on how to revoke your voting instruction and the applicable deadlines.

Q: Should I send in my stock certificates or other evidence of ownership now?

A: No. After the Merger is completed, you will be sent a letter of transmittal with detailed written instructions for exchanging your shares of Common Stock for the Per Share Merger Consideration. If your shares of Common Stock are held in “street name” by your broker, bank or other nominee, you may receive instructions from your broker, bank or other nominee as to what action, if any, you need to take to effect the surrender of your “street name” shares in exchange for the Per Share Merger Consideration. Do not send in your certificates now.

Q: What happens if I sell my shares of Common Stock before completion of the Merger?

A: If you transfer your shares of Common Stock, you will have transferred your right to receive the Per Share Merger Consideration in the Merger. In order to receive the Per Share Merger Consideration, you must hold your shares of Common Stock at the Effective Time of the Merger.

The Record Date for stockholders entitled to vote at the Annual Meeting is earlier than the date on which the Merger will be consummated. As such, if you transfer your shares of Common Stock after the Record Date but before the Annual Meeting, you will have transferred your right to receive the Per Share Merger Consideration in the Merger, but retained the right to vote at the Annual Meeting.

Q: Who will count the votes?

A: The inspector of elections appointed for the Annual Meeting will separately tabulate the relevant affirmative and negative votes, abstentions and broker non-votes for each proposal.

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Q: Will members of the Company’s independent registered public accounting firm be present at the Annual Meeting?

A: We have been advised that representatives of BDO USA, LLP will be in attendance virtually at the Annual Meeting with the opportunity to make a statement, if so desired, and will be available to respond to appropriate questions.

Q: Who can help answer my other questions?

A: If you have more questions about the Merger, or require assistance in submitting your proxy or voting your shares or need additional copies of the proxy statement or the enclosed proxy and voting instruction card(s), please contact Mackenzie Partners, Inc., which is acting as the proxy solicitation agent and information agent in connection with the Merger.

Mackenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, New York 10018
Banks and Brokers Call: (212) 929-5500
All Others Call Toll-Free: (800) 322-2885
Email: proxy@mackenziepartners.com

If your broker, bank or other nominee holds your shares, you can also call your broker, bank or other nominee for additional information.

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SPECIAL FACTORS

Background of the Merger

The following chronology summarizes key events and contacts that led to the signing of the Merger Agreement. This chronology does not purport to catalogue every conversation among the Special Committee, members of our management or the Special Committee’s representatives and other parties with respect to the Merger.

Prior to February 11, 2013, Parent and certain of its affiliates began to purchase shares of Common Stock in the open market for investment purposes. On February 11, 2013, the Company and Parent entered into an Investment Agreement pursuant to which Parent invested $30,000,000 into the Company in exchange for 7,500,000 shares of Common Stock and warrants to purchase up to 2,000,000 shares of Common Stock. After the issuance of these shares, Parent and its affiliates owned approximately 29.99% of the outstanding shares of the Company.

On December 15, 2017, the Company entered into a Preferred Stock Purchase Agreement with SPH Group Holdings LLC, an affiliate of Parent, pursuant to which the Company issued 35,000 shares of Series C Preferred Stock to SPH Group Holdings LLC for an aggregate purchase consideration of $35.0 million and the Company repurchased the warrant for $100 and terminated the warrant. The Company used a portion of these funds to complete its acquisition of IWCO Direct Holdings Inc. After the issuance of these shares, Parent and its affiliates owned approximately 52.3% of the outstanding shares of the Company.

On February 27, 2018, the Company changed its name from ModusLink Global Solutions, Inc. to “Steel Connect, Inc.”

As part of the continuous evaluation of our businesses and plans, the Board and senior management regularly consider a variety of potential strategic options and transactions, all in a continued effort to enhance stockholder value. Since the acquisition of IWCO, in view of industry and market conditions, our business and financial performance and the relatively limited trading volume of our stock, the Board focused on and considered potential strategic alternatives presented or available to us, as well as the opportunities and risks associated with our continuing to operate as an independent company.

In August 2018, the Company engaged a financial advisor to assist in the potential sale of ModusLink including identifying, evaluating and contacting potential purchasers with respect to such a sale (the “ModusLink Sale Process”). Starting in January 2019, the financial advisor reached out to approximately 230 potential strategic and financial buyers for ModusLink. This process resulted in seven indications of interest (two from potential strategic buyers and five from potential financial buyers), in addition to informal interest from an eighth potential buyer (“Company X”) that was interested in only acquiring a portion of the ModusLink business. Company X, a strategic party, was advised that the Company was not interested in divesting only a portion of ModusLink at that time. After performing further due diligence, the potential strategic buyers (aside from Company X) withdrew from the ModusLink Sale Process and three of the potential financial buyers submitted letters of intent. The letters of intent were based on valuations of $20 million and below, which the Company determined to be insufficient. The Company then abandoned the ModusLink Sale Process and the financial advisor was authorized to ask Company X to submit a proposal for evaluation. The Company and Company X remained in periodic contact thereafter; however, Company X did not submit a transaction proposal until its indication of interest discussed below.

On February 28, 2019, the Company borrowed $14.9 million from SPH Group Holdings LLC in exchange for a 7.50% Convertible Senior Note due 2024 in connection with a refinancing transaction to refinance the Company’s then-outstanding 5.25% Convertible Senior Notes due 2019 that were then held by SPH Group Holdings LLC.

On June 7, 2019, Company X submitted a proposal to acquire four of ModusLink’s facilities for $50 million. After performing further diligence and preliminary negotiations, Company X submitted a revised proposal on July 18, 2019 to acquire seven ModusLink facilities for $50 million. After additional negotiations, Company X submitted a further revised proposal on September 29, 2019 to acquire 13 ModusLink facilities for $50 million, together with the assumption by Company X of 50% of the costs associated with shutting down ModusLink’s Waltham facility. Over the course of the following several months, negotiations continued regarding the purchase price and potential deal structure. However, the restrictions on travel due to the onset of the COVID-19 pandemic halted the negotiations in March 2020.

In late January and early February 2020, the Company instructed the financial advisor from the ModusLink Sale Process to again seek to market ModusLink. The financial advisor contacted over 20 potential buyers, including parties that submitted indications of interest during the 2019 ModusLink Sale Process. However, this effort resulted in no written offers.

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Over the course of 2019, 2020 and 2021, the Company also received several inbound inquiries about a potential transaction involving ModusLink. However, none of these inquiries resulted in formal proposals or progressed beyond preliminary discussions.

On November 19, 2020, Warren G. Lichtenstein delivered a letter on behalf of Parent to the Board setting forth a non-binding proposal to acquire all of the shares of Common Stock not already owned by Parent or its affiliates for a combination of cash and Parent’s 6% Series A Preferred Units, implying a value per share of Common Stock in the range of $0.65 to $0.72 per share (the “Initial Proposal”). The letter further stated that Parent expected that the proposed transaction would be considered by a special committee of independent directors of the Company, who would retain independent legal and financial advisors to assist it in reviewing, evaluating, considering, negotiating and approving or disapproving the Initial Proposal.

The letter stated that the proposed transaction would be conditioned on the approval of the stockholders holding at least a majority of all the issued and outstanding shares of Common Stock not held by Parent, its affiliates or senior management or their respective affiliates, and that Parent would not be willing to move forward with the proposed transaction unless it was approved by the special committee and a majority of the outstanding shares of Common Stock other than shares of Common Stock held by Parent or its affiliates. The letter also informed the Board that the ongoing relationship between the Company and Parent and its affiliates would not be adversely affected if the Special Committee or a majority of the minority stockholders of the Company were to decline or fail to approve the proposed transaction. The letter also stated that Parent and its affiliates intended to remain long-term stockholders of Company and, thus, would not expect, in their capacities as stockholders of the Company, to vote in favor of any alternative sale, merger or other extraordinary corporate transaction involving the Company.

On November 19, 2020, Parent filed the letter setting forth the Initial Proposal with the SEC in an amendment to its beneficial ownership report on Schedule 13D. The closing price of the shares of Common Stock on Nasdaq on November 19, 2020 was $0.71.

On November 20, 2020, the Board held a meeting to discuss the Initial Proposal. After discussion and deliberation, the Board resolved to establish a special committee (the “Special Committee”) of independent and disinterested directors, to be comprised of Maria U. Molland and Renata Simril, to consider the Initial Proposal and any alternatives to the Initial Proposal.

The Board further resolved to delegate to the Special Committee the power and authority, among other matters, to engage in discussions and/or negotiations relating to all terms and conditions of the potential transaction with Parent, to select and retain, at the Company’s expense, such independent financial advisors, legal counsel and other advisors as it deemed appropriate, and to make any recommendations to the Board that the Special Committee deemed appropriate. The Board further resolved that it would not approve or recommend to the stockholders of the Company a transaction with Parent or any alternative transactions without the prior favorable recommendation of the Special Committee.

On November 20, 2020, the Special Committee held a meeting to discuss, among other matters, the process for selecting legal counsel to advise the Special Committee. At this meeting, the Special Committee appointed Ms. Molland to act as chair of the Special Committee. Following the meeting, members of the Special Committee contacted a number of law firms for consideration as potential legal counsel to the Special Committee.

On November 21, 2020, the Special Committee met to discuss their review of the law firms. After discussion and deliberation, the Special Committee approved the selection of Dentons US LLP (“Dentons”) as legal counsel to the Special Committee. The Special Committee selected Dentons after confirmation that Dentons US LLP had no conflicting relationships with Parent or the Company and based, in part, on its experience representing special committees in circumstances similar to that of the Special Committee. Shortly thereafter, the Special Committee provided to Dentons an executed engagement letter formalizing Dentons’ engagement as legal counsel to the Special Committee.

On November 28, 2020, the Special Committee held a meeting with representatives of Dentons in attendance. The representatives of Dentons reviewed with the Special Committee various legal matters, including the fiduciary duties of directors in the context of a potential “going-private” transaction with a controlling stockholder and the Special Committee’s role, mandate and powers. The Special Committee discussed the importance of engaging an independent financial advisor and identified eight potential advisors having the relevant experience to represent the Special Committee as financial advisor, and the protocol for inviting each to make a proposal to the Special

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Committee with respect to the potential representation. This protocol included asking each potential financial advisor to identify any potential sources of conflicts that may arise from any relationships between the financial advisor and the Company or Parent or its affiliates. The Special Committee and representatives of Dentons agreed to coordinate contacting potential financial advisors and to work towards scheduling a series of financial advisor presentations and interviews.

Between November 28, 2020 and December 27, 2020, the Special Committee met with five potential financial advisors and discussed their qualifications and fee proposals. Certain potential financial advisors were eliminated and the Special Committee narrowed its selection to two potential advisors that the Special Committee determined to be qualified and free from any conflicts that would prevent them from acting as independent financial advisor to the Special Committee.

On December 27, 2020, the Special Committee held a meeting with representatives of Dentons in attendance. The representatives of Dentons reviewed with the Special Committee various legal matters, including the fiduciary duties of directors in the context of a potential “going-private” transaction with a controlling stockholder and the Special Committee’s role, mandate and powers. The members of the Special Committee then discussed the current discussions with potential financial advisors and, following these discussions and based on Houlihan Lokey’s qualifications, expertise in representing special committees in similar transactions and reputation, the Special Committee determined it would seek to engage Houlihan Lokey, subject to the negotiation of an acceptable engagement letter.

On January 4, 2021, the Special Committee, the Company and Houlihan Lokey entered into an engagement letter providing for the engagement of Houlihan Lokey as financial advisor to the Special Committee. The terms of such engagement are described in more detail in the section entitled “Special Factors — Opinion of Houlihan Lokey Capital, Inc., Financial Advisor to the Special Committee.”

On January 6, 2021, the Special Committee, along with representatives from Dentons and Houlihan Lokey, met to discuss the process by which Houlihan Lokey would gather information from the Company and to discuss a preliminary timeline for evaluating the Initial Proposal.

During the months of January, February and March of 2021, representatives of Houlihan Lokey met with representatives of Imperial Capital LLC, Parent’s financial advisor (“Imperial Capital”), on several occasions to discuss the Initial Proposal. Houlihan Lokey had been provided with projections prepared by ModusLink management and reviewed and approved by the Special Committee for the ModusLink business unit, but had not been provided projections for IWCO. Company management conveyed the challenges it faced in finalizing projections for IWCO given ongoing challenges in the IWCO business.

On January 6, 2021, January 24, 2021, March 9, 2021, March 12, 2021, March 22, 2021, and March 31, 2021, the Special Committee held meetings with representatives of Dentons and Houlihan Lokey in attendance, to discuss the progress in evaluating the Initial Proposal, the Company’s long-term outlook and projections prepared by ModusLink management and IWCO management for the Company’s ModusLink and IWCO business segments, respectively. During these meetings, the Special Committee discussed the challenges facing the Company’s two business segments and the potential for continued declines in outlook. During these meetings, the Special Committee discussed the potential benefits of reaching out to potential alternative buyers. The Special Committee noted that it would be highly unlikely that any third parties would have interest in a potential acquisition of the Company because of Parent’s controlling position in the Company and its stated unwillingness to sell its shares of Common Stock to any third party, as well as the composition and outlook of the Company. The Special Committee also noted that prior attempts to sell ModusLink and to recapitalize the entire Company had been unsuccessful, despite outreach to a broad universe of parties.

During the March 9, 2021 meeting of the Special Committee, representatives of Houlihan Lokey reviewed preliminary financial perspectives of ModusLink. Houlihan Lokey’s preliminary financial perspectives did not address IWCO, as updated IWCO management projections had not been provided to representatives of Houlihan Lokey. During this meeting, and other Special Committee meetings, the Special Committee and representatives from Houlihan Lokey discussed the trading price of the Common Stock, which was significantly in excess of the Initial Proposal.

During the March 12, 2021 meeting of the Special Committee, the Special Committee and Houlihan Lokey discussed the liquidity and trading price of the Company’s stock, including market reaction to the Company’s announcement of its second quarter results, noting that the stock closed at $1.74 per share on March 12, 2021 and had

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closed at or above $1.68 per share since January 19, 2021. The Special Committee determined that the Initial Proposal was not at a price per share level sufficient to warrant a counterproposal or price guidance in light of the current information provided to representatives of Houlihan Lokey, the preliminary financial perspectives of Houlihan Lokey, and the historical and current stock price and recent trading activity as compared to the value of the Initial Proposal. The Special Committee instructed representatives of Houlihan Lokey to reach out to Imperial Capital to deliver this message in order to elicit a potential reaction from Parent. In March of 2021, representatives of Houlihan Lokey met with representatives of Imperial Capital and discussed the Special Committee’s view of the Initial Proposal.

During the March 31, 2021 meeting of the Special Committee, representatives of Houlihan Lokey reviewed the Company’s recent stock price trading range and performance. The Special Committee and representatives of Houlihan Lokey also discussed financial performance and projections for ModusLink and IWCO. During this meeting, Houlihan Lokey reported to the Special Committee that it had not received any indication from Imperial Capital that Parent would be willing to modify the Initial Proposal. The Special Committee discussed whether it would be in the best interests of the Company’s minority stockholders for the Special Committee to make a counterproposal to Parent. Based on the fact that the Special Committee was still waiting to receive additional and updated information from management of IWCO and the Company, and the absence of an enhanced proposal from Parent, the Special Committee determined that it would continue to negotiate with Parent, but would not make a counterproposal until Parent increased the value to the Company’s unaffiliated stockholders provided for in Parent’s Initial Proposal.

