Schedule 13E-3/A
Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 13E-3

(Rule 13e-100)

TRANSACTION STATEMENT UNDER

SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934 AND

RULE 13e-3 THEREUNDER

Rule 13e-3 Transaction Statement under Section 13(e)

of the Securities Exchange Act of 1934

(Amendment No. 1)

 

 

STEIN MART, INC.

Name of Subject Company (Issuer)

 

 

Stein Mart, Inc.

Stratosphere Holdco, LLC

Stratosphere Merger Sub, Inc.

Kingswood Capital Management, L.P.

Kingswood Stratosphere Investor, LLC

Kingswood Intermediary I, Inc.

Kingswood Intermediary II, Inc.

Kingswood Capital Opportunities Fund I, L.P.

Kingswood Capital Opportunities Fund I-A, L.P.

Kingswood Capital Opportunities Fund I GP, L.P.

Jay Stein

Stein Family Holdco LLC

(Names of Filing Persons (other person(s)))

Common Stock, Par Value $0.01 Per Share

(Title of Class of Securities)

858375108

(CUSIP Number of Class of Securities)

 

Alex Wolf

Managing Partner

Kingswood Capital Management, L.P.

11777 San Vicente Blvd., Suite 650

Los Angeles, CA 90049

(424) 744-8238

 

D. Hunt Hawkins

Chief Executive Officer

Stein Mart, Inc.

1200 Riverplace Blvd.

Jacksonville, FL 32207

(904) 346-1500

 

Jay Stein

Manager

Stein Family Holdco LLC

8265 Bayberry Road

Jacksonville, FL 32256

(904) 739-1311

(Name, address, and telephone numbers of person authorized to receive notices and communications on behalf of filing persons)

With copies to:

 

John Haggerty, Esq.

Goodwin Procter LLP

100 Northern Avenue

Boston, Massachusetts 02210-1980

Telephone: (617) 649-1411

 

Gardner F. Davis, Esq.

John J. Wolfel, Esq.

Foley & Lardner LLP

One Independent Drive

Jacksonville, Florida 32202-5039

Telephone: (904) 359-2000

 

David Zaheer, Esq.

Latham & Watkins, LLP

355 South Grand Avenue

Los Angeles, CA 90071-1560

Telephone: (213) 891-8045

 

 

This statement is filed in connection with (check the appropriate box):

 

a.

    The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934.

b.

    The filing of a registration statement under the Securities Act of 1933.

c.

    A tender offer.

d.

    None of the above.

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies:  ☒

Check the following box if the filing is a final amendment reporting the results of the transaction:  ☐

Calculation of Filing Fee

 

Transaction valuation*   Amount of filing fee**
   

$28,568,804.

  $3,708.

 

*

The maximum aggregate value was determined based upon 31,743,115 shares of Company Common Stock (including 761,569 shares of Company Common Stock subject to time vesting restricted stock units, 343,219 shares of Company Common Stock subject to time vesting restricted stock and 29,734 shares that could be issued under the Stein Mart, Inc. Employee Stock Purchase Plan prior to the completion of the merger) multiplied by $0.90 per share.

**

The filing fee was calculated in accordance with Rule 0-11 under the Securities and Exchange Act of 1934, as amended, by multiplying the transaction value by 0.0001298.

 

☒ 

Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and date of its filing.

 

Amount Previously Paid: $3,708.

   Filing Party: Stein Mart, Inc.

Form or Registration No.: Schedule 14A

   Date Filed: March 2, 2020

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THIS TRANSACTION, PASSED UPON THE MERITS OR FAIRNESS OF THIS TRANSACTION, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS SCHEDULE 13E-3. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE

 

 

 


Table of Contents

TABLE OF CONTENTS

 

Item 1.

  Summary Term Sheet      2  

Item 2.

  Subject Company Information      2  

Item 3.

  Identity and Background of Filing Person      3  

Item 4.

  Terms of the Transaction      3  

Item 5.

  Past Contacts, Transactions, Negotiations and Agreements      4  

Item 6.

  Purposes of the Transaction and Plans or Proposals      5  

Item 7.

  Purposes, Alternatives, Reasons and Effects      5  

Item 8.

