RNWK RealNetworks Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

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Filed by a Party other than the Registrant  ☐

Check the appropriate box:

RealNetworks, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION—DATED SEPTEMBER 19, 2022

1501 First Avenue South

Seattle, Washington 98134

                , 2022

Dear Shareholder:

You are cordially invited to attend a Special Meeting (including any adjournment or postponement thereof, the “Special Meeting”) of the shareholders of RealNetworks, Inc., a Washington corporation (“RealNetworks,” “Real”, the “Company,” “we,” “us” or “our”), which we will hold at the offices of                 , on                         , 2022, at                 , Pacific time.

At the Special Meeting, holders of our outstanding capital stock will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated July 27, 2022 (the “Merger Agreement”), by and among the Company, Greater Heights LLC, a Washington limited liability company (“Parent”), Greater Heights Acquisition LLC, a Washington limited liability company and wholly owned subsidiary of Parent (“Merger Sub,” and together with Parent, “Purchasers”), and, exclusively for purposes of Section 8.15 thereof, Robert Glaser (“Parent Guarantor”), and to approve the related transactions contemplated by the Merger Agreement. Pursuant to the Merger Agreement, the Company will be merged with and into Merger Sub (the “Merger”), the separate corporate existence of the Company will cease and Merger Sub will continue its corporate existence under Washington law as the surviving company in the Merger. Parent will own 100% of the equity interests of the surviving company following the transactions contemplated by the Merger Agreement. Parent is affiliated with Mr. Glaser, who beneficially owns approximately 38.5% of the total number of outstanding shares of Common Stock of the Company and 100% of the total outstanding shares of preferred stock of the Company as of August 17, 2022.

At the effective time of the Merger (the “Effective Time”), each share of the Company’s common stock, par value $0.001 per share (the “Common Stock”), issued and outstanding immediately prior to the Effective Time, other than (a) shares held by Parent, Mr. Glaser, the Company (in treasury or otherwise) or any of their respective direct or indirect wholly owned subsidiaries as of immediately prior to the Effective Time or (b) shares held by holders who have not voted in favor of the Merger and who are entitled to demand and properly exercised dissenters’ rights in accordance with Washington law (as described more fully under “Special Factors—Certain Effects of the Merger” on page 61 of the enclosed proxy statement) will be converted into the right to receive $0.73, in cash (the “Merger Consideration”), without interest and less any required withholding taxes, and automatically canceled. At the Effective Time, each share of Company Common Stock and preferred stock that is owned by Parent, Mr. Glaser, the Company (in treasury or otherwise) or any of their respective direct or indirect wholly owned subsidiaries as of immediately prior to the Effective Time will automatically be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor. The proposed Merger is a “going-private transaction” under the rules of the Securities and Exchange Commission (the “SEC”). If the Merger is completed, the Company will become a privately held company, wholly owned by Parent.

The Board of Directors of the Company (the “Board of Directors” or the “Board”), other than Mr. Glaser who recused himself from the meeting of the Board, based in part on the unanimous recommendation of a special committee of independent and disinterested members of the Board (the “Special Committee”), that was established to evaluate and negotiate a potential transaction with the assistance of its own independent legal and financial advisors (as described more fully in the enclosed proxy statement), has (a) determined that the Merger Agreement, including all exhibits and documents attached thereto, and the related transactions contemplated thereby are advisable and in the best interests of the Company and its shareholders, (b) approved, adopted, declared advisable and authorized in all respects the Merger Agreement and the related transactions contemplated

thereby, and (c) resolved to recommend that the Company’s shareholders approve the adoption of the Merger Agreement and the related transactions contemplated thereby. The Board of Directors recommends that you vote “FOR” the adoption of the Merger Agreement and the approval of the related transactions contemplated thereby (the “Merger Proposal”) and “FOR” the adjournment of the Special Meeting, if necessary and for a minimum period of time reasonable under the circumstances, to ensure that any necessary supplement or amendment to the proxy statement accompanying this notice is provided to the Company’s shareholders a reasonable amount of time in advance of the Special Meeting, or to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to approve the proposal to approve the adoption of the Merger Agreement and the related transactions contemplated by the Merger Agreement.

Pursuant to rules of the SEC, you also will be asked to vote at the Special Meeting on an advisory (non-binding) proposal (the “Compensation Proposal”) to approve specified compensation that may become payable to the named executive officers of the Company in connection with the Merger, as described in the proxy statement. The Board of Directors also recommends that the shareholders of the Company vote “FOR” the Compensation Proposal.

The enclosed proxy statement describes the Merger Agreement (a copy of which is attached to the enclosed proxy statement as Annex A), the Merger and related agreements and provides specific information concerning the Special Meeting. In addition, you may obtain information about us from documents filed with the SEC. We urge you to read the entire proxy statement, including the annexes and the documents referred to or incorporated by reference in the proxy statement, carefully, as it sets forth the details of the Merger Agreement and other important information related to the merger.

The Merger cannot be completed without (i) the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock and preferred stock, each voting as a separate class, and (ii) the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock held by the holders of our Common Stock other than Mr. Glaser and his affiliates and the Company directors who were not members of the Special Committee. Pursuant to our Amended and Restated Articles of Incorporation, as amended (our “Charter”), shares of Common Stock are entitled to one vote per share, and shares of Series B Preferred Stock are non-voting except as required by law. In addition, the Merger Agreement makes the approval by shareholders of the Merger Proposal a condition to the parties’ obligations to consummate the Merger. If you fail to vote on the Merger Proposal, the effect will be the same as a vote against the Merger Proposal.

If you own shares of our Common Stock of record, you will find enclosed a proxy card and an envelope in which to return the card. Whether or not you plan to attend the Special Meeting, please sign, date and return your enclosed proxy card, or vote over the phone or Internet, as soon as possible so that your shares can be voted at the Special Meeting in accordance with your instructions. You can revoke your proxy before the Special Meeting and issue a new proxy as you deem appropriate. You will find the procedures to follow if you wish to revoke your proxy on page 87 of the enclosed proxy statement. If you are a shareholder of record, submitting a proxy will not prevent you from voting your shares in person if you subsequently choose to attend the Special Meeting.

If you are a shareholder who holds your Common Stock in “street name” through a broker, bank or other nominee, please be aware that you will need to follow the directions provided by such broker, bank or nominee regarding how to instruct it to vote your Common Stock at the Special Meeting. Your broker, bank or other nominee will be unable to vote your shares without instructions from you.

On behalf of the Board of Directors, I would like to express our appreciation for your support of RealNetworks. We look forward to seeing you at the meeting.

Sincerely,

MICHAEL PARHAM

Senior Vice President, General Counsel and Corporate Secretary

                , 2022

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the Merger, passed upon the merits or fairness of the Merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

This proxy statement is dated                 , 2022, and is first being mailed to shareholders on or about                 , 2022.

REALNETWORKS, INC.

1501 First Avenue South, Suite 600

Seattle, Washington 98134

Approval of the Merger Proposal requires (i) the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock and preferred stock, each voting as a separate class, and (ii) the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock held by the holders of our Common Stock other than the Voting Agreement Shareholders (as defined below). Pursuant to our Amended and Restated Articles of Incorporation, as amended (our “Charter”), shares of our Common Stock are entitled to one vote per share, and shares of our Series B Preferred Stock (the “Series B Preferred Stock”) are non-voting except as required by law. Under the terms of a Voting and Support Agreement, dated as of July 27, 2022 (the “Voting Agreement”) that Parent, Mr. Glaser and his affiliates (the “Founder Shareholders”) and the Company directors who were not members of the Special Committee (collectively with the Founder Shareholders, the “Voting Agreement Shareholders”) entered into with the Company concurrently with the execution and delivery of the Merger Agreement, the Voting Agreement Shareholders, as holders of approximately 29% of the outstanding Common Stock as of the date of the Voting Agreement, agreed, among other things, to vote all shares they own in favor of adoption of the Merger Agreement. A failure to vote your shares “FOR” the Merger Proposal or an abstention from voting on the Merger Proposal will have the same effect as a vote “AGAINST” the Merger Proposal for purposes of the required shareholder vote. Approval of the Compensation Proposal and the Adjournment Proposal each require a majority of the votes entitled to be cast at the Special Meeting and the presence of quorum. A failure to vote your shares “FOR” the Compensation Proposal or the Adjournment Proposal or an abstention from voting on each proposal will have the same effect as a vote “AGAINST” each proposal for purposes of the required shareholder vote. Even if you plan to attend the Special Meeting in person, we request that you complete, sign, date and return the enclosed proxy and thus ensure that your shares will be represented at the Special Meeting if you are unable to attend. You also may submit your proxy by using a toll-free telephone number or the Internet. We have provided instructions in the enclosed proxy statement and on the proxy card for using these convenient services.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the Merger Proposal, Compensation Proposal and Adjournment Proposal. If you fail to attend the Special Meeting or submit your proxy card, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting and will have the same effect as a vote “AGAINST” the Merger Proposal and no effect on the Compensation Proposal and the Adjournment Proposal.

You may revoke your proxy at any time before the vote at the Special Meeting by following the procedures outlined in the enclosed proxy statement. If you are a shareholder of record, attend the Special Meeting and wish to vote in person, you may revoke your proxy and vote in person.

If you are a shareholder who holds your Common Stock in “street name” through a broker, bank or other nominee, please be aware that you will need to follow the directions provided by such broker, bank or nominee regarding how to instruct it to vote your shares at the Special Meeting.

BY ORDER OF THE BOARD OF DIRECTORS,

MICHAEL PARHAM

Senior Vice President, General Counsel and Corporate Secretary

Seattle, Washington

                        , 2022

TABLE OF CONTENTS

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REALNETWORKS, INC.

1501 First Avenue South, Suite 600

Seattle, Washington 98134

(206) 674-2700

statement, Parent has not engaged in any business activities other than those incidental to its formation and in connection with the transactions contemplated by the Merger Agreement. The principal executive offices of Parent are located at 1501 First Avenue South, Suite 600 Seattle, Washington 98134 and its telephone number is (206) 674-2700. As of the date hereof, the Parent Guarantor holds 100% of the issued and outstanding equity interests in Parent; however, pursuant to the engagement letter with Imperial, upon the Closing, Parent has agreed to grant Imperial warrants to purchase $200,000 worth of equity interests in Parent at an exercise price of $0.01 per equity interest.

Greater Heights Acquisition LLC (“Merger Sub”)

Merger Sub is a Washington limited liability company and a wholly owned subsidiary of Parent and was formed on July 25, 2022, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement. As of the date of this proxy statement, Merger Sub has not engaged in any business activities other than those incidental to its formation and in connection with the transactions contemplated by the Merger Agreement. The principal executive offices of Merger Sub are located at 1501 First Avenue South, Suite 600 Seattle, Washington 98134 and its telephone number is (206) 674-2700.

Parent and Merger Sub are affiliated with Robert Glaser (the “Parent Guarantor”). In connection with the transactions contemplated by the Merger Agreement, the Parent Guarantor has provided to the Company a guarantee of the payment obligations of Parent and Merger Sub under the Merger Agreement.

The Merger Proposal

You are being asked to consider and vote upon the Merger Proposal.

At the effective time of the Merger (the “Effective Time”), each share of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), issued and outstanding immediately prior to the Effective Time, other than (a) shares held by Parent, Mr. Glaser, the Company (in treasury or otherwise) or any of their respective direct or indirect wholly owned subsidiaries as of immediately prior to the Effective Time or (b) shares held by holders who have not voted in favor of the Merger and who are entitled to demand and properly exercised dissenters’ rights in accordance with Washington law (as described more fully under “Special Factors—Certain Effects of the Merger” on page 61 of the enclosed proxy statement) will be converted into the right to receive $0.73, in cash (the “Merger Consideration”), without interest and less any required withholding taxes, and automatically canceled. At the Effective Time, each share of Common Stock and preferred stock that is owned by Parent, Mr. Glaser, the Company (in treasury or otherwise) or any of their respective direct or indirect wholly owned subsidiaries as of immediately prior to the Effective Time will automatically be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange therefor. Upon completion of the Merger, our Common Stock will no longer be publicly traded, and our shareholders (other than Parent directly) will cease to have any ownership interest in the surviving company.

The Special Meeting (Page 86)

The Special Meeting will be held at                 , on                 , 2022, at                 , Pacific time.

Record Date and Quorum (Page 86)

You are entitled to receive notice of, and to vote at, the Special Meeting if you owned shares of Common Stock at the close of business on                 , 2022, which the Company has set as the record date for the Special Meeting (the “Record Date”). As of the Record Date, a total of shares                  of Common Stock were outstanding and entitled to vote for purposes of voting on the matters set forth in this proxy statement,                  shares of which were held by the Voting Agreement Shareholders. Each share of Common Stock has one vote.

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As of the Record Date, a total of 8,064,516 shares of the Company’s Series B Preferred Stock (the “Series B Preferred Stock”) were outstanding, all of which were held by Mr. Glaser. Each share of Series B Preferred Stock is non-voting except as required by law.

The presence at the Special Meeting, in person or by proxy, of the holders of a majority of the shares of the Common Stock of the Company entitled to vote outstanding on the Record Date will constitute a quorum, permitting the Company to conduct its business at the Special Meeting. Proxies received but marked as abstentions will be included in the calculation of the number of shares considered to be present at the Special Meeting.

Required Shareholder Votes for the Merger (Page 86)

Approval of the Merger Proposal requires (i) the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock and preferred stock, each voting as a separate class, and (ii) the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock held by the holders of our Common Stock other than the Voting Agreement Shareholders. Pursuant to our Charter, shares of our Common Stock are entitled to one vote per share, and our Series B Preferred Stock are non-voting except as required by law. Under the terms of the Voting Agreement, the Voting Agreement Shareholders entered into with the Company concurrently with the execution and delivery of the Merger Agreement, the Voting Agreement Shareholders, as holders of approximately 29% of the outstanding Common Stock as of the date of the Voting Agreement, agreed, among other things, to vote all shares they own in favor of adoption of the Merger Agreement. A failure to vote your shares “FOR” the Merger Proposal or an abstention from voting on the Merger Proposal will have the same effect as a vote “AGAINST” the Merger Proposal for purposes of the required shareholder vote.

Approval of the Compensation Proposal and the Adjournment Proposal each require a majority of the votes entitled to be cast at the Special Meeting and the presence of quorum. A failure to vote your shares “FOR” the Compensation Proposal or the Adjournment Proposal or an abstention from voting on each proposal will have the same effect as a vote “AGAINST” each proposal for purposes of the required shareholder vote. Even if you plan to attend the Special Meeting in person, we request that you complete, sign, date and return the enclosed proxy and thus ensure that your shares will be represented at the Special Meeting if you are unable to attend. You also may submit your proxy by using a toll-free telephone number or the Internet. We have provided instructions in the enclosed proxy statement and on the proxy card for using these convenient services.

Except in their capacities as members of the Board or as members of the special committee (the “Special Committee”) that was established to evaluate and negotiate a potential transaction and consider other alternatives available to the Company (as described more fully under “Special Factors—Background of the Merger” on page 16), and except as contemplated by the Voting Agreement, no executive officer or director of the Company has made any recommendation either in support of or in opposition to the Merger or the Merger Agreement.

Conditions to the Merger (Page 105)

The obligations of the Company, Parent and Merger Sub to effect the Merger are subject to the satisfaction or waiver (where permissible pursuant to applicable law), at or prior to the closing, of each of the following conditions:

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The obligation of the Company to effect the Merger is subject to the satisfaction or waiver, at or prior to the closing, of each of the following conditions:

The obligation of Purchasers to effect the Merger is subject to the satisfaction or waiver (where permissible pursuant to applicable law), at or prior to the closing, of each of the following conditions:

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When the Merger Becomes Effective (Page 91)

We anticipate completing the Merger in the fourth quarter of 2022, subject to adoption of the Merger Agreement by the Company’s shareholders as specified herein and the satisfaction or waiver of the other conditions to closing.

Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger (Page 41)

Based in part on the unanimous recommendation of the Special Committee, the Board of Directors recommends that the shareholders of the Company vote “FOR” the adoption of the Merger Proposal. The Company’s purpose for engaging in the Merger is to enable its shareholders to receive the Merger Consideration, which represents a premium of approximately 55% over the closing price of the Company’s Common Stock of $0.47 per share on May 6, 2022 (the last trading day prior to the public announcement of the Merger Proposal). For a description of the reasons considered by the Special Committee and the Board for their respective recommendations, see “Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger” beginning on page 41.

Position of the Purchaser Filing Parties As to the Fairness of the Merger (Page 50)

The “Purchaser Filing Parties” means (i) Parent, (ii) Merger Sub, and (iii) the Parent Guarantor. The Purchaser Filing Parties believe that the proposed Merger is substantively and procedurally fair to the Company’s “unaffiliated security holders,” as defined in Rule 13e-3 under the Exchange Act (the “Unaffiliated Shareholders”). However, none of the Purchaser Filing Parties has undertaken any formal evaluation of the fairness of the Merger to the Unaffiliated Shareholders or engaged a financial advisor for such purpose. Moreover, none of the Purchaser Filing Parties participated in the deliberations of the Special Committee or received advice from the Special Committee’s or the Company’s respective legal or financial advisors in connection with the Merger. The belief of the Purchaser Filing Parties as to the procedural and substantive fairness of the Merger is based on the factors discussed in “Special Factors—Position of the Purchaser Filing Parties as to the Fairness of the Merger” beginning on page 50.

Opinion of the Special Committee’s Financial Advisor (Page 53)

On July 26, 2022, Houlihan Lokey Capital, Inc. (“Houlihan Lokey”) verbally rendered its opinion to the Special Committee (which was subsequently confirmed in writing), as to the fairness, from a financial point of view as of July 26, 2022, of the Merger Consideration to be received by the Unaffiliated Shareholders pursuant to the Merger Agreement.

Houlihan Lokey’s opinion was directed to the Special Committee (in its capacity as such) and only addressed the fairness, from a financial point of view as of July 26, 2022, of the Consideration to be received by the Unaffiliated Shareholders in the Merger pursuant to the Merger Agreement and did not address any other aspect or implication of the Merger or any other agreement, arrangement or understanding. The summary of Houlihan Lokey’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex C to this proxy statement and describes certain of the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not constitute, advice

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or a recommendation to the Special Committee, the Board of Directors, any security holder of the Company or any other person as to how to act or vote with respect to any matter relating to the Merger. See “Special Factors—Opinion of the Special Committee’s Financial Advisor” beginning on page 53.

Purposes and Reasons of Purchaser Filing Parties for the Merger (Page 60)

For a full description of the purposes and reasons of the Purchaser Filing Parties for the Merger, see “Special Factors—Purposes and Reasons of Purchaser Filing Parties for the Merger” beginning on page 60.