Between April 2021 and June 2021, the Company continued to face a number of challenges in its business operations, while its stock price continued to trade significantly above the proposed value in the Initial Proposal. Parent declined to increase its proposal during this time.

On June 7, 2021, the Special Committee held a meeting with representatives of Dentons and Houlihan Lokey in attendance, to discuss updates received by the Board regarding the performance of IWCO and its continued customer attrition. The Special Committee also discussed the adoption by the Board of a Competitive Improvement Plan for IWCO to upgrade its production platform to new digital and inserting technology, as well as expanding its market services capabilities, while reducing its costs. The Special Committee directed representatives of Houlihan Lokey to review updated financial information provided by IWCO management and to seek from IWCO management additional information regarding IWCO needed by Houlihan Lokey to complete its preliminary financial analysis. The Special Committee then directed representatives of Houlihan Lokey to reengage with Imperial Capital and Parent to seek an enhanced proposal from Parent.

On July 23, 2021, the Special Committee held a meeting with representatives of Dentons and Houlihan Lokey in attendance, to discuss updates on Houlihan Lokey’s requests for additional financial information regarding IWCO. Representatives of Houlihan Lokey reported to the Special Committee that it was expecting to receive additional information from the Company and IWCO management and would be in a position to report to the Special Committee on its preliminary financial analysis in several weeks.

On September 9, 2021, the Special Committee held a meeting with representatives of Dentons and Houlihan Lokey in attendance. At this meeting, representatives of Houlihan Lokey reviewed its preliminary financial analysis of the Company. Following further discussion, the Special Committee instructed the representatives of Houlihan Lokey to inform Imperial Capital and Parent that the Special Committee was not willing to recommend that the Company proceed with a transaction at the price set forth in the Initial Proposal and that, based on Houlihan Lokey’s preliminary financial analyses and the sustained increase in the trading price of its stock since January 2021, the Special Committee would be prepared to recommend a transaction based on cash consideration of $2.50 per share, and to invite Parent to submit a revised proposal should it wish to proceed with a transaction. Representatives of Houlihan Lokey communicated this message to representatives of Imperial Capital.

On October 6, 2021, the Special Committee held a meeting with representatives of Dentons and Houlihan Lokey in attendance. At this meeting, representatives of Houlihan Lokey reported that Imperial Capital had indicated that Parent might be in a position to propose a counterproposal of $2.15 per share. Houlihan Lokey also discussed that ModusLink and IWCO management would be providing revised financial projections and the Special Committee determined to re-convene once Houlihan Lokey had reviewed such revised financial projections and assessed the impact of the financial projections on its preliminary financial analysis.

On October 21, 2021, the Special Committee held a meeting with representatives of Dentons and Houlihan Lokey in attendance. At this meeting, representatives of Houlihan Lokey again summarized the results of a call held between representatives of Houlihan Lokey and Imperial Capital on October 5, 2021 to discuss the Special

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Committee’s $2.50 per share all-cash counterproposal and noted that Imperial Capital had indicated that Parent might be in a position to propose a counterproposal of $2.15 per share. Representatives of Houlihan Lokey then reviewed its updated preliminary financial analysis of the Company, noting declines in near-term financial projections for ModusLink and upward revisions to longer-term financial projections for IWCO based on figures provided by ModusLink and IWCO management, respectively. The Special Committee also discussed the recent performance of the stock, which had recently traded at an intraday high of $2.45. The Special Committee discussed whether the potential value of the net operating losses (“NOLs”) to Parent could also be a catalyst for a higher price. The Special Committee directed Houlihan Lokey to propose again a price of $2.50 per share and representatives of Houlihan Lokey communicated this message to representatives of Imperial Capital. The Special Committee discussed the desire to include substantial value for the NOLs in any transaction price, but was cognizant that the benefit from the NOLs was of limited utility to the Company due to its limited taxable income and also that it could not be transferred to another party (except for Parent), including through any acquisition of the Company.

Between October 21, 2021 and January 13, 2022, at the direction of the Special Committee, representatives of Houlihan Lokey and representatives of Imperial Capital had several conversations regarding the Special Committee’s view of the value of the Company. These discussions included the potential value of the NOLs, which Parent believed to be limited given the expiration dates of the Company’s NOLs.

Additionally, in October 2021, Company X contacted the Company to restart discussions regarding a potential transaction involving ModusLink. On November 25, 2021, Company X submitted an indication of interest to the Company, seeking to acquire 100% of ModusLink for a purchase price of $70 million (it was unclear, however, whether the approximately $20 million of ModusLink cash and cash equivalents would be treated as excess cash, which would potentially represent an overall implied equity value of $90 million). The Company’s management promptly updated the Board, including the Special Committee, of the indication of interest, while the Company discussed the indication of interest directly with Company X.

On January 10, 2022, the Special Committee held a meeting with representatives of Dentons and Houlihan Lokey in attendance. Representatives of Houlihan Lokey reviewed its updated preliminary financial analysis of the Company. The Special Committee continued to discuss the challenges faced by ModusLink and IWCO and the execution risk faced by the Company as a standalone platform absent a transaction with Parent.

On January 13, 2022, the Special Committee met, along with representatives of Dentons and Houlihan Lokey. Representatives of Houlihan Lokey reviewed their recent conversations with Imperial Capital. Representatives of Houlihan Lokey reported to the Special Committee that Imperial Capital had indicated that Imperial Capital’s previous suggestion that a price of $2.15 per share might be proposed by Parent was not confirmed by Parent and that Imperial Capital now believed that the highest end of any proposed price by Parent was closer to $1.80 per share in light of the Company’s recent stock performance, among other factors. The Special Committee directed Houlihan Lokey to propose that Parent make a proposal of $2.15 per share (as had previously been suggested by Imperial Capital) and representatives of Houlihan Lokey communicated this message to representatives of Imperial Capital. The Special Committee also discussed the efforts of the Company to sell ModusLink and Company X’s proposal to purchase ModusLink for $70 million.

The Special Committee subsequently discussed with its advisors the possibility that the Company would need to transfer IWCO to its lead creditors to avoid foreclosure. Discussions with Parent regarding the proposed transaction were suspended during this time as the Company prioritized evaluating its options with respect to IWCO, on the understanding that any potential disposition of IWCO to its lead creditors would impact the value of the Company and the structure and terms of any potential transaction between the Company and Parent or a third party buyer.

On February 16, 2022, the Special Committee met, along with representatives of Dentons and Houlihan Lokey, to discuss the potential decision of the Company to transfer IWCO to its creditors to avoid a foreclosure and eliminate debt and a potential sale of ModusLink to a third party.

On February 21, 2022, the Special Committee met, along with representatives of Dentons and Houlihan Lokey. Representatives of Houlihan Lokey reviewed the current status of discussions between Houlihan Lokey and Imperial Capital. The Special Committee and its advisors discussed the recent decision of the Company to transfer IWCO to its creditors to avoid a foreclosure and eliminate debt. The Special Committee also discussed the ongoing efforts of the Company to sell ModusLink including ongoing discussions with Company X and outreach to other parties. Representatives of Dentons advised the Special Committee that this process should now be included in the Special

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Committee’s mandate once IWCO was no longer a division of the Company. The Special Committee directed representatives of Dentons to speak to White & Case LLP (“White & Case”), counsel to the Company, to discuss delegating the ModusLink Sale Process to the Special Committee.

On February 25, 2022, the Company entered into a transaction agreement with IWCO and its creditors and their affiliates, pursuant to which the Company transferred all of its interests in IWCO to an entity owned by the creditors as part of a negotiated restructuring of the capital structure and certain financial obligations of IWCO to the creditors under a financing agreement with IWCO (the “Financing Agreement”). The Company received no cash consideration for the disposition. In addition, the parties also entered into mutual releases and the purchaser entity issued a note with a principal amount of $6,945,325.46 payable to the Company as consideration for intercompany obligations owed by IWCO to the Company (the “Subordinated Note”). The disposition of IWCO is discussed in further detail in the section entitled “Important Additional Information Regarding Steel Connect — Company Background — Disposition of IWCO” on page 111.

On March 4, 2022, Company X provided an indication of interest, proposing a purchase price for ModusLink of $80 million (inclusive of cash on the balance sheet).

On March 14, 2022, the Board met to discuss the latest indication of interest for ModusLink. The Board determined that it would be appropriate for the Special Committee to take the lead on any further discussions with Company X. Company management requested that White & Case contact Dentons to update them as counsel to the Special Committee and discuss the appropriate role for the Special Committee with respect to this indication of interest.

On March 22, 2022, the Special Committee met, along with representatives of Dentons and Houlihan Lokey, to discuss current developments. The Special Committee reported that the Company had made a counterproposal of $90 million to Company X for the purchase of ModusLink, but that Company X ultimately withdrew its updated indication of interest. Discussions were terminated with Company X before this process could be transferred to the Special Committee and the Special Committee reported that other outreach efforts by the Company had not resulted in any interest on the part of any parties contacted. The Special Committee also reported that they had discussions with representatives of Parent about reengaging on the potential transaction with Parent. Company X was later contacted by Houlihan Lokey during the go-shop period and indicated that it was not interested in pursuing a transaction with the Company.

On March 24, 2022, the Special Committee met, along with representatives of Dentons, to discuss a new proposal from Warren G. Lichtenstein on behalf of Parent to the Special Committee setting forth a new proposal based on all-cash consideration of $1.30 per share (the “Second Proposal”), representing a premium of approximately 10% over the closing price per share of common stock of the Company on March 23, 2022, and an approximately 83% increase to the closing share price on November 19, 2020, the closing price on the day of the Initial Proposal. The Special Committee discussed the fact that the revised proposal was for all cash, and that none of the conditions of the Initial Proposal relating to the Special Committee’s process or the approval of a majority of the minority stockholders of the Company had been varied. The Special Committee directed representatives of Dentons to discuss the Second Proposal with Houlihan Lokey, to request that Houlihan Lokey contact Company management to obtain updated projections from the Company and ModusLink and to request Houlihan Lokey’s estimate on when it would be in the position to review its updated preliminary financial analysis of the Company (based on the disposition of IWCO), views on the Second Proposal, as well as potential subsequent approaches and strategies for negotiating with Parent and Imperial Capital. Houlihan Lokey also requested additional information regarding the impact of the IWCO transfer on the Company’s likely NOL utilization in 2022 and beyond.

On March 28, 2022, Parent filed the letter setting forth the Second Proposal with the SEC in an amendment to its beneficial ownership report on Schedule 13D.

On April 4, 2022, the Special Committee met, along with representatives from Dentons and Houlihan Lokey. Representatives from Houlihan Lokey reviewed its updated preliminary financial analysis of the Company following the IWCO disposition, as well as a situation overview. The Special Committee discussed recent financial performance of ModusLink (as well as revisions to the fiscal year 2022 forecast by ModusLink management), the Company’s NOLs, and revisions to the Company’s corporate overhead costs (reflecting the potential for savings following the disposition of IWCO), which remained subject to further review by Company management. The Special Committee discussed the Company’s unsuccessful attempt to sell ModusLink, the continued operating

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challenges at ModusLink and strategies for responding to the $1.30 per share proposal. Based on these discussions, the Special Committee directed representatives of Houlihan Lokey to propose (A) a price of $1.70 per share in cash or (B) $1.45 per share in cash plus (i) a contingent value right that would pay stockholders their pro rata share of any net proceeds upon a sale of ModusLink above $80 million (the “ModusLink CVR”) and (ii) a contingent value right tied to Parent’s ability to utilize the NOLs (the “Tax CVR”). Representatives of Houlihan Lokey communicated this message to representatives of Imperial Capital.

Between April 12, 2022 and April 14, 2022, representatives of Parent and the Special Committee met on several occasions, with representatives of Dentons and Houlihan Lokey, legal and financial advisors to the Special Committee, and Greenberg Traurig, LLP (“Greenberg Traurig”) and Imperial Capital, legal and financial advisors to Parent, present to discuss the Second Proposal. During these discussions, Parent indicated that it would be willing to propose $1.32 per share along with the ModusLink CVR. Parent also proposed to agree to a go-shop provision. The Special Committee subsequently proposed a price of $1.40 per share and the ModusLink CVR. On April 13, 2022, Parent proposed a price of $1.35 per share and the ModusLink CVR, with a proposal to proceed without a majority of the minority condition. Parent also agreed to add additional value to the go-shop provision by agreeing to enter into a voting agreement to approve any transaction offered during the go-shop period that is more favorable to the stockholders. The Special Committee indicated that it would not agree to eliminate the majority of the minority condition based on the proposal suggested by Parent.

On April 15, 2022, the Special Committee met, along with representatives from Dentons and Houlihan Lokey, to discuss the current proposal from Parent to proceed without a majority of the minority condition at a price of $1.35 per share and a ModusLink CVR. The Special Committee discussed the legal and practical ramifications of proceeding without a majority of the minority condition. The Special Committee concluded that the majority of the minority condition was important to the Company’s unaffiliated stockholders and that, absent a compelling value proposition, the Special Committee would not recommend a transaction without this condition. The Special Committee directed representatives of Dentons to convey this message to Greenberg Traurig and Dentons conveyed this message that same day.

On April 20, 2022, the Special Committee met, along with representatives from Dentons and Houlihan Lokey, to discuss the latest status of discussions with Parent and a proposal that had been made by a global leader in financial services to engage in a complicated structured transaction with the Company to extract value for the Company’s NOLs. The Special Committee directed Houlihan Lokey to speak to Parent about this proposal. The Special Committee and its representatives acknowledged that the proposal was of a very preliminary form and would require significant time and effort before it could be considered as a viable alternative to a transaction with Parent.

On April 25, 2022, representatives of Greenberg Traurig sent a draft of the Merger Agreement to representatives of Dentons.

On April 27, 2022, the Special Committee met, along with representatives from Dentons and Houlihan Lokey, to further discuss a structured proposal that had been preliminarily reviewed with Houlihan Lokey by the previously noted global leader in financial services that envisioned a multi-step process to take advantage of certain exceptions to Internal Revenue Code Section 382 change of control NOL limitations under the bankruptcy code. Such a transaction would by necessity treat Parent differently from the minority shareholders and require its consent in order to pursue such a proposal. The Special Committee directed Houlihan Lokey to speak to Imperial Capital regarding this proposal. Representatives of Dentons conveyed that they had received a draft of the Merger Agreement from representatives of Greenberg Traurig.

On April 28, 2022, the Special Committee met, along with representatives from Dentons and Houlihan Lokey, to discuss the structured proposal. Representatives from Houlihan Lokey reported that they had discussed the structured proposal with representatives of Imperial Capital, and that Parent was not in favor of pursuing this proposal due to complexity, execution challenges and significant time required to complete such a transaction (which may exceed the residual life of the $1.8 billion of NOLs expiring in 2023), among other factors. At this meeting the Special Committee continued to discuss the importance of a majority of the minority condition and that they would not be willing to forego this provision absent a significant change to Parent’s proposal.

