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

~~If we cannot provide quality technical and applications support, we could lose customers and our business and prospects will suffer.~~

The placement of our products and the introduction of our technology at new customer sites requires the services of highly trained technical support personnel. Hiring technical support personnel is very competitive in our industry due to the limited number of people available with the necessary scientific and technical backgrounds and ability to understand our technology at a technical level. If we are unable to attract, train or retain the number of highly qualified technical services personnel that our business needs, our business and prospects will suffer.

Our long-term results depend upon our ability to improve existing products and services and develop, introduce, and market new products and services successfully.

Our business is dependent on the continued improvement of our existing products and services and our development of new products and services utilizing our current or other potential future technology. As we introduce new products and services or refine, improve, or upgrade versions of existing products and services, we cannot predict the level of market acceptance or the amount of market share these products and services will achieve, if any. We cannot ~~assure you~~be certain that we will not experience material delays in the introduction of new products or services in the future.

We generally sell our products and services in industries that are characterized by rapid technological changes, frequent new product introductions, and changing industry standards. If we do not develop new products and services and product enhancements based on technological innovation on a timely basis, our products and services may become obsolete over time and our revenues, cash flow, profitability, and competitive position may suffer. Even if we successfully innovate and develop new products, services and product enhancements, we may incur substantial costs in doing so, and our profitability may suffer.

We may face risks associated with launching new products and services. If we encounter development or manufacturing challenges or discover errors during our product development cycle, the product launch dates of new products and services may be delayed. The expenses or losses associated with unsuccessful product development or launch activities or lack of market acceptance of our new products and services could adversely affect our business or financial condition.

~~Our ability to protect our intellectual property and proprietary technology through patents and other means is uncertain.~~

We rely on patent protection as well as trademark, copyright, trade secret and other intellectual property rights protection and contractual restrictions to protect our proprietary technologies, all of which provide limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage. Our success depends, in part, on our

ability to protect our proprietary rights to the technologies used in our products. If we fail to protect and/or maintain our intellectual property, third parties may be able to compete more effectively against us, we may lose our technological or competitive advantage, and/or we may incur substantial litigation costs in our attempts to recover or restrict use of our intellectual property.

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

To the extent our intellectual property offers inadequate protection, or is found to be invalid or unenforceable, we would be exposed to a greater risk of direct or indirect competition. If our intellectual property does not provide adequate coverage of our competitors’ products, our competitive position could be adversely affected, as could our business.

The measures that we use to protect the security of our intellectual property and other proprietary rights may not be adequate, which could result in the loss of legal protection for, and thereby diminish the value of, such intellectual property and other rights or we may need to enter into costly license agreements in the future.

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

If we are sued for infringing intellectual property rights of third parties, it would be costly and time consuming, and an unfavorable outcome in that litigation could have a material adverse effect on our business.

Our success also depends on our ability to develop, manufacture, market and sell our products and perform our services without infringing the proprietary rights of third parties. Numerous U.S. issued patents and pending patent applications owned by third parties exist in the fields in which we are developing products and services. As part of a business strategy to impede our successful commercialization and entry into new markets, competitors may allege that our products and/or services infringe their intellectual property rights.

We could incur substantial costs and divert the attention of our management and technical personnel in defending ourselves against claims of infringement made by third parties. Any adverse ruling by a court or administrative body, or perception of an adverse ruling, may have a material adverse impact on our ability to conduct our business and our finances. Moreover, third parties making claims against us may be able to obtain injunctive relief against us, which could block our ability to offer one or more products or services and could result in a substantial award of damages against us. Intellectual property litigation can be very expensive, and we may not have the financial means to defend ourselves.

Because patent applications can take many years to issue, there may be pending applications, some of which are unknown to us, that may result in issued patents upon which our products or proprietary technologies may infringe. Moreover, we may fail to identify issued patents of relevance or incorrectly conclude that an issued patent is invalid or not infringed by our technology or any of our products.

Our issued patents could be found invalid or unenforceable if challenged in court, at the USPTO or other administrative agency, or in other lawsuits which could have a material adverse impact on our business.

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

Competitors may attempt to challenge or invalidate our patents, or may be able to design alternative techniques or devices that avoid infringement of our patents that have issued or that may issue in the future, or develop products with functionalities that are comparable to ours. In the event a competitor infringes upon our patent or other intellectual property rights, litigation to enforce our intellectual property rights or to defend our patents against challenge, even if successful, could be expensive and time consuming and could require significant time and attention from our management. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents against challenges from others.

An adverse result in any such litigation proceedings could put one or more of our patents at risk of being invalidated, being found to be unenforceable, and/or being interpreted narrowly and could impact the validity or enforceability positions of our other patents. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, an adverse outcome in such litigation or proceedings may expose us to loss of our proprietary position, expose us to significant liabilities, or require us to seek licenses that may not be available on commercially acceptable terms, if at all.

We may make financial investments in other businesses that may lose value.

As we look for the best ways to deploy our capital and maximize our returns for our businesses and stockholders, we may make financial investments in other businesses or processes for purposes of enhancing our supply chain, creating financial returns, strategic developments, or other purposes. These investments may be speculative in nature, and there is no guarantee that we will experience a financial return and we may lose our entire principal balance if not successful.

Our goodwill and other long-lived assets are subject to potential impairment that could negatively impact our earnings.

A significant portion of our assets consists of goodwill and other long-lived assets, the carrying value of which may be reduced if we determine that those assets are impaired. At December 31, ~~2021,~~2023, goodwill and net intangible assets represented ~~$21.1~~$17.0 million, or ~~31.0%~~22.5% of our total assets, and at December 31, ~~2020,~~2022, goodwill and net intangible assets represented ~~$26.4~~$17.8 million, or ~~29.6%~~24.3% of our total assets. In addition, net property and equipment assets totaled ~~$8.9~~$7.8 million and ~~$9.8~~$5.7 million, or ~~13.1%~~10.4% and ~~10.9%~~7.7%, respectively, of our total assets at those dates. If actual results differ from the assumptions and estimates used in our goodwill and long-lived asset valuation calculations, we could incur impairment charges, which could negatively impact our earnings.

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

We recorded anno impairment loss ~~of $3.4 million associated with~~during the ~~impairment assessment of the KBS reporting unit as of~~years ended December 31, ~~2021~~2023 and ~~an impairment loss of $0.4 million associated with the impairment assessment of the EBGL reporting unit as of December 31, 2020.~~2022. See Note 2. Basis of Presentation and Significant Accounting Policies, and Note 7. Goodwill, within the notes to our accompanying consolidated financial statements for further discussion regarding goodwill and long-lived assets.

If KBS is unable to maintain or establish its relationships with independent dealers and contractors who sell its homes, KBS revenue could decline.

KBS sells residential homes through a network of independent dealers and contractors. As is common in the modular home industry, KBS’s independent dealers may also sell homes produced by competing manufacturers and can cancel their relationships with KBS on short notice. In addition, these dealers may not remain financially solvent, as they are subject to industry, economic, demographic and seasonal trends similar to those faced by KBS. If KBS is not able to maintain good relationships with its dealers and contractors or establish relationships with new solvent dealers or contractors, KBS’s revenue could decline.

Due to the nature of our business, many of our expenses are fixed costs and if there are decreases in demand for products, it may adversely affect operating results.

Many of our expenses, particularly those relating to properties, capital equipment, and certain manufacturing overhead items, are fixed in the short term. Reduced demand for products causes fixed production costs to be allocated across reduced production volumes, which may adversely affect gross margins and profitability.

Due to the nature of the work we and our subsidiaries perform, we may be subject to significant liability claims and disputes.

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

Rising inflation and interest rates could negatively impact our revenues, profitability and borrowing costs. In addition, if our costs increase and we are not able to correspondingly adjust our commercial relationships to account for this increase, our net income would be adversely affected, and the adverse impact may be material.

Inflation rates in the U.S. recently increased to a 40-year high before retreating in the latter part of 2023. Increased inflation may result in decreased demand for our products, increased operating costs (including our labor costs), reduced liquidity, and limitations on our ability to access credit or otherwise raise debt and equity capital. In addition, the United States Federal Reserve has raised, and may again raise, interest rates in response to concerns about inflation. Increases in interest rates have had, and could continue to have, a material impact on our borrowing costs. In an inflationary environment, we may be unable to raise the sales prices of our products at or above the rate at which our costs increase, which could reduce our profit margins and have a material adverse effect on our financial results and net income. We also may experience lower than expected sales if there is a decrease in spending on products in our industry in general or a negative reaction to our pricing. A reduction in our revenue would be detrimental to our profitability and financial condition and could also have an adverse impact on our future growth.

Risks Related to ~~our~~ Indebtedness

~~On March 29, 2019, we and certain of~~Any indebtedness incurred by the Healthcare subsidiaries entered into a Loan and Security Agreement with SNB (the “SNB Loan Agreement”). The SNB Loan Agreement is a five-year revolving credit facility (maturing in March 2024), which, as amended, has a maximum credit amount of $20 million (the “SNB Credit Facility”). As of December 31, 2021, our floating rate under this facility was 2.60%. On January 31, 2020, we and certain of our Investments subsidiaries entered into a Loan and Security Agreement with Gerber (as amended, the “Star Loan Agreement”), which provides for a credit facility with borrowing availability of up to $2.5 million, bearing interest at the prime rate plus 3.5% per annum, and matures on January 1, 2025, unless terminated in accordance with the terms therein (the “Star Loan”). On January 31, 2020, we and certain of our Construction subsidiaries entered into a Loan and Security Agreement with Gerber (the “EdgeBuilder Loan Agreement”), which provides for a credit facility with borrowing availability of up to $3.0 million, bearing interest at the prime rate plus 2.75% per annum, and matures on January 1, 2023, subject to annual automatic extensions (the “EdgeBuilder Loan”). The credit facility under the Loan and Security Agreement, dated February 23, 2016, by and among us, KBS, ATRM, and Gerber (as amended, the “KBS Loan Agreement”) provides for a revolving credit facility of up to $4.0 million, bearing interest at the prime rate plus 2.75%, that matures on February 22, 2023, subject to automatic extension for an additional year unless terminated. The SNB Loan Agreement, Star Loan Agreement, EdgeBuilder Loan Agreement and KBS Loan Agreement are collectively referred to as the “Company Loan Agreements.”

