Jim Pritchett

Arecont Vision Costar, a provider of network-based video surveillance solutions, announces the 1st anniversary of its launch as a business unit of Texas-based Costar Technologies, Inc. The new company has committed itself to the delivery of the surveillance industry’s best customer experience and to fully addressing ongoing customer needs and requirements. 3 pillars of business “It’s been an exciting first year for Arecont Vision Costar,” said Shane Compton, Chief Engineering Officer, Costar Technologies, Inc., and General Manager, Arecont Vision Costar. “All aspects of the company are focused on the three main pillars of our business, which are Product Quality and Reliability, Customer Service and Support, and in delivering Innovation in everything we do.” Integrating and leveraging resources Arecont Vision Costar has been integrating and leveraging the wider resources of parent Costar The company marked its 1st anniversary with the launch of a new public website. Arecont Vision Costar launched on July 13th, 2018, following the acquisition of the product portfolio, patents, trademarks, and technology of the original Arecont Vision, LLC. A majority of the employees at time of acquisition moved to the new company, and Costar has been adding key personnel in executive leadership roles and across sales, development, operations, customer support, and other areas. Significant investment has been made in new technology to improve the customer experience and increase operational efficiency, including the implementation of a NetSuite ERP system, a Customer Support Portal powered Zendesk customer service software, an updated Partner Portal, and the new public website launched this week. Throughout this process, Arecont Vision Costar has been integrating and leveraging the wider resources of parent Costar. Ongoing strategic planning “Arecont Vision Costar is a key component of Costar’s ongoing strategic planning,” stated James Pritchett, President and Chief Executive Officer. “The leadership and team members of the new business unit have come together quickly and are already making a big contribution to Costar and to overall customer satisfaction. We expect the entire company will continue to grow and expand our business and manufacturing capabilities thanks in part to what has already been accomplished.” Costar product portfolio Costar Technologies, Inc. is a publicly traded corporation headquartered in Coppell, Texas. Costar designs, develops, manufactures, and distributes a full range of products for the video surveillance and machine vision markets. In addition to Arecont Vision Costar, the company operates four other businesses - CohuHD Costar, Costar Video Systems, Innotech Security, and IVS Imaging. The combined Costar product portfolio consists of video surveillance system software, cameras, NVRs and recorders, monitors, lenses, cables, and other electronic accessories with manufacturing in the United States and around the world. Expanding corporate operations Many headquarters functions moved to a new Collaboration and Development center Arecont Vision Costar expanded its corporate operations from a single headquarters and manufacturing facility in Glendale, California to three new locations over the past year. Many headquarters functions moved to a new Collaboration and Development center about one mile from the original facilities in Glendale. Manufacturing and warehousing operations were moved about 20 miles inland to the city of Duarte. When Costar added a new office facility located in Clovis in California’s Central Valley, Arecont Vision Costar opened a new Advanced Technology Center onsite. New showroom and demonstration facilities are also in planning. Arecont Vision Costar continues international operations from company facilities in Dubai, UAE. Both sales and field application engineering team members are located in regional locations around the world, backed by a network of authorized manufacturer’s sales representatives and partners. Total Video Solution The Arecont Vision Costar Total Video Solution™ continues as the premier offering of the one-year old business. The solution consists of a growing portfolio of ConteraIP® megapixel cameras and Made in USA products that include award-winning MegaIP® megapixel cameras, advanced ConteraVMS® video management system, cyber-secure ConteraWS® web services, and ConteraCMR® cloud-managed video recorders. Company products are ONVIF compliant and feature advanced integration with 3rd party offerings through the Arecont Vision Costar MegaLab™ program. Arecont Vision Costar products are sold by a global network of authorized distributors, systems integrators, and security dealers.