On May 10, 2022 Parent communicated to the Special Committee an alternative structure based on a $1.30 cash price, the ModusLink CVR and the Tax CVR. However, the Tax CVR would be subject to a $0.15 per share cap and would be contingent on specific usage parameters laid out in the proposal. In addition, the proposal continued to forego the majority of the minority vote condition.

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On May 13, 2022, the Special Committee met along with representatives from Dentons and Houlihan Lokey. The Special Committee and its advisors discussed the alternative structure proposed by Parent and the potential added monetary value; however, given both the uncertainties regarding NOL usage and the complexity and limitations of the proposed Tax CVR, the Special Committee maintained that this structure neither provided the same certainty of value as Parent’s alternative structure (based on $1.35 of cash and a ModusLink CVR) nor did it provide sufficient value to justify elimination of the majority of the minority vote condition. In assessing the potential value of the NOLs to Parent, the Special Committee and its representatives considered the near-term expiration of approximately $1.8 billion of NOLs in 2023 and its understanding that Parent had its own NOLs to utilize in the same period, which, the Special Committee determined, created additional uncertainty regarding any future utilization by Parent and the minority shareholders’ ability to extract value from a Tax CVR. The Special Committee also noted that a transaction structure with a third party tied to the ultimate usage of the NOLs was not a legitimate strategic alternative available to the Company as Parent is the only potential buyer that can utilize the NOLs after an acquisition without triggering limitations under Section 382 of the Internal Revenue Code. The Special Committee noted that it would be willing to consider a transaction structure based on a $1.30 cash price, the ModusLink CVR tied to the sale of ModusLink, and the Tax CVR; however the Tax CVR would need to be more comprehensive than the type currently proposed by Parent, and Parent had demonstrated a lack of willingness to negotiate the Tax CVR any further.

On May 18, 2022, the Special Committee met along with representatives from Dentons and Houlihan Lokey. The Special Committee discussed proposed strategies for improving the most recent proposal from Parent and directed representatives of Houlihan Lokey to propose that Parent enhance its most recent proposal.

On May 27, 2022, representatives from Greenberg Traurig and representatives from Dentons engaged in a conversation during which Greenberg Traurig indicated that Parent would be willing to agree to $1.35 per share with the ModusLink CVR, go-shop, Parent voting commitment to approve a higher proposal and to maintain the majority of the minority condition (the “Final Proposal”) as its best and final proposal (in line with a similar communication by representatives of Imperial Capital to representatives of Houlihan Lokey around that time). Later that day, representatives from Greenberg Traurig sent a revised Merger Agreement to representatives of Dentons, which representatives of Dentons shared with the Special Committee and Houlihan Lokey.

On May 30, 2022, the Special Committee met, along with representatives from Dentons and Houlihan Lokey. The Special Committee, representatives from Dentons and Houlihan Lokey discussed the proposal of $1.35 per share with a ModusLink CVR, go-shop, Parent voting commitment to approve a higher proposal and agreement to maintain the majority of the minority condition. Following discussion, the Special Committee instructed the representatives of Houlihan Lokey to inform Parent that the Special Committee would be willing to pursue a transaction with Parent on the terms outlined above, and directed representatives of Dentons to request an updated Merger Agreement from Greenberg Traurig and to commence negotiation of the terms of a definitive Merger Agreement and related documentation including a voting agreement, and to prepare disclosure schedules with input from the Company’s management and its counsel, White & Case.

On June 1, 2022, Parent filed an amendment to its beneficial ownership form on Schedule 13D with the SEC disclosing that it had made the Final Proposal to the Special Committee on May 27, 2022.

On June 2, 2022, Dentons discussed the process for revising the Merger Agreement with White & Case and Dentons and White & Case agreed that Dentons would prepare and send to Greenberg Traurig a revised draft of the Merger Agreement and White & Case would begin to prepare disclosure schedules.

On June 3, 2022, representatives of Dentons delivered a revised draft of the Merger Agreement to representatives of Greenberg Traurig, and, over the next several days, the representatives of Dentons and Greenberg Traurig negotiated the terms of the Merger Agreement, the ModusLink CVR Agreement and the Support Agreement and while White & Case prepared disclosure schedules with input from the Company’s management.

On June 8, 2022, the Special Committee met, along with representatives from Dentons and Houlihan Lokey, to discuss the status of the definitive agreements. Representatives of Dentons described certain open issues relating to the termination fee. The Special Committee directed representatives from Dentons to continue to require a termination fee. The Special Committee and representatives of Houlihan Lokey also discussed the updates to the financial projections that the Special Committee and Houlihan Lokey were awaiting from ModusLink and Company management.

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On June 10, 2022, representatives from Dentons and Greenberg Traurig negotiated certain provisions and proposals with respect to the Merger Agreement, which involved negotiations regarding the go-shop and non-solicitation sections, representations and warranties, fees and expenses and termination provisions of the Merger Agreement.

On June 10, 2022, the Special Committee and representatives from Dentons and Houlihan Lokey met with ModusLink management to discuss such management’s updated financial projections. Members of the Board not on the Special Committee were invited to join this call to be able to make their own independent analysis regarding the financial projections. ModusLink management explained the methodology and assumptions utilized by such management in preparing the financial projections.

On June 12, 2022, representatives from Dentons delivered a revised draft of the Merger Agreement, the ModusLink CVR Agreement and the Support Agreement to representatives of Greenberg Traurig and engaged in additional discussions to finalize these agreements.

Also on June 12, 2022, the Special Committee met with representatives from Dentons and Houlihan Lokey to further consider the proposed transaction. Glen Kassan, a Board member affiliated with Parent, attended a portion of the meeting for the sole purpose of educating himself on the material terms of the transaction summary prepared by Dentons and to understand the process by which projections were prepared and shared with representatives of Houlihan Lokey. The information that was discussed in Mr. Kassan’s presence reflected market data as of dates proximate to such materials and were based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and information made available to Houlihan Lokey as of, the date of such materials. The other independent members of the Board who have no affiliation with Parent were also invited by the Special Committee to attend the meeting.

At this meeting, Dentons reviewed with the members of the Special Committee their fiduciary duties in the context of a potential “going-private” transaction with a controlling stockholder. Dentons then summarized the principal terms and conditions of the Merger Agreement and the ModusLink CVR Agreement, as well as certain related transaction agreements. After this presentation on principal terms, Mr. Kassan left the meeting at the request of the Special Committee. At the request of the Special Committee, Houlihan Lokey then reviewed and discussed its financial analyses of the Per Share Merger Consideration. Thereafter, at the request of the Special Committee, Houlihan Lokey orally rendered its opinion to the Special Committee (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the Special Committee dated June 12, 2022), to the effect that, as of such date and based on and subject to various procedures followed, assumptions made, qualifications and limitations on the review undertaken and the other matters considered by Houlihan Lokey in connection with the preparation of its opinion, the Per Share Merger Consideration to be received by the holders of Common Stock (other than holders of Excluded Shares and Dissenting Shares) in the Merger pursuant to the Merger Agreement was fair to such holders from a financial point of view. Following discussion, the Special Committee unanimously (1) determined that the terms of the Merger Agreement are fair to and in the best interests of the Company and the unaffiliated stockholders, (2) recommended to the Board that the Board adopt resolutions approving and declaring advisable the Merger Agreement and the Transactions and (3) recommended to the Board that the Board recommend that the holders of capital stock of the Company entitled to vote, vote for the adoption of the Merger Agreement.

In the evening of June 12, 2022, the Board held a meeting to consider the approval of the adoption of the Merger Agreement and the Merger. The Special Committee delivered its recommendation to the Board and, following the Special Committee recommendation and its own deliberations, the Board, among other things (1) determined that the terms of the Merger Agreement and the Transactions are fair to and in the best interests of the Company and the unaffiliated stockholders, (2) approved and declared advisable the Merger Agreement and the Transactions and (3) recommended that the holders of capital stock of the Company entitled to vote, vote for the adoption of the Merger Agreement. For the basis of the Board’s determination in this regard, please see “— Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger — Recommendation of the Board” beginning on page 26.

Later that day on June 12, 2022, the Merger Agreement was executed by the Company and the Parent Parties, and the Support Agreement was executed by the Company, Parent and certain stockholders who are affiliates of Parent.

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On June 13, 2022, prior to the opening of trading on the U.S. public stock markets, the Company issued a press release announcing the execution of the Merger Agreement. The press release announcing the execution of the Merger Agreement also included a brief description of the “go-shop” period that expires at 11:59 p.m. Eastern time on July 12, 2022, during which the Company may actively solicit and consider alternative acquisition proposals and enter into an acquisition agreement with respect to an alternative proposal received during such period without having to pay a termination fee to Parent.

Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger

As described in the section entitled “— Background of the Merger”, above, the Board duly established the Special Committee and delegated to it the power and authority, among other things, to (1) consider whether or not it is in the best interests of the Company and the unaffiliated stockholders to engage in discussions and/or negotiations relating to a potential transaction with Parent, (2) engage in such discussions and/or negotiations relating to all terms and conditions of a potential transaction with Parent (financial or otherwise), (3) consider and review potential alternatives to a transaction with Parent, (4) consult with and/or advise management of the Company in connection with discussions and/or negotiations concerning potential terms and conditions of a potential transaction with Parent, (5) interview, select and retain, at the Company’s expense, such financial advisors, legal counsel and other advisors as the Special Committee deems appropriate, including an investment bank to deliver a fairness opinion, if requested by the Special Committee, in connection with a potential transaction with Parent, (6) establish the terms of engagement of each such advisor and (7) make any recommendations to the Board concerning a potential transaction with Parent that the Special Committee deems appropriate. The Board further resolved that it would not approve or recommend to the stockholders of the Company a transaction with Parent or any alternative transactions without the prior favorable recommendation of the Special Committee.

The Special Committee, acting with the advice and assistance of its independent legal and financial advisors, evaluated and negotiated the Merger Agreement and the Transactions, including the Merger, and after careful consideration, at a meeting of the Special Committee held on June 12, 2022, the Special Committee, among other things, unanimously adopted resolutions:

• determining that the terms of the Merger Agreement and the Transactions are fair to and in the best interests of the Company and the unaffiliated stockholders;

• recommending to the Board that the Board adopt resolutions approving and declaring advisable the Merger Agreement and the Transactions; and

• recommending to the Board that the Board recommend to the holders of the capital stock of the Company entitled to vote, that they vote for the adoption of the Merger Agreement.

On June 12, 2022, after careful consideration, based in part on the unanimous recommendation of the Special Committee, the Board, adopted resolutions:

• determining that the Merger Agreement and the Transactions are fair to and in the best interests of the Company and the unaffiliated stockholders;

• approving and declaring advisable the Merger Agreement and the Transactions;

• directing that the Merger Agreement be submitted to the holders of capital stock of the Company for its adoption at a special meeting established for such purpose; and

• recommending that the holders of capital stock of the Company entitled to vote, vote for the adoption of the Merger Agreement.

Accordingly, the Board recommends that you vote “FOR” the Merger Proposal to adopt the Merger Agreement at the Annual Meeting.

In considering the recommendations of the Board with respect to the Merger Proposal, you should be aware that executive officers and directors have certain interests in the Merger that may be different from, or in addition to, the interests of the Company’s stockholders generally. The Special Committee, consisting entirely of independent directors, and the Board were aware of these interests and considered them, among other matters, in evaluating

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the Merger Agreement and the Transactions and in making its decision to recommend that the Board approve and declare advisable the Merger Agreement and the Transactions. For more information about these interests, refer to the section entitled “— Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 53. The Special Committee and the Board believe that the Merger Agreement and the Transactions are fair to and in the best interest of the Company and the unaffiliated stockholders.

The Special Committee engaged its own independent legal and financial advisors and received advice throughout the negotiations from such advisors. Since the members of the Special Committee are disinterested with respect to the Transactions and independent of, and not affiliated with the Parent Group and its affiliates or any affiliate of Parent, the Special Committee believed that it could effectively represent the interests of the Company’s unaffiliated stockholders in negotiating the terms of the Merger Agreement and the Transactions, including the Merger, and in making its decision to recommend that the Board approve and declare advisable the Merger Agreement and the Transactions.

In evaluating the Merger Agreement and the Transactions and making the decisions, determinations and recommendations described above, the Special Committee and the Board considered, among other things, the following potentially positive factors, which are not intended to be exhaustive and are not presented in any relative order of importance:

• certain factors related to the Company’s business, financial condition and results of operations, and the Company’s prospects and plans, including:

• the reviews undertaken by, and understandings of, the Special Committee and the Board with respect to the Company’s business, operations, assets, financial condition, earnings, ownership structure, management, strategy, competitive position, current, historical and projected financial performance, prospects and plans, as well as the associated risks involved achieving such forecasts, prospects and plans;

• the reviews undertaken by, and understandings of, the Special Committee and the Board with respect to economic and market conditions and trends, as well as the challenges and uncertainty surrounding such conditions and trends, both on a historical and prospective basis, in the near term and the long term, such as:

• the nature of the industry in which the Company operates, including anticipated industry trends and changing competitive dynamics;

• the potential for continuing supply chain disruptions, which have adversely impacted, and continue to adversely impact, certain aspects of the Company’s business;

• ModusLink’s historical track record of declines in topline performance due to the challenges noted above, among others;

• the potential risks to the Company arising from customer concentration and the limited scale of its platform more generally;

• the potential risks to the Company of continuing to have publicly traded common stock, including the risks of market volatility;

• certain compliance costs and obligations imposed on the Company as a result of having publicly traded common stock;

• the risks and uncertainties relating to the Company’s concentrated stock ownership;

• the management forecasts prepared by Company and ModusLink management for, or otherwise made available to, the Special Committee and the Board;

• certain challenges and limitations on the Company of continuing as a stand-alone public company which (following the transfer of the IWCO business) has only a single operating business;

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• the near-term expiration of approximately $1.8 billion of NOLs in 2023 and the fact that it was unlikely that the Company would be able to utilize any material portion of its NOLs before their expiration in light of historical financial results and management’s financial projections for the Company’s business;

• the fact that the limitations imposed by Section 382 of the Internal Revenue Code would render it impracticable for any third party (other than Parent) to utilize the NOLs after an acquisition; and

• the limited indications of interest received from potential purchasers of ModusLink since the commencement of the ModusLink Sale Process.