~~Our indebtedness~~Company could restrict our operations and make us more vulnerable to adverse economic conditions.

~~Our~~Any indebtedness we incur in the future could have important consequences for us and our stockholders. For example, the SNB Loan Agreement requires a balloon payment at the termination of the facility in March 2024, which payment may require us to dedicate a substantial portion of our cash flow from operations to this future payment if we feel we cannot be successful in our ability to refinance in the future, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, and acquisitions, and for other general corporate purposes. In addition, ourOur indebtedness could:

•increase our vulnerability to adverse economic and competitive pressures in our industry;

•place us at a competitive disadvantage compared to our competitors that have less debt;

•limit our flexibility in planning for, or reacting to, changes in our business and our industry; and

•limit our ability to borrow additional funds on terms that are acceptable to us or at all.

The Company Loan Agreements governing our indebtedness contain restrictive covenants that restrict our operating flexibility and require that we maintain specified financial ratios. If we cannot comply with these covenants, we may be in default under one or more of the Company Loan Agreements.

The Company Loan Agreements governing our indebtedness contain restrictions and limitations on our ability to engage in activities that may be in our long-term best interests. The Company Loan Agreements contain affirmative and negative covenants that limit and restrict, among other things, our ability to:

•~~incur additional debt;~~

•~~sell assets;~~

•~~incur liens or other encumbrances;~~

•~~make certain restricted payments and investments;~~

•~~acquire other businesses; and~~

•~~merge or consolidate.~~

The SNB Loan Agreement limits our ability to pay dividends and to redeem our equity securities if such dividend or redemption would result in our non-compliance with the financial covenants in the SNB Loan Agreement, there is insufficient borrowing availability under the SNB Loan Agreement, or if there is a default or event of default under the SNB Loan Agreement that has occurred and is continuing. In addition, the Company Loan Agreements include explicit restrictions on the payment of dividends and distributions to us, which could limit our ability to pay dividends. We may, therefore be required to reduce or eliminate our dividends, if any, including on our preferred stock (if any outstanding), and/or may be unable to redeem shares of our preferred stock (if any outstanding) until compliance with such financial covenants can be met.

The Company Loan Agreements contain various financial covenants that, going forward, we or our subsidiaries may not have the ability to meet. The Company Loan Agreements also contain various other affirmative and negative covenants regarding, among other things, the performance of our business, capital allocation decisions made by us and our subsidiaries, or events beyond our control.

Our failure to comply with our covenants and other obligations under the Company Loan Agreements may result in an event of default thereunder. A default, if not cured or waived, may permit acceleration of our indebtedness. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness (together with accrued interest and fees), or that we will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all. This could have serious consequences to our financial condition, operating results, and business, and could cause us to become insolvent or enter bankruptcy proceedings, and stockholders may lose all or a portion of their investment because of the priority of the claims of our creditors on our assets.

~~Substantially all of our assets (including the assets of our subsidiaries) have been pledged to lenders as security for our indebtedness under the Company Loan Agreements.~~

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

The inability of our Company, KBS, EdgeBuilder or any of our other subsidiaries to comply with applicable financial covenants under the Company Loan Agreements could have a material adverse effect on our financial condition.

As of December 31, 2021, our last test date, KBS was not in compliance with the bi-annual financial covenants under the KBS Loan Agreement, which required no net annual post-tax loss and certain minimum leverage ratios as of the test date. We obtained waivers from Gerber, our lender, for these financial covenant violations. While Gerber has historically provided us with timely waivers, there can be no assurance that we will be able to receive waivers for any financial covenant violations in the future, or that we will comply with all financial covenants in the future.

If we or any of our subsidiaries fail to comply with any applicable financial covenants under the Company Loan Agreements to which we are a party, or if there is otherwise an event of default under the Company Loan Agreements by a borrower, the borrowers’ obligations thereunder may (subject to any applicable cure periods) become immediately due and payable and the applicable lender(s) may demand the repayment of the credit facilities amount outstanding and any unpaid interest thereon.

If we are unable to generate or borrow sufficient cash to make payments on our indebtedness, our financial condition would be materially harmed, our business could fail, and stockholders may lose all of their investment.

~~Our~~To the extent we incur indebtedness in the future, our ability to make scheduled payments on or to refinance our obligations will depend on our financial and operating performance, which will be affected by economic, financial, competitive, business, and other factors, some of which are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations to service our indebtedness or to fund our other liquidity needs. If we are unable to meet our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our indebtedness on or before maturity or sell certain of our assets. We cannot assure you that we will be able to restructure or refinance any of our indebtedness on commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.

~~Increases in interest rates could adversely affect our results from operations and financial condition.~~

The SNB Loan Agreement and Star Loan Agreement allow for amounts borrowed thereunder to be subject to a floating interest rate which may change with market interest rates. An increase in prevailing interest rates would have an effect on the interest rates charged on our variable rate debt, which rise and fall upon changes in interest rates. If prevailing interest rates or other factors result in higher interest rates, the increased interest expense would adversely affect our cash flow and our ability to service our indebtedness.

Risks Related to our Common Stock and our Company Preferred Stock

The market price of our common stock may be volatile, and the value of your investment could decline significantly.

The market price of our common stock has been, and we expect it to continue to be, volatile. The prices at which our shares of common stock trade depend upon a number of factors, including our historical and anticipated operating results, our financial situation, announcements of new products by us or our competitors, history of timely dividend payments, our ability or inability to raise the additional capital we may need and the terms on which we raise it, and general market and economic conditions. Some of these factors are beyond our control. Broad market fluctuations may lower the market price of our common stock and affect the volume of trading in our stock, regardless of our financial condition, results of operations, business, or prospects. It is impossible to assure you that the market price of our shares of common stock will not fall in the future.

Our common stock has a low trading volume and shares available under our equity compensation plans could affect the trading price of our common stock.

Our common stock historically has had a low trading volume. Any significant sales of our common stock may cause volatility in our stock price. We also have registered shares of common stock that we may issue under our employee benefit plans or from our treasury stock. Accordingly, these shares can be freely sold in the public market upon issuance, subject to restrictions under the securities laws. If any of these stockholders, or other selling stockholders, cause a large number of securities to be sold in the public market without a corresponding demand, the sales could reduce the trading price of our common stock. One or more stockholders holding a significant amount of our common stock might be able to significantly influence matters requiring approval by our stockholders, possibly including the election of directors and the approval of mergers or other business combination transactions.

If we cannot continue to satisfy the Nasdaq Global Market continued listing standards and other Nasdaq rules, our common stock could be delisted, which would harm our business, the trading price of our common stock, our ability to raise additional capital and the liquidity of the market for our common stock.

Our common stock is currently listed on the Nasdaq Global Market. To maintain the listing of our common stock on the Nasdaq Global Market, we are required to meet certain listing requirements, including, among others, either: (i) a minimum closing bid price of $1.00 per share, a market value of publicly held shares (excluding shares held by our executive officers, directors and 10% or more stockholders) of at least $5.0 million and stockholders’ equity of at least $10 million; or (ii) a minimum closing bid price of $1.00 per share, a market value of publicly held shares (excluding shares held by our executive officers, directors and 10% or more stockholders) of at least $15.0 million and total assets of at least $50.0 million and total revenue of at least $50.0 million (in the latest fiscal year or in two of the last three fiscal years).

There is no assurance that we will be able to maintain compliance with the minimum closing price requirement. In the event that we fail to maintain compliance with Nasdaq listing requirements for 30 consecutive trading days, Nasdaq may send us a notice stating we will be provided a period of 180 days to regain compliance with the minimum bid requirement or else Nasdaq may make a determination to delist our common stock or grant a transfer of our listing to the Nasdaq Capital Market, wherein we would be provided another 180 days to regain compliance. On January 19, 2023 we received a letter stating that we had failed to meet the closing bid price for the last 30 consecutive business days. On June 8, 2023, we received a letter from Nasdaq advising we had regained compliance with the minimum bid price requirement. On February 14, 2024, we received an additional letter from Nasdaq stating that we had failed to meet the closing bid requirement for the last 30 consecutive business days. If our common stock were to be delisted from Nasdaq and was not eligible for quotation or listing on another market or exchange, trading of our common stock could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline.

A possible “short squeeze” due to a sudden increase in demand of our common stock that largely exceeds supply may lead to price volatility in our common stock.

Investors may purchase our common stock to hedge existing exposure in our common stock or to speculate on the price of our common stock. Speculation on the price of our common stock may involve long and short exposures. To the extent aggregate short exposure exceeds the number of shares of our common stock available for purchase in the open market, investors with short exposure may have to pay a premium to repurchase our common stock for delivery to lenders of our common stock. Those repurchases may in turn, dramatically increase the price of our common stock until investors with short exposure are able to purchase additional common shares to cover their short position. This is often referred to as a “short squeeze.” A short squeeze could lead to volatile price movements in our common stock that are not directly correlated to the performance or prospects of our Company and once investors purchase the shares of common stock necessary to cover their short position the price of our common stock may decline.

