Montana Advisors and Peterson Wealth Management Issue Joint Statement to Calloway’s Nursery, Inc’s Board of Directors

Rhea-AI Summary

Montana Advisors and Peterson Wealth Management, major shareholders of Calloway’s Nursery (CLWY), are calling for an exploratory process to uplist the stock to a major exchange or initiate a sale process. They believe CLWY is significantly undervalued due to limited OTC trading disclosure, which hampers investor interest. They argue that the potential for higher stock prices exists, as seen with other businesses that have uplisted. The shareholders express frustration over the Board's lack of communication, estimating CLWY could be worth over $20 per share if on a major exchange or sold properly.

Positive

• Potential for CLWY to exceed 2020 earnings, forecasting over $1.50 per share by 2023.
• Shareholders believe CLWY could be valued over $20 per share if uplisted or sold.

Negative

• CLWY's current undervaluation linked to limited OTC trading disclosure and lack of investor communication.
• Board's lack of response to shareholder communications could negatively impact CLWY's valuation.

Montana Advisors and Peterson Wealth Management, two large shareholders of Calloway’s Nursery, Inc (OTCMKTS: CLWY) or (“The Company”), are urging the Board of Directors to formally announce the beginning steps of an exploratory process of uplisting the stock to a major exchange, or to publicly commit to a sale process. We do applaud the Company on a job well done over the years, but time is of the essence when it comes to maximizing the value of our Company given the amount of liquidity in the markets and lack of attractive profitable targets.

CLWY remains significantly undervalued by the markets due to numerous factors, the primary one being that it trades with limited disclosure on the OTC which in turn leads to no liquidity, trust, or investor communication. We are aware of numerous investors who have expressed interest in acquiring shares of CLWY, however the Company makes it impossible for them to properly execute due diligence before buying. Some investors are required to visit a business and meet management before buying shares, and CLWY has essentially kicked out that entire investor base. We understand that quarterly conference calls and investor meetings can be tedious, but does attending one microcap conference a year really hurt?

Recently, we have seen a handful of OTC businesses with smaller market caps and earnings uplist, resulting in greater demand for their shares, thus far producing a higher stock price. Due to the success of Calloway’s, the logic of trading on the OTC market because of the Company's size and the need to save on expenses is no longer warranted. Even with additional compliance costs on a major exchange, the benefits far outweigh the minor additional cost.

In the four months since Montana Advisors issued an open letter to CLWY, the Board and management have ignored all forms of attempted communication including an email to the Chairman of the Company. The Company’s lack of interest in communicating with its shareholders is perplexing and only hurts its valuation.

If the Company wishes not to uplist, we ask the question, why stay public? Why not run a sale process? We estimate that the Company will match or exceed its 2020 earnings this year, and will continue to grow the top and bottom line at a healthy clip in the years to come. We forecast the Company earning over $1.50 a share by 2023. As much as we applaud those results, we refuse to sit and watch our Company continue to trade the way it does. Simply put, The Company would be worth north of $20 a share if freely traded on a major exchange (not including dividends), or potentially more if put through a thorough sale process based on any reasonable financial metric.

We continue to welcome the opportunity to speak with the Board of Directors via your preferred method of communication.

Respectfully,

Kunal Mehta
President
Montana Advisors LTD

Bryce Peterson
CEO
Peterson Wealth Management

About Montana Advisors LTD

Montana Advisors is a long-term value investor that seeks to work with management to increase stockholder value for the benefit of all shareholders.

About Peterson Wealth Management

Peterson Wealth Management is a Registered Investment Advisor serving businesses, individuals and families, using a value-based investment philosophy and a research-intensive investment process.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210222005954/en/

FAQ

What are Montana Advisors' and Peterson Wealth Management's requests regarding CLWY?

They are urging CLWY's Board to start an exploratory process for uplisting to a major exchange or to initiate a sale process.

Why do shareholders believe CLWY is undervalued?

They cite limited disclosure on the OTC market, which affects liquidity and investor confidence.

What earnings forecast is made for CLWY in 2023?

Shareholders estimate CLWY will earn over $1.50 per share by 2023.

How do shareholders believe uplisting could affect CLWY's stock price?

They argue that if uplisted, CLWY could be valued above $20 per share.

What concerns do shareholders have about communication from CLWY's Board?

The shareholders are frustrated by the Board's lack of communication, which they see as detrimental to the company's valuation.