• the current and historical market prices of the Common Stock, including as set forth in the table under “Important Additional Information Regarding Steel Connect — Market Price of Our Common Stock,” taking into account the market performance of the Common Stock relative to the common stock of other participants in the industry in which the Company operates and general market indices;

• the fact that the Per Share Merger Consideration includes $1.35 in cash, providing the Company’s unaffiliated stockholders with certainty of value and immediate liquidity at an attractive per share equity value without the market or execution risks associated with continued independence;

• the fact that the Per Share Merger Consideration includes a CVR tied to a sale of ModusLink over the 24 months following the Closing Date, providing the Company’s stockholders (other than holders of Excluded Shares or Dissenting Shares) with potential additional value upon a sale for more than $80 million of net proceeds;

• the beliefs of the Special Committee and the Board that the Merger represents the best transaction reasonably available for the Company’s unaffiliated stockholders in light of the foregoing factors, among other things;

• the views of the Special Committee and the Board that the Per Share Merger Consideration to be paid to the holders of the Common Stock (other than holders of Excluded Shares or Dissenting Shares) in accordance with the Merger Agreement represented the highest per share consideration that reasonably could be obtained;

• the beliefs of the Special Committee and the Board that the Per Share Merger Consideration to be paid to the holders of the Common Stock (other than holders of Excluded Shares and Dissenting Shares) was more favorable to such holders than the potential value that might result from other alternatives reasonably available to the Company, including the alternative of remaining an independent public company and pursuing the Company’s current strategic plan, and other strategic or financial alternatives that might be undertaken as an independent public company, in light of a number of factors, including the risks and uncertainties associated with those alternatives, and the administrative and compliance costs associated with operating the Company as a publicly traded company;

• that the Special Committee and the Board , with the assistance of their respective independent legal and other advisors, had considered alternatives, including continuing to operate the Company on a standalone basis, other potential value creating options or a sale to an alternative buyer, and considered the risks and uncertainties associated with such alternatives, and each respectively formed the view that no other alternatives were reasonably likely to create greater value for the Company’s unaffiliated stockholders than the Merger, taking into account the alternatives reasonably available to the Company and the risk of execution, as well as business, competitive, industry and market risks;

• the beliefs of the Special Committee and the Board that, after the extensive negotiations conducted by the Special Committee, with the assistance of experienced independent legal and financial advisors, the Company obtained the best terms and highest price that Parent is willing to pay for the Company, pursuant to a thorough process and that further negotiations would have created a risk of causing Parent to abandon the Merger altogether or materially delay the entry into definitive transaction agreements with respect to the Merger;

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• the reviews undertaken by the Special Committee and the Board of the Merger Agreement and the structure of the Transactions, including, among others, the specific financial and other terms and conditions set out below;

• the terms of the Merger Agreement permitting the Company to solicit Takeover Proposals (as defined herein) during the Go-Shop Period;

• the terms of the Merger Agreement permitting the Company to receive Takeover Proposals that do not result from a breach in any material respect of the Company’s non-solicitation obligations in the Merger Agreement, and the other terms and conditions of the Merger Agreement, including:

• that the Company may, in certain circumstances, (1) furnish any information or access thereto in response to a request from a person making such Takeover Proposal and (2) participate or engage in negotiations or discussions with any such person regarding such Takeover Proposal; provided, in each case, that (a) the Takeover Proposal is received prior to obtaining the requisite Company stockholder approval and the majority of the minority stockholder approval with respect to the Merger Proposal and (b) the Board (acting on the recommendation of the Special Committee) or the Special Committee determines in good faith (after consultation with its legal and financial advisors) that such Takeover Proposal (as defined herein) either constitutes a Superior Proposal or reasonably could be expected to lead to, or result in, a Superior Proposal and failure to take such action could be inconsistent with the directors’ fiduciary duties under applicable law;

• that the Merger Agreement may be terminated, in certain circumstances, including, among others, by the Board (acting on the recommendation of the Special Committee) or the Special Committee to enter into an Alternative Acquisition Agreement (as defined herein), which has been authorized and approved by the Board, with respect to a bona fide written Takeover Proposal that did not result from a breach in any material respect of the non-solicitation obligations in the Merger Agreement and that the Board (acting on the recommendation of the Special Committee) or the Special Committee determines in good faith, after consultation with its legal and financial advisors, constitutes a Superior Proposal; and

• that the Board, acting on the recommendation of the Special Committee, or the Special Committee may, in certain circumstances, make a Change of Recommendation, including in response to (1) an Intervening Event (as defined in the Merger Agreement), or (2) a bona fide written Takeover Proposal that did not result from a breach in any material respect of the non-solicitation obligations in the Merger Agreement that is received by the Company after the date of the Merger Agreement and is not withdrawn prior to the Change of Recommendation, and that the Board, acting on the recommendation of the Special Committee, or the Special Committee determines in good faith, after consultation with its legal and financial advisors, constitutes a Superior Proposal, in each case, subject to and in accordance with the terms and conditions of the Merger Agreement;

• the likelihood of the Merger being completed, based on, among other matters:

• the Company’s ability, under circumstances specified in the Merger Agreement, to seek specific performance of Parent’s obligation to cause the Merger to occur;

• the likelihood and anticipated timing of completing the Merger in light of the scope of the conditions to completion;

• other terms and conditions of the Merger Agreement, including:

• the terms of the Merger Agreement providing the Company sufficient operating flexibility to conduct its business in the ordinary course until the earlier of the consummation of the Merger or the termination of the Merger Agreement;

• the Company’s ability, under circumstances specified in the Merger Agreement, to seek specific performance to prevent certain breaches of the Merger Agreement by Parent Parties; and

• the scope of the representations, warranties and covenants being made by the Company and the Parent Parties;

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• the financial analysis reviewed by Houlihan Lokey with the Special Committee as well as the oral opinion of Houlihan Lokey rendered to the Special Committee on June 12, 2022 (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the Special Committee dated June 12, 2022), as to the fairness, from a financial point of view and as of such date, of the Per Share Merger Consideration to be received by the holders of Common Stock (other than holders of Excluded Shares and Dissenting Shares) in the Merger pursuant to the Merger Agreement, which opinion was based on and subject to the various procedures followed, assumptions made, qualifications and limitations on the review undertaken and the other matters considered by Houlihan Lokey in connection with the preparation of its opinion. See “The Merger — Opinion of Houlihan Lokey Capital, Inc., Financial Advisor to the Special Committee”;

• the beliefs of the Special Committee and the Board that they were fully informed about the extent to which the interests of Parent Group in the Merger differ from those of the unaffiliated stockholders;

• the fact that the Parent Group Members, who collectively and beneficially held approximately 51.6% of the voting power of the Company’s outstanding capital stock as of June 12, 2022, have agreed to vote their shares of Common Stock and Series C Preferred Stock in favor of the adoption of the Merger Agreement;

• the fact that Parent Group Members, who collectively and beneficially held approximately 51.6% of the voting power of the Company’s outstanding capital stock as of June 12, 2022, have agreed to vote their shares of Common Stock and Series C Preferred Stock in favor of the adoption of a Superior Proposal;

• the fact that the Merger Agreement is subject to adoption by the affirmative vote of holders of: (i) a majority of the outstanding shares of Series C Preferred Stock; (ii) a majority in voting power of the outstanding shares of Common Stock and Series C Preferred Stock (voting on an as converted to shares of Common Stock basis), voting together as a single class; and (iii) a majority of the outstanding shares of Common Stock not owned, directly or indirectly, by the Parent Parties, any other officers or directors of the Company or any other person having any equity interest in, or any right to acquire any equity interest in, Merger Sub or any person of which Merger Sub is a direct or indirect subsidiary;

• the right of the Company’s stockholders to exercise their statutory appraisal rights under Section 262 of the DGCL and receive payment of the fair value of their shares of Common Stock in lieu of the Merger Consideration to be paid per share of Common Stock, subject to and in accordance with the terms and conditions of the Merger Agreement and the DGCL, unless and until any such Company stockholder fails to perfect or effectively withdraws or loses his, her, its or their rights to appraisal and payment under the DGCL; and

• the fact that since the public announcement of the Merger Agreement, none of the Company, Parent, the Special Committee, the Board, nor any of their respective independent legal and financial advisors, as applicable, have received any actionable inbound inquiries from third parties related to potential alternative acquisition proposals.

In evaluating the Merger Agreement and the Transactions, and making the decisions, determinations and recommendations described above, the Special Committee and the Board considered, among other things, a number of procedural safeguards that they believed were and are present to ensure the fairness of the Merger Agreement and the Transactions, and to permit the Special Committee to represent effectively the interests of the Company’s unaffiliated stockholders. These procedural safeguards include, among other things, the following, which are not intended to be exhaustive and are not presented in any relative order of importance:

• that the Special Committee was formed immediately upon the Company’s receipt of an acquisition proposal from Parent and prior to any consideration of the Merger Agreement and the Transactions;

• that the Special Committee consists entirely of directors who are independent of, and not affiliated with, the Parent Group, and who are not members of the Company’s management;

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• that the members of the Special Committee are disinterested with respect to the Transactions and had no financial interest in the Merger different from, or in addition to, the Company’s unaffiliated stockholders generally (other than as described in “— Interests of Steel Connect’s Directors and Executive Officers in the Merger” beginning on page 53;

• that the members of the Special Committee were adequately compensated for their services and that their compensation was in no way contingent on their approving the Merger Agreement and taking the other actions described in this Proxy Statement in the section entitled “Interests of Steel Connect’s Directors and Executive Officers in the Merge — Compensation of the Special Committee” on page 55;

• that the Special Committee had exclusive authority to decide whether or not to proceed with a transaction with Parent or any alternative thereto, subject to the Board’s approval of such transactions;

• that the Special Committee retained and was advised by its own experienced and independent legal and financial advisors;

• that the Special Committee had the power and authority, among other things, to (1) consider whether or not it was in the best interests of the Company and the unaffiliated stockholders to engage in discussions and/or negotiations relating to a potential transaction with Parent, (2) engage in such discussions and/or negotiations relating to all terms and conditions of a potential transaction with Parent (financial or otherwise), (3) consider and review potential alternatives to a transaction with Parent, (4) consult with and/or advise management in connection with discussions and/or negotiations concerning potential terms and conditions of a potential transaction with Parent, (5) interview, select and retain, at the Company’s expense, such financial advisors, legal counsel and other advisors as the Special Committee deems appropriate, including an investment bank to deliver a fairness opinion, if requested by the Special Committee, in connection with a potential transaction with Parent, (6) establish the terms of engagement of each such advisor and (7) make any recommendations to the Board concerning a potential transaction with Parent that the Special Committee deemed appropriate;

• that the Board was not permitted to approve or recommend to the Company’s stockholders a transaction with Parent or any alternative transactions without the prior favorable recommendation of the Special Committee;

• that the Special Committee had no obligation to recommend any transaction, including a transaction with Parent, and that the Special Committee had the authority to reject any proposals made by Parent or any other person;

• that the Special Committee, together with its independent financial and legal advisors, conducted a process involving deliberations over a period of time, to consider:

• potential alternatives to the proposed transaction with respect to the Company; and

• the Merger Agreement and the Transactions;

• the consummation of the Transactions is subject to the Company stockholder approval, which requires the affirmative vote of holders of (i) a majority of the outstanding shares of Series C Preferred Stock; (ii) a majority in voting power of the outstanding shares of Common Stock and Series C Preferred Stock (voting on an as converted to shares of Common Stock basis), voting together as a single class and (iii) a majority of the outstanding shares of Common Stock not owned, directly or indirectly, by the Parent Parties, any other officers or directors of the Company or any other person having any equity interest in, or any right to acquire any equity interest in, Merger Sub or any person of which Merger Sub is a direct or indirect subsidiary;

• that the terms of the Merger Agreement, including the Per Share Merger Consideration, were the product of extensive negotiations between the Special Committee and its legal and financial advisors, on the one hand, and Parent, Merger Sub and their affiliates and legal and financial advisors, on the other hand, that resulted, among other things, in an increase in the Per Share Merger Consideration during the course of negotiations as compared to the Initial Proposal, and the improvement, from the perspective of the Company, of other terms of the Merger and the Merger Agreement;

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• the various terms of the Merger Agreement that are intended to help ensure that the Company’s unaffiliated stockholders receive the highest price per share reasonably available, including:

• that the Merger Agreement may be terminated, in certain circumstances, including, among others, by the Board (acting on the recommendation of the Special Committee) or the Special Committee to enter into an Alternative Acquisition Agreement (which has been authorized and approved by the Board) with respect to a bona fide written Takeover Proposal that did not result from a breach in any material respect of the non-solicitation obligations in the Merger Agreement and that the Board (acting on the recommendation of the Special Committee) or the Special Committee determines in good faith, after consultation with its legal and financial advisors, constitutes a Superior Proposal (as more fully described under “Proposal No. 1: The Merger Proposal — The Merger Agreement” beginning on page 78); and

• that the Board, acting on the recommendation of the Special Committee, or the Special Committee may, in certain circumstances, make a Change of Recommendation, including in response to (1) an Intervening Event, or (2) a bona fide written Takeover Proposal that did not result from a breach in any material respect of the non-solicitation obligations in the Merger Agreement received by the Company after the date of the Merger Agreement and is not withdrawn prior to the Change of Recommendation, and that the Board, acting on the recommendation of the Special Committee, or the Special Committee determines in good faith, after consultation with its legal and financial advisors, constitutes a Superior Proposal; in each case, subject to and in accordance with the terms and conditions of the Merger Agreement;

• that the Special Committee made its evaluation of the Merger Agreement and the Transactions, including the Merger, based upon the factors discussed in this proxy statement and with the full knowledge of the interests of Parent Group in the Merger; and

• the ability of the Company and its representatives to actively solicit alternate buyers during the Go-Shop Period.

In evaluating the Merger Agreement and the Transactions and making the decisions, determinations and recommendations described above, the Special Committee and the Board also considered, among other things, certain countervailing factors, including the following uncertainties, risks and other potentially negative factors, which are not intended to be exhaustive and are not presented in any relative order of importance:

• that, following the completion of the Merger, the Company will no longer exist as an independent public company and that the consummation of the Merger and receipt of the Per Share Merger Consideration, while providing relative certainty of value, will not allow the Company’s unaffiliated stockholders to participate in potential further growth in the Company’s assets, future earnings growth, future appreciation in value of the Common Stock or any future dividends after the Merger (except as specifically provided for in the ModusLink CVR Agreement);

• the risk that the Transactions, including the Merger, may not be consummated in a timely manner or at all, for a variety of reasons, and the consequences thereof, including (1) the potential loss of value to the Company’s stockholders, including the reduction of the trading price of the shares of Common Stock, (2) the potential negative impact on the operations and prospects of the Company, including the risk of loss of key personnel and certain key members of senior management, and (3) the market’s perception of the Company’s prospects could be adversely affected if the Transactions were delayed or were not consummated;

• the possible effects of the pendency or consummation of the Transactions, including the potential for suits, actions or proceedings in respect of the Merger Agreement or the Transactions, the risk of any loss or change in the relationship of the Company and its subsidiaries with their respective employees, agents, customers and other business relationships, and any possible effect on the Company’s ability to attract and retain key employees, including that certain key members of senior management might choose not to remain employed with the Company prior to the completion of the Merger;

• the risk of incurring substantial expenses related to the Merger, including in connection with any litigation that may arise in the future;

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• the risks and potentially negative factors described in “— Certain Effects of the Merger” beginning on page 47;

• that the Company’s directors, officers and employees have expended and will expend extensive efforts attempting to complete the Transactions and such persons have experienced and will experience significant distractions from their work during the pendency of the Transactions and that the Company has incurred and will incur substantial costs in connection with the Transactions, even if the Transactions are not consummated;

• that the receipt of the Per Share Cash Merger Consideration in exchange for shares of Common Stock pursuant to the terms of the Merger Agreement will be a taxable transaction for U.S. federal income tax purposes as described in the section entitled “— Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 55;

• the restrictions imposed by the Merger Agreement on the Company’s solicitation of Takeover Proposals from third parties, and that prospective bidders may perceive Parent’s right under the Merger Agreement to negotiate with the Company prior to the Company being able to terminate the Merger Agreement and accept a Superior Proposal to be a deterrent to making alternative proposals;

• that the Parent Group’s existing ownership interest in the Company would likely be taken into account by third parties considering whether to make Takeover Proposals;

• that, if the Merger Agreement is terminated in connection with the Company’s entry into an Alternative Acquisition Agreement with respect to a Superior Proposal, the Company is obligated to pay a termination fee and reimburse Parent for certain of its expenses;

• the understanding that the Company’s executive officers and directors have certain interests in the Merger that may be different from, or in addition to, the interests of the Company’s stockholders generally (as discussed under “— Interests of Steel Connect’s Directors and Executive Officers in the Merger” beginning on page 53); and

• the restrictions placed on the conduct of the Company’s business prior to the completion of the Merger pursuant to the terms of the Merger Agreement, which could delay or prevent the Company from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of the Company absent the pending completion of the Merger.