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Payment of dividends on our common stock is prohibited unless we have declared and paid (or set apart for payment) full accumulated dividends on the Series A Preferred Stock, which also has a significant liquidation value.

Unless full cumulative dividends on our preferred stock have been, or contemporaneously are, declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment for all past dividend periods, no dividends (other than a dividend in shares of common stock or other shares of stock ranking junior to the Series A Preferred Stock (as defined herein) as to dividends and upon liquidation) may be declared and paid or declared and set apart for payment on our common stock, nor may any shares of common stock be redeemed, purchased or otherwise acquired for any consideration by us. To the extent dividends are not paid on our preferred stock, cumulative dividends accrue as part of the liquidation value of our preferred stock, which has a liquidation value of $10.00 per share at issuance. Dividends on our preferred stock are payable out of amounts legally available therefor at a rate equal to 10.0% per annum per $10.00 of stated liquidation preference per share, or $1.00 per share of our preferred stock per year. Dividends on our preferred stock are only payable in cash. As of December 31, ~~2021,~~2023, there were 1,915,637 shares of our Series A Preferred Stock outstanding.

If we fail to pay dividends on our Series A Preferred Stock for six or more consecutive quarters, holders of our Series A Preferred Stock will be entitled to elect two additional directors to our board of directors.

To the extent dividends are not paid on the Series A Preferred Stock in accordance with their terms, cumulative dividends will accrue as part of the liquidation value of the Series A Preferred Stock. Whenever dividends on any shares of Series A Preferred Stock are in arrears for six or more consecutive quarters, then the holders of those shares together with the holders of all other series of preferred stock equal in rank with the Series A Preferred Stock upon which like voting rights have been conferred and are exercisable, will be entitled to vote separately as a class for the election of a total of two additional directors to our board of directors. Holders of our common stock will not be entitled to vote nofor or against such additional directors.

~~We may not be able to redeem our Series A Preferred Stock upon a Change of Control Triggering Event.~~

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

As a smaller reporting company, we are subject to scaled disclosure requirements that may make it more challenging for investors to analyze and compare our results of operations and financial prospects.

Currently, we are a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act. As a “smaller reporting company,” we are able to provide simplified executive compensation disclosures in our filings and have certain other decreased disclosure obligations in our filings with the SEC, including being required to provide only two years of audited financial statements in annual reports. Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects.

Furthermore, we are a non-accelerated filer as defined by Rule 12b-2 of the Exchange Act, and, as such, are not required to provide an auditor attestation of management’s assessment of internal control over financial reporting, which is generally required for SEC reporting companies under Section 404(b) of the Sarbanes-Oxley Act. Because we are not required to, and have not, had our auditor provide an attestation of our management’s assessment of internal control over financial reporting, a material weakness in internal controls may remain undetected for a longer period.

If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, the price and trading volume of our securities could decline.

The trading market for our securities will be influenced by the research and reports that industry or securities analysts publish about us or our business. We currently have two securities and industry analysts providing research coverage. In the event ifthat any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, or if our ~~clinical trials and~~ operating results fail to meet the expectations of analysts, the price of our securities would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause the price or trading volume of our securities to ~~decline~~

decline.

The protective amendment contained in our Restated Certificate of Incorporation, which is intended to help preserve the value of certain income tax assets, primarily tax net operating loss carryforwards, may have unintended negative effects.

Pursuant to Sections 382 and 383 of the Code, use of our NOLs may be limited by an “ownership change” as defined under Section 382 of the Code and the Treasury Regulations thereunder. In order to protect our significant NOLs, we filed an amendment to our certificate of incorporation (the “Restated Certificate of Incorporation”) (as amended and extended, the “Protective Amendment”) with the Delaware Secretary of State on May 5, 2015. The Protective Amendment was approved by our stockholders at our 2021 Annual Meeting of Stockholders held on October 21, 2021.

The Protective Amendment is designed to assist us in protecting the long-term value of our accumulated NOLs by limiting certain transfers of our common stock. The Protective Amendment’s transfer restrictions generally restrict any direct or indirect transfers of the common stock if the effect would be to increase the direct or indirect ownership of the common stock by any person from less than 4.99% to 4.99% or more of the common stock, or increase the percentage of the common stock owned directly or indirectly by a person owning or deemed to own 4.99% or more of the common stock. Any direct or indirect transfer attempted in violation of the Protective Amendment will be void as of the date of the prohibited transfer as to the purported transferee.

The Protective Amendment also requires any person attempting to become a holder of 4.99% or more of our common stock to seek the approval of our board of directors. This may have an unintended “anti-takeover” effect because our board of directors may be able to prevent any future takeover. Similarly, any limits on the amount of stock that a stockholder may own could have the effect of making it more difficult for stockholders to replace current management. Additionally, because the Protective Amendment may have the effect of restricting a stockholder’s ability to dispose of or acquire our common stock, the liquidity and market value of our common stock might suffer.

Our stockholder rights plan, or “poison pill,” includes terms and conditions which could discourage a takeover or other transaction that stockholders may consider favorable.

On June 2, 2021, stockholders of record at the close of business on that date received a dividend of one right (a “Right”) for each outstanding share of common stock. Each Right entitles the registered holder to purchase one one-thousandth of a share of our Series C Participating Preferred Stock (the “Series C Preferred Stock”, and together with the Series A Preferred Stock, the “Company Preferred Stock”), at a price of $12.00 per one-thousandth of a share of Series C Preferred Stock, subject to adjustment (the “Exercise Price”). The Rights are not exercisable until the Distribution Date referred to below. The description and terms of the Rights are set forth in the Rights Agreement, which has previously been filed as an exhibit to our public reports.

The Rights Agreement imposes a significant penalty upon any person or group that acquires 4.99% or more (but less than 50%) of our then-outstanding common stock without the prior approval of our board of directors. A person or group that acquires shares of our common stock in excess of the applicable threshold, subject to certain limited exceptions, is called an “Acquiring Person.” Any rights held by an Acquiring Person are void and may not be exercised. The Rights will not be exercisable until the earlier of ten days after a public announcement by us that a person or group has become an Acquiring Person and ten business days (or a later date determined by our board of directors) after a person or group begins a tender or an exchange offer that, if completed, would result in that person or group becoming an acquiring person. On the date (if any) that the Rights become exercisable (the “Distribution Date”), each Right would allow its holder to purchase one one-thousandth of a share of Preferred Stock for a purchase price of $12.00. In addition, if a person or group becomes an Acquiring Person after the Distribution Date or already is an Acquiring Person and acquires more shares after the Distribution Date, all holders of Rights, except the Acquiring Person, may exercise their rights to purchase a number of shares of the common stock (in lieu of preferred stock) with a market value of twice the Exercise Price, upon payment of the purchase price.

The Rights will expire on the earliest of (i) June 2, 2024, or such earlier date as of which our board of directors determines that the Rights Agreement is no longer necessary for the preservation of our tax assets, (ii) the time at which the rights are redeemed, (iii) the time at which the rights are exchanged, (iv) the effective time of the repeal of Section 382 of the Code or any successor statute if our board of directors determines that the Rights Agreement is no longer necessary for the preservation of our tax assets, and (v) the first day of our taxable year in which our board determines that no NOLs or other tax assets may be carried forward.

The Rights have certain anti-takeover effects, including potentially discouraging a takeover that stockholders may consider favorable. The Rights will cause substantial dilution to a person or group that attempts to acquire us on terms not approved by the board of directors.

Anti-takeover provisions in our organizational documents and Delaware law may prevent or delay removal of current management or a change in control.

Our Restated Certificate of Incorporation and Bylaws contain provisions that may delay or prevent a change in control, discourage bids at a premium over the market price of our common stock, and adversely affect the market price of our common

stock and the voting and other rights of the holders of our common stock. In addition, as a Delaware corporation, we are subject to Delaware corporate law, including Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder unless certain specific requirements are met as set forth in Section 203. These provisions, alone or together, could have the effect of deterring or delaying changes in incumbent management, proxy contests or changes in control.

We expect to be limited in our ability to utilize net operating loss carryforwards to reduce our future tax liability as a result of our ~~recent Offering.~~January 2022 public offering.

Under Section 382 of the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. We expect that ~~our recent Offering,~~the public offering we closed on January 24, 2022 (the “2022 Public Offering”), alone or in conjunction with other changes in our stock ownership that we cannot control, may result in an “ownership change.” We may also experience ownership changes in the future as a result of strategic transactions or partnerships, equity offerings and other shifts in our stock ownership. As a result, if we earn net taxable income, our ability to use our pre-change NOL carryforwards and other deferred tax assets to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, similar limitations may apply at the state level and there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

~~Risks Related to Our Material Weakness and Restatements~~

~~Material weakness in our internal control over financial reporting could have a significant adverse effect on our business and the price of our common stock.~~

As a public reporting company, we are subject to the rules and regulations established from time to time by the SEC. These rules and regulations require, among other things, that we have, and periodically evaluate, disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow decisions regarding required disclosure. Reporting obligations as a public company are likely to continue to burden our financial and management systems, processes and controls, as well as our personnel.

In addition, as a public company, we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting.

