SCHEDULE: Activist Investors Reduce Lantronix Stake to 5.73%

A group of activist investors, including Chain of Lakes Investment Fund, LLC, Haluk L. Bayraktar, and Emre Aciksoz, have significantly reduced their beneficial ownership in Lantronix Inc. to 5.73% through recent open market sales.

Summary

• Chain of Lakes Investment Fund, LLC, Christopher B. Woodruff, Haluk L. Bayraktar, and Emre Aciksoz (the "Reporting Persons") have filed an Amendment No. 2 to their Schedule 13D regarding their beneficial ownership in Lantronix Inc.
• The Reporting Persons initially acquired shares believing them to be materially undervalued and intended to seek to replace a majority of the Issuer's Board to facilitate an expedited return of shareholders' capital through a sale of the Issuer.
• Subsequent to the original filing, the Reporting Persons entered into a Cooperation Agreement with Lantronix Inc. on June 24, 2025, to resolve their differences.
• As of January 28, 2026, the Reporting Persons beneficially own an aggregate of 2,257,090 shares of Lantronix's Common Stock, representing 5.73% of the outstanding shares.
• In the past 60 days, the Reporting Persons have not acquired any additional securities but have sold a total of 780,881 shares in open market transactions.
• Specific sales include Chain of Lakes Investment Fund, LLC selling 461,404 shares, Emre Aciksoz selling 98,142 shares, and Haluk L. Bayraktar selling 221,335 shares, with prices ranging from $6.25 to $7.54 per share.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative signal, as a group of activist investors who previously sought significant changes, including a potential sale of the company, have now substantially reduced their stake, suggesting a diminished conviction or a strategic exit.

Negatives

• The Reporting Persons, who previously sought significant corporate changes including a potential sale of the company, have substantially reduced their stake through open market sales, which could be interpreted as a loss of conviction or a strategic exit.
• Significant selling by a group of activist investors may signal a lack of confidence in the company's future prospects or strategic direction, potentially exerting downward pressure on the stock price.

Future Outlook

The Reporting Persons intend to review their investment in Lantronix Inc. on a continuing basis and may in the future take actions with respect to their investment as they deem appropriate, subject to compliance with the terms of the Cooperation Agreement.

Management Comments

• The Reporting Persons originally acquired shares in Lantronix Inc. because they believed the shares were materially undervalued and represented an attractive investment opportunity.
• The Reporting Persons considered taking actions to replace a majority of the current members of the Board of the Issuer with candidates committed to an expedited return of shareholders' capital through a sale of the Issuer.
• The Reporting Persons engaged in discussions with the Issuer and agreed to resolve their differences by entering into a Cooperation Agreement dated June 24, 2025.

Industry Context

StockSavvy.ai notes that activist investor filings often signal significant strategic shifts or dissatisfaction with management. A substantial reduction in an activist group's stake, especially after a cooperation agreement, can indicate either a partial success of their initial goals, a change in investment thesis, or a strategic exit, which can be viewed negatively by the market.

Corporate Governance

Stakeholder Impact

• Shareholders may interpret the significant selling by the activist group as a lack of confidence in Lantronix's future performance or strategic direction, potentially leading to negative sentiment and downward pressure on the stock price.
• The company's management and board may face reduced pressure from this specific activist group, potentially altering the dynamics of corporate governance and strategic decision-making.

Next Steps

• The Reporting Persons intend to review their investment in the Issuer on a continuing basis.
• The Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate, subject to compliance with the terms of the Cooperation Agreement.

Key Dates

Recommendation

The substantial reduction in stake by a group of activist investors, who initially aimed to drive significant corporate changes including a potential sale of the company, signals a potential loss of conviction or a strategic exit. This significant insider selling activity could be interpreted by the market as a bearish indicator, suggesting that the reporting persons believe the stock's upside is limited or that their strategic objectives are no longer viable, thus warranting a 'sell' recommendation.

Keywords

Lantronix, LANTRONIX INC, Schedule 13D, activist investor, Chain of Lakes Investment Fund, Haluk L. Bayraktar, Emre Aciksoz, stock sales, beneficial ownership, corporate governance