The Special Committee and the Board concluded that, overall, the potentially positive factors outweighed the uncertainties, risks and potentially negative factors relevant to the Merger Agreement and the Transactions, including the Merger. Accordingly, the Special Committee and the Board determined that the Merger Agreement and the Transactions, including the Merger, are advisable, fair to, and in the best interests of, the Company and the unaffiliated stockholders.

Accordingly, the Board recommends that you vote “FOR” the Merger Proposal to adopt the Merger Agreement at the Annual Meeting.

In the course of evaluating the Merger Agreement and the Transactions, and making the decisions, determinations and recommendations described above, the Special Committee and the Board did not consider the liquidation value of the Company because (1) they considered the Company to be a viable, going concern, (2) they believed that liquidation sales generally result in proceeds substantially less than sales of going concerns, (3) they considered determining a liquidation value to be impracticable given the significant execution risk involved in any breakup of the Company and (4) the Company will continue to operate its business following the Merger. For the foregoing reasons, the Special Committee and the Board did not consider liquidation value to be a relevant methodology. Further, the Special Committee and the Board did not consider net book value, which is an accounting concept, as a factor because they believe that net book value is not a material indicator of the value of the Company as a going concern but rather is indicative of historical costs and because net book value does not take into account the prospects of the Company, market conditions, trends in the industry in which the Company operates or the business risks inherent in that industry. The Special Committee and the Board did not seek to determine a pre-Merger going concern value for the shares of Common Stock to determine the fairness of the Per Share Merger Consideration to the Company’s unaffiliated stockholders. The Special Committee and the Board believed that

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the trading price of the shares of Common Stock at any given time represents the best available indicator of the Company’s going concern value at that time so long as the trading price at that time is not impacted by speculation regarding the likelihood of a potential transaction.

The Special Committee and the Board are not aware of any firm offer for a merger, sale of all or a substantial part of the Company’s assets, or a purchase of a controlling amount of the Company’s securities having been received by the Company from anyone other than the Parent Parties in the two years preceding the signing of the Merger Agreement.

The foregoing discussion is not exhaustive, but is intended to summarize the material information and factors considered by the Special Committee and the Board in their consideration of the Merger Agreement and the Transactions, including the Merger. The Special Committee and the Board reached the decision to approve the entry into the Merger Agreement and recommend its adoption by the Company’s stockholders in light of the factors described above and other factors that the Special Committee and the Board believed were appropriate. In view of the variety of factors and the quality and amount of information considered, the Special Committee and the Board did not find it practicable to and did not quantify or otherwise assign relative weights to the specific factors considered in reaching their determinations. In addition, each of the members of the Special Committee and the Board may have given different weight to different factors. The Special Committee and the Board conducted an overall review of the factors described above, including through discussions with the Company’s management and their respective legal and financial advisors, and considered the factors overall to be favorable to, and to support, their decisions, determinations and recommendations. It should be noted that this explanation of the reasoning of the Special Committee and the Board and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in the section entitled “Cautionary Statement Concerning Forward-Looking Information” beginning on page 65.

Opinion of Houlihan Lokey Capital, Inc., Financial Advisor to the Special Committee

On June 12, 2022, Houlihan Lokey orally rendered its opinion to the Special Committee (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the Special Committee dated June 12, 2022), as to the fairness, from a financial point of view and as of such date, of the Merger Consideration to be received by the Unaffiliated Stockholders in the Merger pursuant to the Merger Agreement, which opinion was based on and subject to the various procedures followed, assumptions made, qualifications and limitations on the review undertaken and the other matters considered by Houlihan Lokey in connection with the preparation of its opinion.

Houlihan Lokey’s opinion was directed to the Special Committee (in its capacity as such) and only addressed the fairness, from a financial point of view and as of such date, of the Merger Consideration be received by the Unaffiliated Stockholders in the Merger pursuant to the Merger Agreement and did not address any other aspect or implication of the Merger or any other agreement, arrangement or understanding. The summary of Houlihan Lokey’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex B to this proxy statement and describes certain of the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not constitute, advice or a recommendation to the Special Committee, the Board, the Company, any security holder or any other person as to how to act or vote with respect to any matter relating to the Merger or otherwise.

In arriving at its opinion, Houlihan Lokey, among other things:

• reviewed the Merger Agreement, the ModusLink CVR Agreement and certain related documents;

• reviewed certain publicly available business and financial information relating to the Company that Houlihan Lokey deemed to be relevant;

• reviewed certain information relating to the historical, current and future operations, financial condition and prospects of the Company made available to Houlihan Lokey by the Company, ModusLink, its wholly-owned subsidiary, and the Special Committee, including (a) financial projections prepared by the management of ModusLink, in consultation with the management of the Company, and approved

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by the Special Committee, relating to ModusLink for the fiscal years ending July 31, 2022 through July 31, 2025 (the “ModusLink Projections”), (b) financial projections prepared by the management of the Company, and approved by the Special Committee, relating to the Company’s corporate expenses for the fiscal years ending July 31, 2022 through July 31, 2025 (the “Corporate Expense Projections”), and (c) certain forecasts and estimates prepared by the management of the Company, and approved by the Special Committee, of the net operating losses of the Company to be utilized by the Company on a standalone basis (the “NOL Projections”, and together with the ModusLink Projections and the Corporate Expense Projections, the “Projections”);

• spoke with certain members of the management of ModusLink regarding the businesses, operations, financial condition and prospects of ModusLink and related matters;

• spoke with certain members of the management of the Company regarding the businesses, operations, financial condition and prospects of the Company (including ModusLink), the Merger and related matters;

• compared the financial and operating performance of ModusLink with that of other public companies deemed to be relevant;

• considered publicly available financial terms of certain transactions deemed to be relevant;

• reviewed the current and historical market prices and trading volume for the Common Stock, and the current and historical market prices and trading volume of the publicly traded securities of certain other companies deemed to be relevant; and

• conducted such other financial studies, analyses and inquiries and considered such other information and factors deemed appropriate.

Houlihan Lokey relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available, to Houlihan Lokey, discussed with or reviewed by Houlihan Lokey, or publicly available, and do not assume any responsibility with respect to such data, material and other information. In addition, (a) management of ModusLink, management of the Company, and the Special Committee advised Houlihan Lokey, and Houlihan Lokey assumed, that the ModusLink Projections had been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of management of ModusLink, management of the Company, and the Special Committee as to the future financial results and condition of ModusLink, and (b) management of the Company and the Special Committee advised Houlihan Lokey, and Houlihan Lokey assumed, that each of the Corporate Expense Projections and the NOL Projections had been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of the management of the Company and the Special Committee. Houlihan Lokey assumed that the Projections provided a reasonable basis on which to evaluate the Company and the Merger and, with the Special Committee’s approval, used and relied upon the Projections for purposes of Houlihan Lokey’s analyses and opinion. Houlihan Lokey expressed no view or opinion with respect to the ModusLink Projections, the Corporate Expense Projections or the NOL Projections or the respective assumptions on which they are based. In addition, given the uncertainty around events potentially impacting the value of the ModusLink CVRs, at the Special Committee’s direction, Houlihan Lokey did not ascribe any value to the ModusLink CVRs for purposes of Houlihan Lokey’s analyses or opinion and expressed no view or opinion with respect to the value of the ModusLink CVRs. Houlihan Lokey relied upon and assumed, without independent verification, that there was no change in the businesses, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company (including ModusLink) since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Houlihan Lokey that would be material to its analyses or opinion, and that there is no information or any facts that would make any of the information reviewed by Houlihan Lokey incomplete or misleading.

Houlihan Lokey further relied upon and assumed, without independent verification, that (a) the representations and warranties of all parties to the Merger Agreement, the ModusLink CVR Agreement and all other related documents and instruments that are referred to therein were true and correct, (b) each party to the Merger Agreement, the ModusLink CVR Agreement and such other related documents and instruments would fully and timely perform all of the covenants and agreements required to be performed by such party, (c) all conditions to the consummation of the Merger would be satisfied without waiver thereof, and (d) the Merger would be consummated in a timely manner in accordance with the terms described in the Merger Agreement and such other related documents and instruments, without any amendments or modifications thereto. Houlihan Lokey also relied upon and

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assumed, without independent verification, that (i) the Merger would be consummated in a manner that complies in all respects with all applicable federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the Merger would be obtained and that no delay, limitations, restrictions or conditions would be imposed or amendments, modifications or waivers made that would have an effect on the Merger or the Company that would be material to Houlihan Lokey’s analyses or opinion.

Furthermore, in connection with its opinion, Houlihan Lokey was not requested to make, and did not make, any physical inspection or independent appraisal or evaluation of any of the assets, properties or liabilities (fixed, contingent, derivative, off-balance-sheet or otherwise) of the Company (including ModusLink) or any other party, nor was Houlihan Lokey provided with any such appraisal or evaluation. Houlihan Lokey did not estimate, and expressed no opinion regarding, the liquidation value of any entity or business. Houlihan Lokey did not undertake an independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which the Company was or may be a party or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which the Company was or may be a party or may be subject.

Houlihan Lokey’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Houlihan Lokey as of, the date of Houlihan Lokey’s opinion. Houlihan Lokey did not undertake, and is under no obligation, to update, revise, reaffirm or withdraw its opinion, or otherwise comment on or consider events occurring or coming to Houlihan Lokey’s attention after the date of its opinion. Houlihan Lokey did not express any opinion as to what the value of the ModusLink CVRs actually will be when issued pursuant to the Merger or the price or range of prices at which the Common Stock or the ModusLink CVRs may be purchased or sold, or otherwise be transferable, at any time.

Houlihan Lokey’s opinion was furnished for the use of the Special Committee (in its capacity as such) in connection with its evaluation of the Merger and may not be used for any other purpose without Houlihan Lokey’s prior written consent. Houlihan Lokey’s opinion is not intended to be, and does not constitute, a recommendation to the Special Committee, the Board, any security holder or any other party as to how to act or vote with respect to any matter relating to the Merger or otherwise.

Houlihan Lokey was not been requested to opine as to, and the opinion did not express an opinion as to or otherwise address, among other things: (i) the underlying business decision of the Special Committee, the Company, its respective security holders or any other party to proceed with or effect the Merger, (ii) the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the Merger or otherwise (other than the Merger Consideration to the extent expressly specified in Houlihan Lokey’s opinion), (iii) the fairness of any portion or aspect of the Merger to the holders of any class of securities, creditors or other constituencies of the Company, or to any other party, except if and only to the extent expressly set forth in the last sentence of Houlihan Lokey’s opinion, (iv) the relative merits of the Merger as compared to any alternative business strategies or transactions that might be available for the Company, or any other party, (v) the fairness of any portion or aspect of the Merger to any one class or group of the Company’s or any other party’s security holders or other constituents vis-à-vis any other class or group of the Company’s or such other party’s security holders or other constituents (including, without limitation, the allocation of any consideration amongst or within such classes or groups of security holders or other constituents), (vi) whether or not the Company, its security holders or any other party is receiving or paying reasonably equivalent value in the Merger, (vii) the solvency, creditworthiness or fair value of the Company, Parent or any other participant in the Merger, or any of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters, or (viii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any party to the Merger, any class of such persons or any other party, relative to the Merger Consideration or otherwise. Furthermore, no opinion, counsel or interpretation was intended in matters that require legal, regulatory, accounting, insurance, tax or other similar professional advice. It was assumed that such opinions, counsel or interpretations had been or would be obtained from the appropriate professional sources. Furthermore, Houlihan Lokey relied, with the consent of the Special Committee, on the assessments by the Special Committee, the Company and their respective advisors, as to all legal, regulatory, accounting, insurance, tax and other similar matters with respect to the Company and the Merger or otherwise. The issuance of Houlihan Lokey’s opinion was approved by a committee authorized to approve opinions of this nature.

In performing its analyses, Houlihan Lokey considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of the opinion. No company, transaction or business used in Houlihan Lokey’s analyses for comparative purposes is

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identical to the Company, ModusLink or the proposed Merger and an evaluation of the results of those analyses is not entirely mathematical. As a consequence, mathematical derivations (such as the high, low, mean and median) of financial data are not by themselves meaningful and in selecting the ranges of multiples to be applied were considered in conjunction with experience and the exercise of judgment. The estimates contained in the financial forecasts prepared by the managements of the Company and ModusLink and the implied reference range values indicated by Houlihan Lokey’s analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of the Company. Much of the information used in, and accordingly the results of, Houlihan Lokey’s analyses are inherently subject to substantial uncertainty.

Houlihan Lokey’s opinion was only one of many factors considered by the Special Committee in evaluating the proposed Merger. Neither Houlihan Lokey’s opinion nor its analyses were determinative of the Merger Consideration or of the views of the Special Committee or management with respect to the Merger or the Merger Consideration. Under the terms of its engagement as financial advisor to the Special Committee, neither Houlihan Lokey’s opinion nor any other advice or services rendered by it in connection with the proposed Merger or otherwise, should be construed as creating, and Houlihan Lokey should not be deemed to have, any fiduciary duty to, or agency relationships with, any of the Special Committee, the Company, security holders, creditors or other constituencies of the Company or any other person or entity. The type and amount of consideration payable in the Merger were determined through negotiations between the Special Committee and Parent, and the decision to enter into the Merger Agreement was solely that of the Special Committee and the Board.

Financial Analyses

In preparing its opinion to the Special Committee, Houlihan Lokey performed certain financial analyses described below under the heading “— June 12, 2022 Financial Presentation.” The summary of Houlihan Lokey’s analyses is not a complete description of the analyses underlying Houlihan Lokey’s opinion. The preparation of such an opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither Houlihan Lokey’s opinion nor its underlying analyses is readily susceptible to summary description. Houlihan Lokey arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. While the results of each analysis were taken into account in reaching Houlihan Lokey’s overall conclusion with respect to fairness, Houlihan Lokey did not make separate or quantifiable judgments regarding individual analyses. Accordingly, Houlihan Lokey believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors, without considering all analyses, methodologies and factors, could create a misleading or incomplete view of the processes underlying Houlihan Lokey’s analyses and opinion.

The following is a summary of the material financial analyses performed by Houlihan Lokey in connection with the preparation of its opinion and reviewed with the Special Committee on June 12, 2022. The order of the analyses does not represent relative importance or weight given to those analyses by Houlihan Lokey. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis, could create a misleading or incomplete view of Houlihan Lokey’s analyses.