In connection with the preparation of our financial statements for 2021, our management identified a material weakness in our internal control over financial reporting as we do not have a sufficient complement of accounting resources to address complex accounting matters across all operating entities and to allow timely completion of financial reporting and accounting activities, including sufficiently precise management review controls. The material weakness did not result in any material identified misstatements to the financial statements, and there were no material changes to previously released financial results.

ITEM 1B.UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C.CYBERSECURITY

Risk Management and Strategy

We identify and address cybersecurity threats and risks related to our business using an interdisciplinaryapproach that includes assessments primarily by our management, IT team and legal department. To defend against, detect and respond to cybersecurity incidents, we employ a multi-layered approach that has been integrated into our overall risk management systems and processes which includes, among other things: conducting proactive privacy and cybersecurity reviews of systems and applications, auditing applicable data policies, conducting employee training, monitoring emerging laws and regulations related to data protection and information security and continuously improving controls and implementing appropriate changes. The cybersecurity-control principles that form the basis of our cybersecurity program are informed by the National Institute of Standards and Technology Cybersecurity Framework. Our management performs an annual review of third-party service providers’ SOC reports to verify appropriate controls are in place.

In 2023, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our ongoing efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents. Please refer to the risk factor titled “We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could materially harm our business.” in “Risk Factors” in Part I, Item 1A of this Form 10-K for more information on the risks posed to us by cybersecurity threats.

Cybersecurity Governance

Cybersecurity is an important part of our risk management processes and is an area of focus for our board of directors and management. Our board of directors, as a whole, has oversight responsibility for our strategic and operational risks, and ensures that appropriate risk mitigation strategies are implemented by management. Our audit committee assists the board of directors with this responsibility by periodically reviewing and discussing our risk assessment and risk management practices, including cybersecurity risks, with members of our management team, which is responsible for the assessment and management of cybersecurity risks.

In addition, we have retained an external consultant to serve as our internal audit function and to support our cybersecurity risk management and governance practices. Our consultant has substantial experience in cybersecurity risk management and information technology, including security, compliance, systems and programming and reports to our audit committee and our board of directors on any appropriate items.

ITEM 2.PROPERTIES

~~Effective January 1, 2021, we moved our~~Our principal executive offices ~~from Suwanee, GA to~~are in Old Greenwich, ~~CT,~~Connecticut, where we ~~have been leasing 1,344~~lease 2,006 square feet of office ~~space since 2019.~~space.

On the healthcare side, we still maintain a lease for 7,500 square feet of office space in Suwanee, GA. We also lease a 21,300 square foot facility in Poway, CA that houses our Diagnostic Imaging operations. Our Diagnostic Services segment leases approximately 24 small hub locations in the various states in which we operate. These hubs primarily house our fleet of mobile imaging cameras and vans.

In April 2019, our Investments division (through Star Real Estate, ~~"SRE”~~“SRE”) acquired three manufacturing facilities in Maine, which it then leased back to KBS in our ~~construction~~Construction segment. These ~~include KBS’~~included KBS’s 84,800 square foot main production facility in South Paris, ~~ME, as well as~~Maine and a 92,200 square foot manufacturing facility in Oxford, ~~ME, and a 61,900 square foot manufacturing~~Maine. We sold our Waterford, Maine production facility in ~~Waterford, ME.~~June 2023. SeeNote 5. Supplementary Balance Sheet Information for further details.

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We utilize ~~three~~four additional facilities in our construction businesses, related specifically to EBGL. In October 2021, we extended two existing leases, a 10,800 square foot office/sales/showroom space in Oakdale, MNMinnesota and a 34,200 square foot production facility in Prescott, ~~WI.~~Wisconsin. In addition, we entered into a new lease in October 2021 for 22,800 square feet of lumberyard/warehouse space in Hudson, ~~WI.~~Wisconsin. With the BLL acquisition in late 2023, we acquired a fourth facility, a 22,300 square foot lumberyard/warehouse/showroom space in Big Lake, Minnesota. See Note 16. Mergers and Acquisitions for further information.

We believe that we have adequate space for our anticipated needs and that suitable additional space will be available at commercially reasonable prices as needed.

ITEM 3. LEGAL PROCEEDINGS

See Note 9. Commitments and Contingencies, within the notes to our accompanying consolidated financial statements for a summary of any legal proceedings.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock and preferred stock are traded on the ~~NASDAQ~~Nasdaq Global Market under the symbols “STRR” and “STRRP”, respectively.

As of March ~~28, 2022~~7, 2024 there were approximately ~~159~~168 holders of record of our common stock. We believe that the number of beneficial owners is substantially greater than the number of record holders because a large portion of our common stock is held of record through brokerage firms in “street name.”

Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities


Period	Total Number of Shares Purchased During the Period	Average Price Paid Per Share for Period Presented	Total Cumulative Number of Shares Purchased as Part of Publicly Announced Plan (1)	Maximum Number of Shares that May Yet Be Purchased Under the Plan (2)
October 1, ~~2021~~2023 – October 31, ~~2021~~2023	—	—	—	200,000
November 1, ~~2021~~2023 – November 30, ~~2021~~2023	—	—	—	200,000
December 1, ~~2021~~2023 – December 31, ~~2021~~2023	—	—	—	200,000
Total	—	—	—	200,000

(1)On October 31, 2018, our board of directors approved a stock repurchase program that will enable us to repurchase up to 200,000 shares of our common stock from time to time in market or private transactions (the “2018 Buyback Program”). Under the 2018 Buyback Program, we may purchase shares of our common stock through various means, including open market transactions in compliance with Rule 10b-18 under the Exchange Act, privately negotiated transactions, tender offers or any combination thereof. The number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, stock price, trading volume and general market conditions, along with our working capital requirements, general business conditions and other factors. The 2018 Buyback Program has no time limit and may be modified, suspended or terminated at any time by our board of directors. Repurchases under the 2018 Buyback Program will be funded from our existing cash and cash equivalents or future cash flow and equity or debt financings.

(2)As of December 31, ~~2021,~~2023, there were 0no cumulative shares purchased as part of the 2018 Buyback Program and 200,000 shares that may yet be purchased under the 2018 Buyback Program.

Securities Authorized for Issuance Under Equity Compensation Plans

See Item 12. “Security Ownership of Certain Beneficial Owners and Management Related Stockholders Matters” for information with respect to our compensation plans under which equity securities are authorized for issuance.

ITEM 6.[RESERVED]

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ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth previously under the caption “Risk Factors.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited consolidated financial statements and related notes included elsewhere in this report.

Overview

Star Equity ~~has operated as~~is a multi-industry holding company since the acquisition of ATRM Holdings, Inc. (“ATRM”) in September 2019. With that merger, we added two construction businesses and one investment business to what historically had been a pure-play healthcare company. Today, Star Equity is a diversified holding company with two divisions. Our operating ~~businesses in two key industry sectors of the economy, Healthcare and Construction.~~

~~Our Healthcare~~ division ~~which operates as Digirad Health, Inc., (“Digirad Health”) provides products and services~~focuses in the area of nuclear medical imaging with a focus on cardiac health. Digirad Health operates across the United States. The Healthcare business comprises two businesses, Diagnostic Services, which offers imaging services to healthcare providers using a fleet of our proprietary solid-state gamma cameras and Diagnostic Imaging, which manufactures, distributes, and maintains our proprietary solid-state gamma cameras.Construction industry. In addition, we have an Investments division.

Our Construction division is currently made up of three operating ~~businesses,~~businesses: KBS, ~~Builders, Inc. (“KBS”),~~ EdgeBuilder, ~~Inc.,~~ and Glenbrook, ~~Building Supply, Inc—~~with the latter two managed together and referred to jointly as “EBGL”. KBS is based in Maine and manufactures modular buildings, ~~for installation~~typically in the single and multi-family residential segments, servicing principally in the New England market. EBGL is based in the Minneapolis-Saint Paul area and principally serves the Upper ~~Midwest.~~Midwest region. Together, the EBGL businesses manufacture and deliver structural wall panels, primarily for multi-family residential buildings, and other engineered wood-based ~~products as well as~~products. We distribute building materials from two lumberyard locations primarily tofocused on professional builder customers.

~~Currently, our~~Our Investments division ~~is an internally focused unit directly supervised by Star Equity management. This entity~~ currently holds and manages our corporate-owned real estate, ~~which currently includes our three~~including two manufacturing facilities in Maine that are leased to KBS ~~as well as any~~and one manufacturing facility in Minnesota that is leased to Glenbrook. The Investments division also manages internally-funded, concentrated minority investments ~~we make~~ in a number of public companies. It also holds and manages a $7 million promissory note and a $6 million private ~~companies.~~equity stake in TTG Parent LLC, the parent entity of TTG Imaging Solutions, LLC. We acquired these interests in May 2023 as a result of the sale of Digirad Health (see Note 3. Discontinued Operations for further information).

Current Market Conditions

Since the second quarter of 2020, navigating the COVID-19 pandemic has proved to be challenging for the vast majority of businesses across many sectors of the economy. As the vaccine rollout expanded through the second quarter of 2021, we have seen our businesses return substantially to pre-COVID levels. We believe the uncertainty surrounding the pandemic decreased as we are through the fourth quarter of 2021. On the Healthcare side, we see imaging volume increase due to an increase in camera sales, we expect that we will continue to recover from the impact of COVID. In Construction, we expect that continued recovery in employment and a strong housing market will underpin a period of secular growth.

