Form 4: Key Investors Report Significant Holdings and New Swap Agreements in Tile Shop Holdings

Fund 1 Investments, LLC and affiliated entities have filed an SEC Form 4 detailing their substantial beneficial ownership in Tile Shop Holdings, Inc. and new cash-settled total return swap agreements.

Summary

• Fund 1 Investments, LLC, Pleasant Lake Partners LLC, and PLP Funds Master Fund LP, all identified as Directors and 10% Owners of Tile Shop Holdings, Inc. (TTSH), have filed a Form 4.
• The filing reports indirect beneficial ownership of 11,855,745 shares of Common Stock held for the account of PLP Funds Master Fund LP.
• An additional 1,002,207 shares of Common Stock are held indirectly for an unaffiliated private fund for which Pleasant Lake Partners LLC serves as investment adviser.
• The reporting persons entered into a cash-settled total return swap arrangement on June 11, 2025, providing economic exposure to 10,000 notional shares of common stock at a price of $6.2393 per share.
• Another cash-settled total return swap arrangement was entered into on June 13, 2025, providing economic exposure to 25,000 notional shares of common stock at a price of $6.0217 per share.
• Following these transactions, the total notional shares from cash-settled total return swaps beneficially owned by the reporting persons amount to 807,690 shares.
• The swap agreements provide economic results comparable to ownership but do not grant voting or disposition power over the underlying shares.

Sentiment

Score: 6

Explanation: The sentiment is mildly positive to neutral. The filing indicates continued significant economic exposure by key investors and directors through both direct holdings and derivative instruments, which can be interpreted as a sign of ongoing confidence, though it is a factual reporting of transactions rather than a performance update.

Positives

• The reporting persons, who are significant shareholders and directors, maintain substantial beneficial ownership and economic exposure to Tile Shop Holdings, Inc., potentially indicating continued confidence in the company.

Risks

• The cash-settled total return swap agreements provide economic exposure but do not grant the reporting persons the power to vote or direct the voting or dispose of or direct the disposition of the underlying common stock, meaning they lack direct control over these shares.
• The reporting persons disclaim beneficial ownership of the subject shares of the swap agreements except to the extent of their pecuniary interest therein, which limits their direct legal ownership and control.

Future Outlook

The cash-settled total return swap agreements have an expiration date of April 7, 2028, and will be automatically extended for successive 12-month periods unless one party provides written notice not to extend, indicating a long-term economic exposure strategy.

Industry Context

This Form 4 filing is a specific disclosure of insider transactions and beneficial ownership, and as such, does not provide broader industry context or trends.

Related Party Transactions

• Fund 1 Investments, LLC serves as managing member of Pleasant Lake Partners LLC, which in turn serves as investment adviser to PLP Funds Master Fund LP and an additional private investment vehicle. Jonathan Lennon serves as managing member of Fund 1 Investments, LLC, establishing a related party structure among the reporting entities.

Stakeholder Impact

• Shareholders may view the continued significant economic exposure and new derivative positions by a 10% owner and director group as a signal of sustained interest and potential confidence in the company's future performance.

Next Steps

• The cash-settled total return swap agreements will automatically extend for successive 12-month periods unless notice of non-extension is provided by either party.

Key Dates

Keywords

SEC Form 4, Beneficial Ownership, Total Return Swap, TTSH, Tile Shop Holdings, Insider Filing, Investment Fund, Derivative Securities, Equity Securities