Introduction

For purposes of its analyses, Houlihan Lokey reviewed a number of financial metrics, including:

• Enterprise Value — generally, the value as of a specified date of the relevant company’s equity market value plus debt outstanding, preferred stock and minority interests and less cash and cash equivalents, based on reported fully-diluted shares; and

• Adjusted EBITDA — generally, the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization, as adjusted for certain non-recurring items, for a specified time period.

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Unless the context indicates otherwise, enterprise values and equity values used in the selected companies analysis described below were calculated using the closing price of the common stock of the selected companies listed below as of June 9, 2022, and transaction values for the selected transactions analysis described below were calculated on an enterprise value basis based on the announced transaction equity price and other public information available at the time of the announcement. The estimates of the future financial performance of the selected companies listed below were based on certain publicly available research analyst estimates for those companies.

June 12, 2022 Financial Presentation

Selected Companies Analysis

Houlihan Lokey reviewed certain data for selected companies, with publicly traded equity securities, that Houlihan Lokey deemed relevant for purposes of its financial analyses related to ModusLink. The selected companies consisted of the following (collectively, the “selected companies”):

Selected Companies

• Celestica Inc.

• CJ Logistics Corporation

• Deutsche Post AG

• FedEx Corporation

• Flex Ltd.

• GXO Logistics, Inc.

• Jabil Inc.

• Kerry Logistics Network Limited

• Kuehne + Nagel International AG

• United Parcel Service, Inc.

• Wincanton plc

The financial data reviewed included:

• For illustrative purposes only, Enterprise Values as a multiple of latest 12 months Adjusted EBITDA;

• Enterprise Values as a multiple of estimated fiscal year 2022 (referring to the Company’s fiscal year ending July 31, 2022) Adjusted EBITDA; and

• Enterprise Values as a multiple of estimated fiscal year 2023 (referring to the Company’s fiscal year ending July 31, 2023) Adjusted EBITDA

The overall low to high latest 12 months Adjusted EBITDA (for illustrative purposes only), fiscal year 2022 estimated Adjusted EBITDA and fiscal year 2023 estimated Adjusted EBITDA multiples (and median and mean multiples) observed for the selected companies were as follows:

Selected Companies	Low	High	Median	Mean
Latest 12 Months Adjusted EBITDA (for illustrative purposes only)	5.2x	11.2x	6.1x	6.7x
Fiscal Year 2022 Estimated Adjusted EBITDA	4.5x	10.4x	5.4x	6.4x
Fiscal Year 2023 Estimated Adjusted EBITDA	3.9x	9.4x	5.1x	5.8x

Taking into account the results of the selected companies analysis, Houlihan Lokey applied selected multiple ranges of 4.0x to 6.0x latest 12 months Adjusted EBITDA (for illustrative purposes only), 4.0x to 6.0x fiscal year 2022 estimated Adjusted EBITDA and 4.0x to 6.0x fiscal year 2023 estimated Adjusted EBITDA in each case

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to corresponding financial data for ModusLink, and in the case of fiscal year 2022 estimated Adjusted EBITDA and fiscal year 2023 estimated Adjusted EBITDA based on the ModusLink Projections. The selected companies analysis (after taking into account the outstanding balance of ModusLink cash and cash equivalents as of April 30, 2022) indicated implied ModusLink equity value reference ranges of $53.2 million to $72.3 million based on the selected range of multiples of latest 12 months Adjusted EBITDA (for illustrative purposes only), $58.4 million to $80.2 million based on the selected range of multiples of fiscal year 2022 estimated Adjusted EBITDA and $84.9 million to $119.9 million based on the selected range of multiples of fiscal year 2023 estimated Adjusted EBITDA. Houlihan Lokey then deducted the present value of corporate expenses based on the Corporate Expense Projections, added the present value of the NOLs based on the NOL Projections and incorporated the impact of the outstanding balances of corporate cash and cash equivalents, IWCO subordinated note, convertible note payable, and Series C convertible preferred stock as of April 30, 2022 to arrive at implied per share value reference ranges of $0.13 to $0.37 per share of Common Stock based on the selected range of multiples of the latest 12 months Adjusted EBITDA (for illustrative purposes only), $0.22 to $0.50 per share of Common Stock based on the selected range of multiples of fiscal year 2022 estimated Adjusted EBITDA and $0.66 to $1.16 per share of Common Stock based on the selected range of multiples of fiscal year 2023 estimated Adjusted EBITDA, as compared to the Per Share Merger Consideration.

Selected Transactions Analysis

Houlihan Lokey considered certain financial terms of certain transactions involving target companies that Houlihan Lokey deemed relevant for purposes of its financial analyses related to ModusLink. The selected transactions consisted of the following (collectively, the “selected transactions”):

Date Announced	Target	Acquiror
3/25/2022	Intermodal Business of XPO Logistics, Inc.	STG Logistics, Inc.
2/20/2022	Clipper Logistics plc	GXO Logistics, Inc.
2/14/2022	Kane Logistics, Inc.	ID Logistics Group SA
12/22/2022	LF Logistics Holdings Limited	A.P. Møller — Mærsk A/S
12/13/2021	Whiplash Inc.	Ryder System, Inc.
9/10/2021	Echo Global Logistics, Inc.	The Jordan Company, L.P.
8/6/2021	B2C Europe Holding B.V.	A.P. Møller — Mærsk A/S
8/6/2021	Visible Supply Chain Management, LLC	A.P. Møller — Mærsk A/S
7/22/2021	Transplace Inc.	Uber Freight LLC
7/8/2021	Imperial Logistics Limited	DP World Limited
7/1/2021	Syncreon.Us Inc.	DP World Limited
6/30/2021	Quad Logistics Services, LLC	Mullen Group Ltd.
5/12/2021	Lasership, Inc.	American Securities LLC
4/27/2021	Agility Global Integrated Logistics	DSV Panalpina A/S
3/17/2021	AIT Worldwide Logistics Inc.	The Jordan Company, L.P.
12/9/2020	Ingram Micro Inc.	Platinum Equity, LLC
2/19/2020	Performance Team LLC	A.P. Møller — Mærsk A/S
1/28/2020	Prime Distribution Services, Inc.	C.H. Robinson Worldwide, Inc.
11/5/2018	CaseStack, Inc.	Hub Group, Inc.
2/17/2015	APL Logistics Ltd.	Kinetsu World Express, Inc.
12/15/2014	FedEx Supply Chain Distribution System, Inc.	FedEx Corporation
7/29/2014	New Breed Holding Company	XPO Logistics, Inc.

The overall low to high latest 12 months Adjusted EBITDA multiples (and median and mean multiples) observed for the selected transactions were as follows:

Selected Transactions		Low		High		Median		Mean
Latest 12 Months Adjusted EBITDA		6.1x		20.0x		12.3x		11.8x

Taking into account the results of the selected transactions analysis, Houlihan Lokey applied a selected multiple range of 5.0x to 7.0x latest 12 months Adjusted EBITDA to the fiscal year 2022 estimated Adjusted EBITDA for ModusLink based on the ModusLink Projections. The selected transactions analysis indicated an

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implied ModusLink equity value reference range (after taking into account the outstanding balance of ModusLink cash and cash equivalents as of April 30, 2022) of $69.3 million to $91.1 million based on the selected range of multiples of fiscal year 2022 estimated Adjusted EBITDA. Houlihan Lokey then deducted an estimate of hypothetical wind-down/severance cash outlays to liquidate the corporate entity per Company management, added the present value of the NOLs based on the NOL Projections and incorporated the impact of the outstanding balances of cash and cash equivalents, IWCO subordinated note, convertible note payable, and Series C convertible preferred stock as of April 30, 2022 to arrive at an implied per share value reference range of $0.84 to $1.27 per share of Common Stock based on the selected range of multiples applied to fiscal year 2022 estimated Adjusted EBITDA, as compared to the Per Share Merger Consideration.

Discounted Cash Flow Analysis

Houlihan Lokey performed a discounted cash flow analysis of ModusLink by calculating the estimated net present value of the projected unlevered, free cash flows that ModusLink was forecasted to generate for the fiscal year ending July 31, 2022 through the fiscal year ending July 31, 2025 based on the ModusLink Projections. Houlihan Lokey calculated terminal values for ModusLink by applying a range of perpetuity growth rates of 0.0% to 2.0% to ModusLink’s fiscal year 2025 estimated unlevered, free cash flow. The net present values of the Company’s projected future cash flows and terminal values were then calculated using discount rates ranging from 13.0% to 15.0%. The discounted cash flow analysis (after taking into account the outstanding balance of ModusLink cash and cash equivalents as of April 30, 2022) indicated an implied ModusLink equity value reference range of $92.4 million to $117.5 million. Houlihan Lokey then deducted the present value of corporate expenses based on the Corporate Expense Projections, added the present value of the NOLs based on the NOL Projections and incorporated the impact of the outstanding balances of cash and cash equivalents, IWCO subordinated note, convertible note payable, and Series C convertible preferred stock as of April 30, 2022 to arrive at an implied per share value reference range of $0.78 to $1.12 per share of Common Stock, as compared to the Per Share Merger Consideration.

Preliminary Discussion Materials

In addition to the June 12, 2022 financial presentation provided to the Special Committee in connection with Houlihan Lokey’s opinion, dated June 12, 2022, to the Special Committee as summarized above, Houlihan Lokey also provided, for informational purposes, certain preliminary discussion materials to the Special Committee as summarized below. At the request of the Special Committee, extracts and/or summaries of certain information from the June 12, 2022 financial presentation and such preliminary discussion materials also were provided to the Board for informational reference.

The preliminary financial considerations and other information in the preliminary discussion materials reflected market data as of dates proximate to such materials and were based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and information, including tax information relating to the Company, made available to Houlihan Lokey as of, the date of such materials. Accordingly, to the extent preliminary financial analyses or information were included in such preliminary discussion materials, such preliminary financial analyses or information may have differed from the June 12, 2022 financial presentation as a result of, among other things, the disposition by the Company of IWCO, changes in the Company’s, ModusLink’s and IWCO’s internal financial forecasts, estimates and assumptions, such financial, economic, monetary, market and other conditions and circumstances and other information. Houlihan Lokey also continued to refine various aspects of such preliminary financial considerations and other information. The June 12, 2022 financial presentation superseded the preliminary discussion materials. None of the preliminary discussion materials constituted an opinion of, or recommendation by, Houlihan Lokey with respect to a possible transaction or otherwise.

• April 4, 2022 Preliminary Discussion Materials. The April 4, 2022 preliminary discussion materials were substantially similar to the June 12, 2022 financial presentation and contained, among other things, a preliminary selected companies analysis, a preliminary selected transactions analysis and a preliminary discounted cash flow analysis, which preliminary analyses generally used the same methodologies as described above under the heading “— June 12, 2022 Financial Presentation.” In addition, the April 4, 2022 preliminary discussion materials also included certain sensitivities related to Company corporate expenses and net operating losses.

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• January 10, 2022 Preliminary Discussion Materials. The January 10, 2022 preliminary discussion materials included, among other things: (i) an update of the Company’s, IWCO’s and ModusLink’s financial performance based on the Company’s public filings, financial projections provided by and discussions with Company, IWCO and ModusLink management; (ii) an overview of certain trading data for the Company, which included, among other things, average daily trading values and volume weighted average prices for Common Stock during various periods, as well as overall recent trading activity; (iii) a preliminary selected companies analysis, a preliminary selected transactions analysis and a preliminary discounted cash flow analysis; and (iv) an overview of IWCO and ModusLink historical and projected financial information.

• October 21, 2021 Preliminary Discussion Materials. The October 21, 2021 preliminary discussion materials included, among other things: (i) an update of financial projections of IWCO and ModusLink to October 2021 based on discussions with Company, IWCO and ModusLink management; and (ii) an overview of certain trading data for the Company, which included, among other things, average daily trading values and volume weighted average prices for Common Stock during various periods, as well as overall recent trading activity.

• September 9, 2021 Preliminary Discussion Materials. The September 9, 2021 preliminary discussion materials included, among other things: (i) a preliminary selected companies analysis, a preliminary selected transactions analysis and a preliminary discounted cash flow analysis; (ii) an overview of IWCO and ModusLink historical and projected financial information, including revenue and profitability, as well as certain industry trends based on discussions with Company, IWCO and ModusLink management; (iii) an overview of the Initial Proposal; and (iv) an overview of certain trading data for the Company, which included, among other things, average daily trading values and volume weighted average prices for Common Stock during various periods, as well as overall recent trading activity.

• March 31, 2021 Preliminary Discussion Materials. The March 31, 2021 preliminary discussion materials included, among other things: (i) an overview of certain trading data for the Company, which included, among other things, average daily trading values and volume weighted average prices for Common Stock during various periods and the performance of Common Stock against the S&P 500 Index from March 2020 to February 2021, as well as overall recent trading activity; and (ii) an overview of IWCO’s and ModusLink’s historical financial information and near-term forecasts based on public filings and information provided by Company, IWCO and ModusLink management.

• March 9, 2021 Preliminary Discussion Materials. The March 9, 2021 preliminary discussion materials included, among other things: (i) preliminary financial and profitability observations regarding ModusLink; (ii) a summary comparison of ModusLink’s fiscal year 2021 forecast and original budget, based on discussions with Company and ModusLink management; (iii) an overview of ModusLink’s historical and projected financial information based on discussions with Company and ModusLink management; (iv) observations relating to the ModusLink Sale Process (defined herein) to date; and (v) an overview of updates and next steps regarding the process for responding to the Initial Proposal.

Miscellaneous

Houlihan Lokey was engaged as the Special Committee’s financial advisor. The Special Committee engaged Houlihan Lokey based on Houlihan Lokey’s experience and reputation. Houlihan Lokey is regularly engaged to provide financial advisory services in connection with mergers and acquisitions, financings, and financial restructurings. Pursuant to its engagement by the Special Committee, Houlihan Lokey is entitled to a fee of up to $3.125 million for its services, a portion of which became payable upon the execution of Houlihan Lokey’s engagement letter, a portion of which became payable upon delivery of Houlihan Lokey’s opinion (which portion is not contingent upon the consummation of the Merger) and up to $1.0 million of which is contingent upon consummation of the Merger. The Company has also agreed to reimburse Houlihan Lokey for certain expenses and to indemnify Houlihan Lokey, its affiliates and certain related parties against certain liabilities and expenses, including certain liabilities under the federal securities laws, arising out of or related to Houlihan Lokey’s engagement.

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In the ordinary course of business, certain of Houlihan Lokey’s employees and affiliates, as well as investment funds in which they may have financial interests or with which they may co-invest, may acquire, hold or sell, long or short positions, or trade, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in, the Company, Parent, or any other party that may be involved in the Merger and their respective affiliates or security holders or any currency or commodity that may be involved in the Merger.

Houlihan Lokey and certain of its affiliates may provide investment banking, financial advisory and/or other financial or consulting services to the Company, Parent, other participants in the Merger or certain of their respective affiliates or security holders in the future, for which Houlihan Lokey and its affiliates may receive compensation. Furthermore, in connection with bankruptcies, restructurings, distressed situations and similar matters, Houlihan Lokey and certain of its affiliates may have in the past acted, may currently be acting and may in the future act as financial advisor to debtors, creditors, equity holders, trustees, agents and other interested parties (including, without limitation, formal and informal committees or groups of creditors) that may have included or represented and may include or represent, directly or indirectly, or may be or have been adverse to, the Company, Parent, other participants in the Merger or certain of their respective affiliates or security holders, for which advice and services Houlihan Lokey and its affiliates have received and may receive compensation.