Arecont Vision Costar, the industry provider of IP-based megapixel cameras and video surveillance solutions, announced its key product portfolio, business plans, and executive leadership team following the initial launch of the business in July, 2018. The new company is a business unit of Costar Technologies, Inc. (OTC Markets Group: CTSI), a Coppell, Texas-based corporation that designs, develops, manufactures, and distributes a wide range of proven products for the video surveillance and machine vision markets. Arecont Vision Costar continues to base its headquarters, R&D, manufacturing, and support facilities in Glendale, California in Los Angeles county, taking over the building formerly occupied by its predecessor business, Arecont Vision, LLC. The majority of employees and the executive leadership team transitioned to the new business, as did all existing products, technologies, patents, and trademarks of the original company. Arecont Vision Total Video Solution The Total Video Solution is composed of the industry’s leading megapixel cameras, cloud-enabled video management software, and cloud-managed video recorders“We’re very excited to have a new beginning for Arecont Vision Costar, with a great strategic fit that builds on our predecessor’s pioneering legacy of megapixel camera technology leadership, while leveraging the resources and expertise of Costar Technologies,” stated Raul Calderon, President, Arecont Vision Costar. “The result is that our customers can be confident not only of our financial health and long-term future, but also in purchasing our new Arecont Vision Total Video Solution to meet their surveillance system needs.” The Total Video Solution is composed of the industry’s leading megapixel cameras (MegaIP and ConteraIP series), cloud-enabled video management software (ConteraVMS and ConteraWS web services), and cloud-managed video recorders (ConteraCMR). Authorized security dealers and system integrators are able to offer a complete, cyber-secure, and web-enabled solution, or any of the individual product series in integration with the customer’s existing cameras, video management software, or recorder platforms. ONVIF compliance and the company’s API - available through the Technology Partner Program - help to ensure the best possible integration with 3rd party hardware and software. Expanding Costar’s Video Surveillance Platform The original Arecont Vision, LLC was founded in 2003 and announced a reorganisation under voluntary Chapter 11 on May 14, 2018. This was undertaken to clear the company of outstanding debt and to simplify the sale of the entire business in order to secure new investment. Costar was the winning bidder, and the transaction was completed on July 13th, 2018 with the launch of Arecont Vision Costar, LLC. The acquisition of Arecont Vision expands the Costar Technologies’ video surveillance platform by strengthening our product line" “The acquisition of Arecont Vision expands the Costar Technologies’ video surveillance platform by strengthening our product line,” said James Pritchett, President and Chief Executive Officer, Costar Technologies, Inc. “This purchase supports Costar’s strategy to become a leader in the video surveillance industry, transitioning from a value-added OEM product company into a manufacturing and design business. Along with our other recent acquisitions, the Arecont Vision acquisition increases our manufacturing and design from approximately 50% to 75% of our revenue.” Improving Sales And Technical Support “We intend to continue developing new technologies, products, and solutions to better serve our customers, partners, and the industry overall,” continued Mr. Calderon. “Improvements are currently also underway in our quality assurance processes, and in improving both our sales support and technical assistance programs.” Mr. Calderon, formerly Chief Operating Officer and General Manager of Arecont Vision, LLC now serves as President of Arecont Vision Costar. Kyle Parker is VP, Americas Sales, Sanjit Bardhan, VP, International Sales, and Mitch Fagundes, VP, Global Strategic Accounts. Brad Donaldson continues as VP, Product Development, Jeff Whitney, VP, Marketing, and VP of Finance is Edmond Deravanessian.

It has been an eventful few months for Arecont Vision, which has gone through Chapter 11 bankruptcy and, ultimately, was acquired by Costar Technologies Inc. What emerged is a new company, Arecont Vision Costar, poised for future growth unfettered by previous debt. For insights into what’s next for the newly minted company, we posed several questions to Jim Pritchett, CEO, Costar Technologies Inc., and Raul Calderon, President, Arecont Vision Costar. Q. Please relate how Costar came to acquire Arecont Vision. Why did you see it as an attractive acquisition target? Pritchett: We were excited when we learned that Arecont Vision was for sale. We have a long history with the management team and know the potential of the brand as a leader in omnidirectional megapixel cameras. It also solidifies the breadth of Costar’s offerings for our three major market segments – commercial security, traffic, and critical infrastructure. Q. What benefits and/or synergies do you see of adding Arecont Vision to the Costar “family?” This acquisition transitions us from 50% of revenue related to design and manufacturing to 75%Pritchett: The security market continues to face significant competition and pricing pressures. The more scale we gain, the better we can compete. Size also allows us to invest more in the business, producing differentiated products. To that end, this acquisition transitions us from 50% of revenue related to design and manufacturing to 75%. Not only is that another step towards unlocking value for our shareholders, it better allows us to control our own destiny. Q. What new insights have you gained during these first few weeks since the acquisition? What has surprised you the most? Calderon: Since I have known the Costar management team for over two decades, there have been no real surprises. We have already had cross-company strategy meetings and are making decisions that will improve different facets of the organization, starting with adding much-needed headcount on both the domestic and international sales teams. Q. What is the path ahead for Arecont Vision Costar? How is that path different than what we discussed previously about your expectations if Turnspire Capital Partners had acquired the company (as previously proposed)? There are opportunities to leverage products and benefit customers between companiesCalderon: Arecont Vision set a plan in motion last year for turning around the organization. There will be no significant deviation under Arecont Vision Costar of the main components of that turnaround. They are still in motion. The main difference is that Costar and its group of companies are in the same business as we are. So, there is already a fundamental understanding of our requirements, and of our competitive pressures, and of how the industry