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HSB Capital Partners Nominates Four Highly Qualified Directors for Election at Tix Corporation

Believes There Is an Urgent Need for Change Given Tix's Long Term Underperformance and Lack of Accountability

SANTA ANA, Calif., July 1, 2019 /PRNewswire/ -- HSB Capital Partners, L.P. (together with its affiliates, "HSB"), a large stockholder of Tix Corporation ("Tix" or the "Company") (TIXC), beneficially owning approximately 4.8% of Tix's outstanding common stock, today issued an open letter to the Company's stockholders outlining its serious concerns with the Company's long-term underperformance.  HSB believes the Company's performance issues stem from poor oversight by Tix's board of directors (the "Board") who lack both the experience and independence to set a clear, stockholder-focused, value-creating strategy. As a result, HSB has identified and intends to nominate for election at the Company's 2019 annual meeting of stockholders a slate of four independent, highly qualified nominees to join Tix's Board: Haren Bhakta, Palak Bhakta, John Buckingham and Michael Fisk

HSB notes that the Board has spent a significant amount of stockholder resources to spread misinformation about HSB and attempt to prevent HSB from exercising its most fundamental stockholder right to nominate directors in opposition to the Company's entrenched directors. This effort to disenfranchise stockholders, rather than make the necessary changes to increase stockholder value, clearly demonstrates the urgent need for change.  HSB has validly nominated four highly qualified directors who possess the right mix of skills and relevant backgrounds to turnaround Tix and will not be derailed from allowing stockholders to decide the future direction of the Company.

VIEW THE PDF OF THE LETTER HERE https://mma.prnewswire.com/media/941811/HSB___Tix_Public_Letter.pdf 

HSB's letter highlights the following:

  • Long-Term Underperformance: Despite Tix's compelling business qualities, its stock price has plummeted under the helm of the existing Board. Below highlights the devastating performance of TIXC as compared to SPY, an S&P 500 index fund, over the course of each of the independent directors' long tenures, through May 31, 2019.


Value of $100 invested in TIXC stock since director's appointment vs SPY

Director

Since

TIXC

Return

SPY

Return

Norman Feirstein

March, 1995

$1

(99%)

$874

774%

Andrew Pells

July, 2007

$9

(91%)

$234

134%

Steven L. Zelinger

August, 2013

$48

(52%)

$183

83%

Aaron S. Bergman

October, 2013

$46

(54%)

$184

84%













Source: Yahoo! Finance






In HSB's view, this performance is not representative of the intrinsic-value Tix holds to the very fabric of the Las Vegas market. The Company has been plagued by repeated strategic errors, operational missteps, and stockholder disappointments and has caused a deterioration in Tix's competitive position and loss in stockholder confidence.

  • Lack of Accountability: Despite the Company's long-term underperformance, there is a striking lack of accountability at Tix. Mitch Francis is both CEO and Chairman of Board and given the long average tenure of the Board, there does not appear to be anyone to hold him accountable and to ensure that stockholder interests are being protected. The most prudent action here in order to accelerate the growth and maintain the stability of Tix would be to separate these two roles and appoint new independent directors who will provide effective oversight over management.
     
  • Tix Can Cut Expenses to Drive Value: Because of the significant losses that the Company has experienced in the past several years, it is important to streamline operations. There is a revenue drain due to the separated positions of CEO and COO. For a company of this size, the two positions have directly related responsibilities that can cause a disconnect in management and therefore should be combined. In HSB's view, reducing executive redundancies, better aligning pay for performance, as well as closing the Studio City, CA office so that operations can be consolidated to Las Vegas only, can drive over $1 million in annual savings.
     
  • Cultural Transformation from the Top-Down Can Grow Revenue: HSB believes a new Board can address the lack of support, culture of fear and intimidation resulting from poor management and Company practices that has plagued employee morale. By creating a well-managed work environment, Tix can train, recruit and retain top employee talent, increasing sales and profitability.
     
  • Leveraging Strengths Can Build Market Share: Tix's physical locations on the Vegas strip can be better leveraged in order to gain a strong competitive edge by marketing the Company's website to patrons on the Vegas strip. Simultaneously, online marketing campaigns tailored to the Company's largest demographics can be created to acquire greater market share.
     
  • Refresh the Board: Given the urgent need to address the Company's prolonged underperformance, the time for action is now. HSB has validly nominated four highly qualified directors who possess the right mix of skills and relevant backgrounds to turnaround Tix. Each of the Nominees are independent of the Company and each other, have no familial relationship to each other, and were selected to address the qualifications that are currently lacking on the Board.

HSB's nominees are:

  • Haren Bhakta – has extensive experience in securities analysis, corporate finance and portfolio management and will bring an independent stockholder perspective to the Board.
     
  • Palak Bhakta – has more than 10 years' experience working in the technology industry and will bring an extensive background and unique experience from advising on broad corporate legal matters.
           
  • John Buckingham – received his MBA from Harvard Business School and has almost four decades of experience as an executive officer and business school professor and has served as a director on public boards driving business growth and sustainability in various industries.
       
  • Michael Fisk – has over 20 years of executive marketing experience in the entertainment industry, giving him a keen understanding on the importance of ticketing sales and marketing.

IMPORTANT INFORMATION

HSB Capital Partners, L.P. ("HSB") intends on mailing a proxy statement to solicit proxies from stockholders of Tix Corporation ("Tix") for use at Tix's 2019 annual meeting of stockholders. HSB STRONGLY ADVISE ALL SECURITY HOLDERS OF TIX TO READ ANY SUCH PROXY STATEMENT IF AND WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.

The following persons are, or may be deemed to be, participants in the potential proxy solicitation:  HSB, Haren Bhakta, Palak Bhakta, John Buckingham and Michael Fisk.  HSB is the direct beneficial owner of 746,849 shares of Tix common stock.  As the managing partner of HSB, Haren Bhakta may be deemed to beneficially own the 746,849 shares of Tix common stock. Haren Bhakta also beneficially owns 93,000 shares of Tix common stock held directly by him in his IRA account.  None of Palak Bhakta, John Buckingham and Michael Fisk beneficially own any shares of Tix common stock.

Contacts:

Haren Bhakta, Managing Member
HSB Capital Partners, L.P.
(714) 658-7846

Cision

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