The Parent Group Members’ Purposes and Reasons for the Merger

Under the SEC rules governing “going private” transactions, each Parent Group Member is deemed to be engaged in a “going private” transaction and, therefore, is required to express his, her or its reasons for the Merger to the unaffiliated stockholders, as defined in Rule 13e-3 of the Exchange Act. Each Parent Group Member is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

For each Parent Group Member, the primary purpose of the Merger is to acquire, through Parent, all shares of Common Stock not owned by them to benefit from any future earnings and growth of the Company after the Merger of Merger Sub with and into the Company, making the Company a wholly owned subsidiary of Parent. The Parent Group believes that structuring the transaction in such manner is preferable to other transaction structures because (i) it will enable Parent to directly acquire all of the outstanding shares of the Company at the same time (other than Excluded Shares and Dissenting Shares), (ii) it will allow the Company to cease to be a publicly registered and reporting company and (iii) it represents an opportunity for the Company’s stockholders other than the Parent Group to immediately realize the value of their investment in the Company. Further, the Parent Group believes that structuring the transaction as a merger transaction provides a prompt and orderly transfer of ownership of the Company in a single step, without the necessity of financing separate purchases of Common Stock in a tender offer and implementing a second-step merger to acquire any Common Stock not tendered into any such tender offer, and without incurring any additional transaction costs associated with such activities.

The Parent Group also believes, in light of the risks and uncertainties relating to the Company’s prospects and the market, economic and other risks, that it is in the best interests of the Company to operate as a wholly owned subsidiary of Parent. As a wholly owned subsidiary of Parent, the Company will have greater operational and business flexibility, and the Company’s management will have the ability to more effectively concentrate on operational matters and long-term growth.

In addition, as a wholly owned subsidiary of Parent, the Company will be relieved of many of the other expenses, burdens and constraints imposed on companies that are subject to the public reporting requirements under the federal securities laws of the U.S., including the Exchange Act and Sarbanes-Oxley Act of 2002, which instead will be handled by Parent. Moreover, Parent intends to integrate and rationalize various aspects of the managerial and legal structures of the Company with those of other members of the Parent Group as well as to achieve economies of scale with respect to purchasing and treasury management functions. Finally, as a wholly owned subsidiary of Parent, the Company may be in a position to better utilize its deferred tax assets.

The Board of Directors of Steel Partners Holdings GP, Inc., the general partner of the Company, has approved the Merger Agreement and the Transactions. The Parent Group also considered a variety of potentially negative factors to it concerning the Merger Agreement and the Merger, which are listed below, although not listed in any relative order of importance:

• all of the risk of any possible decreases in the Company’s revenues, free cash flow or value following the Merger will be borne by the Parent Group;

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• risks associated with pending legal proceedings and possible adverse regulatory changes against the Company will be borne by the Parent Group;

• the business risks facing the Company, including increased competition, will be borne by the Parent Group;

• an investment in the surviving corporation by the Parent Group following the Merger will involve substantial risk resulting from the limited liquidity of such an investment; and

• there will be no trading market for the surviving corporation’s equity securities following the Merger.

The foregoing discussion of the information and factors considered by the Parent Group is not intended to be exhaustive, but includes the material factors considered by the Parent Group. In view of the variety of factors considered in connection with its evaluation of the Merger, the Parent Group did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination. The Parent Group did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Parent Group based its determination on the totality of the information presented.

Position of the Parent Group as to Fairness of the Merger

Under the SEC rules governing “going private” transactions, each of the Parent Group Members is required to express his, her or its belief as to the fairness of the Merger to the unaffiliated stockholders. Each of the Parent Group Members is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

The Parent Group has interests in the Merger that are different from those of the other stockholders of the Company by virtue of its continuing interests in the surviving corporation after the completion of the Merger. The Parent Group attempted to negotiate with the Special Committee the terms of a transaction that would be most favorable to the Parent Group, and not necessarily to the Company’s unaffiliated stockholders, and, accordingly, did not negotiate the Merger Agreement with a goal of obtaining terms that were fair to such unaffiliated stockholders. The Special Committee consists of two directors of the Company who are not affiliated with the Parent Group Members, are not employees of the Company or any of its affiliates and have no financial interest in the Merger different from, or in addition to, the interests of the Company’s unaffiliated stockholders other than their interests described under “Special Factors — Interests of Steel Connect’s Directors and Executive Officers in the Merger” beginning on page 53. Accordingly, the Parent Group believes that the members of the Special Committee are independent and disinterested directors of the Company.

The Parent Group did not participate in the deliberations of the Special Committee regarding, or receive any advice from the Special Committee’s independent legal or financial advisors as to, the substantive or procedural fairness of the Merger to the Company’s unaffiliated stockholders. The Parent Group has not performed, or engaged a financial advisor to perform, any valuation or other analysis for the purposes of assessing the fairness of the Merger to the Company’s unaffiliated stockholders. No financial advisor provided the Parent Group with any analysis, opinion or appraisal with respect to the fairness of the Per Share Merger Consideration to the unaffiliated stockholders.

Based on its knowledge and analysis of available information regarding the Company, as well as the factors considered by, and the analyses and resulting conclusions of, the Special Committee and the Board discussed under “Special Factors — Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 26, each Parent Group Member believes that the Merger is substantively and procedurally fair to the unaffiliated stockholders based on its consideration of the following factors, which are not listed in any relative order of importance:

• the Special Committee, consisting entirely of independent directors who are not officers or employees of the Company and who are not affiliated with any member of the Parent Group, was established and given authority to, among other things, review, evaluate and negotiate the terms of the Merger and to recommend to the Board what action should be taken by the Company, including not to engage in the Merger;

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• members of the Special Committee do not have any interests in the Merger different from, or in addition to, those of the unaffiliated stockholders, other than (i) the directors’ receipt of board compensation in the ordinary course, (ii) the Special Committee members’ compensation in connection with its evaluation of the Merger (which is not contingent upon the completion of the Merger or recommendation of the Merger by the Special Committee or the Board) and (iii) the directors’ indemnification and liability insurance rights under the Merger Agreement and their corresponding indemnification agreements;

• the Special Committee retained and was advised by its legal and financial advisors who are experienced in advising committees such as the Special Committee in similar transactions;

• the Special Committee was deliberate in its process, taking over several months to determine whether the Merger was in the best interest of the Company’s unaffiliated stockholders and to analyze, evaluate and negotiate the terms of the Merger;

• the Parent Group did not participate in or seek to influence the deliberative process of, or the conclusions reached by, the Special Committee or the negotiating positions of the Special Committee;

• the Special Committee and the Board had no obligation to recommend the approval and adoption of the Merger Agreement and the Transactions, including the Merger, or any other transaction;

• the Special Committee and the Board was fully informed about the extent to which the interests in the Merger of certain stockholders of the Company who are also Parent Group Members differed from those of the unaffiliated stockholders;

• the Special Committee and the Board, acting upon the unanimous recommendation of the Special Committee, determined that the Merger Agreement and the Transactions, including the Merger, are advisable and fair to, and in the best interests of, the unaffiliated stockholders;

• the current and historical market prices of the shares of Common Stock, including the fact that the Per Share Cash Merger Consideration represents a premium of (i) approximately 90.1% over the closing price of the shares of Common Stock of $0.71 on November 19, 2020, the last trading day prior to the public disclosure that Parent had delivered a non-binding expression of interest regarding a potential combination of the Company and Parent for consideration consisting of cash and units of Parent’s 6% Series A Preferred Units that would imply a value per share of Common Stock in the range of $0.65 to $0.72, (ii) a premium of 11.6% over the closing price of the shares of Common Stock of $1.21 on June 10, 2022, the last trading day prior to the public announcement of the Merger, and (iii) a premium of approximately 9.3% over the 30 trading-day average closing price of the shares of Common Stock as of June 10, 2022, the last trading day prior to the public announcement of the Merger Agreement;

• the shares of Common Stock traded as low as $0.92 per share during the 52-week period prior to the announcement of the execution of the Merger Agreement on June 12, 2022;

• the Per Share Cash Merger Consideration is all cash, which allows the unaffiliated stockholders to immediately realize certainty of value and liquidity without incurring brokerage and other costs typically associated with market sales (including the limited trading liquidity for the shares of Common Stock on Nasdaq) and allows the unaffiliated stockholders not to be exposed to risks and uncertainties relating to the prospects of the Company;

• the ModusLink CVR represents a further opportunity for unaffiliated stockholders to participate in upside from a sale of ModusLink during the 24-month period following the closing of the Merger if the proceeds of such sale exceed $80 million plus certain related costs and expenses;

• the Per Share Merger Consideration and the other terms and conditions of the Merger Agreement and the Transactions, including the Merger, were the result of extensive negotiations over an extended period of time between the Special Committee and its advisors on the one side and the Parent Group and its advisors on the other side;

• notwithstanding that the Parent Group may not rely upon the opinion provided by Houlihan Lokey to the Special Committee, the Special Committee received its oral opinion from Houlihan Lokey, which was subsequently confirmed in writing dated effective June 12, 2022, as to the fairness, from a financial

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point of view, of the Per Share Merger Consideration to be received by the unaffiliated stockholders in the Merger, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion;

• the recognition of the potential disadvantages that the Company would continue to face as an SEC-reporting public company, including continuing to be subject to the (i) regulatory compliance costs and (ii) requirement to disclose a considerable amount of business information to the public, some of which would otherwise be considered competitively sensitive and would not be disclosed by a non-reporting company;

• the Merger Agreement requires that it be adopted not only by the affirmative vote of the holders of (i) a majority of the outstanding shares of Series C Preferred Stock and (ii) a majority in voting power of the outstanding shares of Common Stock and Series C Preferred Stock (voting on an as converted to shares of Common Stock basis), voting together as a single class, but also (iii) a majority of the outstanding shares of Common Stock not owned, directly or indirectly, by the Parent Parties, any other officers or directors of the Company or any other person having any equity interest in, or any right to acquire any equity interest in, Merger Sub or any person of which Merger Sub is a direct or indirect subsidiary;

• subject to compliance with the Merger Agreement and prior to receipt of the Requisite Stockholder Approval, the ability of the Board or the Special Committee to participate in discussions or negotiations with, or provide non-public information to, any person in response to an unsolicited Takeover Proposal for the Company, if the Board or the Special Committee determines, after consultation with outside legal counsel, that such Takeover Proposal is reasonably likely to lead to a Superior Proposal (defined herein);

• the ability of the Company to actively solicit and consider alternative acquisition proposals during the Go-Shop Period;

• the ability of the Board or the Special Committee, subject to certain conditions, to make a change in the Board Recommendation;

• modest Expense Reimbursement and Termination Fees payable by the Company to Parent if the Merger Agreement is terminated under certain circumstances;

• the Company, under certain circumstances as set out in the Merger Agreement, is able to specifically enforce the terms of the Merger Agreement;

• the Merger is not conditioned on any financing being obtained by Parent, thus increasing the likelihood that the Merger will be consummated and the Per Share Merger Consideration will be paid to the unaffiliated stockholders; and

• the ability of the Company’s stockholders to exercise appraisal rights under Section 262 of the DGCL, which provides such stockholders with the opportunity to have the Delaware Court of Chancery determine the “fair value” (as defined pursuant to Section 262 of the DGCL) of their shares of Company Stock (which may be more than, less than or the same as the amount such stockholders would have received under the Merger Agreement) and to receive payment based on that valuation in lieu of receiving the Per Share Merger Consideration.

The Parent Group did not consider the Company’s net book value, which is defined as total assets minus total liabilities, as a factor. The Parent Group believes that net book value, which is an accounting concept based on historical costs, is not a material indicator of the value of the Company as a going concern because it does not take into account the future prospects of the Company, market conditions, trends in the industry in which the Company conducts its business or the business risks inherent in competing with other companies in the same industry.

In its consideration of the fairness of the Merger, the Parent Group did not consider the Company’s liquidation value to be a relevant valuation method because it considers the Company to be a viable, going concern business where value is derived from cash flows generated from its continuing operations and because the Company plans to continue to operate its business following the Merger.

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The Parent Group did not seek to establish a pre-Merger going concern value for the shares of Common Stock to determine the fairness of the Per Share Merger Consideration to the unaffiliated stockholders. However, to the extent the pre-Merger going concern value was reflected in the pre-announcement price of the shares of Common Stock, the Per Share Merger Consideration represented (i) a premium of 11.6% over the closing price of the shares of Common Stock of $1.21 on June 10, 2022, the last trading day prior to the public announcement of the Merger, and (ii) a premium of approximately 9.3% over the 30 trading-day average closing price of the shares of Common Stock as of June 10, 2022.

Except as described in “Special Factors — Background of the Merger,” none of the Parent Group Members is aware of, and thus did not consider in its fairness determination, any offers or proposals made by any unaffiliated third parties with respect to (a) a merger or consolidation of the Company with or into another company, (b) a sale of all or a substantial part of the Company’s assets or (c) the purchase of the Company’s voting securities that would enable the holder to exercise control over the Company.

The Parent Group did not perform or receive any independent reports, opinions or appraisals from any third party related to the Merger, and thus did not consider any such reports, opinions or appraisals in determining the substantive and procedural fairness of the Merger to the unaffiliated stockholders.

The foregoing is a summary of the information and factors considered and given weight by each of the Parent Group Members in connection with its evaluation of the substantive and procedural fairness of the Merger to the unaffiliated stockholders, which is not intended to be exhaustive, but includes all material factors considered by the Parent Group. The Parent Group did not find it practicable to assign, and did not assign, relative weights to the individual factors considered in reaching their conclusion as to the substantive and procedural fairness of the Merger to the unaffiliated stockholders. Rather, its fairness determination was made after consideration of all of the foregoing factors as a whole.

Each of the Parent Group Members believes these factors provide a reasonable basis for its belief that the Merger is substantively and procedurally fair to the unaffiliated stockholders. This belief should not, however, be construed as a recommendation to any stockholder of the Company to vote in favor of the proposal to adopt the Merger Agreement. None of the Parent Group Members makes any recommendation as to how stockholders of the Company should vote their shares of Common Stock on the proposal to adopt the Merger Agreement.

Plans for Steel Connect After the Merger

It is expected that Steel Connect’s operations will be conducted after the Merger substantially as they currently are being conducted, except that it will cease to be a publicly traded company and will instead be a wholly owned subsidiary of Parent. Following the consummation of the Merger, the Company will no longer be subject to the Exchange Act and Nasdaq compliance and reporting requirements along with the related direct and indirect costs and expenses, and may experience positive effects on profitability as a result of the elimination of such costs and expenses.

The directors of Merger Sub will be the directors of Steel Connect immediately following the Merger. The officers of Merger Sub will be the officers of Steel Connect immediately following the Merger.

The Parent Group Members have advised Steel Connect that they do not have any current intentions, plans or proposals to cause Steel Connect to engage in any of the following:

• an extraordinary corporate transaction with a third party such as a merger;

• the relocation of any material operations or sale or transfer of a material amount of assets; or

• any other material changes in its business.

