Item 1.01 Entry into a Material Definitive Agreement.

On June 2, 2021, the Board of Directors (the "Board") of Star Equity Holdings, Inc. (the "Company") declared a dividend to the Company's stockholders of record as of the close of business on June 14, 2021 (the "Record Date"), for each outstanding share of the Company's common stock, par value $0.0001 per share ("Common Stock"), of one right (a "Right") to purchase one one-thousandth of a share of a new series of participating preferred stock of the Company. The terms of the Rights are set forth in the Rights Agreement, dated as of June 2, 2021 (the "Rights Agreement"), by and between the Company and American Stock Transfer & Trust Company, LLC, as rights agent.

The Company entered into the Rights Agreement in an effort to preserve the value of the its significant U.S. net operating loss carryforwards ("NOLs") and other tax benefits. The Company's ability to utilize its NOLs may be substantially limited if the Company experiences an "ownership change" within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"). In general, an "ownership change" would occur if the percentage of the Company's ownership by one or more "5-percent shareholders" (as defined in the Code) increases by more than 50 percent over the lowest percentage owned by such stockholders at any time during the prior three years. The Rights Agreement is designed to preserve the Company's tax benefits by deterring transfers of Common Stock that could result in an "ownership change" under Section 382.

In general terms, the Rights Agreement imposes a significant penalty upon any person or group that acquires beneficial ownership (as defined under the Rights Agreement) of 4.99% or more of the Company's outstanding Common Stock without the prior approval of the Board (an "Acquiring Person"). Any Rights held by an Acquiring Person are null and void and may not be exercised.

The Company intends to seek stockholder approval of the Rights Agreement at the Company's 2021 annual meeting of stockholders.

The following summary description of the Rights Agreement is not complete and is qualified in its entirety by reference to the full text of the Rights Agreement, a copy of which is attached as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The Rights. If the Rights become exercisable, each Right would allow its holder to purchase from the Company one one-thousandth of a share of the Company's Series C Participating Preferred Stock ("Series C Preferred Stock") for a purchase price of $12.00. Each fractional share of Series C Preferred Stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of Common Stock. The Series C Preferred Stock rank, with respect to the payment of dividends and the distribution of assets, junior to all other series of the Company's preferred stock and rank senior to the Common Stock as to such matters. Prior to exercise, however, a Right does not give its holder any dividend, voting or liquidation rights.

Exercisability. The Rights will not be exercisable until the earlier of:

· 10 days after a public announcement by the Company that a person or group has


   become an Acquiring Person; and

· 10 business days (or a later date determined by the Board) 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.

Until the date that the Rights become exercisable (the "Distribution Date"), Common Stock certificates will also evidence the Rights and will contain a notation to that effect. Any transfer of shares of Common Stock prior to the Distribution Date will constitute a transfer of the associated Rights. After the Distribution Date, the Rights will separate from the Common Stock and be evidenced by Right certificates, which the Company will mail to all holders of Rights that have not become void.

After the Distribution Date, if a person or group already is or becomes an Acquiring Person, all holders of Rights, except the Acquiring Person, may exercise their Rights upon payment of the purchase price to purchase shares of Common Stock (or other securities or assets as determined by the Board) with a market value of two times the purchase price (a "Flip-in Event").

After the Distribution Date, if a Flip-in Event has already occurred and the Company is acquired in a merger or similar transaction, all holders of Rights, except the Acquiring Person, may exercise their Rights upon payment of the purchase price, to purchase shares of the acquiring or other appropriate entity with a market value of two times the purchase price of the Rights.

Rights may be exercised to purchase Series C Preferred Stock only after the Distribution Date occurs and prior to the occurrence of a Flip-in Event as described above. A Distribution Date resulting from the commencement of a tender offer or an exchange offer as described in the second bullet point above could precede the occurrence of a Flip-in Event, in which case the Rights could be exercised to purchase Series C Preferred Stock. A Distribution Date resulting from any occurrence described in the first bullet point above would necessarily follow the occurrence of a Flip-in Event, in which case the Rights could be exercised to purchase shares of Common Stock (or other securities or assets) as described above.

Exempted Persons and Exempted Transactions. The Board recognizes that there may be instances when an acquisition of Common Stock that would cause a stockholder to become an Acquiring Person may not jeopardize the availability of the Company's tax benefits or would otherwise be in the best interests of the . . .

Item 3.03 Material Modification to Rights of Security Holders.

The information set forth under Item 1.01 hereof is incorporated into this Item 3.03 by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal


           Year.

On June 2, 2021, in connection with the Company's entry into the Rights Agreement, the Company filed with the Secretary of State of the State of Delaware a Certificate of Designation of Series C Participating Preferred Stock (the "Certificate of Designation") to create the Series C Preferred Stock. The description of the rights of the Series C Preferred Stock set forth in Item 1.01 hereof is incorporated into this Item 5.03 by reference. A copy of the Certificate of Designation is attached as Exhibit 3.1 hereto and is incorporated herein by reference.




 Item 8.01 Other Events.

On June 2, 2021, the Company issued a press release announcing its entry into the Rights Agreement and the declaration of the dividend of the Rights. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.






(d) Exhibits:



Exhibit No. Description

3.1 Certificate of Designation of Series C Participating Preferred Stock of

Star Equity Holdings, Inc.

4.1 Rights Agreement, dated as of June 2, 2021, by and between Star Equity

Holdings, Inc. and American Stock Transfer & Trust Company, LLC, as Rights
     Agent.

99.1 Press Release dated June 2, 2021.

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