Star Equity Fund, LP (“Star Equity Fund” or “we”) is an investment
fund focused on unlocking shareholder value and improving corporate
governance at its portfolio companies. Star Equity Fund owns 5.4%
of the common stock of Servotronics, Inc. (NYSE American: SVT)
(“Servotronics” or “Company”) and, for the benefit of all SVT
stockholders, announced today that we will be proceeding with the
nomination of two highly qualified candidates for election to the
Company’s board of directors (the “Board”) at the Company’s 2023
annual meeting of shareholders (the “Annual Meeting”).
As we mentioned in our press release on February
14, 2023, we have concluded the only way to improve corporate
governance and maximize shareholder value at SVT is to change the
composition of the incumbent Board. We are seeking to replace
Edward Cosgrove (10 years on the Board) and Christopher Marks (6
years on the Board), the longest tenured Board members, who have
overseen a period of value destruction, poor financial and
operating performance, and bad corporate governance. We believe
that Cosgrove and Marks should be held responsible for their poor
track records and are seeking to replace them with two highly
qualified candidates, Mark Pomeroy and Richard Coleman. We believe
our nominees for election to the Board will bring vital experience,
new perspectives, and most importantly, the urgency and commitment
to taking action and improving shareholder value.
As a whole, we believe the incumbent Board lacks
the necessary experience and expertise to change the trajectory at
SVT. It is remarkable that for a company primarily focused on the
aerospace industry, there is not one independent director with any
aerospace experience on the Board or even someone with an
engineering or technical background. Additionally, the Board lacks
personnel with turnaround experience, a history of improving
operational performance, or a track record of creating substantial
shareholder value for all shareholders in a microcap stock like
SVT. We do not believe Cosgrove and Marks possess the skillset – or
resolve – to induce change of this nature at Servotronics.
Moreover, we question incumbent Cosgrove’s status as an independent
director given the conflict of interest between the Company and the
law firm he owns, as evidenced by the relationship between his firm
and SVT and payments received by his firm totaling over $1.2
million from 2013-2021.
Our nominees for election to the Board
are highly qualified, possess the necessary expertise, and are
fully aligned to act in the best interests of all
shareholders.
Mr. Pomeroy brings crucial manufacturing,
research and development, financial, and, most critically,
aerospace expertise ― of which the Board currently has
none ― and would be a high-value addition to the
Board. Similarly, Mr. Coleman, an Air Force Academy graduate, has
extensive engineering training as well as experience in a number of
high-tech ventures including Air Force and commercial research and
development, software development, and public company executive
leadership.
Mark Pomeroy spent 20 years working for General
Electric Co.’s Aircraft Engine division where he acted as both a
Master Black Belt staff engineer and Manager of Fleet Operations
and Engine Overhaul Customer Satisfaction. Additionally, Mr.
Pomeroy spent 15 years at Johnson & Johnson where he held
leadership positions overseeing R&D in Endo-Surgery and
Diabetes Care. He is the former Chief Innovation Officer of Red
Tiger Investments, LLC, a start-up developing public private
partnerships for the creation of innovation districts in
progressive municipalities, from 2018-2022. He currently serves as
the President of Pomme Ventures, LLC, a company that invests,
advises, and consults with start-up companies in the aerospace,
energy, and medical devices, and has been in this role since 2018.
He holds a bachelor’s degree in Mechanical Engineering, Magna Cum
Laude, from the Georgia Institute of Technology and a master’s
degree in Management from the Sloan School of Management, MIT.
Richard Coleman currently serves as Chief
Executive Officer for Star Equity Holdings, Inc. (NASDAQ: STRR), a
diversified holding company, and has served on the board of
directors since April 2022. He has ample experience as a
high-performance executive with a history of improving operations
and creating shareholder value at both public and private companies
such as Command Center, Inc. (n/k/a HireQuest, Inc. (NASDAQ: HQI)),
a provider of on-demand flexible employment solutions, Crossroads
Systems Inc., an intellectual property licensing company, and Vroom
Technologies, Inc., a leading provider of sales and marketing
effectiveness solutions for the telecommunications industry. Also,
Mr. Coleman served on the boards of directors of Hudson Global,
Inc. (NASDAQ: HSON) (d/b/a “Hudson RPO”), a global recruitment
process outsourcing company from 2014-2022, Command Center, Inc.
from 2018-2019, and Crossroads Systems from 2013-2017, among
others. Mr. Coleman holds a B.S. in Management from the United
States Air Force Academy and a M.B.A. from Golden Gate University.
He is also a graduate of the USAF Communications Systems Officer
School and Harvard University’s Strategic Marketing Management
Program.
Star Equity Fund remains resolute in its opinion
that additional change in Board composition is vital to altering
corporate governance practices, improving financial results, and
ultimately unlocking shareholder value at SVT. Despite recent
changes in board composition and new additions to management at the
Company, we have yet to see any concrete evidence of a concerted
effort to effectuate meaningful change. We believe long-suffering
SVT shareholders deserve better, and we aim to give shareholders an
opportunity to vote for much-needed change on the Board at the
Annual Meeting.
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
Star Equity Fund, LP (“Star Equity Fund”),
together with the other participants named herein (collectively,
“Star Equity”), intends to file a definitive proxy statement and
accompanying WHITE proxy card with the Securities and Exchange
Commission (“SEC”) to be used to solicit votes for the election of
its slate of highly-qualified director nominees at the 2023 annual
meeting of stockholders of Servotronics, Inc., a Delaware
corporation (the “Company”).
STAR EQUITY STRONGLY ADVISES ALL STOCKHOLDERS OF
THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS
AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON
THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE
PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
The participants in the proxy solicitation are
anticipated to be Star Equity Fund, Star Equity Fund GP, LLC (“Star
Equity Fund GP”), Star Value, LLC (“Star Value”), Star Equity
Holdings, Inc. (“Star Equity Holdings”), Star Investment
Management, LLC (“Star Investment Management”), Jeffrey E.
Eberwein, Richard K. Coleman, Jr., and G. Mark Pomeroy.
As of the date hereof, Star Equity Fund
beneficially owns directly 135,000 shares of common stock, par
value $0.20 per share, of the Company (the “Common Stock”). Star
Equity Fund GP, as the general partner of Star Equity Fund, may be
deemed to beneficially own the 135,000 shares of Common Stock owned
directly by Star Equity Fund. Star Value, as the sole member of
Star Equity Fund GP, may be deemed to beneficially own the 135,000
shares of Common Stock owned directly by Star Equity Fund. Star
Equity Holdings, as the parent company of Star Equity Fund, may be
deemed to beneficially own the 135,000 shares of Common Stock owned
directly by Star Equity Fund. Star Investment Management, as the
investment manager of Star Equity Fund, may be deemed to
beneficially own the 135,000 shares of Common Stock owned directly
by Star Equity Fund. Mr. Eberwein, as the Portfolio Manager of Star
Equity Fund, may be deemed to beneficially own the 135,000 shares
of Common Stock owned directly by Star Equity Fund. As of the date
hereof, neither Messrs. Coleman nor Pomeroy beneficially owns any
Common Stock.
For more information contact: |
|
Star Equity Fund, LP |
The Equity
Group |
Jeffrey E. Eberwein |
Lena Cati |
Portfolio Manager |
Senior Vice President |
203-489-9501 |
212-836-9611 |
jeff.eberwein@starequity.com |
lcati@equityny.com |
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