works. This will help greatly as we mold our strategy to fit within the new organization. Additionally, there are opportunities to leverage products and benefit customers between companies that would not have existed under different ownership. Q. How actively involved will Costar be in managing Arecont Vision going forward? Any other changes in how the company is managed? Pritchett: Costar will be very actively involved in supporting the Arecont Vision business plan. Having said that, our mantra is that our people make the difference. Our job on the executive team is to remove obstacles from the paths of our employees, enabling them to execute the strategy. We have a long history and a lot of confidence in the Arecont Vision Costar leadership team. Costar will be very actively involved in supporting the Arecont Vision business plan Q. What misconceptions have you encountered in the market about the bankruptcy process, the new owner, and/or other aspects of the transition? Calderon: Bankruptcy (Chapter 11) typically has a negative connotation because it is many times associated with shuttering a company. For Arecont Vision, this was a tactical vehicle that enabled us to improve the company’s balance sheet and secure our financial future by selling its assets to Costar. This has made us a much stronger company than we otherwise would have been. There has been very little mis-step in onboarding all our employees. We are already in process of or have completed paying the pre-petition liabilities to our vendors. All-in-all, the transition is going smoothly, and our customers will soon begin to notice the improvements that we are making. Q. Do you expect any personnel downsizing or other efficiencies as the companies combine (i.e., eliminating any redundancies in the two operations)? We are looking for areas where we can expand the workforce, not reduce itPritchett: We are looking for areas where we can expand the workforce, not reduce it. Specifically, sales, engineering, and customer support are all critical to our customers’ experiences. With the industry’s obsession with decreasing prices over the last number of years, it seems there is a real opportunity for a company that is laser-focused on the customer, and that is what the Costar Technologies companies will deliver. Q. What is your hope and/or expectations for Arecont Vision Costar in the next year? Pritchett: It is a little over a month after the transaction closed. During that time, we onboarded all the employees, had in-depth strategy meetings with the executive management team, and identified the areas where we are going to make immediate investments. We are also in the process of scoping our NetSuite (business software) implementation plan for Arecont Vision Costar, transitioning them from QuickBooks and Fishbowl. The various initiatives and investments will not only pay off in the long run but will also make this acquisition accretive in 2019. Q. Will we see you at the upcoming GSX show in Las Vegas? ISC West 2019 will be the first show where you will see a fully combined presence for the Costar group of companiesCalderon: Arecont Vision decided long ago not to participate in GSX this year for a variety of reasons. We will have a meeting room not far from the exhibits, and we will be presenting to our key customers during scheduled meetings. We’ll also be making several pre-planned product announcements around additions to the Arecont Vision Total Video Solution that we first unveiled at ISC West 2018. ISC West 2019 next April will be the first show where you will see a fully combined presence for the Costar group of companies, including Arecont Vision. Q. What is your overarching message to the security marketplace about the “new” Arecont Vision Costar? Calderon: The new Arecont Vision Costar is stronger than ever with a renewed commitment to its customers and partners to provide improved product solutions and customer experience. We will continue to build upon our legacy of industry leadership in megapixel camera firsts, in advanced designs that our competitors frequently attempt to copy, and now in leadership of both stand-alone and web-enabled surveillance systems with our Contera families.

Arecont Vision, the provider of IP-based megapixel camera and video surveillance solutions, announced that the acquisition by Costar Technologies, Inc. (OTC markets Group: CSTI) of its assets has been approved by the bankruptcy court (“Court”). It is anticipated that the sale will close on July 13, 2018. As previously announced, Arecont Vision initiated proceedings under chapter 11 of the United States Bankruptcy Code in the District of Delaware in May, 2018 and has achieved its goal of moving through this process quickly. After the closing of the sale, upon emergence the assets formerly operated by Arecont Vision will begin operating as Arecont Vision Costar, LLC and be part of Costar, a US corporation that designs, develops, manufactures, and distributes a full range of proven products for the video surveillance and machine vision markets. Costar provides resources that will enable Arecont Vision to continue to innovate and lead the market" New Market Verticals “Costar’s family of companies, composed of CohuHD Costar, Costar Video Systems, Innotech, and IVS Imaging, is a great strategic fit for Arecont Vision providing synergies that can be leveraged to grow our business in new market verticals and product areas. Costar provides resources that will enable Arecont Vision to continue to innovate and lead the market,” said Raul Calderon, Chief Operating Officer and General Manager, Arecont Vision. “I am proud of our team, and we are grateful for the support, patience, and continued commitment of our employees, suppliers and customers, as we look forward to becoming a new Costar business.” The Company has been successfully operating under normal business conditions throughout the bankruptcy process, did not experience any layoffs, and continued the introduction of its new Contera IP cameras, video management system, web services, and cloud managed recorders. The acquisition of the assets of Arecont Vision expands Costar Technologies’ video surveillance platform by strengthening our product line"   Strengthening Video Surveillance Range Under Costar’s leadership, substantially all of Arecont’s employees will be hired by Costar, customer programs and services will continue, and investments will be made into the development of new, industry-leading products. “The acquisition of the assets of Arecont Vision expands Costar Technologies’ video surveillance platform by strengthening our product line,” said James Pritchett, Costar President and Chief Executive Officer. “It supports Costar’s strategy to become a leader in the video surveillance industry, transitioning from a value-added OEM product company to a manufacturing based and design company. Along with our other recent acquisitions, the Arecont acquisition increases our manufacturing and design from approximately 50% to 75% of our revenue.”