Form 4: Fund 1 Investments Exercises Tile Shop Total Return Swaps

Fund 1 Investments, a 10% owner and director of Tile Shop Holdings, Inc., exercised over 400,000 cash-settled total return swap agreements in early December 2025.

Summary

• Fund 1 Investments, LLC, a 10% owner and director of TILE SHOP HOLDINGS, INC. (TTSH), reported the exercise of cash-settled total return swap agreements.
• On December 9, 2025, 60,888 swap agreements were exercised at a price of $6.4139 per swap, leaving 841,225 swaps beneficially owned.
• On December 10, 2025, an additional 235,478 swap agreements were exercised at $6.4476 per swap, reducing beneficial ownership to 605,747 swaps.
• On December 11, 2025, 123,044 swap agreements were exercised at $6.4367 per swap, resulting in 482,703 swaps remaining beneficially owned.
• The total number of swaps exercised across these three days was 419,410.
• The underlying security for these swaps is Common Stock of Tile Shop Holdings, Inc.
• The reporting person disclaims beneficial ownership of the securities except to the extent of its pecuniary interest therein, as they are held by private investment vehicles.

Sentiment

Score: 5

Explanation: The filing is neutral, reporting routine insider transactions involving derivative instruments. It does not provide information that would significantly alter the fundamental outlook of the company.

Positives

• The exercise of cash-settled total return swaps indicates the reporting person is realizing value from these derivative positions.

Negatives

• The reduction in swap positions could be interpreted as a decrease in the reporting person's synthetic exposure to the company's stock.

Risks

• The nature of total return swaps involves market risk related to the underlying common stock.
• The reporting person disclaims beneficial ownership except for pecuniary interest, which could imply a complex ownership structure.

Future Outlook

The cash-settled total return swap agreements have an expiration date of April 7, 2028, which will automatically extend for successive 12-month periods unless one party provides written notice not to extend.

Management Comments

• The Reporting Person previously entered into certain cash-settled total return swap arrangements with an unaffiliated third party financial institution.
• The Reporting Person disclaims beneficial ownership of the securities reported herein except to the extent of its pecuniary interest therein.

Industry Context

This filing details an insider transaction involving derivative securities, which is a common practice for large shareholders and directors to manage their exposure to a company's stock. It does not directly reflect broader industry trends but rather specific portfolio management by a significant stakeholder.

Related Party Transactions

• Fund 1 Investments, LLC is a 10% owner and director of Tile Shop Holdings, Inc., making its transactions related to the company's securities a related party matter, even if the swaps are with an unaffiliated third party.

Stakeholder Impact

• Shareholders may observe a change in the synthetic exposure of a significant insider to the company's stock, which could be interpreted in various ways depending on individual investment strategies.

Next Steps

• The remaining cash-settled total return swap agreements will continue until their expiration date of April 7, 2028, with potential automatic 12-month extensions.

Key Dates

Keywords

Tile Shop Holdings, TTSH, Form 4, SEC filing, insider transaction, total return swap, derivative, beneficial ownership, equity securities, Fund 1 Investments