272 Capital and B. Riley Financial Issue Follow-Up Letter to Tile Shop Holdings Board of Directors
Calls out Board for Lack of Responsiveness and Continued Failure to Up-List
Intends to Nominate Highly-Qualified and Independent Directors to Replace Current Board Members
DALLAS & LOS ANGELES--(BUSINESS WIRE)-- 272 Capital, LP and B. Riley Financial, Inc., two significant shareholders of Tile Shop Holdings, Inc. (OTCMKTS: TTSH), today released a letter to the Board of Directors of Tile Shop condemning the Board’s lack of engagement with shareholders and its failure thus far to up-list TTSH to a major stock exchange. The full text of the letter follows:
February 26, 2021
Tile Shop Holdings, Inc.
c/o Board of Directors
14000 Carlson Parkway
Plymouth, MN 55441
To the Members of the Board of Directors,
272 Capital, LP (“272 Capital”), together with B. Riley Financial, Inc., collectively represent more than 10% of the outstanding common stock shares (the “Shares”) of Tile Shop Holdings, Inc. (“TTSH” or the “Company”).
As noted in previous letters, we strongly believe that up-listing the Shares of the Company on a major stock exchange would unlock both immediate and long-term value for all shareholders.
It has now been one month since our latest letter and four months since 272 Capital’s initial letter, each of which called on the Company to take the simple, reasonable, and value-unlocking step of up-listing to a major exchange. We quite simply are perplexed as to why the Board of Directors of the Company has not yet announced an application to up-list.
Since our last letter, we have received an extraordinary amount of supportive feedback from other shareholders, with many of these shareholders just as adamant as we are that change needs to take place immediately. When listening to other shareholders, it becomes clear that while there was some initial optimism that the documented self-serving history of this Board would change with the addition of three new directors in conjunction with the settlement in July of 2020, that hope has now faded as this Board has not taken even the simplest step of up-listing.
We acknowledge the Board’s announcement that it has formed a special committee to evaluate a re-listing on Nasdaq, but this was only after months of pressure from shareholders and now, a month after the committee’s formation, no action has been taken and shareholders continue to be left in the dark. The decision to up-list is not complex, and the benefits are obvious; it should not take this long to implement a simple step and do what is right for shareholders and the Company.
It appears to us that the only decision the Board was willing to make was its decision to disregard shareholders. In addition to failing to respond to our letter, the Board announced that it would not make any disclosures regarding the contemplation of an up-listing or the timing of a decision until it makes a final decision. When we sought to engage with the Company to have a discussion about an up-listing in order to facilitate the Company’s decision, we were rebuffed and told that the Company was not willing to have an interactive discussion or answer any questions.
With the Board’s continued refusal to engage, as noted in our last letter, we intend to run an opposing slate of highly-qualified and independent board nominees at the upcoming annual meeting to give all shareholders the opportunity to have a say in the future of the Company. We intend to provide more details in the coming weeks and months about how a reconstituted Board with directors that both understand and are chosen by shareholders can take steps to benefit all shareholders.
Chief Executive Officer
272 Capital, LP
About 272 Capital, LP
272 Capital LP is a registered investment adviser which seeks to provide attractive risk adjusted returns through a long/short equity strategy with low net exposure. 272 Capital invests primarily in individual publicly traded equity securities based mostly in the US through a rigorous bottom-up fundamental research investment process.
About B. Riley Financial, Inc.
B. Riley Financial (NASDAQ: RILY) provides collaborative financial services solutions tailored to fit the capital raising, business, operational, and financial advisory needs of its clients and partners. B. Riley operates through several subsidiaries which offer a diverse range of complementary end-to-end capabilities spanning investment banking and institutional brokerage, private wealth and investment management, corporate advisory, restructuring, due diligence, forensic accounting, litigation support, appraisal and valuation, and auction and liquidation services. Certain registered affiliates of B. Riley originate and underwrite senior secured loans for asset-rich companies. B. Riley also makes proprietary investments in companies and assets with attractive return profiles. For more information about B. Riley and its affiliated companies, visit www.brileyfin.com.
Source: 272 Capital, LP & B. Riley Financial, Inc.