Certain Effects of the Merger (Page 61)

If the conditions to the closing of the Merger are either satisfied or waived, the Company will be merged with and into Merger Sub, the separate corporate existence of the Company will cease and Merger Sub will continue its corporate existence under Washington law as the surviving company in the Merger and a wholly owned subsidiary of Parent. At the Effective Time, each share of Common Stock issued and outstanding immediately prior to the Effective Time, other than (a) shares held by Parent, Mr. Glaser, the Company (in treasury or otherwise) or any of their respective direct or indirect wholly owned subsidiaries as of immediately prior to the Effective Time or (b) shares held by holders who have not voted in favor of the Merger and who are entitled to demand and properly exercised dissenters’ rights in accordance with Washington law (as described more fully under “Dissenters’ Rights” on page 121) will be converted into the right to receive $0.73, in cash (the “Merger Consideration”), without interest and less any required withholding taxes, and automatically canceled. Upon completion of the Merger, our Common Stock will no longer be publicly traded, and our shareholders (other than Parent directly) will cease to have any ownership interest in the surviving company. For a full description of certain effects of the Merger, see “Special Factors—Certain Effects of the Merger” on page 61.

Treatment of RealNetworks Equity Awards (Page 67)

The Merger Agreement provides that the Company will take such actions as necessary so that, at the Effective Time, each option to purchase Company Common Stock that is outstanding and vested under any of the Company’s 2020 Inducement Equity Incentive Plan, the Company’s 1996 Stock Option Plan, the Company’s 2007 Employee Stock Purchase Plan, and the Company’s 2005 Stock Incentive Plan (collectively, the “Company Plans”) as of immediately before the Effective Time will be canceled and converted into the right to receive a cash payment, equal to the product of (a) the total number of shares of Company Common Stock underlying such option, multiplied by (b) the excess, if any, of (i) the $0.73 per share Merger Consideration over (ii) the per-share exercise price for such option, less applicable taxes required to be withheld pursuant to the terms of the Merger Agreement. Each option to purchase Common Stock under the Company Plans that is outstanding and unvested under any of the Company Plans as of immediately before the Effective Time will be treated in accordance with the terms of the applicable Company Plan and form of award agreement thereunder. Notwithstanding the foregoing, any Company option with a per share exercise price that is equal to or greater than the per share Merger Consideration (an “underwater option”) will be cancelled as of the Effective Time for no consideration.

In addition, the Merger Agreement provides that the Company will take such actions as are necessary so that, at the Effective Time, each performance or restricted stock unit (“RSU”) subject to vesting, repurchase, or other lapse of restrictions that is outstanding and vested under any Company Plan as of immediately before the Effective Time will vest in full and become free of restrictions and will be canceled in exchange for the right to receive a cash payment, equal to the $0.73 per share Merger Consideration, less applicable taxes required to be withheld pursuant to the terms of the Merger Agreement. Each RSU under the Company Plans that is outstanding but unvested immediately before the Effective Time will be treated in accordance with the terms of the applicable Company Plan and form of award agreement thereunder.

The Company and Parent currently expect that unvested options and unvested RSUs will not be assumed or substituted in connection with, and instead will be canceled upon, the closing of the Merger; and therefore, in

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accordance with the terms of the Company Plans and the forms of award agreement thereunder, the unvested options and unvested RSUs will accelerate vesting in full and be treated in the same manner as vested options and vested RSUs, respectively, in the Merger.

Any such payments will be made by Parent or the surviving company, without interest, as promptly as reasonably practicable after the Effective Time, pursuant to the terms of the Merger Agreement.

Interests of the Company’s Directors and Executive Officers in the Merger (Page 66)

In considering the recommendations of the Special Committee and of the Board of Directors with respect to the Merger Agreement, you should be aware that, aside from their interests as shareholders of the Company, the Company’s directors and executive officers have interests in the Merger that are different from, or in addition to, those of other shareholders of the Company generally. In particular, Robert Glaser, our Chairman of the Board and Chief Executive Officer, is the sole member of Parent, and after the consummation of the Merger, the Company will become a wholly owned subsidiary of Parent. Following completion of the Merger, Mr. Glaser will continue as manager of the surviving company.

In addition to the foregoing, other interests of executive officers and directors that may be different from or in addition to the interests of the Company’s shareholders include the fact that:

These interests are discussed in more detail in the section entitled “Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 66. The Special Committee and the Board of Directors were aware of the different or additional interests described herein and considered those

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interests along with other matters in recommending and/or approving, as applicable, the Merger Agreement and the related transactions contemplated thereby.

Voting and Support Agreement (Page 110)

Concurrently with the execution and delivery of the Merger Agreement, the Voting Agreement Shareholders entered into the Voting Agreement with the Company. Pursuant to the Voting Agreement, the Voting Agreement Shareholders have agreed (i) to vote all shares of the Company’s capital stock owned by them in favor of the adoption of the Merger Agreement and the approval of the Merger and against any takeover proposal, acquisition agreement (other than the Merger Agreement) or any proposal, transaction, agreement or action in competition with or inconsistent with the Merger Agreement or the Merger, (ii) not to transfer their shares of Company Common Stock prior to the expiration of the Voting Agreement, (iii) not to take any actions that would in any way restrict, limit or interfere with the performance of such shareholder’s obligations under the Voting Agreement, make any representation or warranty of such shareholder in the Voting Agreement untrue or incorrect or otherwise restrict, limit, interfere, prevent or disable such shareholder from performing its obligations under the Voting Agreement and the Merger Agreement and (iv) to waive, and not to assert, any rights of appraisal or rights to dissent in connection with the Merger Agreement and the Merger. For more information, see “Voting and Support Agreement” beginning on page 110.

Material U.S. Federal Income Tax Consequences of the Merger (Page 79)

If you are a U.S. holder, the receipt of cash in exchange for Common Stock pursuant to the Merger will generally be a taxable transaction for U.S. federal income tax purposes. You are encouraged to consult your own tax advisors regarding the particular tax consequences to you of the exchange of shares of Common Stock for cash pursuant to the Merger in light of your particular circumstances (including the application and effect of any state, local or foreign income and other tax laws). For more information, see “Special Factors—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 79.

Dissenters’ Rights (Page 121 and Annex D)

Shareholders have the right under Chapter 23B.13 of the Washington Business Corporation Act (“WBCA”) to dissent from, and obtain a cash payment of the fair value (as defined in Chapter 23B.13.010 of the WBCA) of their shares of the Company’s Common Stock (plus accrued interest from the Effective Time) in the event of, the Merger instead of receiving the Merger Consideration. A shareholder electing to dissent from the Merger must strictly comply with all procedures required under the WBCA. The procedures are summarized under “Dissenters’ Rights” beginning on page 121 in this proxy statement and reproduced in their entirety in Annex D to this proxy statement.

ANY SHAREHOLDER WHO WISHES TO EXERCISE DISSENTER’S RIGHTS OR WHO WISHES TO PRESERVE THEIR RIGHT TO DO SO SHOULD REVIEW ANNEX D CAREFULLY AND IN ITS ENTIRETY AND SHOULD CONSULT THEIR LEGAL ADVISOR, SINCE FAILURE TO TIMELY AND PROPERLY COMPLY WITH THE PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF SUCH RIGHTS.

No Solicitation of Takeover Proposals (Page 99)

The Merger Agreement provides that the Company, its affiliates and its representatives are not permitted to, directly or indirectly, initiate, solicit, or knowingly take any action to facilitate or encourage the submission of any Takeover Proposal (as defined below in “The Merger Agreement—No Solicitation of Takeover Proposals” beginning on page 99) or the making of any proposal that could reasonably be expected to lead to any Takeover Proposal.

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Notwithstanding the foregoing, the Company, subject to compliance with certain requirements set forth in the Merger Agreement, may provide information to, and may engage or participate in discussions or negotiations, with respect to an unsolicited Takeover Proposal that the Company’s Board of Directors has determined, in good faith and after consultation with its financial advisors and outside legal counsel, individually or in the aggregate with any other unsolicited Takeover Proposals, constitutes or could reasonably be expected to result in a Superior Proposal (as defined below in “The Merger Agreement—No Solicitation of Takeover Proposals” beginning on page 99).

Financing (Page 82)

We anticipate that Parent will need total funds of approximately $                 million to:

We anticipate that the funds needed to pay the amounts described above will be obtained from the cash and other liquid assets on hand of Parent Guarantor. In addition, Parent Guarantor owns 12,903,088 shares of Company Common Stock and 8,064,516 shares of Series B Preferred Stock immediately prior to the Merger (representing the equivalent of an approximately $15.3 million based upon the $0.73 per share Merger Consideration), which are being rolled over and not cashed out in connection with the Merger.

See “Special Factors—Financing” on page 82. The obtaining of financing is not a condition to the obligations of Parent and Merger Sub to effect the Merger pursuant to the terms of the Merger Agreement.

Guarantee (Page 109)

Pursuant to the Merger Agreement, the Parent Guarantor has agreed to personally and unconditionally guarantee the payment, performance and discharge of Parent and Merger Sub’s obligations under the Merger Agreement.

Termination and Termination Fee (Page 106])

The Merger Agreement contains certain termination rights for the Company, Parent and Merger Sub, whether before or after the requisite shareholder approval of the Merger. If the Merger Agreement is terminated under certain circumstances as provided in the Merger Agreement, the Company could be required to pay Parent a termination fee equal to (i) $1,043,971, (ii) the lesser of (A) $521,985.50 or (B) Parent’s fees and expenses incurred in connection with the Merger Agreement and the Merger, or (iii) the lesser of (A) Parent’s fees and expenses incurred in connection with the Merger Agreement and the Merger or (B) $500,000, depending on the circumstances of the termination. See “Merger Agreement—Termination of the Merger Agreement” on page 106 and “Merger Agreement—Termination Fees and Expenses” on page 108.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the Special Meeting, the Merger Agreement and the Merger. These questions and answers may not address all questions that may be important to you as a shareholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement for further information.

As of the Record Date, a total of                  shares of our Common Stock were outstanding and entitled to vote, of which a total of                  shares of our Common Stock are held by holders other than Mr. Glaser and his affiliates.

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Under the terms of the Voting Agreement, the Voting Agreement Shareholders, as holders of approximately 29% of the outstanding Common Stock as of the date of the Voting Agreement, agreed, among other things, to vote all shares they own in favor of adoption of the Merger Agreement. In addition, each of the directors and executive officers of the Company has informed the Company that, as of the date of this proxy statement, they intend to vote in favor of the adoption of the Merger Agreement.

Pursuant to our Charter, shares of Common Stock are entitled to one vote per share, and shares of preferred stock are non-voting except as required by law.

You should read “Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger” beginning on page 41 for a discussion of the factors that the Special Committee and the Board of Directors considered in deciding to recommend

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and/or approve, as applicable, the Merger Agreement. See also “Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 66.

In addition, the Merger Agreement provides that the Company will take such actions as are necessary so that, at the Effective Time, each RSU you hold (if any) that is subject to vesting, repurchase, or other lapse of restrictions and that is outstanding and vested under any Company Plan immediately before the Effective Time will vest in full and become free of restrictions and will be canceled in exchange for the right to receive a cash payment, equal to the $0.73 per share Merger Consideration, less applicable taxes required to be withheld pursuant to the terms of the Merger Agreement. Each RSU under the Company Plans that is outstanding but unvested immediately before the Effective Time will be treated in accordance with the terms of the applicable Company Plan and form of award agreement thereunder.

The Company and Parent currently expect that unvested options and unvested RSUs will not be assumed or substituted in connection with, and instead will be canceled upon, the closing of the Merger; and therefore, in accordance with the terms of the Company Plans and the forms of award agreement thereunder, the unvested options and unvested RSUs will accelerate vesting in full and be treated in the same manner as vested options and vested RSUs, respectively, in the Merger.

Any such payments will be made by Parent or the surviving company, without interest, as promptly as reasonably practicable after the Effective Time, pursuant to the terms of the Merger Agreement.

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If you are a shareholder of record, you can ensure that your shares are voted at the Special Meeting by submitting your proxy via:

If you hold your Common Stock in “street name” through a broker, bank or other nominee, you should follow the directions provided by it regarding how to instruct it to vote your shares. Without those instructions, your shares will not be voted, which will have the same effect as voting “AGAINST” approval of the Merger Proposal, the Compensation Proposal and the Adjournment Proposal.

Please note that if you hold your Common Stock in “street name” and you have instructed a broker, bank or other nominee to vote your Common Stock, the above-described options for revoking your voting instructions do not apply, and instead you must follow the instructions received from your broker, bank or other nominee to revoke your voting instructions.

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If your shares of Common Stock are held through a broker, bank or other nominee, you will receive either a voting form or a proxy card from the nominee with specific instructions about the voting methods available to you. As a beneficial owner, in order to ensure your shares of Common Stock are voted, you must provide voting instructions to the broker, bank or other nominee by the deadline provided in the materials you receive from them.

If your broker, bank or other nominee holds your Common Stock, you can also call your broker, bank or other nominee for additional information.

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SPECIAL FACTORS

Background of the Merger

The Company was founded by Mr. Glaser in 1994 and completed its initial public offering in November of 1997.

In the six months leading up to Mr. Glaser’s consideration of a going private transaction, the trading price of the Company’s Common Stock entered a significant decline. On February 18, 2022, the Company was notified that it was out of compliance with the Nasdaq’s continuing listing standards. Subsequent to that time, the Company had increasingly been facing liquidity constraints, a declining cash-balance and the risk that the Company would not be able to continue all of its business lines as a long-term going concern absent a capital raise or other significant liquidity event.

As the trading price declined, beginning in the fall of 2021, Mr. Glaser, who remains the Company’s largest shareholder, as well as the Chairman and Chief Executive Officer, began to consider that a go-private transaction might be the best route to maximizing value for shareholders of the Company.

At a Board meeting on November 9, 2021, Mr. Glaser informed the Board that he was considering a proposal to acquire all of the Company shares not owned by Mr. Glaser or his affiliates, and he conveyed that he was not requesting that the Board take any action at such time. In response to Mr. Glaser’s potential plans, the Board formed a special committee of independent and disinterested directors (the “Special Committee”) to establish the process by which Mr. Glaser could engage with management of the Company, and to allow the Board to evaluate any proposal Mr. Glaser might make and negotiate the terms thereof. The Board appointed Bruce Jaffe and Erik Prusch to serve as the members of the Special Committee. The Board’s resolutions authorized the Special Committee to, among other things and in its sole discretion, engage independent legal and financial advisors, obtain information from and direct the Company’s management and direct the negotiation of any potential transaction that Mr. Glaser might propose. Further, the Board resolved that it would not approve or recommend approval by the Company’s shareholders of any transaction with Mr. Glaser without the prior favorable approval and recommendation of the transaction by the Special Committee.

In November 2021, the Special Committee considered three potential legal advisors, including representatives of King & Spalding LLP (“K&S”). After considering the expertise and qualifications of the various firms in representing special committees evaluating “going private” transactions and confirming that K&S had no conflicts of interest involving the Company, Mr. Glaser or any of Mr. Glaser’s affiliates, the Special Committee retained K&S as the Special Committee’s independent legal advisor.

On November 17, 2021, the Special Committee held a meeting at which its advisors from K&S participated. The Special Committee reviewed its fiduciary duties in the context of a potential going private transaction, the conflicts of interest presented by any proposal Mr. Glaser might make, and the standards of review applicable to going private transactions. The Special Committee also discussed the need to retain an independent financial advisor and began to identify such potential advisors.

In the week following the meeting, Mr. Glaser contacted Mr. Jaffe to discuss his potential interest in making a proposal to acquire all of the Company’s outstanding shares not owned by Mr. Glaser and his affiliates. Mr. Jaffe and Mr. Glaser discussed the potential process for the Special Committee’s consideration of any such proposal, though at such time Mr. Glaser did not make any specific proposal, nor was there any discussion of price or the terms of any potential proposal. Mr. Glaser’s intention was to partner with third parties to assist in financing the potential proposal.

On November 23, 2021, the Special Committee held a meeting at which its representatives from K&S participated. During such meeting, the Special Committee discussed the preliminary information received from seven potential independent financial advisors contacted by the Special Committee and its advisors.

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On December 2, 2021, the Special Committee held a meeting at which its advisors from K&S participated. The Special Committee discussed the interest and preliminary qualification materials received from potential independent financial advisors, concluding that the Special Committee would interview representatives of three such independent financial advisors.

During the last week of December 2021, Mr. Glaser again contacted Mr. Jaffe to discuss a process to enable any due diligence anticipated by any third-party investors and reiterated the fact that at that time Mr. Glaser was only considering making a proposal if additional investors could be identified to provide a portion of the needed capital. In that discussion, Mr. Glaser noted that he did not anticipate he would be in a position to make a formal proposal, if at all, until late in the first quarter of 2022.

On December 16, December 23, and December 28, 2021, the Special Committee held meetings at which its advisors from K&S participated to discuss the process by which Mr. Glaser could provide confidential information regarding the Company to potential financing sources and to discuss the retention of an independent financial advisor. The Special Committee resolved to reach agreement with Mr. Glaser on the terms of a non-disclosure agreement, which would be signed by potential financing sources and would protect the confidential information of the Company and further resolved that Mr. Glaser should not have access to any financial forecast that was not concurrently made available to the Special Committee.

On December 27, 2021, Mr. Glaser and Mr. Jaffe communicated about the process to provide certain financial information to Mr. Glaser’s financial advisor, Imperial Capital, LLC (“Imperial”), subject to an obligation of confidentiality, so that Imperial could begin the process of soliciting potential interest from financing sources.

On January 6, 2022, the Special Committee held a meeting at which its advisors from K&S participated. The Special Committee reviewed the materials received from certain investment banks, the lack of potential conflicts identified by such potential financial advisors, and the interviews conducted of the teams that would lead such engagement. Based on the experience of the team in providing independent financial advice to special committees considering going private transactions, the industry expertise of the investment bank and the independence and disinterest with regards to the Company and Mr. Glaser, the Special Committee resolved to engage Houlihan Lokey as its independent financial advisor, subject to the completion of a satisfactory engagement letter. Houlihan Lokey and the Special Committee subsequently entered into an engagement letter dated February 2, 2022.

During the weeks of January 10 and 17, 2022, K&S and Mr. Glaser’s legal advisors, DLA Piper LLP (US) (“DLA”), discussed and revised a proposed non-disclosure agreement that would protect the Company’s confidential information when shared by the Company or Mr. Glaser with potential financing sources. The legal advisors also discussed the creation and management of a dataroom to ensure that any information made available to Mr. Glaser’s potential financing sources related to the Company would also be available to the Special Committee. The legal advisors reached agreement on the terms of such non-disclosure agreement and the process for sharing such confidential information with potential financing sources on January 19, 2022.

On January 26, 2022, the Board held a regularly scheduled meeting. During such meeting, the Board discussed three-year financial forecasts prepared by the Company’s management team, with a view to approving a budget for FY 2022. In consideration of the budget, the Board reviewed a “baseline forecast” that did not reflect any additional near-term capital investment and a financial forecast that assumed the Company would receive approximately $15 million of additional near-term capital to fund its growth projects. In light of business uncertainty and related open questions around additional capital required, the Board approved a budget for only the first six months of 2022 and requested more detail from management regarding financial outlays and projections for the second half of 2022.

