Star Equity Holdings, Inc. (NASDAQ:STRR), a company specializing in electromedical and electrotherapeutic apparatus, has completed the purchase of assets from Timber Technologies, Inc., as disclosed in a recent SEC filing. The transaction, which took place on June 28, 2024, involved the acquisition of substantially all assets used in Timber Technologies' business operations.
The deal included the sale of owned real property by Timber Properties, LLC, an affiliate of the seller, to 106 Bremer, LLC, a wholly-owned subsidiary of Star Equity Holdings. The property was acquired for a sum of $3.0 million plus closing costs. This transaction is part of a larger asset purchase agreement that was initially closed on May 17, 2024, and previously reported in a Form 8-K filed on May 20, 2024.
To finance the property purchase, 106 Bremer issued a promissory note for the principal amount of $3.0 million, secured by a mortgage on the acquired property. The note carries an interest rate of 7.50%, with quarterly interest payments and a maturity date set for June 29, 2034.
The mortgage is subordinate to the obligations of the Bridgewater Loan Agreement, also dated May 17, 2024, between Star Equity Holdings and Timber Technologies Solutions, Inc. and Bridgewater Bank.
The SEC filing includes details of the promissory note and mortgage, outlining standard events of default and other customary provisions for transactions of this nature. Should any defaults occur, the obligations could become immediately due and payable.
Star Equity Holdings' strategic acquisition is expected to expand its operational capabilities within its core market. The company, previously known as Digirad Corp., has its headquarters in Old Greenwich, Connecticut, and is incorporated in Delaware. Information about this transaction is based on the latest 8-K filing with the Securities and Exchange Commission.
In other recent news, Star Equity Holdings announced a 1-for-5 reverse stock split, reducing the number of outstanding shares from approximately 15.8 million to around 3.2 million. This move aims to elevate the per-share trading price to comply with Nasdaq's minimum bid price requirement.
Concurrently, the company faced a challenging first quarter in 2024, with revenues dropping by 26.1% to $9.1 million due to delayed customer financing for key commercial projects. The gross profit also declined by 63.1% from the previous year.
In a strategic move, Star Equity Holdings acquired Timber Technologies, a manufacturer of engineered wood products. This acquisition, expected to close in June 2024, was financed by a $7 million term loan from Bridgewater Bank at a 7.85% interest rate. The acquisition is anticipated to bolster the company's Building Solutions Division.
These recent developments indicate a strategic approach by Star Equity Holdings to navigate financial challenges and expand its market presence. While the first quarter of 2024 did not meet financial targets, the acquisition of Timber Technologies signals a potential avenue for future growth.
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