  Fairness of the Transaction      6  

Item 9.

  Reports, Opinions, Appraisals and Negotiations      7  

Item 10.

  Source and Amounts of Funds or Other Consideration      8  

Item 11.

  Interest in Securities of the Subject Company      8  

Item 12.

  The Solicitation or Recommendation      8  

Item 13.

  Financial Statements      9  

Item 14.

  Persons/Assets, Retained, Employed, Compensated Or Used      9  

Item 15.

  Additional Information      9  

Item 16.

  Exhibits      9  

 


Table of Contents

INTRODUCTION

This Amendment No. 1 to Rule 13E-3 Transaction Statement on Schedule 13E-3, together with the exhibits hereto (this “Schedule 13E-3” or “Transaction Statement”) is being filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the “Exchange Act”), jointly by the following persons (each, a “Filing Person,” and collectively, the “Filing Persons”): (i) Stein Mart, Inc. (“Stein Mart,” or the “Company”), a Florida corporation and the issuer of the common stock, par value $0.01 per share (the “Company Common Stock”), that is subject to the Rule 13e-3 transaction; (ii) Stratosphere Holdco, LLC, a Delaware limited liability company (“Parent”), (iii) Stratosphere Merger Sub, Inc., a Florida corporation and an indirectly wholly-owned subsidiary of Parent (“Merger Sub”); (iv) Stein Family Holdco LLC, a Delaware limited liability company managed by Jay Stein, the Chairman of the Company’s board of directors (“Stein Family Holdco”); (v) Jay Stein, individually (together with Stein Family Holdco, collectively, the “Rollover Investor”), (vi) Kingswood Stratosphere Investor, LLC, a Delaware limited liability company (“TopCo”); (vi) Kingswood Intermediary I, Inc., a Delaware corporation (“Kingswood Intermediary I”); (viii) Kingswood Intermediary II, Inc., a Delaware corporation (“Kingswood Intermediary II”); (ix) Kingswood Capital Opportunities Fund I, L.P. , a Delaware limited partnership (“Kingswood Fund I”); (x) Kingswood Capital Opportunities Fund I-A, L.P., a Delaware limited partnership (“Kingswood Fund I-A”); and (xi) Kingswood Capital Management, L.P., a Delaware limited partnership (“Kingswood” and, together with Parent, Merger Sub, TopCo, Kingswood Intermediary I, Kingswood Intermediary II, Kingswood Fund I and Kingswood Fund I-A, collectively, the “Kingswood Group Filing Persons”) . The Rollover Investor and the Kingswood Group Filing Persons are collectively referred to herein as the “Acquiring Group” or the “Acquiring Group Filing Persons.”

The Company, Parent and Merger Sub entered into an Agreement and Plan of Merger (as amended, restated, supplemented or otherwise modified from time to time, the “merger agreement”), dated January 30, 2020, which provides for, among other things, the merger of Merger Sub with and into the Company (the “merger”), with the Company surviving the merger as an indirect wholly-owned subsidiary of Parent. Concurrently with the filing of this Schedule 13E-3, the Company is filing with the SEC a preliminary Proxy Statement (the “Proxy Statement”) under Regulation 14A of the Exchange Act, relating to a special meeting of the shareholders of the Company (the “Special Meeting”) at which the shareholders of the Company will consider and vote upon a proposal to adopt the merger agreement and cast an advisory (non-binding) vote to approve certain items of compensation that are based on or otherwise related to the merger and may become payable to certain named executive officers of the Company under existing agreements with the Company. The adoption of the merger agreement will require the affirmative vote of the holders of a majority of the shares of the Company Common Stock entitled to vote thereon outstanding as of the close of business on the record date for the Special Meeting. A copy of the preliminary Proxy Statement is attached hereto as Exhibit (a)(2)(i). A copy of the merger agreement is attached as Appendix A to the preliminary Proxy Statement and is incorporated herein by reference.

