Tile Shop (TTSH) investor relations material

Executive summary

• A special meeting is scheduled to approve a reverse stock split (1-for-2,000 to 1-for-4,000) followed by a forward stock split at the inverse ratio, aiming to reduce the number of record holders below 300 and enable deregistration from the SEC and delisting from Nasdaq.

• Stockholders with fewer than the minimum number of shares will be cashed out at $6.60 per share, while those with more will retain their holdings post-split.

• The primary motivation is to eliminate the costs and burdens of public company status, estimated at $2.4 million in annual savings, and to allow small shareholders to liquidate at a fair price.

• The transaction was recommended by an independent committee, supported by a fairness opinion from GuideCap Partners, and unanimously approved by the board.

• The board retains the right to abandon the transaction if circumstances change.

Voting matters and shareholder proposals

• Proposal 1: Amend the certificate of incorporation to effect the reverse and forward stock splits at a ratio set by the board.

• Proposal 2: Approve adjournment of the special meeting if more time is needed to solicit votes.

• Both proposals are recommended for approval by the board.

Board of directors and corporate governance

• The transaction was reviewed by a Transaction Committee of independent directors, who engaged legal and financial advisors.

• The board and committee considered alternatives, including maintaining public status and seeking strategic transactions, but found the split and deregistration most beneficial.

• Directors and executive officers collectively own 36.9% of outstanding shares and intend to vote in favor.