On January 27, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated. Following a discussion of the Board-approved budget for the first half of 2022, the Special

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Committee and its advisors discussed the potential implications of such budget and the potential impact on the financial prospects of the Company’s various business segments. The Special Committee also shared the Board’s position that if a potential transaction were not possible, the Board may have to consider paring back the Company’s financial outlay to preserve cash, which would necessarily impact the Company’s potential growth prospects.

Beginning the last week of January and through the beginning of March, representatives of Houlihan Lokey met on numerous occasions with Company management in connection with Houlihan Lokey’s diligence of the Company. Houlihan Lokey discussed with Company management the Company’s business plan and strategic initiatives, the market environment for various business segments and other matters related to the financial perspectives being prepared by Houlihan Lokey.

On February 25, 2022, Mr. Jaffe and Mr. Glaser attended a social event together, during which Mr. Jaffe and Mr. Glaser briefly discussed the status of Mr. Glaser’s outreach to potential sources of financing. Mr. Glaser explained that a number of potential financing sources were reluctant to invest in a potential transaction whereby Mr. Glaser would take the Company private for a variety of reasons, including the current economic climate, the state of such potential investors’ current portfolios, the complexity of the Company’s business portfolio, and concerns about the Company’s prospects.

On March 1, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated and discussed Houlihan Lokey’s preliminary observations regarding the Company and the industries in which it operates. Houlihan Lokey discussed recent trading performance and the make-up of the Company’s shareholder base, as well as the “baseline” financial forecast prepared by Company management, which management indicated represented management’s best estimates for future financial performance. Houlihan Lokey also highlighted the Company’s historic track record of failing to achieve forecasted performance, both across the Company and in various business segments.

In early March 2022, Mr. Glaser contacted Mr. Jaffe and indicated that Mr. Glaser had not identified any potential financing sources with whom he was willing to agree to terms to support his potential acquisition of the Company. Mr. Glaser stated that he would continue to explore possible alternative transaction structures, including partnering with a potential acquirer of one or more of the Company’s businesses with Mr. Glaser responsible for the remainder of the necessary capital. Mr. Glaser was ultimately unable to secure sufficient interest to proceed with these alternative structures.

On March 24, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated. The Special Committee and its advisors discussed the status of the process, as well as the recent trading performance of the Company.

On April 11, 2022, in preparation for the regularly scheduled meeting Board meeting on April 21, 2022, Mr. Glaser informed the Board that he had ended his efforts to pursue a potential transaction with a third-party investor, including Imperial’s support of those efforts. Having been unable to identify potential partner financing sources, Mr. Glaser told the Board that the concept of a transaction supported by a partner financing source was not viable at this time. A similar discussion occurred at the April 22, 2022 Board meeting.

On April 26, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated and discussed Mr. Glaser’s recent statements that in light of his inability to raise committed third-party financing for a transaction, Mr. Glaser was terminating the process initiated in November 2021, by which the Special Committee would evaluate a potential take-private proposal from Mr. Glaser. In light of Mr. Glaser’s potential interest in participating in potential transactions if buyers for various business segments were identified through other means the Special Committee concluded that it should not disband, but rather should sit in hiatus in case any such transaction emerged.

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On May 6, 2022, Mr. Glaser contacted Mr. Jaffe to inform him Mr. Glaser had decided to proceed with a proposed transaction that did not require third-party financing and that he would be submitting a proposal to acquire all of the outstanding shares of the Company that were not currently owned by Mr. Glaser and his affiliates. Thereafter, Mr. Glaser delivered a letter to the Board setting forth his proposal (the “Proposed Transaction”) the text of which is as follows:

May 6, 2022

The Board of Directors

RealNetworks, Inc.

1501 First Avenue South

Seattle, Washington 98134

Dear Members of the Board:

I, Robert Glaser, am pleased to submit this preliminary non-binding proposal to acquire RealNetworks, Inc. (the “Company”) in a going private transaction (the “Transaction”).

Having founded the Company and been actively involved through its many stages as the broader technology sector has transformed, I believe that private ownership of the Company will provide it with cost efficiencies and flexibility that will ensure its ongoing viability and enhance the Company’s ability to deliver on its promise to its customers, partners, and employees. In light of the Company’s diminishing cash balance, I believe it is critical for the Company in the very near term to reduce its spending and pursue growth initiatives unencumbered by the cost and complexity of being a public company.

I have formed a special purpose entity for the Transaction, Greater Heights LLC. I am prepared to move forward with this Transaction alone, and I have the liquid financial resources to do so. It is possible that I might team with additional buyer parties (collectively, the “Buyers”); if this were to happen, they would co-invest with me in Greater Heights LLC, which would facilitate seamless negotiations with the Company. I envision acquiring all the outstanding shares of common stock of the Company (the “Shares”) that are not already directly or indirectly beneficially owned by me (or any other Buyer), although I may wish to propose an asset acquisition instead depending on the results of my due diligence review.

As you know, I currently beneficially own 13,362,189 Shares and 8,064,516 shares of non-voting Series B Preferred Stock. As the largest shareholder of the Company, I have the most to lose if the Company does not address its cash burn in the near term. I believe I am also uniquely positioned to successfully consummate a Transaction.

Based on information available to me at this time, I am proposing to purchase the Shares for a purchase price of $.67 per Share, which represents a premium of approximately 44% to the closing price of the Shares on May 6, 2022 and a premium of approximately 18% to the volume-weighted average price of the Shares during the last 30 trading days. This proposal reflects an attractive value for the Company’s shareholders under the difficult circumstances, and a unique opportunity for them to monetize their investment at a premium to the Company’s current and recent stock price.

I expect that you will establish a special committee of independent directors to consider this proposal on behalf of the Company’s shareholders and to make a recommendation to the full board of directors. I also expect that the special committee will retain its own independent legal and financial advisors to assist in its review of the Transaction. I have retained legal and financial advisors to assist in the pursuit of the Transaction.

Given my extensive history and knowledge of the Company, I am prepared to negotiate definitive agreements with the special committee and its advisors, with the assistance of my advisors, and to complete the

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Transaction in an expedited manner. I expect that the definitive agreements will provide for representations, warranties, covenants, and conditions that are typical, customary, and appropriate for transactions of this type.

In considering this proposal, please note that, in my capacity as a shareholder of the Company, I believe it would be in the best interests of the Company for the special committee to negotiate exclusively with me toward definitive agreements and not attempt to commence an auction process in parallel with our negotiation. Such a process would introduce uncertainty and delay at a time when the Company can afford neither. If the special committee or board of directors feels a need to market check my proposed offer, there can be an opportunity to do so after we have reached a definitive agreement.

Through a combination of the rollover of existing capital stock in the Company and my available liquid financial resources, this Transaction would be fully funded, as would the ongoing operations of the Company following the Transaction. Accordingly, this proposal would not be subject to an uncertainty or delay with respect to any financing, and the Transaction will not be subject to a financing condition.

Following the Transaction, I would expect that the Company’s management team would remain in place. In addition, I anticipate maintaining the Company’s talented and valuable employee base at closing, which I view as one of its most important assets.

I have engaged DLA Piper LLP (US) as legal advisor for the Transaction. I have also engaged Imperial Capital as financial advisor for the Transaction.

This letter constitutes only a preliminary indication of interest and does not constitute any binding commitment with respect to the Transaction proposed in this letter or any other transaction. A binding commitment will result only after additional confirmatory due diligence and the execution of definitive agreements, and then will be on terms and conditions provided in such documentation.

While this letter is a non-binding commitment that I may withdraw at any time, please note that I regard time as of the essence in light of the Company’s financial position, and I do not intend to move forward with an offer on the terms set forth herein if we do not reach a definitive agreement by June 8, 2022 or if the Company’s cash balance falls below $15 million.

I would welcome the opportunity to meet with the special committee and/or its advisors as soon as possible to discuss this proposal. I look forward to your response.

Sincerely,

Robert Glaser

On May 9, 2022, the Company issued a press release acknowledging the receipt of Mr. Glaser’s proposal and advising of the formation of the Special Committee to review and evaluate the Proposed Transaction.

On May 10, 2022, the Special Committee and its advisors held a meeting to discuss the terms of the Proposed Transaction and the process to evaluate it. The Special Committee noted items that they believed required clarification from Mr. Glaser, including: (i) whether the completion of the Proposed Transaction was conditioned on (a) the approval of the Special Committee and/or (b) the approval of a majority of the shares not owned by Mr. Glaser and his affiliates; (ii) whether Mr. Glaser would be interested in selling his shares in a transaction with an alternative party at a higher price, if such a proposal should arise; (iii) whether Mr. Glaser would veto any alternative transaction via his role as the Chairman of the Board’s Strategic Transactions Committee; (iv) intended transaction structure and financing sources and (v) what sort of due diligence Mr. Glaser would require. Further, the Special Committee discussed the Company’s performance relative to the “baseline” financial forecast provided in January, noting that the Company had materially failed to achieve projected performance since such time. The Special Committee discussed these matters with its advisors and

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concluded that Company management should prepare an updated financial forecast reflecting Company management’s then-existing best estimates of future financial performance to accurately assess any proposal. Finally, in response to a request from the Special Committee, Company management provided the Special Committee and its advisors a summary of all ongoing discussions with third parties about potential strategic transactions so that the Special Committee could evaluate the Proposed Transaction in light of potential alternative transactions.

Beginning on May 10, 2022 and throughout the remainder of the month, representatives of Houlihan Lokey met with Company management in connection with Houlihan Lokey’s financial analysis of the Company. Company management discussed with Houlihan Lokey the Company’s recent performance, business plan and strategic initiatives, and Houlihan Lokey discussed with Company management the market environment for the various business segments and other matters related to the financial analysis being prepared by Houlihan Lokey, including an updated financial forecast being prepared by the Company’s management.

On May 11, 2022, the Special Committee delivered a letter to Mr. Glaser seeking clarification regarding a number of items included in his proposal of May 6^th, the text of which is as follows:

May 11, 2022

Rob Glaser

RealNetworks, Inc.

1501 First Avenue South

Seattle, Washington 98134

Dear Rob:

We are in receipt of your proposal dated May 6, 2022, that sets forth certain terms on which you propose to acquire RealNetworks, Inc. (the “Company”). We, the special committee established by the Company’s board of directors, intend to work expeditiously to evaluate your proposal. To that end, we have engaged an independent financial advisor (Houlihan Lokey) and counsel (King & Spalding) to advise and assist us. In connection with our review, the special committee will require some information to evaluate the financial terms of your proposal. We have already contacted Christine and Mike—we anticipate that financial information will be available in the near term.

As we consider your proposal, it would help to clarify a few points as well. While it may make sense for our advisors to connect on these points (or for all of us to speak), set forth below are certain areas where greater detail will assist us in our review.

Structure

Your proposal indicated that you “may wish to propose an asset acquisition…depending on the results of [your] due diligence review”. Before the special committee can evaluate your proposal, we need to understand what we are being asked to consider. A cash merger and an asset acquisition have very different implications for the public shareholders and the Company. Please advise whether your thinking on transaction structure has been refined and/or what diligence you must complete in order to finalize your transaction structure. While we anticipate moving expeditiously, we cannot begin to evaluate your proposal without this information. Additionally, please advise us as to the nature of the due diligence, the timeline for completion and the names of any third parties that have been or will be engaged to assist.

Financing

We appreciate that pursuant to your proposal, any transaction would not be subject to a financing condition, that the proposed transaction (and ongoing operations of the Company) would be “fully funded” and

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that you have “the liquid financial resources” to complete a transaction on the terms you proposed. So that we may confirm the funding available for the proposed transaction, associated expenses and ongoing operations, please provide the special committee with a detailed schedule of sources & uses.

Pursuant to your proposal, we also understand that you may partner with potential co-investors in connection with the proposed transaction. Please advise us as to your anticipated outreach to potential co-investors, the extent to which any such co-investors will require due diligence or other information from the Company and the timing of any such review.

Approvals

Please advise whether your proposed transaction is subject to any conditions. More specifically, before the special committee begins to evaluate your proposal, please advise whether the proposed transaction would be contingent upon the approval of the special committee and/or the approval of a majority of the shareholders that are not affiliated with you.

Market Check

Your proposal includes a request that, in light of the diminishing cash balance and the potential for delay, the special committee forgo any efforts to solicit alternative transactions on a parallel path with evaluating your proposal. You proposed that in the alternative, “there can be an opportunity [for a market check] after we have reached a definitive agreement.” While the special committee will not make any commitments regarding its process, it would be helpful to understand what sort of market check you would permit the special committee to undertake after entry into definitive agreement. More specifically, in connection with any such market check, would you be willing to terminate the Strategic Transactions Committee or forgo any approval rights such committee has over any potential alternative transaction? Additionally, notwithstanding your stated desire to take the Company private, are there terms on which you would agree to sell the Company to a third party?

Rob, thank you for your guidance. To the extent helpful to discuss this (whether in an advisor-to-advisor or an all-hands call) we are happy to do so.

We look forward to engaging with you on your proposed transaction. We all share the desire to do what is best for the Company and its shareholders.

Best Regards,

Bruce Jaffe & Erik Prusch

In response to the Special Committee’s letter seeking clarification on May 11^th, Mr. Glaser responded with a letter on May 12, 2022, the text of which is as follows:

May 12, 2022

Special Committee of the Board of Directors

RealNetworks, Inc.

1501 First Avenue South

Seattle, Washington 98134

Dear Bruce and Erik:

Thank you for your letter from May 11, 2022 in response to my letter dated May 6, 2022 proposing to acquire RealNetworks, Inc. (the “Company”) in a going private transaction (the “Proposal”). This letter is to respond to the questions contained in your letter.

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Regarding your questions about structure, I do not think the final form of the structure should slow down or delay my negotiations with the Company. The language in my offer reflects the fact that my tax advisors are assessing whether a deemed asset purchase (in other words, a forward merger treated as an asset purchase) would be a financially beneficial and efficient structure for me. If such a structure is proposed, we don’t anticipate a materially different tax outcome to the Company or its shareholders. We plan to follow-up in short order with the due diligence requests necessary to complete our analysis. In any event, we do not believe the timing or the results of our analysis should impact the special committee’s ability to evaluate the Proposal.

Regarding your questions about financing, I will have more than sufficient capital available to meet the needs for the full acquisition of all the outstanding shares of the Company at the price indicated in the Proposal. This will include reasonable allocations for legal, financial, tax, accounting, and other third party expenses customary for a transaction of this nature. At the right time, we will be prepared to provide proof of funds to support the capital availability for the transaction, as outlined above. As I indicated in the Proposal, my offer is not conditioned on the participation of co-investors. Moreover, I am not anticipating any near-term diligence from any potential co-investor. I would simply ask that we be able to share information with prospective co-investors when the time comes, pursuant to appropriate nondisclosure agreements for sharing such information.

Regarding approvals, I acknowledge that the Board of Directors may wish to make the consummation of the proposed transaction contingent upon the approval of the special committee, the Company’s full board, and/or the approval of a majority of the shareholders that are not affiliated with me. I do not have a position on this issue at this time. I will note that I regard the economic terms of my Proposal as an attractive deal for the Company’s shareholders, especially given both macro and company-specific circumstances. I also do not think it is necessary to delay your evaluation of the Proposal as we work through and resolve these matters.

Regarding your questions on a market check, I anticipate that the definitive agreement may include a “go shop” provision to be negotiated and agreed upon within market norms. With respect to the Strategic Transactions Committee, as you know this structure has been in the Company’s charter since before the Company went public in 1997. I do not anticipate that we would terminate the committee in connection with my proposed transaction or any other transaction.

In the interest of efficiency, I would suggest that we (including our lawyers and/or advisors) have a conference call today (Thursday) or Friday to discuss these and any other matters so that we can continue to move this process forward both rigorously and expeditiously. Please let me know if you agree and when would be a convenient time for to talk.

Sincerely,

Rob Glaser

On May 13, 2022, the Special Committee and its advisors, and Mr. Glaser and his advisors, held a meeting to discuss the terms of the Proposed Transaction as reflected in Mr. Glaser’s two letters. During the course of this meeting, the Special Committee and its advisors sought to maximize the protections afforded to the transaction process by conditioning the Proposed Transaction on both (i) approval by the Special Committee and (ii) approval by a majority of the shares not held by Mr. Glaser or his affiliates. Mr. Glaser did not commit during the meeting to condition the Proposed Transaction on both such requirements. Further, Mr. Glaser confirmed that he was not willing to waive in advance the applicability of the Strategic Transactions Committee, which has been in the Company’s Charter for its entire life as a public company, to any alternative transaction that the Special Committee might discover during Mr. Glaser’s proposed “go-shop” period.

On May 16, 2022, representatives of Houlihan Lokey held a call with representatives of Imperial to discuss the status of the Special Committee’s process. Representatives of Imperial communicated that Mr. Glaser was highly concerned about the Company’s financial position and thus was focused on a timely response to his proposal from the Special Committee.

- 22 -

On May 16, 2022, Mr. Glaser contacted Mr. Jaffe to express his concern over the deteriorating financial position at the Company and the pace of progress and his strong desire to move quickly to finalize terms. He also previewed a letter he would send to the Special Committee, further clarifying his position following the call with the Special Committee and its and his respective advisors. Following such conversation, Mr. Glaser delivered such letter to the Special Committee, the text of which is as follows:

May 16, 2022

Special Committee of the Board of Directors

RealNetworks, Inc.

1501 First Avenue South

Seattle, Washington 98134

Dear Bruce and Erik:

Thank you for your discussion on Friday, May 13, 2022, regarding my proposal to acquire RealNetworks, Inc. (the “Company”) in a going private transaction (the “Proposal”). This letter is to update you regarding my willingness to agree to a “majority of the minority” condition. I also want to reiterate to the Special Committee (the “Special Committee”) of the Board of Directors of the Company (the “Board”) the importance of commencing substantive negotiations with me as soon as possible.

My prior letter to you dated May 12, 2022 stated, among other things, that I did not have a position at that time regarding whether the consummation of the proposed transaction be contingent [sic] the approval of the Special Committee and a majority of the shareholders that are not affiliated with me. Upon further consideration, I am willing to confirm to you that the Proposal will be contingent on the approval of Special Committee and the approval of the holders of a majority of the vote of shares of the Company (present in person or by proxy and voting at the special meeting) other than shares held by me and any affiliated holders.

In addition, I remind you that the Proposal includes a June 8, 2022 deadline for entering into definitive agreements. While I understand that some preparatory steps are needed, at this point 10 days has [sic] lapsed from my original Proposal and no substantive negotiations have commenced.

There is no reason that we can’t begin to engage in substantive negotiations immediately, even as the Special Committee and its advisors do whatever work the Special Committee deems necessary for it to be in a position to fully evaluate my offer.

Given macro economic and financial market issues, and also the Company’s financial situation, I truly hope that we all agree that time is of the essence, and that we set up our work flow accordingly.

I look forward to hearing from you about the substantive terms of my offer, including enabling me to commence diligence, as a matter of urgency. I remain committed to moving forward rapidly and efficiently. Please let me know when to expect the Special Committee’s response.

