On January 21, 2020, Lawndale Capital Management, LLC announced that it has been in contact with P&F Industries Inc.’s management and members of Board of Directors regarding concerns relating to the Company’s executive compensation policies and the Board’s composition and corporate governance practices. In addition, Lawndale Capital Management stated that over several years, it has requested implementation of constructive changes that would further improve corporate governance, better align management and directors with shareowners’ interests, and other capital allocation steps to maximize value for all shareowners. Lawndale Capital expressed its view that, since the Company’s market valuation multiple has only marginally improved as a result of the Company better focusing on a single industry segment, maintaining a small quarterly dividend, and buying back shares, the Company’s Board should continue to aggressively repurchase shares and, in particular, re-initiate a 10b5-1 stock buyback plan, capped at attractive price valuation multiples, enabling periodic open market purchases that are not limited by narrow ‘insider trading windows’. Lawndale Capital also expressed its view that the Board should adopt ‘best practices’ minimum share ownership requirements for all its Board members and senior management. Lawndale Capital stated that it continues to view that the Company’s Board should make by-law changes to adopt ‘best practices’ in corporate governance such as de-staggering director terms to a single year vs. the Company’s present 3-year terms, adopting a majority vote requirement for director election, and enhancing shareholders’ right to call a special meeting or remove a director, among others.