The target market for our Healthcare products and services is comprised of cardiologists, internal medicine physicians, family practice physicians, hospitals, integrated delivery networks, and federal institutions in the United States that perform or could perform a diagnostic imaging procedure or have interest in purchasing diagnostic imaging products. Our diagnostic services businesses currently operate in approximately 25 states. The overriding challenge during 2020 was the drop in imaging volume due to the COVID-19 pandemic. During the twelve months ended December 31, 2021, we have seen a return to a more normal pre-COVID volume of imaging.

The target customers for our Construction division include professional home builders, general contractors, project owners, developers, and design firms. ~~While housing~~Despite a higher interest rate environment, we are continuing to see significant demand ~~and home improvement activity continues to be very strong, supply chain disruptions caused by the COVID-19 pandemic led to a historic increase~~for our products, although there have been some delays in ~~building materials prices during the first half of 2021. While our revenues~~execution as customers finalize project financing. We have benefited from ~~both the robust activity in the housing sector and from price increases that we have~~having implemented ~~our bottom line was negatively impacted in 2021 by this rapid and historic price increase in building materials. While our~~both price increases and ~~changes made to~~margin protection language in our ~~contract terms began to have a positive impact to our bottom line in the second half of 2021, we believe they will have~~contracts and this had a significantly positive effect on our profitability in ~~2022.~~

2023. We noted slower business activity in the second half of 2023 and related lower revenues, but believe this slowdown is temporary. Our sales pipelines continue to indicate strong potential demand for our services, but we can give no assurances as to our ability to compete for these opportunities, or the periods during which successfully negotiated projects will be completed.

Trends and Drivers

The market for diagnostic services and products is highly competitive. Our business, which is focused primarily on the private practice and hospital sectors, continues to face uncertainty in the demand for diagnostic services and imaging equipment, which we believe is due in part to the impactModular Building Institute has estimated that permanent modular construction increased as a percentage of the ~~Deficit Reduction Act on~~construction industry from 2.14% in 2015 to 6.03% as of the ~~reimbursement environment and the 2010 Healthcare Reform laws, as well as general uncertainty~~end of 2022. In turn, in overall healthcare and legislative changes in healthcare, such as the Affordable Care Act. These challenges have impacted, and will likely continue to impact, our operations. We believe that the principal competitive factors in our market include budget availability for our capital equipment, qualifications for reimbursement, pricing, ease-of-use, reliability, and mobility. We have addressed, and will continue to address, these market pressures by modifying our healthcare business models, and by assisting our Healthcare customers in complying with new regulations and requirements.

In our Construction division, we continue to see a greater ~~adoption~~acceptance of offsite or prefab construction in single-family and multi-family residential building projects in our target market. Our modular units and structural wall panels offer builders a number of benefits over traditional onsite or “stick built” construction. These include shorter time to market, higher quality, reduced waste, and potential cost savings, among others. 3D ~~BIM~~modeling software ~~modeling~~ and developments in engineered wood products ~~offers~~offer greater design flexibility for higher-end applications. The need for more affordable housing solutions also presents ~~a great opportunity~~opportunities for the continued growth of factory built housing.

Risks arising from global economic instability and conflicts, wars, and health crises could impact our business. In addition the inflation caused by such events may impact demand for our products and services and our cost to provide products and services.

~~COVID-19 Pandemic~~Discontinued Operations

As discussed in detail in Note 3. Discontinued Operations, we completed the sale of Digirad Health on May 4, 2023, for total aggregate consideration of $40 million, comprised of $27 million in cash, a $7 million promissory note (“Seller Note”), and $6 million in rollover equity in the parent entity of TTG. We ~~continue~~deemed the disposition of Digirad Health, which was our entire Healthcare business unit, to ~~sustain recovery from the economic effects~~represent a strategic shift that will have a major effect on our operations and financial results. As of the COVID-19 pandemic. During the twelve months ended December 31, 2021, we had a $9.3 million increase in Healthcare division revenue, and a $19.1 million increase in Construction division revenue, as compared to the same perioddate of the ~~prior year. The~~accompanying consolidated financial statements, the results of operations of the Healthcare ~~division continued to rebound to more normal levels versus last year~~business unit represent “discontinued operations” in accordance with ~~revenue increasing 18.9% for~~U.S. Generally Accepted Accounting Practices (“GAAP”) (ASC 205-20-45-1B). Therefore, the twelve months ended 2021. Our Construction division grew revenue by 66.2% due to increased output at both KBS and EBGL coupled with pricing increases associated with higher raw materials costs. Nevertheless, the current COVID-19 pandemic continues to impact worldwide economic activity, and the extent to which the COVID-19 pandemic will impact our business will depend on future developments that are highly uncertain and cannot be predicted at this time.

~~Discontinued Operations~~

The DMS Sale Transaction was completed on March 31, 2021, for $18.75 million in cash. After certain adjustments, including a working capital adjustment, we received an immaterial net escrow settlement in January, 2022. Additionally, Mobile Healthcare’s assets and liabilities, as well as the earnings, of ~~December 31, 2020~~the discontinued operation are presented separately ~~presented as held~~in the accompanying consolidated financial statements for ~~sale on~~all periods presented. Unless otherwise noted, discussion

within the ~~audited Consolidated Balance Sheets.~~notes to the consolidated financial statements and this Management’s Discussion and Analysis of Financial Condition and Results of Operations relates to continuing operations.

Goodwill ~~and long-lived asset valuation~~Valuation

We review goodwill for impairment on an annual basis during the fourth quarter, and when events or changes in circumstances indicate that a reduction in the carrying value may not be recoverable. We elected to by-pass the qualitative assessment for all reporting units to estimate whether it is more likely than not that the fair value of each reporting unit was less than its carrying amount. We performedrecognize an impairment ~~analysis by quantitatively comparing the fair value of the reporting unit to the carrying value of the reporting unit, including goodwill. An impairment~~ charge ~~for goodwill is recognized for the amount by which~~if we determine that the carrying value of the reporting unit exceeds its fair value and such loss should not exceed the total goodwill allocated to the reporting unit. No impairment of goodwill was recorded in 2023.

We also review long-lived assets for impairment when events or changes in circumstances indicate that a reduction in the carrying value may not be recoverable. ~~There are numerous~~Certain factors ~~that~~ may cause the fair value of a reporting unit to fall below its carrying amount and/or ~~that may cause~~ the value of long-lived assets to not be ~~recoverable, which~~recoverable. This could lead to the measurement and recognition of long-lived asset impairment ~~charges.~~charges and may cause impairment. These factors include, but are not limited to, significant negative variances between actual and expected financial results, lowered expectations of future financial results, failure to realize anticipated synergies from acquisitions, adverse changes in the business climate, and the loss of key personnel. As of December 31, ~~2021,~~2023, we performed qualitative trigger events ~~analysis and concluded that if~~analyses designed to conclude whether we ~~are not~~were able to achieve projected performance levels ~~future impairments could be possible, which could negatively impact our earnings. Based on the results of this qualitative assessment, we~~and determined that it is more likely than not that long-lived assets were not impaired.

See Note 7. Goodwill, within the notes to our accompanying consolidated financial statements for further information.

~~2021~~2023 Financial Highlights

2023 Revenues were ~~$106.6~~$45.8 million, ~~for the year ended December 31, 2021.~~representing a decrease of $11.4 million or 19.9% versus 2022 Revenues of $57.1 million. This decrease was driven by lower revenues at both KBS and EBGL related to slower business activity, which we believe is temporary.

2023 Gross profit was $11.9 million, representing a decrease of $0.4 million or 3.6% versus 2022 Gross profit of $12.4 million. This decrease was related to lower 2023 revenues and was mitigated by our ability to sustain pricing, while benefiting from commodity and input price stability.

2023 Operating expenses were $16.3 million, representing an increase of ~~$28.4~~$0.4 million or ~~36.3%, compared to the prior year due to the following:~~

•2% versus 2022 total Operating expenses of $15.9 million. The increase of $0.4 million was ~~mainly due to $19.1 million revenue generated~~driven by ~~the Construction division~~increased legal and ~~$9.3 million by the Healthcare division.~~

•Diagnostic Imaging segment revenue increased $4.8 million, or 48.4%, primarily due to an increase in the number of cameras sold, reflecting the continuation of the division’s recovery from the COVID-19 pandemic-related downturn.

•Diagnostic Services segment revenue increased $4.5 million, or 11.5%, primarily due to an increase in scanning service performed, reflecting the continuation of the division’s recovery from the COVID-19 pandemic-related downturn.

Gross profit increased by $1.3 million, or 9.0%, compared to the prior year, mainly due to a $2.3 million increase in the Healthcare division as a result of the continuation of the division’s recovery from the COVID-19 pandemic-related downturn, offset by a $1.0 million decrease in Construction division gross profit due to an adverse impact of a rapid and historic rise in raw materials costs in the first half of the year. For the Construction division, we significantly increased pricing levels during 2021 to offset these higher input costs and expect to continue to see further benefit from these increases on our margins in 2022.

~~Total operating~~outside services expenses increased $5.6 million, or 26.6%, for the year ended December 31, 2021 compared to the prior year, primarily due to additional $4.0 million sales, marketing and general and administrative expenses. Additionally, there was a $2.9 million increase related to ~~an impairment of goodwill from the Construction division, which was offset by a $0.8 million gain on~~ the sale of ~~MDOS.~~Digirad Health and our Investments division-related activities.