Sincerely,

Rob Glaser

On May 17, 2022, Mr. Glaser called Mr. Jaffe and reiterated his concern at what he viewed as a lack of urgency on the part of the Special Committee. Mr. Glaser shared his perspective that the Company was in an increasingly financially challenging position and that each day of delay created additional cost and risk that Mr. Glaser would determine that the Proposed Transaction would not be a prudent use of his personal financial resources. Further, the absence of an agreed upon transaction could potentially put the Company at risk. Mr. Glaser acknowledged that the Special Committee would require an updated financial forecast in order to

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analyze a transaction but requested that the Special Committee engage in negotiations regarding the Proposed Transaction on a parallel path. Mr. Jaffe informed Mr. Glaser that the Special Committee anticipated using the management plan/forecast that would be presented shortly to the Board. Finally, Mr. Glaser reminded Mr. Jaffe that his proposal would expire if the Special Committee and Mr. Glaser had not resolved substantive terms by June 8, 2022.

On May 18, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated. Houlihan Lokey provided an update to the Special Committee regarding their recent communications with certain shareholders who had reached out following the announcement of Mr. Glaser’s proposal, as well as discussions related to unsolicited, inbound inquiries about potential alternative transactions. The Special Committee and its advisors discussed the low likelihood of consummating any such alternative transactions, given that the parties with which Houlihan Lokey communicated about the Company were not interested in all of the Company’s assets, the practical challenges associated with identifying and segregating the businesses that may be of interest to such parties, the significant diligence and complexity associated with executing such an alternative transaction (particularly in light of the Company’s financial position) and the approval needed from the Strategic Transactions Committee (chaired by Mr. Glaser) with respect to any such alternative transaction. Mr. Jaffe also provided a summary of his recent conversations with Mr. Glaser and Mr. Glaser’s request that the Special Committee move with greater urgency, as well as his request for a formal letter inviting Mr. Glaser to begin formal due diligence. Finally, the Special Committee and its advisors discussed the financial forecast being prepared by Company management, noting that the forecast assumed additional capital to fund operations, but with no specific guidance or expectations on whether, or the terms on which, such capital would be provided. The Special Committee noted that without the additional capital, or a significant change in the Company’s strategic plan, the Company’s cash reserves would likely be depleted within 12 to 15 months.

Following the Special Committee meeting, the Special Committee delivered the following letter to Mr. Glaser (as requested by Mr. Glaser), the text of which is as follows:

May 18, 2022

Rob Glaser

RealNetworks, Inc.

1501 First Avenue South

Seattle, Washington 98134

Dear Rob:

Thank you for the discussion on May 13, 2022 and your response letter dated May 16, 2022. We appreciate your clarification on various structural points in your proposal to acquire RealNetworks, Inc. (the “Company”).

As we discussed, we acknowledge your desire for the special committee of the board of directors of the Company (the “Special Committee”) to move expeditiously in considering your proposal. To that end, the Special Committee retained independent advisors, reviewed your formal proposal, engaged in discussions with you and your advisors regarding the terms of your proposal, met with management (other than you) regarding their perception of whether the previously prepared financial forecast continues to reflect management’s best estimates of future financial performance, communicated with the Company’s shareholders that have expressed a desire to convey their opinion of your proposal to the Special Committee and communicated with third parties that have approached the Company or the Special Committee regarding potential alternative transactions. We appreciate that much of this is happening “on our side of the table”, so it may not appear to you as though the Special Committee is moving quickly to assess your proposal, but rest assured, we are working hard to do so.

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As you know, the Special Committee will require certain information and advice before it can thoughtfully consider your proposal. As you can see from the above, we are working to obtain such information and advice promptly. However, we also understand that you will require certain due diligence information in connection with finalizing the terms of your proposal. We encourage you to conduct such due diligence on a parallel path. To the extent we, or our advisors, can be helpful in facilitating your due diligence review, please advise us on how best to assist you. Further, while we do not want to unintentionally create any perception of our view regarding your proposal, we are mindful of your request to move expeditiously. To that end, while it is your decision regarding when to direct your advisors to begin preparing an initial draft of a merger agreement, we have directed our legal advisors to be ready to review any such draft merger agreement upon its receipt. We believe that your due diligence, our consideration of the financial terms of your proposal and any negotiations of the terms set forth in a definitive agreement can all happen concurrently.

We look forward to engaging with you on your proposed transaction. We all share the desire to do what is best for the Company and its shareholders.

Best Regards,

Bruce Jaffe & Erik Prusch

On May 19, 2022, Mr. Glaser spoke with Mr. Jaffe and informed Mr. Jaffe that Mr. Glaser did not think it was financially prudent to direct his attorneys to begin preparing a draft of the merger agreement prior to receiving a formal response to his proposal. Mr. Jaffe outlined the steps needed to respond, including the need for a final version of Company management’s financial forecast and time for the Special Committee’s advisors to review such plan and prepare resulting financial analysis. Specifically, Mr. Jaffe and Mr. Glaser agreed that Company management should prioritize completion of its updated financial forecast.

On May 23, 2022, Mr. Glaser and Mr. Jaffe spoke again about the process to review Mr. Glaser’s proposal.

On May 24, 2022, Mr. Glaser and Mr. Jaffe held a call to discuss the status of the updated management plan and financial forecast to be presented at the upcoming May 26, 2022 meeting of the Board, including Mr. Glaser’s position that the forecast would be extremely challenging to achieve, and Mr. Glaser’s intention to present his own alternative financial forecast to the Board, in addition to the forecast to be presented by the Company’s CFO and its President. Mr. Jaffe communicated the Special Committee’s intent to move expeditiously after it had the opportunity to review all relevant materials and consult with its advisors. Accordingly, Mr. Glaser instructed his attorneys to prepare an initial draft of the merger agreement.

On May 25, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated. Houlihan Lokey again advised the Special Committee of its communications with certain shareholders following the announcement of the Proposed Transaction as well as inbound inquiries from potential buyers. Again, the Special Committee and its advisors discussed the low likelihood of consummating any such alternative transactions. The Special Committee also discussed the outlook for the Company’s businesses, the updated financial forecast and the preparation by Company management for the Special Committee of an illustrative plan, to the extent feasible, to operate without the need for additional capital, including by separating and/or eliminating lines of business. The Special Committee and its advisors discussed the practical challenges associated with implementing such a plan, including personnel and customer retention, operating complexity and the potential role of the Strategic Transactions Committee. Ultimately the Special Committee concluded that it was not in a position to communicate anything more definitive than that the Special Committee would need the information and the time it determined were required to respond properly and that it was not prepared to approve a transaction based on $0.67 per share as set forth in Mr. Glaser’s proposal.

On May 26, 2022, in advance of a regularly scheduled Board meeting, Mr. Jaffe spoke with Mr. Glaser, during which meeting Mr. Jaffe communicated to Mr. Glaser that the delay in the Special Committee’s response

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to Mr. Glaser’s proposal at this point was a result of the Special Committee waiting for the financial forecast, which had just recently been distributed to the Board, and only now could Houlihan Lokey begin considering its financial analysis. Mr. Glaser reiterated that, as per his letter dated May 6, 2022, he might cease discussions if key terms were not resolved by June 8, 2022, but Mr. Jaffe was non-committal on the Special Committee’s ability to meet the requested timeline, reminding Mr. Glaser that the Special Committee needed time and information to adequately respond.

Later on May 26, 2022, the Board held a regularly scheduled meeting with the intention to approve a budget for the second half of 2022. At such meeting Mr. Glaser expressed concern to the Board regarding the Special Committee’s inability to move at the pace that he thought was the most prudent and in the Company’s best interests. Before a presentation of the financial forecast and management’s proposed budget for the second half of 2022, a director inquired about the Company’s plans to conserve cash and/or raise capital in the event the Company and Mr. Glaser could not reach agreement on the Proposed Transaction. Given open questions on the topic and the pendency of the negotiations between the Special Committee and Mr. Glaser, the Board again deferred approval of the second half budget to its regularly scheduled July meeting, at which time it expected to have better visibility on the likelihood of the Proposed Transaction.

After the Board meeting on May 26, 2022, all members of the Board (exclusive of Mr. Glaser) met and the Special Committee apprised the independent directors of the process being undertaken by the Special Committee, its thoroughness and commitment to the process, and the underlying reasons for Mr. Glaser’s frustration with the timeline. The independent directors expressed support for the Special Committee and its view of the most appropriate process.

On both May 27 and May 29, 2022, the Special Committee held meetings at which its advisors from K&S and Houlihan Lokey participated to discuss the financial forecast prepared by Company management. The Special Committee and its advisors acknowledged that the forecast prepared by management assumed the Company would raise additional capital to fund operations, but that achievement of such forecast was uncertain given that there was no source of such funding identified nor any apparent strategy to raise such capital. Nevertheless, the Special Committee and its advisors concluded that such forecast represented the best estimates of future financial performance available to the Special Committee.

On June 3, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated. Houlihan Lokey presented to the Special Committee a preliminary version of the financial analyses presented by Houlihan Lokey to the Special Committee on July 26, 2022. The Special Committee and its advisors also discussed the low likelihood of an alternative transaction that represented superior value being presented in the context of any solicitation (particularly given the diverse nature of the Company’s business segments and the complexity associated with segregating the businesses) and concluded that in light of these factors and Mr. Glaser’s unwillingness to waive the applicability of the Strategic Transactions Committee to such alternative transaction, any solicitation process was unlikely to be fruitful. The Special Committee and its advisors then discussed the Proposed Transaction and a response to Mr. Glaser’s Proposed Transaction, which would: (i) focus on significant certainty of closing; (ii) not include a financing condition; (iii) require the approval of a majority of the shares held by shareholders other than Mr. Glaser and his affiliates; (iv) include a personal guarantee of performance by Mr. Glaser; and (v) subject to the foregoing, be based on a purchase price of $0.90 per share.

On June 4, 2022, Mr. Jaffe and Mr. Prusch called Mr. Glaser to convey the Special Committee’s response to Mr. Glaser’s proposal. The Special Committee conveyed to Mr. Glaser it was prepared to support a transaction at $0.90 per share, provided that the merger agreement provided for limited conditionality and a personal guarantee from Mr. Glaser. With those terms, the Special Committee conveyed that it was prepared to move quickly to execute an agreement. Mr. Glaser requested that the Special Committee put its response in writing and confirmed that his legal advisors would prepare a merger agreement to be delivered to the Special Committee in the near term.

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Later on June 4, 2022, per Mr. Glaser’s request, the Special Committee delivered a letter memorializing the Special Committee’s response to Mr. Glaser’s Proposed Transaction, the text of which is as follows:

Rob Glaser

RealNetworks, Inc.

1501 First Avenue South

Seattle, Washington 98134

Dear Rob:

Thank you for the discussion earlier today regarding your proposal to acquire RealNetworks, Inc. (the “Company”). We want to thank you and your team for the continued effort put forward through the diligence process.

As stated in our prior discussions, our intention is to move expeditiously in considering your proposal. To that end, we have worked diligently over the past several weeks with our independent advisors to review your proposal, and have conducted extensive meetings with our advisors and the Company’s management team (other than you) to fully evaluate the terms of your proposal. Additionally, we have communicated with the Company’s shareholders who have expressed a desire to convey their opinion of your proposal to the special committee, and have communicated with third parties that have approached the Company or the special committee regarding potential alternative transactions.

After our review of the information provided to the special committee to date, along with the time our teams have spent together, we are prepared to recommend acceptance of your proposal based on increased cash consideration of $0.90 per share. Our counterproposal is subject to the negotiation of a satisfactory merger agreement, which will (i) include limited conditionality given your extensive knowledge of the Company, (ii) not include any financing conditions, (iii) require that the transaction be approved by a majority of the Company’s shareholders who are unaffiliated with you and (iv) not include a go-shop provision. The special committee and its advisors are prepared to begin negotiating the merger agreement and related legal documentation. We are prepared to move towards signing a definitive agreement in short order.

We look forward to engaging with you on your proposed transaction. We all share the desire to do what is best for the Company and its shareholders. We look forward to your response and thank you again for the effort you have put forward to date.

Best Regards,

Bruce Jaffe & Erik Prusch

On June 6, 2022, representatives of Imperial contacted representatives of Houlihan Lokey to discuss the letter and to better understand the diluted share count of the Company. Imperial stated that Mr. Glaser did not believe an increase in the purchase price was warranted and remained concerned about the financial position of the Company by the anticipated time of closing. Further, Mr. Glaser took the position that any solicitation of alternative transactions by the Special Committee should occur following the Special Committee and Mr. Glaser reaching final agreement on the Proposed Transaction, and reiterated that Mr. Glaser would not waive or eliminate the rights of the Strategic Transactions Committee.

Later on June 6, 2022, Mr. Glaser called Mr. Jaffe and Mr. Prusch to provide a counter-proposal of a transaction at $0.70 per share and previewed some elements of a soon to be delivered draft merger agreement.

Later still on June 6, 2022, representatives of DLA delivered an initial draft of a proposed merger agreement to representatives of K&S.

- 27 -

On June 7, 2022, the Special Committee held multiple meetings at which its advisors from K&S and Houlihan Lokey participated to discuss the financial and legal terms set forth in Mr. Glaser’s counter proposal and draft merger agreement. The Special Committee and its advisors discussed the price at which Mr. Glaser proposed to complete the transaction relative to the future prospects of the Company and the terms of the draft merger agreement circulated by Mr. Glaser’s legal counsel. The Special Committee noted that the draft merger agreement did not appear to reflect the certainty of price or certainty of closing that the Special Committee indicated were of paramount importance to the Special Committee, including the fact that certain conditions to closing appeared to be in Mr. Glaser’s control, the draft did not include a personal guarantee from Mr. Glaser, the majority of the minority approval condition appeared tied to the shares voting at the shareholder meeting, rather than shares outstanding, and that the merger agreement included a purchase price adjustment that was also potentially in Mr. Glaser’s control. The Special Committee and its advisors discussed the appropriate approach to responding to Mr. Glaser and concluded that firmly establishing the terms on which the Special Committee could support a transaction, primarily certainty of price and certainty of closing, should be set forth in writing with a material move on Mr. Glaser’s part on price to allow the parties to more efficiently resolve key differences and execute definitive agreements.

Later on June 7, 2022, the Special Committee delivered a letter formally responding to Mr. Glaser’s proposed price and terms, the text of which is as follows:

June 7, 2022

Rob Glaser

RealNetworks, Inc.

1501 First Avenue South

Seattle, Washington 98134

Dear Rob:

Thank you for the discussion yesterday regarding your proposal to acquire RealNetworks, Inc. (the “Company”) and for the draft Agreement and Plan of Merger (the “Merger Agreement”). We have considered your proposed terms and our counsel has undertaken a preliminary review of the Merger Agreement. Per your request that we respond by June 8th, we thought a written response was most appropriate to ensure that nothing was lost in translation.

In an effort to facilitate a prompt resolution of key terms, below are the terms on which we are prepared to recommend a transaction, subject of course, to the lawyers documenting the deal terms. The below reflects our view of the material changes to your proposal necessary for the Special Committee to recommend a transaction. We are focused, as we reiterated in our letter over the weekend, on maximum certainty for the Company’s shareholders, both as to price and as to closing.

We are prepared to support a transaction at $0.80 per share, which we view as a substantial concession to get to final terms.

In order to recommend a transaction at such price, we will expect the Merger Agreement to be revised to reflect the following:

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- 29 -

We look forward to engaging with you on your proposed transaction. We all share the desire to do what is best for the Company and its shareholders. We look forward to your response and thank you again for the effort you have put forward to date.

Best Regards,

Bruce Jaffe & Erik Prusch

On June 8, 2022, representatives of K&S and DLA spoke to discuss principal terms of the Special Committee’s counterproposal, with K&S reiterating the importance of the points highlighted in the Special Committee’s June 7^th letter and underscoring the Special Committee’s focus on ensuring a certain price for shareholders and ensuring that any transaction agreed to would in fact close. DLA expressed Mr. Glaser’s concern that the finances of the Company were deteriorating and he did not want to agree to a certain price only to see the value of the business erode. Finally, DLA confirmed that Mr. Glaser remained unwilling to waive the applicability of the Strategic Transaction Committee’s right to reject any alternative transaction that might be solicited in a proposed “go shop” provision.

Later on June 8, 2022, Mr. Glaser contacted Mr. Jaffe and Mr. Prusch via email to express his concern with the potential expenses incurred by the Company and the Special Committee in connection with the Proposed Transaction and indicated that some level of certainty regarding such fees would be necessary for Mr. Glaser to provide a certain price.

Late in the evening on June 8, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated to discuss the responses from Mr. Glaser and his advisors. The Special Committee and its advisors determined to prepare certain information for Mr. Glaser regarding anticipated fees of its advisors so that Mr. Glaser could include such fees in his analysis of the overall expense of the Proposed Transaction, but otherwise that the Special Committee did not believe it was productive to engage with Mr. Glaser until the Special Committee had a more comprehensive response on the issues presented by the Special Committee in its June 7^th letter.

On June 9, 2022, the Special Committee and Mr. Glaser held a call to discuss the terms proposed by the Special Committee’s June 7^th letter, with the Special Committee focused on ensuring certainty of price and certainty of closing. The Special Committee was not willing to engage in price negotiations in isolation from the other key transaction terms, so the call concluded without resolution on any key issues. During such call, Mr. Glaser expressed that he thought he was offering shareholders fair value and discussed the possibility that, if he were to withdraw the Proposed Transaction, the stock price would likely decrease significantly and Mr. Glaser could potentially be able to return later to propose to purchase the Company at a lower price. The Special Committee stated that it would not agree to terms, including price, that it did not believe were in the best interests of the shareholders unaffiliated with Mr. Glaser.

Later on June 9, 2022, Mr. Glaser responded with a letter to the Special Committee, the text of which is as follows:

June 9, 2022

Special Committee of the Board of Directors

RealNetworks, Inc.

1501 First Avenue South

Seattle, Washington 98134

Dear Bruce and Erik:

Thank you for your letter of June 7, 2022 relating to my offer to acquire RealNetworks, Inc. (the “Company”) and to the draft merger agreement (the “Proposed Agreement”). I also appreciate your time today

- 30 -

in discussing the issues set forth in your letter. As you requested, this letter responds comprehensively to the points contained in your letter.

Please note that this price assumes a suitable resolution to my questions regarding the treatment of restricted stock units and that there are no further adjustments to the transaction expense profile of the Company.

You and your financial advisors may have different information or opinions bearing on the utility of an affirmative market check. You are entitled to decide whether you wish to include one, and if you do my expectation is that it will be substantially in line with the one set forth in the Proposed Agreement. If you don’t

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want one that’s fine with me too. In any event, as I have consistently said, I am not terminating or waiving the strategic transaction committee, and I am not pre-committing to blindly approving future unidentified transactions that the Special Committee concludes are “superior” to my offer. I also note that I regard the break fee set forth in the Proposed Agreement as within market norms, and I am not agreeing to a “significantly reduced termination fee” to the extent it is outside of market norms.

