ANDREW M. FREEDMAN, ESQ.
The information required
on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities
Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however,
see
the
Notes
).
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1
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NAME OF REPORTING PERSON
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PHILOTIMO FUND, LP
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ☐
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(b) ☐
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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WC
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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☐
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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DELAWARE
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NUMBER OF
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7
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SOLE VOTING POWER
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SHARES
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BENEFICIALLY
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- 0 -
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OWNED BY
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8
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SHARED VOTING POWER
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EACH
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REPORTING
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300,000
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PERSON WITH
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9
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SOLE DISPOSITIVE POWER
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- 0 -
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10
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SHARED DISPOSITIVE POWER
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300,000
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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300,000
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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☐
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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1.1%
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14
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TYPE OF REPORTING PERSON
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IA, PN
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1
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NAME OF REPORTING PERSON
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KANEN WEALTH MANAGEMENT, LLC
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ☐
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(b) ☐
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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OO; AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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☐
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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FLORIDA
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NUMBER OF
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7
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SOLE VOTING POWER
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SHARES
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BENEFICIALLY
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- 0 -
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OWNED BY
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8
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SHARED VOTING POWER
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EACH
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REPORTING
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1,733,714
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PERSON WITH
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9
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SOLE DISPOSITIVE POWER
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- 0 -
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10
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SHARED DISPOSITIVE POWER
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1,733,714
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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1,733,714
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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☐
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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6.3%
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14
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TYPE OF REPORTING PERSON
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IA, OO
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1
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NAME OF REPORTING PERSON
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DAVID L. KANEN
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ☐
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(b) ☐
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
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PF; OO
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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☐
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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USA
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NUMBER OF
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7
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SOLE VOTING POWER
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SHARES
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BENEFICIALLY
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69,629
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OWNED BY
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8
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SHARED VOTING POWER
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EACH
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REPORTING
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1,733,714
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PERSON WITH
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9
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SOLE DISPOSITIVE POWER
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69,629
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10
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SHARED DISPOSITIVE POWER
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1,733,714
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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1,803,343
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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6.5%
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14
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TYPE OF REPORTING PERSON
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IN
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The following constitutes the Schedule
13D filed by the undersigned (the “Schedule 13D”).
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Item 1.
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Security and Issuer
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This statement relates
to the common stock, $0.001 par value per share (the “Shares”), of Aqua Metals, Inc., a Delaware corporation (the “Issuer”).
The address of the principal executive offices of the Issuer is 1010 Atlantic Avenue, Alameda, California 94501.
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Item 2.
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Identity and Background.
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(a) This
statement is filed by:
(i) Philotimo
Fund, LP, a Delaware limited partnership (“Philotimo”), with respect to the Shares directly and beneficially owned
by it;
(ii) Kanen
Wealth Management, LLC, a Florida limited liability company (“KWM”), as the general partner of Philotimo and with respect
to the Shares directly and beneficially owned by it; and
(iii) David
L. Kanen, as the managing member of KWM and with respect to the Shares directly and beneficially owned by him.
Each of the foregoing
is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting
Persons is party to that certain Joint Filing Agreement, as further described in Item 6. Accordingly, the Reporting Persons are
hereby filing a joint Schedule 13D.
(b) The
address of the principal office of each of Philotimo, KWM and Mr. Kanen is 5850 Coral Ridge Drive, Suite 309, Coral Springs, Florida
33076.
(c) The
principal business of each of KWM and Philotimo is investing in securities. The principal occupation of Mr. Kanen is serving as
the managing member of KWM.
(d) No
Reporting Person, has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) No
Reporting Person, has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to
such laws.
(f) Mr.
Kanen is a citizen of the United States of America.
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Item 3.
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Source and Amount of Funds or Other Consideration
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The Shares purchased
by Philotimo were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in
the ordinary course of business) in open market transactions. The Shares purchased by KWM were purchased with the funds for the
accounts of its customers (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of
business) in open market transactions. The Shares purchased by Mr. Kanen were purchased with personal funds (which may, at any
given time, include margin loans made by brokerage firms in the ordinary course of business) in open market transactions. The aggregate
purchase price of the 1,433,714 Shares beneficially owned by KWM is approximately $3,845,100, including brokerage commissions.
The aggregate purchase price of the 300,000 Shares beneficially owned by Philotimo is approximately $719,490, including brokerage
commissions. The aggregate purchase price of the 69,629 Shares beneficially owned by Mr. Kanen is approximately $189,247, including
brokerage commissions.
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Item 4.
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Purpose of Transaction.
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The Reporting Persons
purchased the Shares based on the Reporting Persons’ belief that the Shares, when purchased, were undervalued and represented
an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the
Reporting Persons, and the availability of Shares at prices that would make the purchase or sale of Shares desirable, the Reporting
Persons may endeavor to increase or decrease their position in the Issuer through, among other things, the purchase or sale of
Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may
deem advisable.
The Reporting Persons
intend to consider plans and/or make proposals with respect to, among other things, the Issuer’s operations, Board composition,
strategy and plans, and a potential strategic review to maximize shareholder value. The Reporting Persons intend to communicate
with the Issuer’s management and Board about a broad range of operational and strategic matters, including on ways to accelerate
the commercialization of the Issuer’s proprietary technology and create value for shareholders.
No Reporting Person
has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of
Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following,
any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis.
Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the
price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons
may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without
limitation, engaging in communications with management and the Board of Directors of the Issuer, engaging in discussions with
stockholders of the Issuer or other third parties about the Issuer and the Reporting Persons’ investment, including potential
business combinations or dispositions involving the Issuer or certain of its businesses, making recommendations or proposals to
the Issuer concerning changes to the capitalization, ownership structure, board structure (including board composition), potential
business combinations or dispositions involving the Issuer or certain of its businesses, or suggestions for improving the Issuer’s
financial and/or operational performance, purchasing additional Shares, selling some or all of their Shares, engaging in short
selling of or any hedging or similar transaction with respect to the Shares, including swaps and other derivative instruments,
or changing their intention with respect to any and all matters referred to in Item 4.
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Item 5.
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Interest in Securities of the Issuer.
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The aggregate percentage
of Shares reported owned by each person named herein is based upon 27,552,762 Shares outstanding, immediately following the completion
of a public offering of Shares by the Issuer, as reported in the Issuer’s Prospectus Supplement filed pursuant to Rule 424(b)(5)
with the Securities and Exchange Commission on December 11, 2017.
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(a)
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As of the close of business on February 22, 2018, Philotimo beneficially owned 300,000 Shares.
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Percentage: Approximately 1.1%
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(b)
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1. Sole power to vote or direct vote: 0
2. Shared power to vote or direct vote: 300,000
3. Sole power to dispose or direct the disposition: 0
4. Shared power to dispose or direct the disposition: 300,000
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(c)
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The transactions in the Shares by Philotimo during the past sixty days are set forth in Schedule
A and are incorporated herein by reference.
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(a)
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As of the close of business on February 22, 2018, KWM beneficially owned 1,433,714 Shares. KWM,
as the general partner of Philotimo, may be deemed the beneficial owner of the 300,000 Shares owned by Philotimo.
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Percentage: Approximately 6.3%
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(b)
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1. Sole power to vote or direct vote: 0
2. Shared power to vote or direct vote: 1,733,714
3. Sole power to dispose or direct the disposition: 0
4. Shared power to dispose or direct the disposition: 1,733,714
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(c)
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The transactions in the Shares by KWM during the past sixty days are set forth in Schedule A and
are incorporated herein by reference. The transactions in the Shares on behalf of Philotimo during the past sixty days are set
forth in Schedule A and are incorporated herein by reference.
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(a)
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As of the close of business on February 22, 2018, Mr. Kanen directly beneficially owned 69,629
Shares. Mr. Kanen, as the managing member of KWM, may be deemed the beneficial owner of the (i) 1,433,714 Shares owned by KWM and
(ii) 300,000 Shares owned by Philotimo.
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Percentage: Approximately 6.5%
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(b)
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1. Sole power to vote or direct vote: 69,629
2. Shared power to vote or direct vote: 1,733,714
3. Sole power to dispose or direct the disposition: 69,629
4. Shared power to dispose or direct the disposition: 1,733,714
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(c)
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The transactions in the Shares by Mr. Kanen during the past sixty days are set forth in Schedule
A and are incorporated herein by reference. The transactions in the Shares on behalf of each of KWM and Philotimo during the past
sixty days are set forth in Schedule A and are incorporated herein by reference.
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KWM, in its role as
investment manager to several customer accounts (collectively, the "Accounts") to which it furnishes investment advice,
and Mr. Kanen, as the managing member of KWM, may each be deemed to beneficially own shares of the Issuer's Shares held in the
Accounts.
Each Reporting Person,
as a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons. Each Reporting
Person disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.
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(d)
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No person other than the Reporting Persons is known to have the right to receive, or the power
to direct the receipt of dividends from, or proceeds from the sale of, the Shares.
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Item 6.
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Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
.
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On February 22, 2018,
the Reporting Persons entered into a Joint Filing Agreement in which the Reporting Persons agreed to the joint filing on behalf
of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable
law. The Joint Filing Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Other than as described
herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting
Persons and any other person, with respect to the securities of the Issuer.
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Item 7.
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Material to be Filed as Exhibits
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99.1
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Joint Filing Agreement by and between Kanen Wealth Management, LLC, Philotimo Fund, LP and David
L. Kanen, dated February 22, 2018.
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SIGNATURES
After reasonable inquiry
and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated: February 22, 2018
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KANEN WEALTH MANAGEMENT, LLC
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By:
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/s/ David L. Kanen
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Name:
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David L. Kanen
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Title:
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Managing Member
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PHILOTIMO FUND, LP
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By:
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Kanen Wealth Management, LLC its general partner
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By:
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/s/ David L. Kanen
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Name:
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David L. Kanen
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Title:
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Managing Member
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/s/ David L. Kanen
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DAVID L. KANEN
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SCHEDULE A
Transactions in the Shares of the
Issuer During the Past Sixty Days
Nature of the Transaction
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Amount of Shares
Purchased/(Sold)
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Price ($)
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Date of
Purchase/Sale
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PHILOTIMO
FUND, LP
Purchase of Common Stock
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150,000
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1.9658
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02/12/2018
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Purchase of Common Stock
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73,961
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2.8575
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02/13/2018
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Purchase of Common Stock
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26,039
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2.8385
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02/14/2018
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Purchase of Common Stock
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50,000
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2.6867
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02/15/2018
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KANEN
WEALTH MANAGEMENT, llC
Purchase of Common Stock
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27,895
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1.9599
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02/12/2018
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Purchase of Common Stock
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1,402,355
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2.7178
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02/13/2018
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Purchase of Common Stock
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3,500
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2.7971
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02/20/2018
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DAvid
L. Kanen
Purchase of Common Stock
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41,984
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1.9599
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02/12/2018
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Purchase of Common Stock
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27,645
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2.7178
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02/13/2018
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