B. Riley Financial, Inc. (NasdaqGM:RILY) made a non-binding proposal to acquire additional 49.99% stake in National Holdings Corporation (NasdaqCM:NHLD) for $13.5 million on April 30, 2020. Under the terms of B Riley's proposal, B. Riley is willing to acquire all shares of NHLD not owned by the current management team at $2.00 per share. As on July 24, 2020, B. Riley sent a revised non-binding proposal to the Special Committee of the Board of Directors of National Holdings to acquire the shares at $2.75 each. B. Riley Financial, Inc. entered into a merger agreement to acquire remaining 54.8% stake in National Holdings Corporation for $35.3 million on January 10, 2021. Under the terms of agreement, B. Riley will acquire remaining shares of National Holdings through a cash tender offer for $3.25 per share of common stock in cash. As of January 27, 2021 B. Riley has commenced the tender offer. Upon close of the transaction, National Holdings will operate as wholly owned subsidiary of B. Riley. In case of termination of the transaction, National Holdings is required to pay a termination fee equal to the dollar value of 3.25% of the equity value of the shares of common stock that are not held by B. Riley. The board of directors of National Holdings will consist of five members, including two directors who qualify as “independent” directors within the meaning of the listing standards of the Nasdaq Stock Exchange, the Chief Executive Officer and two directors designated by B. Riley. The transaction is subject to customary closing conditions including receipt of required regulatory approvals and number of shares of National Holdings common stock validly tendered and not validly withdrawn represent at least a majority of the shares of common stock then outstanding that are not shares held by B. Riley. The offer is not subject to any financing conditions. The transaction has been approved by the special committee and the Board of Directors of National Holdings. Board of Directors of B. Riley unanimously approved the transaction. The transaction is not subject to any financing condition. The transaction is expected to close during the first quarter of 2021. As of January 27, 2021 the offer is scheduled to expire on February 24, 2021. The transaction is expected to be immediately accretive. Jeffrey A. Brill, Timothy F. Nelson and Graham Robinson of Skadden, Arps, Slate, Meagher & Flom LLP are serving as legal counsel to the Special Committee of National Holdings's Board of Directors. Andrew Goldman and Jeff Stein of Wilmer Cutler Pickering Hale and Dorr LLP are acting as legal advisor to National Holdings. Keefe, Bruyette, & Woods, Inc. is acting as financial advisor and fairness opinion provider to National Holdings. Patrick S. Brown of Sullivan & Cromwell LLP is acting as legal advisor to B. Riley. B. Riley Securities, Inc. acting as dealer manager. Innisfree M&A Inc. acting as information agent for National Holdings and paid of a fee $15000. Computershare Trust Company, NA acting as depository bank for National Holdings. Pursuant to the Keefe, Bruyette, & Woods, Inc. engagement agreement, National agreed to pay Keefe, Bruyette, & Woods, Inc. an aggregate cash fee of $600,000, $350,000 of which became payable in connection with the signing of the engagement agreement and on specified dates during the course of the engagement and $250,000 of which became payable to Keefe, Bruyette, & Woods, Inc. with the rendering of Keefe, Bruyette, & Woods, Inc.'s opinion.

B. Riley Financial, Inc. (NasdaqGM:RILY) completed the acquisition of additional 49.99% stake in National Holdings Corporation (NasdaqCM:NHLD) on February 24, 2021. As of the expiration of the Offer, the total number of Shares tendered and not validly withdrawn was 5,364,675 for an aggregate purchase price of approximately $17.4 million. This represents approximately 39% of National's outstanding Shares and a sufficient number of Shares such that the minimum tender condition to the Offer was satisfied. Additionally, the Depositary has advised that an additional 60,060 Shares had been tendered by notice of guaranteed delivery, representing less than 1% of National's Shares. At the effective time of the merger, each Share then outstanding (other than Shares that are held by B. Riley or its subsidiaries, National or its subsidiaries, or the stockholders of National who have properly demanded appraisal rights pursuant to Section 262 of the DGCL) will be converted into the right to receive $3.25 per Share in cash, without interest, less any applicable withholding taxes, the same consideration received by stockholders who tendered their shares pursuant to the Offer. Following the completion of the merger, the Shares will be delisted and will cease to trade on the Nasdaq Capital Market. As a result of the merger, National will become a wholly owned subsidiary of B. Riley.