At your earliest convenience, please let me know if you view these terms as establishing a viable framework for a transaction. I am, and I have instructed my advisors to be, standing by to rapidly respond to any questions or comments, consistent with my track record of rapid responses.

Sincerely,

Rob Glaser

On June 10, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated to discuss the recent response from Mr. Glaser. The Special Committee reiterated its focus on negotiating a transaction with a certain price that delivered appropriate value to shareholders and certainty that any such transaction would close. Based on Mr. Glaser’s June 9^th letter, the Special Committee expressed concern that the Special Committee and Mr. Glaser did not seem particularly close on either item. The Special Committee and its advisors discussed the terms proposed by Mr. Glaser and how best to respond, concluding that the Special Committee should provide a comprehensive revision to the draft merger agreement reflecting the Special Committee’s position on all relevant issues, which would also ensure that there was no ambiguity regarding the Special Committee’s position on any issues, and which would focus on ensuring a certain price with certainty of closing and performance. Further, the Special Committee and its advisors concluded that, notwithstanding Mr. Glaser’s letter, it would again suggest that if Mr. Glaser was serious about providing the Special Committee an opportunity to market check the deal after announcement, the Special Committee would need a more fulsome ability to do so.

On June 10, 2022, Mr. Glaser and Mr. Jaffe spoke to discuss the items in Mr. Glaser’s letter and the overall process.

On June 12, 2022 and again on June 13, 2022, the Special Committee held meetings at which its advisors from K&S and Houlihan Lokey participated, to discuss Mr. Glaser’s position on the issues and how to respond in the form of a merger agreement.

On June 13, 2022, the Special Committee delivered a responsive draft merger agreement to Mr. Glaser, also indicating that it was prepared to recommend a transaction based on $0.79 per share.

On June 14, 2022, Mr. Glaser called Mr. Jaffe to discuss the potential terms of a Proposed Transaction. During such call, Mr. Glaser again shared his discomfort at not having certainty regarding the cash position of the Company at closing and the impact of the Special Committee’s process on such cash balance. Additionally, Mr. Glaser indicated that he might be able to increase his proposed purchase price to $0.71 per share, but would not exceed that price.

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Following such call, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated to discuss the terms proposed by Mr. Glaser and proposed responses thereto. Later that day, the Special Committee delivered a letter to Mr. Glaser responding to the issues Mr. Glaser raised in his communications:

Rob Glaser

RealNetworks, Inc.

1501 First Avenue South

Seattle, Washington 98134

Dear Rob:

Thank you for your revised proposal to acquire RealNetworks, Inc. (the “Company”). As we discussed, we provided a comprehensive response in the form of a draft Agreement and Plan of Merger (the “Merger Agreement”), in which we provided detail on our position regarding what we view as all the open issues, and which also reflects the terms on which we would be willing to recommend a transaction. In response to your request, this letter provides a high-level summary of our position on the terms that you identified in your letter of June 9th. We are focused, as we have explained before and as is reflected in our draft of the Merger Agreement, on maximum certainty for the Company’s shareholders, both as to price and as to closing.

- 33 -

We look forward to continuing to engage with you on your proposed transaction. We all share the desire to do what is best for the Company and its shareholders. We look forward to your response and thank you again for the effort you have put forward to date.

Best Regards,

Bruce Jaffe & Erik Prusch

On June 15, 2022, Mr. Glaser called Mr. Jaffe to discuss the Special Committee’s concerns with a purchase price adjustment and how Mr. Glaser could get comfortable with the cash position of the Company at closing. Mr. Jaffe requested that Mr. Glaser prepare an issues list or other written communication that set forth his comprehensive position on what Mr. Glaser viewed as open issues so that the Special Committee could review holistically. Following such call, the Special Committee held a meeting, at which its advisors from K&S and Houlihan Lokey participated, to discuss Mr. Glaser’s concerns with the Company’s cash position and the impact of the Special Committee’s process and advisor fees on such cash position. Mr. Glaser re-affirmed his position on price.

On June 16, 2022, Mr. Glaser delivered to Mr. Jaffe a list of what Mr. Glaser considered the material issues in the merger agreement, which included Mr. Glaser’s proposed resolution of such issues.

Following receipt of Mr. Glaser’s issues list, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated to discuss such issues, certain of which introduced closing uncertainty that the Special Committee was not willing to accept. The Special Committee and its advisors agreed that Mr. Jaffe should call Mr. Glaser to convey that the parties were diverging.

Following the meeting of the Special Committee and its advisors, Mr. Jaffe called Mr. Glaser to inform him that the Special Committee felt that the parties were diverging and proposed that the negotiations cease. Mr. Glaser disagreed that progress and movement had not been achieved by both sides. Mr. Glaser recommended that the respective counsels speak, to which Mr. Jaffe agreed. Mr. Jaffe presented the Special Committee’s position that Mr. Glaser had drawn a firm line and would not discuss price and thus they were left to finalize terms, but despite weeks of negotiations the parties remained very far apart and continued discussions of that sort were fruitless. Mr. Glaser informed Mr. Jaffe that he primarily cared about the issue of transaction fees, and that further he might have flexibility on price but was not specific.

Later still on June 16, 2022, representatives of DLA and K&S discussed the issues presented in Mr. Glaser’s issues list.

Later still on June 16, 2022, the Special Committee and its advisors reconvened their meeting from earlier in the day to discuss the responses from Mr. Glaser and the discussion between representatives of DLA and K&S,

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and to evaluate the alternatives to the Proposed Transaction, including operating the Company on a standalone basis if the Special Committee ceased discussions with Mr. Glaser.

On June 17, 2022, Mr. Jaffe sent an email to Mr. Glaser indicating that the Special Committee may be willing to recommend a transaction based on a price of $0.75 per share and suggesting that the Special Committee was willing to agree to a termination right if certain fees payable to the Special Committee’s advisors were to exceed $3,250,000 so long as no termination fee would be payable by the Company if such termination right was exercised and that if Mr. Glaser did exercise such termination right that he would be bound to disband the Strategic Transactions Committee for a period of time following termination. Mr. Jaffe also suggested that Mr. Glaser direct his attorneys at DLA to provide a full markup of the Merger Agreement.

Later on June 17, 2022 Mr. Glaser called Mr. Jaffe to discuss the Special Committee’s proposal and his desire to proceed but did not agree to the $0.75 per share. Mr. Jaffe expressed disappointment and concluded that if Mr. Glaser wished to proceed he should provide a full response to the draft Merger Agreement.

Later still on June 17, 2022 the Special Committee met with the independent directors of the Board to inform them of the status. The Special Committee explained its reasoning behind its conclusion to propose ceasing negotiations given that discussions were not resulting in the Special Committee obtaining adequate certainty of price and closing to recommend a transaction. And, although negotiations had resumed, the Special Committee indicated that its support of a transaction was in no way imminent.

On June 20, 2022, representatives of Imperial contacted Houlihan Lokey to discuss potential resolution of certain transaction terms. Imperial noted that Mr. Glaser was not willing to waive the role of the Strategic Transactions Committee or support a go-shop on the terms desired by the Special Committee, but may have more flexibility than previously indicated on the purchase price. Imperial also communicated that Mr. Glaser and his advisors were in the process of preparing a full mark-up of the merger agreement, as previously requested by the Special Committee.

On June 22, 2022, representatives of K&S and DLA spoke to discuss the material issues presented by Mr. Glaser’s issues list. Following such call, on June 23, 2022, representatives of DLA distributed a revised merger agreement to K&S and the Special Committee. Later that evening, the Special Committee held a meeting, at which its advisors from K&S and Houlihan Lokey participated to discuss the terms set forth in the revised draft to review whether it reflected the certainty of price and certainty of closing required by the Special Committee.

On June 24, 2022, representatives of DLA and K&S again spoke to discuss the material open issues in the merger agreement.

On June 27, 2022, representatives of K&S distributed a revised draft of the merger agreement to DLA, and the respective legal advisors again spoke to discuss the open issues in the merger agreement.

On June 27, 2022, Mr. Glaser called Mr. Jaffe to inform him that several major issues were yet to be resolved. Mr. Jaffe indicated that he was under the impression that the issues were manageable.

On June 28, 2022, Mr. Glaser distributed a list of material issues in the merger agreement which Mr. Glaser, the Special Committee and their respective advisors discussed on a call on June 29, 2022.

Following the call on June 29, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated to discuss the status of the open issues. The Special Committee concluded that discussing the issues with Mr. Glaser had become unproductive. Accordingly, the Special Committee determined to put its “best and final” version of key open terms on the table and explain to Mr. Glaser that he was free to either accept such terms or, reject them, in which case the Special Committee would cease discussions; if such

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terms were acceptable, the Special Committee was prepared to again engage in price discussions. On June 30, 2022, the Special Committee delivered a revised draft of the merger agreement, along with such message, to Mr. Glaser, which the legal advisors subsequently discussed on July 1, 2022.

On July 8, 2022, the Special Committee received an email from Mr. Glaser indicating that he was in general substantive agreement with the terms proposed by the Special Committee, subject to minor edits. Accordingly, he sought to reengage in price negotiations as he completed remaining due diligence now that the Special Committee was satisfied with other terms of any Proposed Transaction.

On July 11, 2022, the Special Committee held meetings at which its advisors from K&S and Houlihan Lokey participated, to discuss outstanding issues and the timing of a potential transaction.

On July 14, 2022, Mr. Glaser held a meeting with the Special Committee to inform them that he was in general agreement with the terms of the merger agreement, but given the passage of time, the deal costs, and the Company business and cash forecasts, he would be reducing his price to $0.68 per share. The Special Committee acknowledged the proposal and suggested Mr. Glaser submit it in writing.

Later on July 14, 2022, Mr. Glaser communicated with the Special Committee via email, confirming that he was in general agreement with the terms of the merger agreement, but that his price proposal was now $0.68 per share for the reasons he previously outlined.

On July 15, 2022, Mr. Glaser called Mr. Jaffe to discuss his latest proposal. Mr. Jaffe indicated that the Special Committee would not be able to support a price reduction. Mr. Glaser indicated he might be accommodating to an alternative price and that the Special Committee should respond with such alternative price when ready.

Later on July 15, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated. At this meeting, the Special Committee concluded that it should not make a counter-proposal until Mr. Glaser had completed his due diligence.

On July 17, 2022, representatives of Houlihan Lokey and Imperial spoke regarding the status of Mr. Glaser’s diligence regarding outstanding shares and equity awards and his proposed purchase price. Imperial advised Houlihan Lokey that Mr. Glaser would consider movement into the “low-70s”, and that all future discussions regarding price should occur between the financial advisors.

On July 18, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated to discuss the price at which the Special Committee would be willing to support the Proposed Transaction. The Special Committee concluded that, in order to continue discussions regarding the Proposed Transaction, Mr. Glaser would have to show upward movement on his price offer. Further, the Special Committee concluded that any price negotiations should be concluded in advance of the upcoming regularly scheduled Board meeting so that if there was not a deal to be reached, the Board could focus on how to manage the Company’s deteriorating cash situation. The Special Committee then instructed Houlihan Lokey to inform Imperial that the Special Committee would be prepared to recommend a transaction based on $0.76 per share and that a deal needed to be finalized prior to the Board meeting.

Following the Special Committee meeting, representatives of Houlihan Lokey contacted representatives of Imperial. During such call, Imperial indicated that Mr. Glaser was prepared to show movement if it was reciprocated, but that he was unlikely to pay more than the “low-70s” and sought revisions to the merger agreement to reduce potential expenses. The Special Committee met again that evening with its advisors to discuss the status of negotiations and agreed that if an appropriate price could not be reached in advance of the Board dinner scheduled for July 19, 2022, then negotiations should cease.

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On July 19, 2022, committee meetings of the Board commenced. Representatives of Houlihan Lokey also continued price discussions with representatives of Imperial, during which Houlihan Lokey was informed that Mr. Glaser was willing to increase his proposed price per share to $0.73, but would not go further. Following the completion of committee meetings, the Special Committee met with its advisors to discuss Mr. Glaser’s latest proposal as well as a preview of the Company’s quarterly results and outlook for the remainder of 2022. In light of the Company’s deteriorating performance, the pending loss of key executives and the certainty of a cash offer, the Special Committee concluded that on the terms negotiated and substantially agreed in the current draft of the merger agreement, it would support a transaction at $0.73 per share.

Later on July 19, 2022, Mr. Jaffe and Mr. Glaser met and confirmed their mutual support for a transaction on the terms previously agreed (subject to finalizing the relevant definitive agreements and agreeing on remaining material terms) and at $0.73 per share. Thereafter the Board met and was informed of the status of negotiations between Mr. Glaser and the Special Committee.

On July 20, 2022, representatives of K&S and DLA spoke to finalize the terms of the merger agreement and discuss other definitive agreements.

Between July 21 and July 25, 2022, representatives of K&S and DLA held multiple discussions to finalize the terms of the merger agreement, the voting agreement and various public disclosures or communications to be made following the announcement of the transaction.

On July 22, 2022, representatives of Houlihan Lokey received written communications from Mr. Glaser related to all strategic initiatives that, to Mr. Glaser’s knowledge, were underway with regards to the Company and/or its businesses and discussed the same with Mr. Glaser and Imperial later that day.

On July 26, 2022, the Special Committee held a meeting at which its advisors from K&S and Houlihan Lokey participated. At the meeting, the Special Committee reviewed and considered the Special Committee’s fiduciary duties in connection with its review and response to Mr. Glaser’s Proposed Transaction and consideration of potential alternative transactions. At the request of the Special Committee, Houlihan Lokey then reviewed and discussed its financial analyses, including the financial analyses more fully described below under “—Opinion of the Special Committee’s Financial Advisors” on page 53. Thereafter, at the request of the Special Committee, Houlihan Lokey verbally rendered its opinion to the Special Committee (which was subsequently confirmed in writing), as to the fairness, from a financial point of view as of July 26, 2022, of the Merger Consideration to be received by the Unaffiliated Shareholders in the Merger pursuant to the Merger Agreement. Based upon a review of the factors and considerations described below under “—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger” on page 41 and in consultation with its legal and financial advisors, the Special Committee unanimously (i) determined that the Merger Agreement and the Proposed Transaction, including the Merger, were advisable and in the best interests of the Company’s Unaffiliated Shareholders; (ii) recommended that the Board adopt resolutions approving and declaring advisable the Merger Agreement and the Proposed Transaction; (iii) recommended that the Board resolve to recommend that the Company’s shareholders approve and adopt the Merger Agreement and the Merger; and (iv) recommended that the Board approve an amendment to the Company’s Rights Plan to exempt the Merger and the transactions contemplated by the Merger Agreement.

At a meeting that evening, based on the recommendations of the Special Committee, the Board (other than Mr. Glaser, who had recused himself), (i) determined that the Merger Agreement, including all exhibits and documents attached thereto, and the Proposed Transaction, including the Merger, were advisable and in the best interests of the Unaffiliated Shareholders; (ii) approved, adopted, declared advisable and authorized in all respects, including for purposes of any applicable anti-takeover statute or regulation, the Merger Agreement, including all exhibits and documents attached thereto, and the consummation of the Proposed Transaction, including the Merger, and the Company’s performance of its obligations under the Merger Agreement and all other actions or matters necessary or appropriate to give effect to the Merger Agreement and the Proposed

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Transaction; (iii) authorized and approved the treatment of the Company’s equity interests as provided in the Merger Agreement; (iv) authorized and approved the amendment to the Company’s Rights Plan to exempt the Merger and the Proposed Transaction by the Merger Agreement; (v) recommended that the shareholders of the Company approve the adoption of the Merger Agreement and the Proposed Transaction; (vi) authorized and directed the Company’s Chief Financial Officer and General Counsel to execute and deliver on behalf of the Company the Merger Agreement and all other agreements and documents contemplated by the Merger Agreement which such officers determined to be necessary or appropriate to effect the Proposed Transaction; (vii) directed that the Special Meeting be called for the purpose of submitting the Merger Agreement and the Proposed Transaction to the shareholders of the Company for their consideration, approval and adoption; (viii) directed that the Merger Agreement be submitted to the shareholders of the Company of record as of the record date for approval and adoption; (ix) authorized and directed the Company’s officers to prepare, execute and file with the SEC this proxy statement and to take such other actions and file other documents with the SEC concerning the Merger, the Merger Agreement and the Proposed Transaction; (x) authorized the Company’s officers to, in connection with the Special Meeting, approve the forms, terms and provisions of the notice to the Special Meeting, mail this proxy statement to each shareholder of the Company as of the record date, designate proxies to be named in the form of proxy to act on behalf of and to represent the shareholders of the Company who desire such representation at the Special Meeting and engage a proxy solicitor with respect to the Special Meeting; (xi) appointed the Company secretary as the agent for service of process for the Company under Exchange Act, in connection with the proxy statement; (xii) authorized and directed the Company’s officers to prepare and file all notices and reports with any and all governmental and other regulatory agencies in connection with the Merger Agreement and the Proposed Transaction; (xiii) ratified, confirmed and approved in all respects the actions of the Special Committee with respect to the engagement of K&S and Houlihan Lokey; (xiv) authorized and directed the Company’s officers to retain other advisors in connection with the Proposed Transaction, upon such terms and conditions as such officers determine appropriate; and (xv) authorized and directed the Company’s officers to pay all fees and expenses incurred in connection with Proposed Transaction, including but not limited to fees and expenses of legal and other advisors of the Company and the Special Committee.

Following the Board meeting, the parties held various calls to discuss the Merger Agreement, including the closing condition requiring approval of the majority of the Company’s shareholders unaffiliated with Mr. Glaser. These discussions continued until mid-afternoon on July 27, 2022 and shortly thereafter, with the assent of the Special Committee, the Company and the Purchasers executed the Merger Agreement.

On the morning of July 28, 2022, the Company announced the execution of the Merger Agreement.

Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger

Reasons for the Merger

The Special Committee, in evaluating and negotiating the Merger, including the terms and conditions of the Merger Agreement, consulted with the Special Committee’s independent legal and financial advisors. The Special Committee determined that the Merger Agreement and the related transactions contemplated thereby are advisable, fair to and in the best interests of the Company and the Company’s Unaffiliated Shareholders (assuming for this purpose that the determination of fairness to the Unaffiliated Shareholders is also applicable to the Company’s “unaffiliated security holders” (as defined in Section 13e-3 under the Exchange Act).