2023 Loss from continuing operations, net of income taxes, ~~for the year ended December 31, 2021,~~ was ~~$8.9~~$1.9 million which ~~is an increase of $3.6 million~~reflects improved results compared to ~~our loss~~2022 Loss from continuing operations, net of ~~income taxes~~tax, of ~~$5.3 million during the prior year. This was predominately~~$5.8 million. The improved results were primarily driven by ~~an additional net loss~~increased interest and other income resulting from our strong cash position and gains realized on certain purchases and sales, and the bargain purchase gain we recognized resulting from the October 2023 acquisition of BLL of approximately $1.2 million (see Note 16. Mergers and Acquisitions for further information). These results were partially offset by a decrease in ~~the Construction division~~gross profit of $0.5 million from our operating segments and ~~increased corporate~~higher overall Operating expenses ~~primarily related to increases in IT, outside services, and an impairment~~ of ~~goodwill during the year ended December 31, 2021.~~

For the year ended December 31, 2021, Diagnostic Services operated 81 nuclear gamma cameras and 46 ultrasound imaging systems. We measure efficiency by tracking system utilization, which is based on the percentage of days that our cameras, equipment and imaging systems are used to deliver services to customers out of the total number of days that they are available to deliver such services. System utilization for Diagnostic Services for the year ended December 31, 2021, was 57% compared to 59% of the prior year.$0.4 million.

Use of EBITDA (Non-GAAP measure)

Management believes earnings before taxes, interest, depreciation, and amortization (“EBITDA”) is a meaningful indicator of the Company’s performance that provides useful information to investors regarding the Company’s financial condition and results of operations. EBITDA is also considered by management as an indicator of operating performance and the most comparable measure across the regions in which we operate. Management also uses this measurement to evaluate capital needs and working capital requirements. EBITDA is a non-Generally Accepted Accounting ~~Principals~~Principles (“non-GAAP”) financial measure that is not intended to be considered in isolation from, as substitute for, or as superior to, the corresponding financial measure prepared in accordance with GAAP or as a measure of the Company’s profitability. Because of these and other limitations, EBITDA should be considered along with GAAP based financial performance measures, including operating income or net income prepared in accordance with GAAP. EBITDA is derived from net income (loss) ~~income~~ adjusted for the provision for (benefit from) income taxes, interest expense (income), and depreciation and amortization.

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


			Year Ended December 31,
		Year Ended December 31,								Year Ended December 31,
$ in thousands	$ in thousands		2021		2020		$ in thousands	2023	2022
Net loss			$	(2,983)	$	(6,457)
Net income (loss)
Adjustment for income (loss) from discontinued operations, net of income taxes	Adjustment for income (loss) from discontinued operations, net of income taxes		5,948		(1,172)
Loss from continuing operations	Loss from continuing operations		(8,931)		(5,285)
Adjustments to loss from continuing operations	Adjustments to loss from continuing operations
Depreciation and amortization	Depreciation and amortization		3,472		3,936
Depreciation and amortization
Depreciation and amortization
Interest expense, net	Interest expense, net		905		1,292
Provision for income taxes	Provision for income taxes		60		129
Total adjustments from loss from continuing operations to EBITDA			4,437		5,357
Total adjustments from income (loss) from continuing operations to EBITDA
EBITDA from continuing operations	EBITDA from continuing operations		$	(4,494)	$	72


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	STRR	NASDAQ Global Market
Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share	STRRP	NASDAQ Global Market
Series C Participating Preferred Stock, par value $0.0001 per share Purchase Rights


Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	x	Smaller reporting company	☒x

		Emerging growth company	☐



		Page
PART I		1
Item 1	Business	1
Item 1A	Risk Factors	137
Item 1B	Unresolved Staff Comments	2717
Item 1C	C ybersecurity	17
Item 2	Properties	2717
Item 3	Legal Proceedings	2818
Item 4	Mine Safety Disclosures	2818

PART II		2919
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2919
Item 6	[Reserved]	2919
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3020
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	4428
Item 8	Financial Statements and Supplementary Data	4529
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	8862
Item 9A	Controls and Procedures	8862
Item 9B	Other Information	8962
Item 9C	Disclosure Regarding Foreign Jurisdictions That Prevent Inspections	8962

PART III		9063
Item 10	Directors, Executive Officers and Corporate Governance	9063
Item 11	Executive Compensation	9068
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	9075
Item 13	Certain Relationships and Related Transactions, and Director Independence	9077
Item 14	Principal Accounting Fees and Services	9077

PART IV		9179
Item 15	Exhibits, Financial Statement Schedules	9179
Item 16	Form 10-K Summary	~~101~~85

Signatures		~~102~~86


	Year ended December 31,
	2021		2020
Healthcare Revenue:
Diagnostic Services	41.1	%	50.3	%
Diagnostic Imaging	13.9	%	12.7	%
Total Healthcare Revenue	55.0	%	63.0	%


	Year ended December 31,
	2021		2020
Construction	45.0	%	36.9	%
Construction Revenue	45.0	%	36.9	%


	Year ended December 31,								Change from Prior Year
	2021		% of Revenues		2020		% of Revenues *		Dollars		Percent
Total revenues	$	106,559	100.0	%	$	78,163	100.0	%	$	28,396	36.3	%
Total cost of revenues	91,319		85.7	%	64,176		82.1	%	27,143		42.3	%
Gross profit	15,240		14.3	%	13,987		17.9	%	1,253		9.0	%
Operating expenses:
Selling, general and administrative	22,595		21.2	%	18,635		23.8	%	3,960		21.3	%
Amortization of intangible assets	1,728		1.6	%	2,124		2.7	%	(396)		(18.6)	%
Goodwill impairment	3,359		3.2	%	436		0.6	%	2,923		670.4	%
Gain on sale of MDOS	(847)		(0.8)	%	—		—	%	(847)		N/M
Total operating expenses	26,835		25.2	%	21,195		27.1	%	5,640		26.6	%
Loss from continuing operations	(11,595)		(10.9)	%	(7,208)		(9.2)	%	(4,387)		60.9	%
Other (expenses) income	(550)		(0.5)	%	874		1.1	%	(1,424)		(162.9)	%
Interest expense, net	(905)		(0.8)	%	(1,292)		(1.7)	%	387		(30.0)	%
Gain on forgiveness of PPP loans	4,179		3.9	%	2,470		3.2	%	1,709		69.2	%
Total other income	2,724		2.6	%	2,052		2.6	%	672		32.7	%
Loss from continuing operations before income taxes	(8,871)		(8.3)	%	(5,156)		(6.6)	%	(3,715)		72.1	%
Income tax provision	(60)		(0.1)	%	(129)		(0.2)	%	69		(53.5)	%
Loss from continuing operations, net of income taxes	(8,931)		(8.4)	%	(5,285)		(6.8)	%	(3,646)		69.0	%
Income (loss) from discontinued operations, net of income taxes	5,948		5.6	%	(1,172)		(1.5)	%	7,120		(607.5)	%
Net loss	$	(2,983)	(2.8)	%	$	(6,457)	(8.3)	%	$	3,474	(53.8)	%


	Year Ended December 31,								Percent of Revenues
	2021		2020		$ Change		% Change		2021		2020
Selling, general and administrative	$	22,595	$	18,635	$	3,960	21.3	%	21.2	%	23.8	%
Amortization of intangible assets	1,728		2,124		(396)		(18.6)	%	1.6	%	2.7	%
Goodwill impairment	3,359		436		2,923		670.4	%	3.2	%	0.6	%
Gain on sale of MDOS	(847)		—		(847)		N/M		(0.8)	%	—	%
Total operating expenses	$	26,835	$	21,195	$	5,640	26.6	%	25.2	%	27.1	%


						Page
			~~Report~~Repor t of Independent Registered Public Accounting Firm (~~BDO USA, LLP~~ Wolf & Company, P.C.,~~San Diego, CA~~Boston, MA,PCAOB ID # #~~243~~)392)			4630
			Consolidated Statements of Operations for the Years Ended December 31, ~~2021~~202 3 and ~~2020~~202 2			4832
			Consolidated Balance Sheets at December 31, ~~2021~~202 3 and ~~2020~~202 2			4933
			Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2021~~202 3 and ~~2020~~202 2			5035
			Consolidated Statements of ~~Mezzanine and~~ Stockholders’ Equity for the Years Ended December 31, ~~2021~~202 3 and ~~2020~~202 2			5237
			Notes to Consolidated Financial Statements			5338


			December 31,
			2021		2020
		December 31,						December 31,
		2023					2023		2022
Assets:	Assets:
Current assets:	Current assets:
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents		$	4,538	$	3,225
Restricted cash	Restricted cash		278		168

Accounts receivable, net			15,811		12,975
Investments in equity securities
Lumber derivative contracts
Accounts receivable, net of allowances of $191 and $270, respectively
Note receivable, current portion
Inventories, net	Inventories, net		8,525		9,787
Other current assets	Other current assets		2,711		2,025
Assets held for sale			—		20,756

Current assets – discontinued operations
Current assets – discontinued operations
Current assets – discontinued operations
Total current assets	Total current assets		31,863		48,936
Property and equipment, net	Property and equipment, net		8,918		9,762
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net		4,494		2,935
Intangible assets, net	Intangible assets, net		15,072		16,900
Goodwill	Goodwill		6,046		9,542

Deferred tax assets
Deferred tax assets
Deferred tax assets
Cost method investment
Notes receivable
Other assets	Other assets		1,659		1,384

Non-current assets – discontinued operations
Total assets	Total assets		$	68,052	$	89,459

Liabilities, Mezzanine Equity and Stockholders’ Equity:
Liabilities and Stockholders’ Equity:
Liabilities and Stockholders’ Equity:
Liabilities and Stockholders’ Equity:
Current liabilities:
Current liabilities:
Current liabilities:	Current liabilities:
Accounts payable	Accounts payable		$	4,277	$	4,952

