Digirad Corporation (NasdaqGM:DRAD) entered into a non-binding letter of intent to acquire ATRM Holdings, Inc. (OTCPK:ATRM) from Jeffrey E. Eberwein, Lone Star Value Management LLC and others on September 7, 2018. Digirad Corporation entered into an agreement to acquire ATRM Holdings, Inc. (OTCPK:ATRM) from Jeffrey E. Eberwein, Lone Star Value Management LLC and others on July 3, 2019. Under the terms of the deal, Digirad Board had approved converting Digirad into a diversified holding company. ATRM stockholders will receive consideration consisting of 0.4 shares of Digirad common stock for each share of outstanding ATRM common stock acquired by Digirad. ATRM Series B Preferred Stock will be exchanged for newly created and issued HoldCo Preferred Stock. HoldCo Preferred Stock will be registered and publicly traded. The final terms of the acquisition are subject to change depending on the outcome of due diligence investigation. Under the terms of the agreement, each issued and outstanding share of common stock of ATRM will be converted into the right to receive 0.03 shares of series A cumulative perpetual preferred stock of Digirad (Digirad Preferred Stock) and each issued and outstanding share of 10.0% Series B Cumulative Preferred Stock of ATRM will be converted into the right to receive 2.5 shares of Digirad Preferred Stock. At the effective time, each unvested share of restricted common stock or restricted common stock unit of ATRM shall be converted into a right to receive a restricted share of Digirad Preferred Stock or restricted Digirad Preferred Stock unit (as applicable) subject only to time based vesting with respect to a number of shares of Digirad Preferred Stock, at a rate equal to 0.03 shares of Digirad Preferred Stock. Digirad intends to apply to have the Digirad Preferred Stock listed on the Nasdaq Global Market under the symbol “DRADP.” Prior to the transaction, Jeffrey E. Eberwein owns 17.4% stake in ATRM. Upon closing, ATRM will continue as the surviving corporation and a wholly-owned subsidiary of Digirad. ATRM will pay Digirad Corporation a termination fee of up to $0.73 million under certain circumstances.

ATRM assets and liabilities will be consolidated with DRAD, but ATRM and Digirad will operate as two separate business divisions of Holdco. HoldCo's team after the ATRM acquisition will include Jeffery Eberwein as Chairman, Matthew Molchan as Chief Executive Officer of Healthcare Imaging Division, Daniel Koch as Chief Executive Officer of Modular Building Division, David Noble as Chief Operating Officer and Chief Financial Officer, Steve Clark as Chief Financial Officer, and Hannah Bible as General Counsel, Chief Compliance Officer and Vice President – Legal. David Noble will report directly to the Board of Directors of Digirad. HoldCo headquarters will be based in Old Greenwich. Healthcare Imaging Division headquarters will be in Atlanta and Modular Building Division headquarters will be in Minneapolis. The transaction will be subject to, among other things, ATRM becoming current with its SEC filings and the negotiation, execution of definitive documentation, required regulatory approvals and Digirad Corporation stockholder vote. As per the agreement, the transaction is subject to approval by the shareholders of ARTM, effectiveness of Digirad's registration statement on Form S-4, Digirad having completed a private placement of Digirad Preferred Stock for gross proceeds to Digirad of no less than $3 million and Digirad having entered into an agreement with Jeffrey Eberwein, the Chairman of the Board of Directors of Digirad and ATRM, pursuant to which Digirad shall have the right to require Jeffrey Eberwein to acquire 0.1 million shares of Digirad Preferred Stock at a price of $10 per share for aggregate proceeds of $1 million at any time, in Digirad's discretion, during the 12 calendar months following the effective time of the merger. The transaction was approved by Digirad and ATRM, respectively, by a special committee of independent directors of each company. The Board of Directors of ATRM unanimously recommended that the holders of ATRM common and preferred stock vote in favor of the transaction. Digirad has entered into a voting agreement with the holders of all of preferred stock of ATRM and approximately 17.4% of the common stock of ATRM pursuant to which such holders have agreed to vote their shares in favor of the transaction.

ATRM's Board of Directors appointed a special committee of independent, disinterested directors of ATRM to evaluate and negotiate the merger agreement. The transaction is expected to close in the first quarter of 2019. As of July 3, 2019, the transaction is expected to close in the third quarter of 2019. As of July 16, 2019, Lone Star signed a Series B Preferred Stock Dividend Agreement with ATRM whereby ATRM issued a total of 0.02 million shares of Series B Preferred Stock as dividend to Lone Star. The transaction is accretive to Digirad shareholders. Oberon Securities, LLC acted as financial advisor and fairness opinion provider to Digirad's Special Committee. Steve Carman, Esq. of Husch Blackwell LLP served as legal advisor to ATRM Holdings, Inc. Martin W. Enright, Esq. of Littman Krooks LLP and Adam W. Finerman, Esq. of Olshan Frome Wolosky LLP served as legal advisors to Digirad Corporation. InvestorCom, LLC acted as proxy solicitor for ATRM and will receive a fee of $0.01 million. Digirad agreed to pay Oberon an aggregate fee of $0.4 million, a portion of which was payable upon delivery of its opinion and the principal portion of which will be payable upon consummation of the merger. American Stock Transfer & Trust Company, LLC acted as transfer agent for Digirad and Computershare, Inc. acted as transfer agent for ATRM.

Digirad Corporation (NasdaqGM:DRAD) completed the acquisition of ATRM Holdings, Inc. (OTCPK:ATRM) from Jeffrey E. Eberwein, Lone Star Value Management LLC and others on September 10, 2019. In connection with the merger, Digirad also completed a private placement, issuing 0.3 million shares of Digirad Preferred Stock to Lone Star Value Investors, LP for a price of $10 per share for total proceeds to Digirad of $3 million. ATRM will deregister and delist its common stock from stock exchange.