The Special Committee unanimously recommended to the Board that it:

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In the course of reaching its determination and making its recommendations, the Special Committee considered the following non-exhaustive list of material factors, which are not presented in any relative order of importance and each of which the Special Committee viewed as being generally supportive of its determination and recommendations to the Board:

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The Special Committee also considered a number of factors discussed below relating to the procedural safeguards that it believes were and are present to ensure the fairness of the Merger and to permit the Special Committee to effectively represent the interests of the Unaffiliated Shareholders and the Company’s unaffiliated security holders. The Special Committee believes these factors support its determinations and recommendations and provide assurance of the procedural fairness of the Merger to the Unaffiliated Shareholders:

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In the course of reaching its determinations and making its recommendations, the Special Committee also considered the following countervailing factors concerning the Merger Agreement and the Merger, which are not presented in any relative order of importance:

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The Special Committee did not specifically consider the liquidation value of the Company’s and its subsidiaries’ assets in determining the fairness of the transaction to the Unaffiliated Shareholders. The Special Committee believes that this method, in not considering the business of the Company and its subsidiaries as a going concern, would have undervalued the assets of the Company and its subsidiaries. In addition, the Special Committee did not seek to establish a pre-merger going concern value for the Company in determining the fairness of the transaction to the Unaffiliated Shareholders because the Special Committee did not believe there was a single method for determining going concern value. Rather, the Special Committee believed that the future financial results reflected in the projections of the management of the Company and the related additional factors considered by the Special Committee provided an indication of the Company’s going concern value and that any divestitures and/or operation winddowns would have required additional challenges, including capital outlays, that would further erode the Company’s cash position. Although the reference to Unaffiliated Shareholders in Houlihan Lokey’s opinion did not exclude the Company’s directors and officers (other than those affiliated with Parent) that the Special Committee believes are deemed affiliates of the Company, such reference did not affect the Special Committee’s determination in respect of the Merger Agreement and the transactions contemplated thereby, including the Merger, because such directors and officers will receive the same Merger Consideration as unaffiliated security holders.

Recommendation of the Board of Directors of the Company

At a meeting on July 26, 2022, based in part on the unanimous recommendation of the Special Committee, as well as on the basis of the other factors described above, the Board unanimously (other than Mr. Glaser, who recused himself):

In reaching these determinations, the Board considered a number of factors, including the following material factors:

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The foregoing discussion of the information and factors considered by the Special Committee and by the Board is not intended to be exhaustive but includes the material factors considered by the Special Committee and the Board, respectively, including the factors considered by the Special Committee and the Board discussed above. In view of the wide variety of factors considered by the Special Committee and by the Board in evaluating the Merger Agreement and the Merger, neither the Special Committee nor the Board found it practicable, or attempted, to quantify, rank or otherwise assign relative weights to the foregoing factors in reaching their respective conclusions. In addition, individual members of the Special Committee and of the Board may have given different weights to different factors and may have viewed some factors more positively or negatively than others. The Special Committee and the Board conducted an overall review of the factors described above and considered the factors overall to be favorable to, and to support, their determinations. It should be noted that this explanation of the reasoning of the Special Committee and the Board and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in the section titled “Cautionary Statement Concerning Forward-Looking Information.”

Other than as described in this proxy statement, the Board is not aware of any firm offer by any other person during the prior two years for a merger or consolidation of the Company with another company, the sale or transfer of all or substantially all of the Company’s assets or a purchase of the Company’s securities that would enable such person to exercise control of the Company.

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The Board recommends that you vote “FOR” the adoption of the Merger Agreement and the related transactions contemplated thereby.

Position of the Purchaser Filing Parties as to the Fairness of the Merger

Under the SEC rules governing “going-private” transactions, each of the Purchaser Filing Parties may be deemed to be an affiliate of the Company and engaged in a “going-private” transaction and, therefore, may be required to express his, her or its beliefs as to the fairness of the Merger to the Company’s “unaffiliated security holders” as defined under Rule 13e-3 of the Exchange Act (the “Unaffiliated Shareholders”). Each of the Purchaser Filing Parties is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. However, the views of each of the Purchaser Filing Parties should not be construed as a recommendation to any Company shareholder as to how that shareholder should vote on the Merger Proposal. Certain of the Purchaser Filing Parties have interests in the Merger that are different from, or in addition to, those of other Company shareholders.

The Unaffiliated Shareholders were represented by the Special Committee, which negotiated the terms and conditions of the Merger Agreement on the Unaffiliated Shareholders’ behalf, with assistance from the Special Committee’s independent financial and legal advisors. The Special Committee consisted solely of independent and disinterested directors who are not affiliated with any member of the Purchaser Filing Parties, are not employees of the Company or any of its affiliates and have no financial interest in the Merger different from, or in addition to, the Unaffiliated Shareholders (other than their interests described in the section of this proxy statement captioned “Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger”). The members of the Purchaser Filing Parties did not participate in the deliberations of the Special Committee or the Board regarding, or receive advice from the Company’s or the Special Committee’s legal or financial advisors as to, the substantive or procedural fairness of the Merger to the Unaffiliated Shareholders, nor did the Purchaser Filing Parties undertake any independent evaluation of the fairness of the Merger to the Unaffiliated Shareholders, or engage a financial advisor for such purposes. See “Special Factors—Background of the Merger” on page 16.

The Purchaser Filing Parties believe, based on, among other things, the factors considered by, and the analysis and resulting conclusions of, the Board and the Special Committee described in the section entitled “Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger,” that the Merger is substantively and procedurally fair to the Company’s unaffiliated security holders.

In particular, the Purchaser Filing Parties considered the following substantive factors, which are not presented in any relative order of importance:

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The Purchaser Filing Parties also considered a number of factors discussed below relating to the procedural safeguards that they believe were and are present to ensure the fairness of the Merger:

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In the course of reaching their determination as to the fairness of the Merger to the Unaffiliated Shareholders, the Purchaser Filing Parties also considered a variety of risks and other countervailing factors related to the Merger Agreement and Merger, including the following:

The foregoing discussion of the information and factors considered and given weight by the Purchaser Filing Parties in connection with the fairness of the Merger is not intended to be exhaustive but includes all material factors considered by the Purchaser Filing Parties. The Purchaser Filing Parties did not find it practicable to, and did not, quantify or otherwise assign relative weights to the individual factors considered in reaching their conclusions as to the fairness of the Merger. Rather, the fairness determinations were made after consideration of all of the foregoing factors as a whole.

Opinion of the Special Committee’s Financial Advisor

On July 26, 2022, Houlihan Lokey verbally rendered its opinion to the Special Committee (which was subsequently confirmed in writing), as to the fairness, from a financial point of view as of July 26, 2022, of the Merger Consideration to be received by the Unaffiliated Shareholders in the Merger pursuant to the Merger Agreement.

Houlihan Lokey’s opinion was directed to the Special Committee (in its capacity as such) and only addressed the fairness, from a financial point of view as of July 26, 2022, of the Merger Consideration to

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be received by the Unaffiliated Shareholders in the Merger pursuant to the Merger Agreement and did not address any other aspect or implication of the Merger or any other agreement, arrangement or understanding. The summary of Houlihan Lokey’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex C to this proxy statement and describes certain of the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement are intended to be, and do not constitute, advice or a recommendation to the Special Committee, the board of directors, any security holder of the Company or any other person as to how to act or vote with respect to any matter relating to the Merger.

In arriving at its opinion, Houlihan Lokey, among other things:

Houlihan Lokey relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available, to Houlihan Lokey, discussed with or reviewed by Houlihan Lokey, or publicly available, and Houlihan Lokey does not assume any responsibility with respect to such data, material and other information. In addition, the management of the Company and the Special Committee have advised Houlihan Lokey, and Houlihan Lokey has assumed, that the financial projections which the Special Committee instructed Houlihan Lokey to use have been reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of the management of the Company as to the future financial results and condition of the Company (assuming the availability of external financing) and reflect the best currently available estimates and judgments of the Special Committee as to the future financial results and condition of the Company (assuming the availability of external financing), and that the management of the Company and the Special Committee believe such projections present

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a reasonable basis on which to evaluate the Company. Houlihan Lokey expresses no opinion with respect to such projections or the assumptions on which they are based. Houlihan Lokey relied upon and assumed, without independent verification, that there was no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to it that would be material to its analyses or opinion, and that there is no information or any facts that would make any of the information reviewed by Houlihan Lokey incomplete or misleading.

Houlihan Lokey relied upon and assumed, without independent verification, that (a) the representations and warranties of all parties to the Merger Agreement and all other related documents and instruments that are referred to therein are true and correct, (b) each party to the Merger Agreement and other related documents and instruments will fully and timely perform all of the covenants and agreements required to be performed by such party, (c) all conditions to the consummation of the Merger will be satisfied without waiver thereof, and (d) the Merger will be consummated in a timely manner in accordance with the terms described in the Merger Agreement and other related documents and instruments, without any amendments or modifications thereto. Houlihan Lokey relied upon and assumed, without independent verification, that (i) the Merger will be consummated in a manner that complies in all respects with all applicable foreign, federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the Merger will be obtained and that no delay, limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have an effect on the Merger, or the Company that would be material to its analyses or opinion.

Furthermore, in connection with its opinion, Houlihan Lokey was not requested to make, and did not make, any physical inspection, independent appraisal or evaluation of any of the assets, properties or liabilities (fixed, contingent, derivative, off-balance-sheet or otherwise) of the Company or any other party, nor was Houlihan Lokey provided with any such appraisal or evaluation. Houlihan Lokey did not estimate, and expressed no opinion regarding, the liquidation value of any entity or business. Houlihan Lokey undertook no independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which the Company was or may be a party or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which the Company was or may be a party or is or may be subject.

Houlihan Lokey was not requested to, and did not, (a) initiate any discussions to solicit indications of interest from third parties with respect to the Merger, the securities, assets, business or operations of the Company or any other party, or any alternatives to the Merger, (b) identify or introduce to the Special Committee or the Company, or screen for creditworthiness, any prospective investors, lenders or other participants in the Merger or any other transaction, or (c) coordinate or facilitate due diligence efforts by third parties, other than such efforts by Parent and its affiliates. Houlihan Lokey’s opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Houlihan Lokey as of, July 26, 2022. Houlihan Lokey did not undertake, and is under no obligation, to update, revise, reaffirm or withdraw its opinion, or otherwise comment on or consider events occurring or coming to its attention after July 26, 2022.

The opinion was furnished for the use of the Special Committee (in its capacity as such) in connection with its evaluation of the Merger. The opinion is not intended to be, and does not constitute, a recommendation to the Special Committee, the board of directors, any security holder or any other party as to how to act or vote with respect to any matter relating to the Merger or otherwise.

Houlihan Lokey was not requested to opine as to, and the opinion did not express an opinion as to or otherwise address, among other things: (i) the underlying business decision of the Special Committee, the board of directors, the Company, its security holders or any other party to proceed with or effect the Merger, (ii) the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the Merger or otherwise (other than the Merger Consideration to the extent expressly

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specified in Houlihan Lokey’s opinion), (iii) the fairness of any portion or aspect of the Merger to the holders of any class of securities, creditors or other constituencies of the Company, or to any other party, except if and only to the extent expressly set forth in the last sentence of the opinion, (iv) the relative merits of the Merger as compared to any alternative business strategies or transactions that might be available for the Company or any other party, (v) the fairness of any portion or aspect of the Merger to any one class or group of the Company’s or any other party’s security holders or other constituents vis-à-vis any other class or group of the Company’s or such other party’s security holders or other constituents (including, without limitation, the allocation of any consideration amongst or within such classes or groups of security holders or other constituents), (vi) whether or not the Company, its security holders or any other party is receiving or paying reasonably equivalent value in the Merger, (vii) the solvency, creditworthiness or fair value of the Company or any other participant in the Merger, or any of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters, or (viii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any party to the Merger, any class of such persons or any other party, relative to the Merger Consideration or otherwise. Furthermore, no opinion, counsel or interpretation was intended in matters that require legal, regulatory, accounting, insurance, tax or other similar professional advice and it was assumed that such opinions, counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, Houlihan Lokey relied, with the consent of the Special Committee, on the assessments by the Special Committee, the board of directors, the Company and their respective advisors, as to all legal, regulatory, accounting, insurance, tax and other similar matters with respect to the Company and the Merger or otherwise. The issuance of the opinion was approved by a committee of Houlihan Lokey authorized to approve opinions of such nature.

In performing its analyses, Houlihan Lokey considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of July 26, 2022. No company, transaction or business used in Houlihan Lokey’s analyses for comparative purposes is identical to the Company or the Merger and an evaluation of the results of those analyses is not entirely mathematical. As a consequence, mathematical derivations (such as the high, low, mean and median) of financial data are not by themselves meaningful and in selecting the ranges of multiples to be applied were considered in conjunction with experience and the exercise of judgment. The estimates contained in the financial forecasts prepared by the management of the Company and the implied reference range values indicated by Houlihan Lokey’s analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of the Company. Much of the information used in, and accordingly the results of, Houlihan Lokey’s analyses are inherently subject to substantial uncertainty.

Houlihan Lokey’s opinion was only one of many factors considered by the Special Committee in evaluating the Merger. Neither Houlihan Lokey’s opinion nor its analyses were determinative of the Merger Consideration or of the views of the Special Committee or management with respect to the Merger or the Merger Consideration. Under the terms of its engagement by the Special Committee, neither Houlihan Lokey’s opinion nor any other advice or services rendered by it in connection with the Merger or otherwise, should be construed as creating, and Houlihan Lokey should not be deemed to have, any fiduciary duty to, or agency relationships with, the Special Committee, the Company, any security holder or creditor or other constituencies of the Company or any other person or entity, regardless of any prior or ongoing advice or relationships. The type and amount of consideration payable in the Merger were determined through negotiation between the Special Committee and Parent, and the decision to enter into the Merger Agreement was solely that of the Special Committee and the board of directors.

Financial Analyses

In preparing its opinion to the Special Committee, Houlihan Lokey performed a variety of analyses, including those described below under the heading “—July 26, 2022 Financial Presentation.” The summary of

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Houlihan Lokey’s analyses is not a complete description of the analyses underlying Houlihan Lokey’s opinion. The preparation of such an opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither Houlihan Lokey’s opinion nor its underlying analyses is readily susceptible to partial analysis or summary description. Houlihan Lokey arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. While the results of each analysis were taken into account in reaching Houlihan Lokey’s overall conclusion with respect to fairness, Houlihan Lokey did not make separate or quantifiable judgments regarding individual analyses. Accordingly, Houlihan Lokey believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors, without considering all analyses, methodologies and factors, could create a misleading or incomplete view of the processes underlying Houlihan Lokey’s analyses and opinion.

The following is a summary of the material financial analyses performed by Houlihan Lokey in connection with the preparation of its opinion and reviewed with the Special Committee on July 26, 2022. The order of the analyses does not represent relative importance or weight given to those analyses by Houlihan Lokey. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis, could create a misleading or incomplete view of Houlihan Lokey’s analyses.

For purposes of its analyses, Houlihan Lokey reviewed a number of financial metrics, including:

Enterprise Value—generally, the value as of a specified date of the relevant company’s outstanding equity securities (taking into account outstanding options and other securities convertible, exercisable or exchangeable into or for equity securities of the company) plus the amount of its net debt (the amount of its outstanding indebtedness, non-convertible preferred stock, capital lease obligations and non-controlling interests less the amount of cash and cash equivalents on its balance sheet).

Unless the context indicates otherwise, enterprise values and equity values used in the selected companies analysis described below were calculated using the closing price of our Common Stock and the common stock of the selected companies listed below as of July 21, 2022. The estimates of the future financial performance of the Company relied upon for the financial analyses described below were based on the Projections. The estimates of the future financial performance of the selected companies listed below were based on certain publicly available research analyst estimates for those companies.

July 26, 2022 Financial Presentation

Selected Companies Analysis. Houlihan Lokey reviewed certain data for selected companies with publicly traded equity securities, that Houlihan Lokey deemed relevant to each operating segment of the Company.

The financial data reviewed included:

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The selected companies for each operating segment of the Company included the following:

Taking into account the results of the selected companies analysis, Houlihan Lokey applied implied blended selected multiple ranges of 0.68x to 1.35x LTM revenue and 0.69x to 1.34x CY 2022E revenue to corresponding financial data for the Company. The selected companies analysis indicated implied per share value reference ranges of $0.45 to $1.12 per share of Company Common Stock based on the selected range of multiples of LTM revenue and $0.47 to $1.15 per share of Company common stock based on the selected range of multiples of CY 2022E revenue, as compared to the Merger Consideration of $0.73 per share of Company Common Stock.

Discounted Cash Flow Analysis. Houlihan Lokey performed a discounted cash flow analysis of the Company by calculating the estimated net present value of the projected unlevered free cash flows of the

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Company for the calendar year ending December 31, 2022 through the calendar year ending December 31, 2024 based on the Projections. Houlihan Lokey calculated terminal values for the Company by applying a range of terminal value revenue multiples of 0.75x to 1.50x to the Company’s calendar year 2024 estimated revenue. The present values of the Company’s projected future cash flows and terminal values were then calculated using discount rates ranging from 15.0% to 20.0%. The discounted cash flow analysis indicated an implied per share value reference range of $0.36 to $1.29 per share of Company Common Stock, as compared to the Merger Consideration of $0.73 per share of Company Common Stock.

The foregoing implied per share value reference ranges (I) reflect a corporate overhead deduction and (II) were calculated using outstanding securities of the Company as of June 30, 2022, as adjusted for certain negotiated reductions and based on the treasury method as applicable, as follows: (i) approximately 8.1 million outstanding shares of Series B Preferred Stock, (ii) approximately 47.3 million outstanding shares of Common Stock , (iii) approximately 1.7 million RSUs and awards (pro forma to account for the negotiated reduction of such units held by a former executive) and (iv) approximately 6.8 million outstanding Common Stock options, to the extent in-the-money.

Preliminary Discussion Materials

In addition to the July 26, 2022 financial presentation provided to the Special Committee in connection with Houlihan Lokey’s opinion to the Special Committee, as summarized above, Houlihan Lokey also provided, for informational purposes, certain preliminary discussion materials to the Special Committee as summarized below.

The preliminary financial considerations and other information in the preliminary discussion materials reflected market data as of dates proximate to such materials and were based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and information, made available to Houlihan Lokey as of, the date of such materials. Accordingly, to the extent preliminary financial analyses or information were included in such preliminary discussion materials, such preliminary financial analyses or information may have differed from the July 26, 2022 financial presentation as a result of, among other things, changes in the Company’s internal financial forecasts, estimates and assumptions, such financial, economic, monetary, market and other conditions and circumstances and other information. Houlihan Lokey also continued to refine various aspects of such preliminary financial considerations and other information. The July 26, 2022 financial presentation superseded the preliminary discussion materials. None of the preliminary discussion materials constituted an opinion of, or recommendation by, Houlihan Lokey with respect to a possible transaction or otherwise.

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Miscellaneous

Houlihan Lokey was engaged by the Special Committee to act as its financial advisor in connection with the Merger and provide financial advisory services, including an opinion to the Special Committee as to the fairness, from a financial point of view as of July 26, 2022, of the Merger Consideration to be received by the Unaffiliated Shareholders in the Merger pursuant to the Merger Agreement. The Special Committee engaged Houlihan Lokey based on Houlihan Lokey’s experience and reputation. Houlihan Lokey is regularly engaged to provide financial advisory services in connection with mergers and acquisitions, financings, and financial restructurings. Pursuant to its engagement by the Special Committee, Houlihan Lokey will receive aggregate fees equal to $950,000 ($500,000 of which became payable to Houlihan Lokey for rendering the opinion and is not contingent upon the successful completion of the Merger) and will receive an additional fee of $300,000 upon consummation of the Merger. The Company has also agreed to reimburse Houlihan Lokey for certain expenses and to indemnify Houlihan Lokey, its affiliates and certain related parties against certain liabilities and expenses, including certain liabilities under the federal securities laws, arising out of or related to Houlihan Lokey’s engagement.