Accounts payable
Accounts payable
Accrued liabilities
Accrued compensation	Accrued compensation		3,051		2,825
Accrued warranty	Accrued warranty		569		214
Billings in excess of costs and estimated profit			312		—
Lumber derivative contracts

Deferred revenue	Deferred revenue		2,457		2,184
Short-term debt and current portion of long-term debt			12,869		18,362
Notes payable to related parties			—		2,307
Deferred revenue
Deferred revenue
Short-term debt

Operating lease liabilities	Operating lease liabilities		1,253		1,278
Other Current Liabilities			3,033		3,000
Liabilities held for sale			—		7,871
Operating lease liabilities
Operating lease liabilities
Finance lease liabilities

Current liabilities - discontinued operations
Current liabilities - discontinued operations
Current liabilities - discontinued operations
Total current liabilities	Total current liabilities		27,821		42,993
Long-term debt, net of current portion			—		3,700

Deferred tax liabilities	Deferred tax liabilities		72		51
Deferred tax liabilities
Deferred tax liabilities
Operating lease liabilities, net of current portion	Operating lease liabilities, net of current portion		3,299		1,727
Finance lease liabilities, net of current portion

Other liabilities			1,118		1,059

Non-current liabilities - discontinued operations

Non-current liabilities - discontinued operations

Non-current liabilities - discontinued operations
Total liabilities	Total liabilities		32,310		49,530

Commitments and contingencies (Note 9)	Commitments and contingencies (Note 9)		0		0

Preferred stock, $0.0001 par value: 10,000,000 shares authorized: Series A Preferred Stock 8,000,000 shares authorized, liquidation preference ($10.00 per share), 1,915,637 shares issued and outstanding at December 31, 2021 and 2020, respectively			18,988		21,500
Commitments and contingencies (Note 9)
Commitments and contingencies (Note 9)

Stockholders’ equity:	Stockholders’ equity:
Preferred stock, $0.0001 par value: 25,000 shares authorized; Series C Preferred Stock, no shares issued or outstanding			—		—
Common stock, $0.0001 par value: 30,000,000 shares authorized; 5,805,916 and 4,798,367 shares issued and outstanding (net of treasury shares) at December 31, 2021 and 2020, respectively			—		—
Treasury stock, at cost; 258,849 shares at December 31, 2021 and 2020			(5,728)		(5,728)
Additional paid-in capital			150,451		149,143

Accumulated deficit			(127,969)		(124,986)
Total stockholders’ equity			16,754		18,429
Total liabilities, mezzanine equity and stockholders’ equity			$	68,052	$	89,459
Stockholders’ equity:
Stockholders’ equity:
Preferred stock, $0.0001 par value: 10,000,000 shares authorized: Series A Preferred Stock, 8,000,000 shares authorized, liquidation preference (10.00 per share), 1,915,637 shares issued and outstanding at 2023 and 2022. (Liquidation preference: $18,988,390 as of December 31, 2023 and 2022.)
Preferred stock, $0.0001 par value: 10,000,000 shares authorized: Series A Preferred Stock, 8,000,000 shares authorized, liquidation preference (10.00 per share), 1,915,637 shares issued and outstanding at 2023 and 2022. (Liquidation preference: $18,988,390 as of December 31, 2023 and 2022.)
Preferred stock, $0.0001 par value: 10,000,000 shares authorized: Series A Preferred Stock, 8,000,000 shares authorized, liquidation preference (10.00 per share), 1,915,637 shares issued and outstanding at 2023 and 2022. (Liquidation preference: $18,988,390 as of December 31, 2023 and 2022.)


Preferred stock, $0.0001 par value: 25,000 shares authorized; Series C Preferred stock, no shares issued or outstanding	—		—
Common stock, $0.0001 par value: 50,000,000 and 50,000,000 shares authorized; 15,826,217 and 15,177,919 shares issued and outstanding (net of treasury shares) at December 31, 2023 and 2022, respectively	2		1
Treasury stock, at cost; 258,849 shares at December 31, 2023 and 2022, respectively	(5,728)		(5,728)
Additional paid-in capital	160,126		161,715

Accumulated deficit	(108,089)		(133,221)
Total stockholders’ equity	65,299		41,755
Total liabilities and stockholders’ equity	$	75,496	$	73,302



Reconciliation of cash, cash equivalents, and restricted cash at end of year
Cash and cash equivalents	$	4,538	$	3,225
Restricted cash	278		168
	$	4,816	$	3,393

Supplemental Information
Cash paid during the year for interest	$	717	$	965
Cash paid during the year for income taxes	$	344	$	30

Non-Cash Investing Activities
MDOS Promissory Note Receivable	$	1,385	$	—
Non-Cash Financing Activities
Gain on Paycheck Protection Program Loan Forgiveness	$	4,179	$	2,470


Cash and cash equivalents	$	18,326	$	4,377
Restricted cash	620		142
Cash, cash equivalents, and restricted cash at end of period	$	18,946	$	4,519

Supplemental Information
Cash paid during the year for interest	$	261	$	689
Cash paid during the year for income taxes	$	651	$	432

Non-Cash Investing Activities
Noncash note receivable	7,000		487
Noncash investment in private company	6,000		—

Non-Cash Financing Activities

Noncash property, plant, and equipment obtained in exchange for finance lease liabilities	—		90
Noncash right-of-use assets obtained in exchange for operating lease liabilities	—		1,492


	Perpetual Preferred Stock			Common stock			Treasury Stock		Additional paid-in capital		Accumulated deficit		Total stockholders’ equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2019	1,916	$	19,602	2,050	$	—	$	(5,728)	$	145,352	$	(118,529)	$	21,095

Stock-based compensation	—	—		—	—		—		524		—		524
Shares issued under stock incentive plans, net of shares withheld for employee taxes	—	—		55	—		—		(10)		—		(10)
Accrued dividend on perpetual preferred stock	—	1,916		—	—		—		(1,916)		—		(1,916)
Net proceeds from sale and exercise of common stock, over allotment options and warrants	—	—		2,693	—		—		5,193		—		5,193
Fees paid on issuance of preferred stock	—	(18)		—	—		—		—		—		—
Net loss	—	—		—	—		—		—		(6,457)		(6,457)
Balance at December 31, 2020	1,916	21,500		4,798	—		(5,728)		149,143		(124,986)		18,429

Stock-based compensation	—	—		—	—		—		527		—		527
Shares issued under stock incentive plans, net of shares withheld for employee taxes	—	—		726	—		—		(18)		—		(18)
Equity issuance costs	—	—		—	—		—		(37)		—		(37)
Equity proceeds from related party private placement	—	—		—	—		—		2,113		—		2,113
Accrued dividend on perpetual preferred stock	—	1,906		—	—		—		(1,906)		—		(1,906)
Preferred stock dividends paid	—	(4,418)		—	—		—		—		—		—
Proceeds received from warrant exercise	—	—		281	—		—		629		—		629

Net loss	—	—		—	—		—		—		(2,983)		(2,983)
Balance at December 31, 2021	1,916	$	18,988	5,805	$	—	$	(5,728)	$	150,451	$	(127,969)	$	16,754


	Perpetual Redeemable Preferred Stock			Perpetual Preferred Stock			Common stock			Treasury Stock		Additional paid-in capital		Accumulated deficit		Total stockholders’ equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2021	1,916	$	18,988	—	$	—	5,805	$	—	$	(5,728)	$	150,451	$	(127,969)	$	16,754

Stock-based compensation	—	—		—	—		—	—		—		438		—		438
Shares issued under stock incentive plans, net of shares withheld for employee taxes	—	—			—		198	—		—		(5)		—		(5)
Equity issuance costs	—	—		—	—		—	—		—		(450)		—		(450)

Dividends to holders of preferred stock ($0.25 per share)	—	479		—	—		—	—		—		(1,916)		—		(1,916)
Preferred stock dividends paid	—	(479)		—	—		—	—		—		—		—		—


Proceeds from the sale of common stock, warrants, and exercise of over allotment options	—	—		—	—		9,175	1		—		13,197		—		13,198
Reclassification of preferred stock to permanent equity (See Note 2)	(1,916)	(18,988)		1,916	18,988		—	—		—		—		—		18,988
Net income (loss)	—	—		—	—		—	—		—		—		(5,252)		(5,252)
Balance at December 31, 2022	—	$	—	1,916	$	18,988	15,178	$	1	(5,728)		$	161,715	$	(133,221)	$	41,755
Stock-based compensation	—	—		—	—		—	—		—		340		—		340
Shares issued under stock incentive plans, net of shares withheld for employee taxes	—	—		—	—		323	0.5		—		(16)		—		(16)
Dividends to holders of preferred stock ($0.25 per share)	—	—		—	—		—	—		—		(1,916)		—		(1,916)


Proceeds from the sale of common stock, warrants, and exercise of over allotment options	—	—		—	—		325	0.5		—		3		—		4

Net income (loss)	—	—		—	—		—	—		—		—		25,132		25,132
Balance at December 31, 2023	—	$	—	1,916	$	18,988	15,826	$	2	$	(5,728)	$	160,126	$	(108,089)	$	65,299


	Allowance for Doubtful Accounts(1)			Reserve for Billing Adjustments (2)
Balance at December 31, 2019		$	635		$	20
Provision adjustment		68			183
Write-offs and recoveries, net		(207)			(190)
Balance at December 31, 2020		496			13
Provision adjustment		656			293
Write-offs and recoveries, net		(309)			(277)
Balance at December 31, 2021		$	843		$	29



~~/s/ BDO USA, LLP~~



/s/ Wolf & Company, P.C.