Nevertheless, following the consummation of the Merger, the surviving corporation’s management and board of directors may implement a legal and management reorganization to combine and align the operations of Steel Connect with other operations owned by Parent. The surviving corporation’s management and board of directors may further initiate a review of Steel Connect and its assets, corporate and capital structure, capitalization, operations, business, properties and personnel to determine what additional changes, if any, would be desirable following the Merger to enhance the business and operations of Steel Connect and may cause Steel Connect to engage in the types

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of transactions set forth above if the management or the board of directors decides that such transactions are in the best interest of Steel Connect upon such review. The Parent Group Members expressly reserve the right to make any changes to Steel Connect operations after consummation of the Merger that they deem appropriate in light of such evaluation and review or in light of future developments.

Certain Effects of the Merger

If the Merger Agreement is adopted by the Requisite Stockholder Approval and the other conditions to the closing of the Merger are either satisfied or waived, Merger Sub will be merged with and into Steel Connect, the separate corporate existence of Merger Sub will cease and Steel Connect will continue its corporate existence under Delaware law as the surviving corporation in the Merger, with all of its rights, privileges, immunities, powers and franchises continuing unaffected by the Merger.

Upon consummation of the Merger, each share of Common Stock issued and outstanding immediately prior to the Effective Time of the Merger (other than Excluded Shares and Dissenting Shares) will immediately be converted into the right to receive the Per Share Merger Consideration, without interest and less applicable withholding taxes.

Following the Merger, the entire equity in the surviving corporation will ultimately be owned by Parent. If the Merger is completed, the Parent Group Members will be the sole beneficiaries of Steel Connect’s future earnings and growth, if any (except for any payments in respect of the ModusLink CVR), and will be entitled to vote on corporate matters affecting Steel Connect following the Merger. Similarly, the Parent Group Members will also bear the risks of ongoing operations, including the risks of any decrease in Steel Connect’s value after the Merger.

If the Merger is completed, Steel Connect’s unaffiliated stockholders will have no interest in Steel Connect’s net book value or net earnings. Based on the 2021 Annual Report, the table below sets forth the direct and indirect interests in Steel Connect’s net book value and net earnings of the Parent Group Members as of and for the year ended July 31, 2021, and what those interests would have been had the Merger been completed as of that date.

	Ownership Prior to the Merger(1)							Ownership Assuming Completion of the Merger(1)
	(in thousands, except % ownership)
Name	Net Book Value		Net Loss			% Ownership		Net Book Value		Net Loss		% Ownership
Parent Group Members	$	2,311	$	(16,513	)	37.2	%	$	6,212	$	44,391	100	%

____________

(1) Ownership percentages are based on shares of Common Stock outstanding as of June 12, 2022, the date of the Merger Agreement.

A primary benefit of the Merger to Steel Connect’s stockholders (other than the Parent Group Members) will be the right of such stockholders to receive the Per Share Merger Consideration as described above. The Per Share Cash Merger Consideration represents a premium of approximately (i) 90.1% over the closing price of the shares of Common Stock of $0.71 on November 19, 2020, the last trading day prior to the public disclosure that Parent had delivered a non-binding expression of interest regarding a potential combination of the Company and Parent for consideration consisting of cash and units of Parent’s 6% Series A Preferred Units that would imply a value per share of Common Stock in the range of $0.65 to $0.72, (ii) 11.6% over the closing price of the shares of Common Stock of $1.21 on June 10, 2022, the last trading day prior to the public announcement of the Merger, and (iii) of approximately 9.3% over the 30 trading-day average closing price of the shares of Common Stock as of June 10, 2022, the last trading day prior to the public announcement of the Merger Agreement.

The primary detriments of the Merger to such stockholders include the lack of interest of such stockholders in Steel Connect’s potential future earnings, growth or value (other than the ModusLink CVR). Additionally, the receipt of cash in exchange for shares of Common Stock pursuant to the Merger will generally be a taxable sale transaction for U.S. federal income tax purposes to our stockholders who surrender shares of Common Stock in the Merger, as described further under the section entitled “Special Factors — Material U.S. Federal Income Tax Consequences of the Merger.”

In connection with the Merger, the Parent Group Members will receive benefits and be subject to obligations that are different from, or in addition to, the benefits received by Steel Connect’s stockholders generally. The primary benefits of the Merger to the Parent Group Members, based on their ownership of all the equity interests in Parent,

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include their indirect interest in Steel Connect’s potential future earnings and growth which, if they successfully execute their business strategies, could be substantial. Additionally, following the Merger, Steel Connect will be a private company, and as such will be relieved of the burdens imposed on companies with publicly traded equity, including the requirements and restrictions on trading that Steel Connect’s directors, officers and beneficial owners of more than 10% of the outstanding shares of Common Stock face as a result of the provisions of Section 16 of the Exchange Act. Finally, as a wholly owned subsidiary of Parent, the Company may be in a position to better utilize its deferred tax assets.

The primary detriments of the Merger to the Parent Group Members include the fact that all of the risk of any possible decrease in Steel Connect’s earnings, growth or value following the Merger will be borne by Parent. Additionally, the investment by the Parent Group Members in Parent and Steel Connect will not be liquid, with no public trading market for such securities.

In connection with the Merger, certain members of Steel Connect’s management will receive benefits and be subject to obligations that may be different from, or in addition to, the benefits and obligations of Steel Connect’s stockholders generally, as described in more detail under “Special Factors — Interests of Steel Connect’s Directors and Executive Officers in the Merger” beginning on page 53. Those incremental benefits are expected to include, among others, certain executive officers continuing as executive officers of the surviving corporation.

Our Common Stock is currently registered under the Exchange Act and quoted on Nasdaq under the symbol “STCN.” As a result of the Merger, Steel Connect will be a wholly owned by Parent and there will be no public market for Steel Connect’s shares. After the Merger, the shares of Common Stock will cease to be listed on Nasdaq and price quotations with respect to sales of shares of Common Stock in the public market will no longer be available. In addition, registration of the shares of Common Stock under the Exchange Act will be terminated.

At the Effective Time, the Certificate of Incorporation and the Bylaws of Steel Connect shall continue to be the certificate of incorporation and bylaws of Steel Connect following the Merger until thereafter amended in accordance with their respective terms and the DGCL.

Projected Financial Information

Our management prepares projections with respect to the Company’s future financial performance as part of its ongoing management of the business. The Company does not, as a matter of course, make available to the public future financial projections due to the inherent uncertainty of the underlying assumptions and estimates. However, the Company is including in this proxy statement a summary of certain unaudited prospective financial and operating information that was prepared by our management in connection with discussions regarding the proposed transaction and made available to the Board from time to time, to the Special Committee, to Houlihan Lokey in connection with the Special Committee’s consideration of the Company’s stand-alone prospects and potential strategic transactions available to the Company, as well as, to the Parent Parties. The inclusion of the below information should not be regarded as an indication that any of the Special Committee, Steel Connect, the Parent Parties, Houlihan Lokey or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future results.

The unaudited prospective financial information prepared by management consists of (a) long-term financial projections for ModusLink for each of the fiscal years 2022 through 2025, which were prepared by ModusLink management in consultation with management of Steel Connect in February 2021 and updated by ModusLink management in May 2022 with respect to fiscal year 2022 based on ModusLink’s budgeting process and year-to-date performance through April 2022 (the “ModusLink Projections”), (b) corporate expense projections for each of the fiscal years 2022 through 2025, which were prepared by Steel Connect management and updated by Steel Connect management in May 2022 to reflect savings opportunities identified following the disposition of IWCO (the “Corporate Expense Projections”), and (c) estimates of taxable income and assumptions for the utilization of our net operating losses (“NOLs”) that were prepared by Steel Connect management (the “NOL Projections” and, together with the ModusLink Projections and the Corporate Expense Projections, the “Projections”).

The Projections were prepared without giving effect to the Merger, including the impact of negotiating or executing the Merger, the expenses that may be incurred in connection with consummating the Merger, the potential synergies that may be achieved as a result of the Merger, or the effect of any business or strategic decision or action that has been or will be taken as a result of the Merger Agreement having been executed.

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The accompanying Projections were not prepared with a view toward public disclosure or with a view toward compliance with the published guidelines established by the SEC or the American Institute of Certified Public Accountants for preparation or presentation of prospective financial information, generally accepted accounting principles (“GAAP”), but, in the view of Steel Connect’s management, were prepared on a reasonable basis, reflected the best available estimates and judgments at the time of preparation, and presented as of the time of preparation, to the best of management’s knowledge and belief, the expected course of action and the expected future financial performance of Steel Connect and its subsidiaries on a stand-alone basis as described above and subject to the assumptions and limitations described in this section. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this proxy statement are cautioned not to place undue reliance on the Projections. Although Steel Connect’s management believes there is a reasonable basis for the Projections, the Company cautions stockholders that future results could be materially different from the Projections. The Projections were made available to the Special Committee and its financial advisor, Houlihan Lokey, and are the projections used by Houlihan Lokey in connection with its financial analyses and opinion as described in “Special Factors — Opinion of Houlihan Lokey Capital, Inc., Financial Advisor to the Special Committee,” beginning on page 34. This summary of the Projections is not being included in this proxy statement to influence your decision whether to vote for the Merger Proposal, but because these Projections were made available to the Special Committee, Houlihan Lokey and the Board for purposes of considering and evaluating the Merger and the Merger Agreement as discussed above in “Special Factors — Background of the Merger” beginning on page 17. Neither the Company’s independent registered public accounting firm, BDO USA, LLP, nor any other independent accountants have examined, compiled or performed any procedures with respect to the projected financial information or any amounts derived therefrom or built thereupon and, accordingly, they have not expressed any opinion or given any form of assurance on the projected financial information or their achievability and assume no responsibility for, and disclaim any association with, the prospective financial information.

The Projections are subject to estimates and assumptions in many respects and, as a result, subject to interpretation. While presented with numerical specificity, the Projections are based upon a variety of estimates and assumptions that are inherently uncertain, though considered reasonable by Steel Connect’s management as of the date of their preparation. These estimates and assumptions may prove to be inaccurate for any number of reasons, including general economic conditions, competition and the risks discussed in this proxy statement under the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 65. See also “Where You Can Find More Information” beginning on page 127. The Projections also reflect assumptions as to certain business decisions that are subject to change. Because the Projections were developed for the Company on a stand-alone basis without giving effect to the Merger, they do not reflect any synergies that may be realized as a result of the Merger or any changes to the Company’s operations or strategy that may be implemented after completion of the Merger. There can be no assurance that the prospective results will be realized or that actual results will not be significantly higher or lower than estimated. Since the unaudited prospective financial information covers multiple years, that information by its nature becomes less predictive each successive year.

The Projections contain certain non-GAAP financial measures that Steel Connect believes are helpful in understanding its past financial performance and future results. Steel Connect management regularly uses a variety of financial measures that are not prepared in accordance with GAAP, including Adjusted EBITDA (defined as net income (loss) from continuing operations excluding net charges related to interest income, interest expense, income tax expense, depreciation, amortization of intangible assets, strategic consulting and other related professional fees, executive severance and employee retention, restructuring and restructuring-related expenses, (gain) loss on sale of long-lived assets, impairment of long-lived assets, impairment of goodwill, unrealized foreign exchange (gains) losses, net, other non-cash (gains) losses, net and other non-recurring and one-time items) and Adjusted EBIT (defined as earnings before the deduction of interest expenses and taxes, as adjusted for interest income, interest expense, income tax expense, strategic consulting and other related professional fees, executive severance and employee retention, restructuring and restructuring-related expenses, (gain) loss on sale of long-lived assets, impairment of long-lived assets, impairment of goodwill, unrealized foreign exchange (gains) losses, net, other non-cash (gains) losses, net and other non-recurring and one-time items) for forecasting, budgeting and measuring operating performance. The non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures.

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The Company believes that providing these non-GAAP measurements is useful, as these measures provide important supplemental information of our performance and permit management to evaluate the operating performance of our business. The Company uses Adjusted EBITDA and Adjusted EBIT in internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to the Board, determining a component of certain incentive compensation for executive officers and other key employees based on operating performance, determining compliance with certain covenants in the Company’s credit facility, and evaluating short-term and long-term operating trends in our core business segments.

The Company believes that these non-GAAP financial measures assist in providing an enhanced understanding of our underlying operational measures to manage our core businesses, to evaluate performance compared to prior periods and the marketplace, and to establish operational goals. Further, the Company believes that these non-GAAP financial adjustments are useful because they allow evaluation of the effectiveness of the methodology and information used by the Company’s management in our financial and operational decision-making. These non-GAAP financial measures should not be considered in isolation or as a substitute for financial information provided in accordance with U.S. GAAP. These non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies.

Some of the limitations of Adjusted EBITDA and Adjusted EBIT include:

• Adjusted EBITDA and Adjusted EBIT do not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA and Adjusted EBIT do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

• Adjusted EBITDA and Adjusted EBIT do not reflect our tax expense or the cash requirements to pay our taxes;

• Adjusted EBITDA and Adjusted EBIT do not reflect historical capital expenditures or future requirements for capital expenditures or contractual commitments;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA and Adjusted EBIT do not reflect any cash requirements for such replacements; and

• other companies in our industry may calculate Adjusted EBITDA and Adjusted EBIT differently, limiting their usefulness as comparative measures.

The non-GAAP financial measures used in the Projections were relied upon by Houlihan Lokey for purposes of its financial analyses and opinion and by the Special Committee in connection with its consideration of the Merger. Financial measures provided to a financial advisor are excluded from the definition of non-GAAP financial measures and, therefore, are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure.

None of Steel Connect or any of its affiliates, advisors, officers, directors or other representatives can provide any assurance that actual results will not differ from the Projections, and none of them undertakes any obligation to update, or otherwise revise or reconcile, the Projections to reflect circumstances existing after the date the Projections were generated or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the Projections, as applicable, are shown to be in error. Except as required by applicable securities laws, Steel Connect does not intend to make publicly available any update or other revision to the Projections, even in the event that any or all assumptions are shown to be in error. Steel Connect has made publicly available its actual results of operations for the year ended July 31, 2021 in its 2021 Annual Report, for the quarterly period ended October 31, 2021 on Steel Connect’s Quarterly Report on Form 10-Q filed with the SEC on December 13, 2021, for the quarterly period ended January 31, 2022 on Steel Connect’s Quarterly Report on Form 10-Q filed with the SEC on March 17, 2022 and for the quarterly period ended April 30, 2022 on Steel Connect’s Quarterly Report on Form 10-Q filed with the SEC on June 14, 2022. None of Steel Connect

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or its affiliates, advisors, officers, directors or other representatives has made or makes any representation to any Steel Connect stockholder or other person regarding the ultimate performance of Steel Connect or its subsidiaries compared to the information contained in the Projections or that forecast results will be achieved. Steel Connect has made no representation to the Parent Parties, in the Merger Agreement or otherwise, concerning the Projections.

The Projections do not take into account any circumstances or events occurring after the date they were prepared.

The following presents the components of the Projections in summary form:

	ModusLink Projections
	dollars in millions
Fiscal Year Ending July 31,	2022E			2023E			2024E			2025E
Revenue	$	201.0		$	240.3		$	249.5		$	259.3
Growth %		-11.1	%		19.5	%		3.8	%		3.9	%
Cost of materials		(89.2	)		(116.8	)