Form 4: Insider Entities Boost Economic Exposure to Tile Shop Holdings Through Shareholdings and Swaps

Key insider entities, including Fund 1 Investments, LLC and Pleasant Lake Partners LLC, have reported significant indirect beneficial ownership in Tile Shop Holdings, Inc. (TTSH), encompassing substantial common stock holdings and economic exposure via cash-settled total return swaps.

Summary

• Fund 1 Investments, LLC, Pleasant Lake Partners LLC, and PLP Funds Master Fund LP are identified as a Director and 10% Owner of Tile Shop Holdings, Inc. (TTSH).
• The reporting persons indirectly own 11,856,805 shares of common stock held for the benefit of PLP Funds Master Fund LP.
• An additional 1,002,207 shares of common stock are indirectly owned, held for the account of an unaffiliated private fund for which Pleasant Lake Partners LLC serves as investment adviser.
• The reporting persons have economic exposure to 867,113 notional shares of common stock through cash-settled total return swap arrangements with an unaffiliated third-party financial institution.
• Specific swap transactions include 25,000 notional shares at $6.478 per share on July 14, 2025, and 10,000 notional shares at $6.5605 per share on July 15, 2025.
• These swap agreements provide economic results comparable to direct ownership but do not grant the reporting persons the power to vote or direct the voting or dispose of the underlying shares.

Sentiment

Score: 6

Explanation: The filing indicates increased economic exposure by significant insider entities, which can be viewed positively as it aligns their interests with shareholders, though the lack of voting power for swap positions is a minor detractor.

Positives

• Increased economic alignment between significant insider entities and the company's performance due to substantial shareholdings and derivative exposure.
• The acquisition of additional economic exposure through cash-settled total return swaps indicates a positive outlook from these key beneficial owners.

Negatives

• The cash-settled total return swaps, while providing economic exposure, do not grant voting or disposition power over the underlying common stock, limiting direct influence on corporate governance.

Risks

• The reporting persons do not possess voting or disposition power over the shares underlying the cash-settled total return swap agreements, limiting their direct control over those positions.

Future Outlook

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

Industry Context

This filing is specific to insider ownership and derivative positions within Tile Shop Holdings, Inc. and does not provide broader industry trends or competitive analysis.

Stakeholder Impact

• Increased alignment of interests between significant indirect owners and other shareholders due to increased economic exposure to the company's stock performance.

Next Steps

• The cash-settled total return swap agreements will automatically extend for successive 12-month periods unless one party provides written notice not to extend at least 30 calendar days prior to the first extension and 15 days prior to any subsequent extension.

Key Dates

Keywords

Tile Shop Holdings, TTSH, SEC Form 4, Beneficial Ownership, Insider Trading, Total Return Swap, Equity Holdings, Investment Fund, Corporate Governance