	Allowance for Doubtful Accounts(1)
Balance at December 31, 2021	$	(477)
Provision adjustment	(432)
Write-offs and recoveries, net	639
Balance at December 31, 2022	(270)
Provision adjustment	(145)
Write-offs and recoveries, net	224
Balance at December 31, 2023	$	(191)


	~~Reserve for Excess and~~ ~~Obsolete Inventories~~ ~~(1)~~
~~Balance at December 31, 2019~~		$	~~383~~
~~Provision adjustment~~		~~137~~
~~Write-offs and scrap~~		~~(121)~~
~~Balance at December 31, 2020~~		~~399~~
~~Provision adjustment~~		30
~~Write-offs and scrap~~		~~(109)~~
~~Balance at December 31, 2021~~		$	~~320~~


As of December 31, 2020	As Previously Reported		Adjustments		As Revised
Assets and liabilities
Operating lease right-of-use assets, net	$	1,769	$	1,166	$	2,935
Total assets	$	88,293	$	1,166	$	89,459
Operating lease liabilities	$	1,011	$	267	$	1,278
Total current liabilities	$	42,726	$	267	$	42,993
Operating lease liabilities, net of current portion	$	828	$	899	$	1,727
Total liabilities	$	48,364	$	1,166	$	49,530


	Twelve Months Ended December 31,
	2023		2022
Total revenues	$	17,962	$	55,002
Total cost of revenues	12,408		41,493
Gross profit	5,554		13,509

Operating expenses:
Selling, general and administrative	3,314		13,068
Amortization of intangible assets	—		1
(Gain) loss on disposal of discontinued operations	(26,680)		—
Total operating expenses	(23,366)		13,069

Income (loss) from discontinued operations	28,920		440

Other (expense) income, net	(1,015)		338
Interest expense, net	(173)		(411)

Income (loss) from discontinued operations before income taxes	27,732		367
Income tax benefit (provision)	(693)		208
Income (loss) from discontinued operations	$	27,039	$	575


	December 31,
	~~2020~~ 2022
Cash and cash equivalents	$	~~443~~288
Accounts receivable, net	~~4,305~~9,782
Inventories, net	505,949
Other current assets	~~459~~1,832
Property and equipment, net	~~7,721~~2,683
Operating lease right-of-use assets, net	~~4,863~~2,626
~~Intangible assets, net~~Goodwill	~~2,915~~1,608

Other assets	521
	$	~~20,756~~25,289


	~~Twelve Months Ended December 31, 2021~~
~~Estimated proceeds~~Proceeds of the disposition, net of transaction costs and indebtedness payoff	$	~~18,750~~32,682
Assets of the businesses	~~(20,920)~~$	(24,071)
Liabilities of the businesses	~~7,712~~
~~Transaction expenses~~$	~~(383)~~18,069
Pre-tax gain on the disposition	$	~~5,159~~26,680


	Year Ended December 31, 2021
	Diagnostic Services		Diagnostic Imaging		Construction		Total
Major Goods/Service Lines
Mobile Imaging(1)	$	43,536	$	—	$	—	$	43,536
Camera Sales	—		7,959		—		7,959
Camera Support	—		6,832		—		6,832
Healthcare Revenue from Contracts with Customers	43,536		14,791		—		58,327
Lease Income	229		—		47		276
Construction Revenue from Contracts with Customers	—		—		47,956		47,956

Total Revenues	$	43,765	$	14,791	$	48,003	$	106,559

Timing of Revenue Recognition
Services and goods transferred over time	$	39,843	$	5,614	$	3,921	$	49,378
Services and goods transferred at a point in time	3,922		9,177		44,082		57,181
Total Revenues	$	43,765	$	14,791	$	48,003	$	106,559


	Year Ended December 31, 2020
	Diagnostic Services		Diagnostic Imaging		Construction		Investments		Total
Major Goods/Service Lines
Mobile Imaging	$	38,690	$	—	$	—	$	—	$	38,690
Camera Sales	—		3,450		—		—		3,450
Camera Support	—		6,515		—		—		6,515
Healthcare Revenue from Contracts with Customers	38,690		9,965		—		—		48,655
Lease Income	577		—		260		—		837
Construction revenue from Contracts with Customers	—		—		28,619		—		28,619
Investments	—		—		—		52		52
Total Revenues	$	39,267	$	9,965	$	28,879	$	52	$	78,163

Timing of Revenue Recognition
Services and goods transferred over time	$	37,559	$	5,544	$	3,255	$	—	$	46,358
Services and goods transferred at a point in time	1,708		4,421		25,624		52		31,805
Total Revenues	$	39,267	$	9,965	$	28,879	$	52	$	78,163


	December 31, 2023
		Construction		Total
Major Goods/Service Lines
Construction Revenue from Contracts with Customers		$	45,785	$	45,785

Total Revenues		$	45,785	$	45,785

Timing of Revenue Recognition

Services and goods transferred at a point in time		45,785		45,785
Total Revenues		$	45,785	$	45,785


	December 31, 2022
		Construction		Total
Major Goods/Service Lines





Construction revenue from Contracts with Customers		$	57,149	$	57,149

Total Revenues		$	57,149	$	57,149

Timing of Revenue Recognition
Services and goods transferred over time		$	11,625	$	11,625
Services and goods transferred at a point in time		45,524		45,524
Total Revenues		$	57,149	$	57,149


Balance at December 31, ~~2019~~2021	$	~~1,801~~946
Revenue recognized that was included in balance at beginning of the year	~~(1,494)~~(822)
Deferred revenue, net, related to contracts entered into during the year	~~2,045~~1,549
Balance at December 31, ~~2020~~2022	1,673		~~2,352~~
Revenue recognized that was included in balance at beginning of the year	~~(1,975)~~(1,604)
Deferred revenue, net, related to contracts entered into during the year	~~2,492~~1,308
Balance at December 31, ~~2021~~2023	$	~~2,869~~1,377


	December 31, 2021		December 31, 2020
Inventories:
Raw materials	$	5,870	$	5,489
Work-in-process	2,145		2,821
Finished goods	830		1,876
Total inventories	8,845		10,186
Less reserve for excess and obsolete inventories	(320)		(399)
Total inventories, net	$	8,525	$	9,787


	December 31, 2021		December 31, 2020
Property and equipment, net:
Land	$	805	$	805
Buildings and leasehold improvements	4,823		4,771
Machinery and equipment	24,881		25,687
Computer hardware and software	2,387		3,688
Gross property and equipment	32,896		34,951
Accumulated depreciation	(23,978)		(25,189)
Total property and equipment, net	$	8,918	$	9,762


	December 31, 2023		December 31, 2022
Inventories:
Raw materials	$	1,394	$	1,629
Work-in-process	410		571
Finished goods	1,616		2,478
Total inventories	3,420		4,678
Less reserve for excess and obsolete inventories	—		—
Total inventories, net	$	3,420	$	4,678


	December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Intangible Assets, Net
Intangible assets with finite useful lives:
Customer relationships	$	14,400	$	(5,831)	$	8,569
Trademarks	5,540		(1,591)		3,949



Total intangible assets, net	$	19,940	$	(7,422)	$	12,518

	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Intangible Assets, Net
Intangible assets with finite useful lives:
Customer relationships	$	13,500	$	(4,466)	$	9,034
Trademarks	5,540		(1,222)		4,318



Total intangible assets, net	$	19,040	$	(5,688)	$	13,352


	December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Intangible Assets, Net
Intangible assets with finite useful lives:
Customer relationships	$	16,440	$	(6,056)	$	10,384
Trademarks	5,540		(853)		4,687
Patents	141		(140)		1


Total intangible assets, net	$	22,121	$	(7,049)	$	15,072

	December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Intangible Assets, Net
Intangible assets with finite useful lives:
Customer relationships	$	17,079	$	(5,238)	$	11,841
Trademarks	5,727		(670)		5,057
Patents	141		(139)		2


Total intangible assets, net	$	22,947	$	(6,047)	$	16,900


	December 31, 2021		December 31, 2020
Other current liabilities:
Professional fees	$	832	$	534
Sales and property taxes payable	550		453
Radiopharmaceuticals and consumable medical supplies	78		219
Current portion of finance lease obligation	588		594
Facilities and related costs	169		70
Outside services and consulting	282		181
Other accrued liabilities	534		949
Total other current liabilities	$	3,033	$	3,000


	December 31, 2023		December 31, 2022
	Principal and interest		Principal and interest
TTG Note	$	7,459	$	—
MDOS Note	1,192		1,358
KBS Customer Note	176		—
	$	8,827	$	1,358


	December 31, 2023		December 31, 2022
Accrued liabilities:
Professional fees	$	108	$	—
Sales and property taxes payable	—		326
Outside services and consulting	279		55

Earn-out Provision	169		—
Taxes Payable related to Digirad Sale	398		81
Other accrued liabilities	552		—
Total accrued liabilities	$	1,506	$	462


			At Fair Value as of December 31, 2021
			Level 1		Level 2		Level 3		Total
Assets:
		At Fair Value as of December 31, 2023											At Fair Value as of December 31, 2023
		Level 1									Level 1	Level 2	Level 3	Total
Assets (liabilities):
Equity securities
Equity securities
Equity securities	Equity securities		$	47	$	—	$	—	$	47
Lumber derivative contracts	Lumber derivative contracts		666		—		—		666
Total	Total		$	713	$	—	$	—	$	713