In the ordinary course of business, certain of Houlihan Lokey’s employees and affiliates, as well as investment funds in which they may have financial interests or with which they may co-invest, may acquire, hold or sell, long or short positions, or trade, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in, the Company or any other party that may be involved in the Merger and their respective affiliates or security holders or any currency or commodity that may be involved in the Merger.

Houlihan Lokey has in the past provided investment banking, financial advisory and/or other financial or consulting services to a committee of the Board of Directors, for which Houlihan Lokey has received compensation. Houlihan Lokey and certain of its affiliates may provide investment banking, financial advisory and/or other financial or consulting services to the Company, Parent, other participants in the Merger or certain of their respective affiliates or security holders in the future, for which Houlihan Lokey and its affiliates may receive compensation. Furthermore, in connection with bankruptcies, restructurings, distressed situations and similar matters, Houlihan Lokey and certain of its affiliates may have in the past acted, may currently be acting and may in the future act as financial advisor to debtors, creditors, equity holders, trustees, agents and other interested parties (including, without limitation, formal and informal committees or groups of creditors) that may have included or represented and may include or represent, directly or indirectly, or may be or have been adverse to, the Company, Parent, other participants in the Merger or certain of their respective affiliates or security holders, for which advice and services Houlihan Lokey and its affiliates have received and may receive compensation.

Purposes and Reasons of Purchaser Filing Parties for the Merger

Under the SEC rules governing “going private” transactions, each of the Purchaser Filing Parties is an affiliate of the Company that is engaged in the “going private” transaction and, therefore, each is required to express its purposes and reasons for the Merger to the Company’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act. The Purchaser Filing Parties are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

For Merger Sub, the purpose of the merger is to effectuate the transactions contemplated by the Merger Agreement. For the other Purchaser Filing Parties, the purpose of the Merger is to allow them to acquire control of the Company and bear the rewards and risks of ownership of the Company after its shares of Common Stock cease to be publicly traded. The Purchaser Filing Parties did not consider any alternatives for achieving these purposes. The transaction has been structured as a cash merger in order to provide the Company’s unaffiliated security holders with cash for their shares of Common Stock and to provide a prompt and orderly transfer of ownership of the Company in a single step, without the necessity of financing separate purchases of Common

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Stock in a tender offer and implementing a second-step merger to acquire any shares of Common Stock not tendered into any such tender offer, and without incurring any additional transaction costs associated with such activities. The Purchaser Filing Parties have undertaken to pursue the transaction at this time in light of the opportunities they perceive to strengthen the Company’s competitive position, strategy and financial performance under a new form of ownership.

Plans for the Company After the Merger

At the Effective Time, Parent anticipates that the surviving entity will generally continue the Company’s current operations, but will cease to be an independent public company. If the Merger is consummated, the Common Stock will cease to be quoted on the Nasdaq and will cease to be registered under the Exchange Act (via termination of registration pursuant to Section 12(g) of the Exchange Act). Except as otherwise directed by Parent, the initial directors of the surviving company will, from and after the Effective Time, be the individuals who are the directors of Merger Sub immediately prior to the Effective Time. Except as otherwise directed by Parent, the officers of the surviving company will, from and after the Effective Time, be the individuals who are the officers of the Merger Sub immediately prior to the Effective Time. At the Effective Time, the certificate of formation and limited liability company agreement of the surviving company will be amended and restated as provided in the Merger Agreement.

The Purchaser Filing Parties have advised the Company that they do not have any specific plans or proposals that relate to or would result in an extraordinary corporate transaction following completion of the Merger involving the surviving company’s corporate structure, business or management, such as a merger, reorganization, liquidation, relocation of any operations or purchase, sale or transfer of a material amount of assets. However, the Purchaser Filing Parties expect to continuously evaluate and review the surviving company’s business and operations following the Merger and may develop new plans and proposals that they consider appropriate to maximize the value of the surviving company. Each of the Purchaser Filing Parties expressly reserves the right to make any changes it deems appropriate in light of such evaluation and review or in light of future developments.

Certain Effects of the Merger

If the conditions to the closing of the Merger are either satisfied or waived, the Company will be merged with and into Merger Sub, the separate corporate existence of the Company will cease and Merger Sub will continue its corporate existence under Washington law as the surviving company in the Merger and a wholly owned subsidiary of Parent. None of our current shareholders, besides Mr. Glaser and his affiliates, will have any direct ownership interest in, or be a shareholder of, the Company after the completion of the Merger.

Upon the consummation of the Merger:

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The Company does not expect to grant any equity awards under the existing Company Plans following the closing of the Merger.

Following the Merger, all of the equity interests in the surviving corporation will be owned by Parent. If the Merger is completed, Parent (and the Parent Guarantor indirectly through his equity interests in Parent) will be the sole beneficiaries of our future earnings and growth, if any, and will be entitled to vote on corporate matters affecting the Company following the Merger. Similarly, Parent (and the Parent Guarantor indirectly) will also bear the risks of ongoing operations, including the risks of any decrease in our value after the merger.

In connection with the Merger, certain members of the Company’s management will receive benefits and be subject to obligations that are different from, or in addition to, the benefits and obligations of the Company’s shareholders generally, as described in more detail under “Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 66. Those incremental benefits are expected to include, among other benefits, certain executive officers continuing as executive officers of the surviving corporation.

Benefits of the Merger for the Company’s Unaffiliated Shareholders

The primary benefit of the Merger to the Unaffiliated Shareholders will be their right to receive the Merger Consideration, less applicable withholding taxes, for each share of Common Stock held by such shareholders as described above. Additionally, such shareholders will avoid the risk after the Merger of any possible decrease in our future earnings, growth or value.

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Detriments of the Merger to the Company’s Unaffiliated Shareholders

The primary detriments of the Merger to our Unaffiliated Shareholders include the lack of an interest of such shareholders in the potential future earnings, growth, or value realized by the Company after the Merger. Additionally, the receipt of cash in exchange for Common Stock pursuant to the Merger will generally be a taxable sale transaction for U.S. federal income tax purposes to shareholders who surrender their Common Stock in the Merger to the extent that such shareholders have any gain on their shares of Common Stock.

Certain Effects of the Merger for the Purchaser Filing Parties

If the Merger is completed, Parent will directly own all of the surviving company’s equity interests.

The benefits of the Merger to the Purchaser Filing Parties include the fact that, following the completion of the Merger, Parent will directly own 100% of the outstanding equity interests of the surviving company and will therefore have a corresponding 100% interest in the surviving company’s net book value and net earnings. The table below sets forth the beneficial ownership of Common Stock and resulting interests in the Company’s net book value and net earnings of the Purchaser Filing Parties prior to and immediately after the Merger, based on the Company’s net book value at June 30, 2022 and net earnings for the six months ended June 30, 2022, as if the Merger were completed on such date.

In addition, the Purchaser Filing Parties will benefit from the savings associated with the surviving company no longer being required to file reports under or otherwise having to comply with provisions of the Exchange Act. Detriments of the Merger to the Purchaser Filing Parties include the lack of liquidity for the Company’s Common Stock following the Merger and the risk that the surviving company will decrease in value following the Merger.

Certain Effects on the Company If the Merger Is Not Completed

If the Merger Agreement is not adopted by the Company’s shareholders or if the Merger is not completed for any other reason, the Company’s shareholders will not receive any payment for their shares of Common Stock in connection with the Merger. Instead, the Company will remain a public company and the Common Stock will continue to be registered under the Exchange Act, with shares quoted on the Nasdaq. In addition, if the Merger is not completed, the Company expects that management will operate the Company’s business in a manner similar to that in which it is being operated today and that the Company’s shareholders will continue to be subject to the same risks and opportunities to which they are currently subject, including, without limitation, risks related to the Company’s ability to continue as a long-term going concern and risks related to our continued listing on the Nasdaq.

Furthermore, if the Merger is not completed, and depending on the circumstances that would have caused the Merger not to be completed, the price of the Common Stock may decline significantly. If that were to occur,

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it is uncertain when, if ever, the price of the Common Stock would return to the price at which the Common Stock trades as of the date of this proxy statement. Accordingly, if the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares. If the Merger is not completed, the Board will continue to evaluate and review the Company’s business operations, properties, dividend policy, share repurchase policy and capitalization, among other things, make such changes as are deemed appropriate and continue to seek to identify strategic alternatives to enhance shareholder value. If the Merger Agreement is not adopted by the Company’s shareholders or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to the Company will be offered or that the Company’s business, prospects or results of operation will not be adversely impacted.

In addition, under specified circumstances, if the Merger Agreement is terminated, the Company may be required to pay Parent a termination fee equal to (i) $1,043,971, (ii) the lesser of (A) $521,985.50 or (B) Parent’s fees and expenses incurred in connection with the Merger Agreement and the Merger, or (iii) the lesser of (A) Parent’s fees and expenses incurred in connection with the Merger Agreement and the Merger or (B) $500,000, depending on the circumstances of the termination, as more fully described in “The Merger Agreement—Termination of the Merger Agreement” beginning on page 106 and “The Merger Agreement—Termination Fees and Expenses” beginning on page 108.

Company operates as well as assumptions related to competition, general business, economic, market and financial conditions and matters specific to the businesses of the Company, all of which are difficult to predict and many of which are beyond the preparing parties’ control. As a result, there can be no assurance that the Projections will be realized or that actual results will not be significantly higher or lower than projected. The Projections are forward-looking statements and should be read with caution. See “Cautionary Statement Concerning Forward-Looking Information” on page 84. The Projections cover multiple years, and such information by its nature becomes less reliable with each successive year. In addition, the Projections will be affected by the Company’s ability to achieve strategic goals, objectives and targets (including raising external capital) over the applicable periods. The Projections also reflect assumptions as to certain business matters that are subject to change.

None of the Company nor any of its respective affiliates intends to, and, except to the extent required by applicable law, each of them expressly disclaims any obligation to, update, revise or correct the Projections to reflect circumstances existing or arising after the date such Projections were generated or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the Projections are shown to be in error or any of the Projections otherwise would not be realized.

Certain of the Projections summarized below were not prepared in accordance with United States generally accepted accounting principles (“GAAP”), including EBITDA. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company’s calculation of non-GAAP financial measures may differ from others in the industry and EBITDA is not necessarily comparable with similar titles used by other companies. The non-GAAP financial measures were provided to Houlihan Lokey for purposes of its financial analyses and opinion and to the Special Committee and the Board in connection with their consideration of the Merger. Financial measures provided to a financial advisor are excluded from the definition of non-GAAP financial measures and therefore are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure.

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Interests of the Company’s Directors and Executive Officers in the Merger

In considering the recommendations of the Board, Company shareholders should be aware that the Company’s directors and executive officers may have interests in the Merger, including financial interests, which may be different from, or in addition to, the interests of Company shareholders generally. These interests are described in more detail below and, with respect to the Company’s executive officers, are quantified under “Special Factors—Quantification of Payments and Benefits to RealNetworks Executive Officers.” In particular, Robert Glaser, our Chairman of the Board and Chief Executive Officer, is the sole member of Parent and the Parent Guarantor, and after the consummation of the Merger, the Company will become a wholly owned subsidiary of Parent. As the sole member of Parent, Mr. Glaser will bear the risks and receive the rewards of such indirect ownership of the surviving company after the Merger, including any future earnings and growth of the surviving company. Following completion of the Merger, Mr. Glaser will continue as manager of the surviving company. The Board was aware of and considered these interests, among other matters, in reaching its determination that the Merger is fair to and in the best interests of the Company and its shareholders, approving and declaring advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, and recommending that Company shareholders approve the Merger Proposal. See the section titled “Special Factors—Background of the Merger” and “Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board of Directors; Fairness of the Merger.” The closing of the Merger is expected to constitute a “change in control” (or similar phrase) for purposes of each of the compensation plans and agreements, if applicable.

Executive Officers

For purposes of this disclosure, each of the following individuals is or was an “executive officer” of the Company at any time since the beginning of the Company’s fiscal year ended December 31, 2021:

Mr. Glaser, Mr. Parham, Ms. Chambers, and Mr. Ensing are considered the Company’s “named executive officers” for purposes of this disclosure. Mr. McClain joined the Company on July 6, 2022, as a Strategic Advisor, and was appointed interim Chief Financial Officer on July 11, 2022. His initial term as interim Chief Financial Officer is scheduled to conclude on November 5, 2022. Ms. Chambers resigned as Senior Vice President and Chief Financial Officer of the Company, effective as of July 31, 2022. Mr. Ensing resigned as President and Chief Operating Officer of the Company, effective as of June 30, 2022, and continued as a Strategic Advisor through August 19, 2022, when his service relationship with the Company terminated. Mr. Lee resigned as Senior Vice President and Chief Financial Officer of the Company effective as of March 5, 2021, and remained in an advisory role with the Company through March 31, 2021, when his service relationship with the Company terminated.

Share Ownership

The Company’s directors and executive officers will receive the same Merger Consideration as other Company shareholders for each share of Common Stock that they own at the Effective Time, except that, pursuant to the terms of the Merger Agreement, Mr. Glaser’s owned shares of Common Stock and Series B Preferred Stock will be cancelled for no consideration. For information regarding beneficial ownership of our

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Common Stock by each of the Company’s current directors, named executive officers and all directors and executive officers as a group, see the section titled “Important Information Regarding RealNetworks—Security Ownership of Management and Certain Beneficial Owners.”

Treatment of RealNetworks Equity Awards

RealNetworks Stock Options

As of August 17, 2022, there were outstanding awards of options to purchase an aggregate of 6,645,612 shares of Common Stock, of which 466,200 shares were subject to options with an exercise price less than $0.73 per share, 3,396,929 shares were subject to options held by Company executive officers and of which 562,781 shares were subject to options held by the Company’s non-employee directors. The Merger Agreement provides that each option to purchase Common Stock under the Company Plans that is not an underwater option and that is vested and outstanding as of immediately before the Effective Time will be canceled in exchange for the right to receive a cash payment, without interest, equal to the product of (a) the total number of shares of Common Stock underlying such option, multiplied by (b) the excess, if any, of (i) the $0.73 per share Merger Consideration over (ii) the per-share exercise price for such option, less applicable taxes required to be withheld pursuant to the terms of the Merger Agreement. Each underwater option will be cancelled for no consideration. All of the outstanding options held by the Company’s executive officers and non-employee directors are underwater options and therefore will be canceled at the Effective Time for no consideration. The Merger Agreement further provides that each option to purchase Common Stock under the Company Plans that is not an underwater option and that is outstanding and unvested as of immediately before the Effective Time will be treated in accordance with the terms of the applicable Company Plan and form of award agreement thereunder. The Company’s form of option agreement under which the options granted to the Company’s executive officers and non-employee directors are subject provides that, in the event of a change in control, (i) if options are continued, assumed, converted, or substituted, and within 24 months thereafter, a participant’s employment is terminated by the Company or its successor without cause or by the participant for good reason, all of the shares subject to the option will vest immediately and may be exercised within 24 months of such termination (subject to the expiration date of such option), and (ii) if options are not continued, assumed, converted, or substituted immediately following a change in control, then the options will accelerate vesting in full and may be exercised within 12 months following the change in control. The Company’s 2005 Stock Incentive Plan provides that in the event of a change of control of the Company (which the Merger will constitute), awards granted under such plan may be assumed or substituted. Additionally, an option granted under such plan may be terminated after providing the option holders with advance notice, or may be terminated in exchange for an amount (payable in cash, stock, and/or other property) equal to the excess of the fair market value of the underlying shares over the exercise price of such shares, provided that underwater options may be terminated without any payment for such awards. The Company’s 2020 Inducement Equity Incentive Plan provides that in the event of a merger of the Company with or into another entity or a change in control of the Company (which the Merger will constitute), an award granted under such plan may be continued, assumed, substituted, terminated after vesting and becoming payable, terminated in exchange for an amount (in cash and/or property) that would have been attained upon exercise or realization of rights under the award (or if no amount would have been attained upon such exercise or realization, the award may be terminated without any payment), replaced by other rights or property, or a combination of the above. However, if an award granted under such plan is not assumed or substituted for, it will accelerate vesting in full unless the award agreement or other agreement with the award holder specifically provides otherwise. To the extent options granted under such plan are not assumed or substituted for, option holders will receive advance notice of their options’ exercisability for a specified period, after which the options will terminate.

The Company and Parent currently expect that unvested options will not be assumed or substituted in connection with, and instead will be canceled upon, the closing of the Merger; and therefore, in accordance with the terms of the Company Plans and the forms of award agreement thereunder, the unvested options will accelerate vesting in full and be treated in the same manner as vested options in the Merger (provided that underwater options will be canceled for no consideration).

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RealNetworks Restricted Stock Units

As of August 17, 2022, there were outstanding awards of RSUs covering an aggregate of 1,629,503 shares of Common Stock, of which 243,750 shares were subject to RSUs held by the Company’s executive officers and 488,249 shares were subject to RSUs held by the Company’s non-employee directors. 200,000 of such shares subject to RSUs are held by Mr. Ensing and are performance-based, such that the RSUs will vest only if the closing of a take-private transaction by Mr. Glaser (which the Merger constitutes) occurs no later than December 31, 2022. The Merger Agreement provides that each RSU subject to vesting, repurchase, or other lapse of restrictions that is outstanding and vested under any Company Plan immediately before the Effective Time will vest in full and become free of restrictions and will be canceled in exchange for the right to receive a cash payment, without interest, equal to the $0.73 per share Merger Consideration, less applicable taxes required to be withheld pursuant to the terms of the Merger Agreement.

The Merger Agreement further provides that each RSU granted under the Company Plans that is unvested and outstanding immediately before the Effective Time will be treated in accordance with the terms of the applicable Company Plan and form of award agreement thereunder. The Company’s form of RSU agreement under which the RSUs granted to the Company’s executive officers and non-employee directors are subject provides that, in the event of a change in control, (i) if RSUs are assumed or substituted on substantially the same terms and conditions (which may include payment in shares of the stock of the surviving company or the parent company), and within 24 months thereafter, a participant’s employment is terminated by the Company or its successor without cause or by the participant for good reason, all then-unvested RSUs will vest immediately, and (ii) if the RSUs are not assumed or substituted for immediately following a change in control on substantially the same terms and conditions, then the RSUs will accelerate vesting in full. Such agreement further provides that if the Company is the surviving company or the parent company in a change in control, it shall be deemed to have assumed the RSUs unless it takes explicit action to the contrary. The Company’s 2005 Stock Incentive Plan provides that in the event of a change of control of the Company (which the Merger will constitute), awards granted under such plan may be assumed or substituted. The Company’s 2020 Inducement Equity Incentive Plan provides that in the event of a merger of the Company with or into another entity or a change in control of the Company (which the Merger will constitute), an RSU award granted under such plan may be continued, assumed, substituted, terminated after vesting and becoming payable, terminated in exchange for an amount (in cash and/or property) that would have been attained upon realization of rights under the award (or if no amount would have been attained upon such realization, the award may be terminated without any payment), replaced by other rights or property, or a combination of the above. However, if an award granted under such plan is not assumed or substituted for, it will accelerate vesting in full unless the award agreement or other agreement with the award holder specifically provides otherwise.

