SCHEDULE: Star Equity Insider Boosts Common Stock Stake to 27.1%

Jeffrey E. Eberwein exchanged preferred stock for 287,631 common shares, increasing his beneficial ownership in Star Equity Holdings to 27.1%.

Summary

• Jeffrey E. Eberwein, a significant shareholder, increased his beneficial ownership in Star Equity Holdings, Inc. to 1,033,069 shares of common stock, representing 27.1% of the class.
• This increase resulted from a Securities Exchange Agreement dated December 8, 2025, where Mr. Eberwein purchased 287,631 common shares at $10.43 per share.
• The consideration for these common shares was the transfer of 320,855 shares of the Issuer's 10.0% Series A Cumulative Perpetual Preferred Stock back to the company.
• The aggregate purchase price for the 1,033,069 common shares beneficially owned by Mr. Eberwein is approximately $21,426,901, excluding brokerage commissions.
• Mr. Eberwein also continues to own 810,217 shares of the Issuer's 10% Series A Cumulative Perpetual Preferred Stock after the exchange.
• The percentage of shares owned is based on 3,810,694 shares outstanding, which includes 3,761,244 shares outstanding as of September 18, 2025, and 49,450 immediately exercisable warrants attributed to Mr. Eberwein.

Sentiment

Score: 7

Explanation: The increased common stock ownership by a significant insider, coupled with the company repurchasing preferred stock, generally signals confidence and a potentially healthier capital structure. The exchange of preferred for common indicates a belief in equity upside.

Positives

• Increased insider ownership by a significant shareholder, Jeffrey E. Eberwein, to 27.1% of common stock, potentially signaling strong confidence in the company's future.
• The company repurchased 320,855 shares of its 10.0% Series A Cumulative Perpetual Preferred Stock, which could reduce future dividend obligations and improve capital structure.

Negatives

• The transaction involved an exchange of preferred stock for common stock, which could be interpreted as Mr. Eberwein converting a fixed-income security into a more volatile equity position, indicating a shift in risk appetite.
• The implied preferred stock price in the exchange was $9.35 per share, which is below its par value of $0.001, though this is the agreed-upon exchange value.

Risks

• The filing does not explicitly detail general company risks, but the nature of the transaction (converting preferred to common) shifts Mr. Eberwein's personal investment risk profile towards greater equity exposure.

Future Outlook

The filing does not contain specific forward-looking statements or guidance regarding the company's future performance or strategic direction, focusing solely on the change in beneficial ownership.

Management Comments

• The parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above written.

Industry Context

This filing primarily details an insider ownership change and does not provide sufficient information to analyze broader industry trends or competitive landscape. However, increased insider stakes can sometimes be viewed positively by the market as a sign of confidence.

Related Party Transactions

• Jeffrey E. Eberwein, a significant shareholder, entered into a Securities Exchange Agreement with Star Equity Holdings, Inc. to exchange preferred stock for common stock.

Stakeholder Impact

• Shareholders: Increased common stock ownership by a key insider may be viewed positively, potentially signaling confidence. The reduction in preferred stock could reduce future dividend obligations, potentially benefiting common shareholders in the long term.
• Creditors: The reduction in preferred stock could slightly improve the company's capital structure, potentially seen as a positive by creditors.

Next Steps

• The 8,918 restricted shares granted on September 15, 2025, under the Issuer's 2009 Incentive Stock and Awards Plan, will vest upon the anniversary of the Restricted Share Grant Date.

Key Dates

Recommendation

The filing indicates a significant insider, Jeffrey E. Eberwein, has increased his common stock ownership to 27.1% through an exchange of preferred shares. This move suggests strong confidence in the company's future equity performance and a willingness to take on more equity risk. Additionally, the company's repurchase of preferred stock could be seen as a positive step for capital structure management. While this insider activity is a positive signal, the filing does not provide broader financial or operational updates to warrant a 'buy' recommendation without further analysis of the company's fundamentals and market conditions. Therefore, a 'hold' recommendation is appropriate, acknowledging the positive insider sentiment while awaiting more comprehensive company performance data.

Keywords

Star Equity Holdings, Jeffrey E. Eberwein, Schedule 13D, Insider Ownership, Common Stock, Preferred Stock, Securities Exchange Agreement, Equity Stake, Shareholder Activity