The Company and Parent currently expect that unvested RSUs will not be assumed or substituted in connection with, and instead will be canceled upon, the closing of the Merger; and therefore, in accordance with the terms of the Company Plans and the forms of award agreement thereunder, the unvested RSUs will accelerate vesting in full and be treated in the same manner as vested RSUs in the Merger.

Except as noted above with respect to RSUs that are not assumed or substituted for, the award agreements for the Company’s RSUs granted to the Company’s executive officers and non-employee directors do not provide for accelerated vesting in the event of a change in control. With respect to any executive officer’s RSUs, if the Company terminates the executive officer’s employment without cause, the next installment of shares subject to the RSU award will vest on a prorated basis for the number of full months of the year elapsed through the termination date, subject to the executive officer entering into a settlement agreement and release with the Company. Additionally, Messrs. Glaser and Parham have entered into severance arrangements with the Company pursuant to which their outstanding Company equity awards will receive accelerated vesting in the event of a qualifying termination in connection with a change in control. Additionally, pursuant to his Transition and Release Agreement entered into with the Company, Mr. Ensing will receive accelerated vesting of 200,000 RSUs previously granted to him if the closing of the Merger occurs no later than December 31, 2022. For information

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on accelerated vesting of RSUs in the event of a termination of employment in connection with a change in control or as set forth in Mr. Ensing’s Transition and Release Agreement, see the section titled “Special Factors—RealNetworks Change in Control and Severance Arrangements with Executive Officers” below.

New RealNetworks Equity Awards

The Company may grant additional equity awards as part of its equity incentive compensation program for 2022, including to the Company’s executive officers. As of the date of this Proxy Statement, the Company has not granted equity awards to any of the Company executive officers for 2022.

New Compensation Arrangements with Parent

Any Company executive officers and directors who become officers, directors or employees or who otherwise are retained to provide services to Parent or the surviving company may enter into new individualized compensation arrangements and may participate in cash or equity incentive or other benefit plans maintained by Parent. As of the date of this Proxy Statement, no compensation arrangements between such persons and Parent and/or its affiliates have been established.

RealNetworks Change in Control and Severance Arrangements with Executive Officers

Each of Messrs. Glaser and Parham is party to an arrangement with the Company pursuant to which he may become entitled to receive severance benefits upon a qualifying termination of employment.

In connection with the appointment of Mr. McClain as interim Chief Financial Officer, the Compensation Committee of the Board approved, in addition to a base salary in the annualized amount of $350,000, that Mr. McClain will be eligible to receive a discretionary cash bonus of up to $18,500 upon conclusion of his initial term in such role ending November 5, 2022. The Company also has agreed to reimburse the cost of the premiums for Mr. McClain’s health insurance coverage during his employment.

Mr. Ensing resigned as President and Chief Operating Officer effective as of June 30, 2022, and entered into a Transition and Release Agreement pursuant to which he served in the role of Strategic Advisor through August 19, 2022. The Transition Agreement provides that certain severance benefits may continue through December 31, 2022, and also provides for the acceleration of certain equity awards if the closing of the Merger occurs no later than December 31, 2022.

Ms. Chambers’ employment with the Company terminated on July 31, 2022, and she is not eligible to receive severance benefits.

Robert Glaser

Mr. Glaser has entered into a CEO Severance Agreement with the Company (the “CEO Severance Agreement”). Pursuant to the CEO Severance Agreement, in the event that, other than during the period beginning three months prior to a change in control of the Company and ending 24 months after the change in control, either his employment is terminated without cause and other than due to his death or disability, or he resigns for good reason, Mr. Glaser is eligible to receive from the Company (i) a lump sum payment equal to 200% of the sum of his then-current annual cash base salary and his then-current target annual bonus, (ii) a lump sum payment equal to the amount of bonus that he otherwise would have received pursuant to the bonus plan in which he participated at the time of his termination based on actual performance, had he remained employed through the end of the performance period, but prorated based on the period he served as chief executive officer during the applicable performance period, and (iii) up to 18 months of company-reimbursed coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (or “COBRA”). These severance benefits are subject to Mr. Glaser entering into a release of claims in favor of the Company, confidentiality obligations with respect to Company confidential information, and his compliance with non-disparagement, no-hire, non-solicitation and non-competition covenants for a period of 24 months following the termination of his employment.

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Additionally, pursuant to the CEO Severance Agreement, if Mr. Glaser’s employment terminates, but Mr. Glaser remains as Chairman of the Board, then he will remain eligible to participate in the Company’s group health plans or the Company may provide him with an annual cash payment equivalent to the Company’s premium cost for his participation in the Company’s group health plan.

The CEO Severance Agreement provides that if, during the period beginning three months prior to a change in control of the Company and ending 24 months after the change in control, his employment is terminated without cause and other than due to his death or disability, or he resigns for good reason, then Mr. Glaser is eligible to receive from the Company (i) a lump sum payment equal to 200% of the sum of his then-current annual cash base salary and his then-current target annual bonus, (ii) a lump sum payment equal to his then-current target bonus, prorated to reflect the period he served as chief executive officer during the applicable performance period, (iii) full acceleration of the vesting of any unvested, non-performance-based equity awards, and (iv) up to 18 months of Company-reimbursed COBRA coverage. These severance benefits are subject to Mr. Glaser timely entering into and not revoking a release of claims in favor of the Company, confidentiality obligations with respect to company confidential information, and his compliance with non-disparagement, no-hire, non-solicitation and non-competition covenants for a period of 24 months following the termination of his employment.

The closing of the Merger will constitute a change in control of the Company under the CEO Severance Agreement (although the Merger will result in Mr. Glaser being in control of the Company).

If the severance payments constitute an “excess parachute payment” within the meaning of Section 280G of the Code, they will be reduced such that no portion of the severance payments would be subject to excise tax under Section 4999 of the Code, whichever results in the greater amount of after-tax benefits to the named executive officer.

Michael Parham

Pursuant to his offer letter entered into with the Company, Mr. Parham is eligible to receive a lump sum payment equal to 12 months of his then-current base salary in the event that his employment is terminated without cause other than in connection with a change in control event. The severance benefit is subject to Mr. Parham entering into and not revoking a release of claims in favor of the Company.

Mr. Parham also has entered into a change in control and severance agreement with the Company (the “Parham Severance Agreement”). Pursuant to the Parham Severance Agreement, if his employment is terminated without cause and other than due to his death or disability or he resigns for good reason and the termination occurs during the period beginning three months prior to a change in control of the Company and ending 12 months after the change in control, then Mr. Parham is eligible to receive from the Company (i) a lump sum payment equal to 125% of his base salary, (ii) a lump sum payment equal to 125% of his target bonus, and a lump sum payment of his prorated target bonus for any partial bonus period, (iii) full acceleration of equity awards granted after February 1, 2010, (iv) extension of post-termination exercisability period of outstanding vested options for up to 12 months (subject to earlier termination based on the option’s maximum term), and (v) up to 18 months of the Company’s reimbursement of his COBRA coverage premiums.

These severance benefits are subject to Mr. Parham timely entering into and not revoking a release of claims in favor of the Company, confidentiality obligations with respect to Company confidential information, and his compliance with non-disparagement, no-hire, and non-solicitation covenants for a period of 12 months following the termination of his employment.

The closing of the Merger will constitute a change in control of the Company under the Parham Severance Agreement.

If the severance payments constitute an “excess parachute payment” within the meaning of Section 280G of the Code, they will be reduced such that no portion of the severance payments would be subject to excise tax under Section 4999 of the Code, whichever results in the greater amount of after-tax benefits to the named executive officer.

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Michael Ensing

Mr. Ensing entered into a Transition and Release Agreement with the Company on June 30, 2022 (the “Ensing Transition Agreement”), in connection with his resignation from his role as the Company’s President and Chief Operating Officer. Under the terms of the Ensing Transition Agreement, Mr. Ensing transitioned into a role as a Strategic Advisor, which role terminated on August 19, 2022. Notwithstanding the termination of Mr. Ensing’s service relationship with the Company, pursuant to the terms of the Ensing Transition Agreement, (i) the Company will continue to pay the monthly premiums for COBRA coverage for Mr. Ensing and his qualified beneficiaries through December 31, 2022, unless Mr. Ensing becomes eligible to receive comparable health coverage benefits from a subsequent employer, (ii) continued eligibility to receive a bonus from the Company under the Company’s management bonus program for the first half of fiscal year 2022, subject to the attainment of the performance goals established under the program generally and the terms and conditions to be determined by the Compensation Committee, to be paid, as provided under the bonus program, no later than March 15, 2023, and (iii) if, no later than December 31, 2022, the Company closes a transaction with Robert Glaser, pursuant to which Mr. Glaser acquires all outstanding shares of Common Stock not currently owned by Mr. Glaser and his affiliates (as described in the Company’s Current Report on Form 8-K dated May 9, 2022), 200,000 RSUs previously granted to Mr. Ensing will receive full accelerated vesting. The Ensing Transition Agreement contains a waiver and release of claims in favor of the Company.

Certain Defined Terms

For purposes of the CEO Severance Agreement and the Parham Severance Agreement, the term “Cause” generally means conduct by the applicable executive, involving one or more of the following: (1) conviction of or plea of no contest to a felony involving moral turpitude resulting in material harm to the Company; (2) willful, substantial and continuing failure for a period of 30 days after written notice to perform the reasonable duties of his position (other than due to illness or incapacity); (3) willful misconduct, gross negligence, fraud, embezzlement, theft, misrepresentation or dishonesty by the executive involving the Company or any of its subsidiaries, intended to result in substantial personal enrichment and that results in substantial material harm to the Company; or (4) violation of any confidentiality or non-competition agreements with the Company or its subsidiaries, resulting in substantial, material harm to the Company.

For purposes of Mr. Parham’s offer letter, the term “Cause” generally means conduct by Mr. Parham involving one or more the following: (1) conviction of or plea of no contest to a felony involving moral turpitude resulting in material harm to the Company; (2) substantial and continuing failure after written notice to render services to the Company in accordance with the terms and requirements of his employment (other than due to illness or incapacity); (3) willful misconduct, gross negligence, fraud, embezzlement, theft, misrepresentation or dishonesty by Mr. Parham involving the Company or any of its subsidiaries, resulting in material harm to the Company; or (4) violation of any confidentiality or non-competition agreements with the Company or its subsidiaries, resulting in material harm to the Company.

For purposes of the award agreements governing the terms of RSUs granted under the Company’s 2005 Stock Incentive Plan to executive officers, “Cause” generally means conduct by the applicable executive, involving one or more of the following: (1) conviction or plea of no contest to a felony involving moral turpitude; (2) indictment for a felony or misdemeanor involving moral turpitude under the federal securities laws; (3) substantial and continuing failure after written notice to render services in accordance with the terms or requirements of the executive’s employment for reasons other than illness or incapacity; (4) willful misconduct or gross negligence; (5) fraud, embezzlement, theft, misrepresentation or dishonesty involving the Company or any of its subsidiaries, or willful violation of a Company policy or procedure resulting in significant harm to the Company; or (6) violation of any confidentiality or non-competition agreements with the Company or its subsidiaries.

For purposes of the CEO Severance Agreement and the Parham Severance Agreement, the term “Good Reason” generally means the executive’s resignation within 30 days (or 60 days, for Mr. Glaser) after the expiration of any Company cure period following the occurrence of one or more of the following, without his written consent: (1) a material reduction in the executive’s duties, authorities or responsibilities (and in the case

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of Mr. Glaser, his ceasing to be Chairman of the Board while CEO will not constitute “Good Reason,” and in the case of Mr. Parham, relative to the executive’s duties, authorities or responsibilities as in effect immediately prior to the change in control); (2) a material reduction in the executive’s annual base compensation; (3) a material reduction in the executive’s annual target bonus opportunity; and (4) a material change in the geographic location at which the executive must perform services. The executive must first provide the Company with written notice within 90 days of the event that the executive believes constitutes “Good Reason” specifically identifying the grounds for good reason and a reasonable cure period of not less than 30 days following the date of such notice.

Quantification of Payments and Benefits to RealNetworks’s Named Executive Officers

The following information, table and the related footnotes present information about the compensation potentially payable to the Company’s named executive officers in connection with the Merger.

Golden Parachute Compensation

In accordance with Item 402(t) of Regulation S-K, the table below sets forth the estimated amounts of compensation and benefits that each named executive officer of the Company could receive that are based on or otherwise relate to the Merger. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules, and in this section such term is used to describe the Merger-related compensation potentially payable to the Company’s named executive officers. The table below sets forth, for the purposes of this golden parachute disclosure, the amount of payments and benefits (on a pre-tax basis) that each of the Company’s named executive officers would receive, using the following assumptions:

The narrative and tables that follow are estimates based on multiple assumptions that may or may not actually occur; particularly in the case of Mr. Glaser, certain of these assumptions are highly unlikely to occur. Accordingly, the actual amounts, if any, to be received by a named executive officer of the Company may differ, including possibly materially, from the amounts set forth below.

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The values in the equity column of the tables above and below reflect the accelerated vesting terms in accordance with the applicable Company Plans and award agreements, the CEO Severance Agreement, the Parham Severance Agreement and the Ensing Transition Agreement:

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Equity Interests of RealNetworks’s Executive Officers and Non-Employee Directors

The following table sets forth, for each person who has been an executive officer or director of the Company at any time since January 1, 2021, the number of shares of Common Stock and the number of shares of Common Stock underlying the Company’s equity awards held by such individual assuming the individual’s continued employment or service through December 31, 2022 (other than shares of Common Stock held by individuals whose services with the Company previously terminated), and, assuming no sales, transfers or exercises, that are expected to be outstanding as of December 31, 2022, which is assumed to be the date of closing of the Merger solely for purposes of this table. The table also sets forth the values of these shares and equity awards, determined as the applicable number of shares multiplied by the per share Merger Consideration set forth in the Merger Agreement, or $0.73 (provided that a value of zero has been ascribed to the options, as all options shown below have a per share exercise price equal to or above $0.73).

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Insurance and Indemnification Interests of Directors and Executive Officers

Pursuant to the terms of the Merger Agreement, following the Effective Time, the Company’s current and former directors and officers will be entitled to certain ongoing rights of indemnification and to coverage under directors’ and officers’ liability insurance policies, and the Company’s directors and certain executive officers are entitled to continued indemnification and insurance coverage under indemnification agreements. For a description of such ongoing indemnification and insurance obligations, refer to the section entitled “The Merger Agreement—Indemnification and Insurance” on page 103.

Material U.S. Federal Income Tax Consequences of the Merger

The following is a summary of the material U.S. federal income tax consequences of the Merger to the shareholders who are “U.S. holders” and “non-U.S. holders” (each as defined below) whose shares of Common Stock are converted into the right to receive cash in the Merger. This summary is for informational purposes only and does not purport to be a complete analysis of all potential tax considerations that might be relevant to our shareholders. This discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), applicable U.S. Treasury regulations, judicial opinions, and administrative rulings and published positions of the Internal Revenue Service (the “IRS”), each as in effect as of the date hereof. These authorities are subject to change, possibly on a retroactive basis, and any such change could affect the accuracy of the statements and conclusions set forth in this discussion. The discussion applies only to beneficial owners who hold shares of Common Stock as capital assets within the meaning of Section 1221 of the Code (generally,

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property held for investment purposes), and does not apply to shares of Common Stock received in connection with the exercise of employee stock options or otherwise as compensation, shareholders who hold an equity interest, actually or constructively, in Parent or the surviving corporation after the Merger, shareholders who have perfected and not withdrawn a demand for, or lost the right to, dissent under the Revised Code of Washington (“RCW”) or to certain types of beneficial owners who may be subject to special rules (such as insurance companies, banks, tax-exempt organizations, financial institutions, broker–dealers, partnerships, S corporations or other pass-through entities, mutual funds, traders in securities who elect the mark-to-market method of accounting, shareholders subject to the alternative minimum tax, U.S. holders that have a functional currency other than the U.S. dollar, shareholders who hold Common Stock as part of a hedge, straddle, constructive sale or conversion transaction, shareholders who exercise dissenting rights in connection with the merger under the RCW, or shareholders who own or have owned (directly, indirectly or constructively) 5% or more of the Company’s stock (by vote or value)). This discussion also does not address the receipt of cash in connection with the cancellation of phantom stock units, or options to purchase shares of Common Stock, or the treatment of RSUs or performance awards, or any other matters relating to equity compensation or benefit plans (including the plans). This discussion does not address any aspect of state, local or foreign tax laws, estate or gift tax laws, the additional 3.8% tax on certain net investment income that may be imposed under the Code or any other form of taxation that may be applicable to a shareholder. Furthermore, it generally does not address the tax consequences of transactions effectuated before, after or at the same time as the Merger, whether or not they are in connection with the Merger.

If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds Common Stock, the tax treatment of a partner of such partnership generally will depend on the status of the partner and the activities of the partner and the partnership. A partner of a partnership holding Common Stock is encouraged to consult the partner’s tax advisor regarding the U.S. federal income tax consequences of the Merger to such partner.

We have not sought, and do not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation.

This discussion is for informational purposes only and is not tax advice. Holders of Common Stock are urged to consult their tax advisors with respect to the U.S. federal income tax consequences of the Merger to them in light of their particular circumstances, as well as any tax consequences of the Merger arising under the U.S. federal tax laws other than those pertaining to income tax, including estate or gift tax laws, or under any state, local or non-U.S. tax laws or under any applicable income tax treaty.

U.S. Holders

For purposes of this discussion, “U.S. holder” means a beneficial owner of shares of Common Stock that is, for U.S. federal income tax purposes:

The exchange of shares of Common Stock for cash in the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder whose shares of Common Stock are converted into the

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right to receive cash in the Merger will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash received with respect to such shares (determined before the deduction of any applicable withholding taxes, as described below in this section under “Backup Withholding and Information Reporting”) and the U.S. holder’s adjusted tax basis in such shares. A U.S. holder’s adjusted tax basis will generally equal the price the U.S. holder paid for such shares. Gain or loss will be determined separately for each block of shares of Common Stock (i.e., shares of Common Stock acquired at the same cost in a single transaction). Such capital gain or loss will be long-term capital gain or loss, provided that the U.S. holder’s holding period for such shares of Common Stock is more than 12 months at the Effective Time. Long-term capital gains for certain non-corporate U.S. holders, including individuals, are generally eligible for a reduced rate of federal income taxation. Short-term capital gains are taxed at ordinary income rates. There are limitations on the deductibility of capital losses. Gain or loss must be calculated separately for each block of Common Stock (i.e., Common Stock acquired at the same time and at the same price in a single transaction). U.S. holders who own separate blocks of Common Stock should consult their own tax advisors with respect to these rules.