Under the terms of the merger agreement, if the merger is completed, each share of Company Common Stock, other than as provided below, will be converted into the right to receive $0.90 in cash (the “per share merger consideration”), without interest and less applicable withholding taxes. The following shares of Company Common Stock will not be converted into the right to receive the per share merger consideration in connection with the merger: (i) shares of Company Common Stock held by the Company or any of its subsidiaries, (ii) shares of Company Common Stock held by Parent or any of its subsidiaries (including shares of Company Common Stock contributed by the Rollover Investor to Parent immediately prior to the effective time of the merger), and (iii) shares of Company Common Stock whose holders have not voted in favor of adopting the merger agreement and have demanded and perfected their appraisal rights in accordance with, and have complied in all respects with the Florida Business Corporation Act.

The merger remains subject to the satisfaction or waiver of the conditions set forth in the merger agreement, including the adoption of the merger agreement by the Company’s shareholders. The Rollover Investor has committed to contribute, immediately prior to the effective time of the merger, all of the outstanding Company Common Stock that it owns (representing approximately 36% of the Company Common Stock outstanding as of the date of the merger agreement) to Parent in exchange for equity securities of Parent.

The board of directors formed a special committee comprised entirely of independent and disinterested directors, consisting of Richard Sisisky (Chairman), Irwin Cohen, Thomas Cole and Timothy Cost (the “Special Committee”) to consider and negotiate the terms and conditions of the merger and to recommend to the board of directors whether to pursue the merger and, if so, on what terms and conditions.

The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement of the information required to be included in response to the items of Schedule 13E-3. Pursuant to General Instruction F to Schedule 13E-3, the information contained in the Proxy Statement, including all appendices thereto, is incorporated in its entirety herein by reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Proxy Statement and the appendices thereto.

 

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As of the date hereof, the Proxy Statement is in preliminary form and is subject to completion and/or amendment. Capitalized terms used but not expressly defined in this Schedule 13E-3 shall have the respective meanings given to them in the Proxy Statement.

While each of the Filing Persons acknowledges that the merger is a “going private” transaction for purposes of Rule 13E-3 under the Exchange Act, the filing of this Transaction Statement shall not be construed as an admission by any Filing Person, or by any affiliate of a Filing Person, that the Company is “controlled” by any Filing Person.

 

Item 

1. Summary Term Sheet.

The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

SUMMARY TERM SHEET

QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING

 

Item 

2. Subject Company Information.

(a) Name and Address. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

THE PARTIES TO THE MERGER

(b) Securities. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

THE SPECIAL MEETING—Who is Entitled to Vote at the Special Meeting?

IMPORTANT INFORMATION REGARDING THE COMPANYSecurity Ownership of Certain Beneficial Owners and Management

The exact title of the subject equity securities is “Stein Mart, Inc. common stock, par value $ 0.01 per share.”

(c) Trading Market and Price. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

IMPORTANT INFORMATION REGARDING THE COMPANYMarkets and Market Price

(d) Dividends. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“IMPORTANT INFORMATION REGARDING THE COMPANY—Markets and Market Price”

“SPECIAL FACTORS—Dividends”

(e) Prior Public Offerings. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

IMPORTANT INFORMATION REGARDING THE COMPANYPrior Public Offerings

(f) Prior Stock Purchases. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

COMMON STOCK TRANSACTION INFORMATION—Transactions by the Acquiring Group Filing Persons

COMMON STOCK TRANSACTION INFORMATION—Transactions by the Company

COMMON STOCK TRANSACTION INFORMATION—Transactions by the Company’s Directors and Executive Officers

 

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Item 

3. Identity and Background of Filing Person.

(a)-(c) Name and Address; Business and Background of Entities; Business and Background of Natural Persons. Stein Mart, Inc. is the subject company. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

THE PARTIES TO THE MERGER

IMPORTANT INFORMATION REGARDING THE COMPANY

IMPORTANT INFORMATION REGARDING PARENT, MERGER SUB, AND THE KINGSWOOD GROUP FILING PERSONS”

IMPORTANT INFORMATION REGARDING THE ROLLOVER INVESTOR

 

Item 

4. Terms of the Transaction.

(a)(1) Tender Offers. Not Applicable.

(a)(2) Mergers or Similar Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Acquiring Group Filing Persons for the Merger”

“SPECIAL FACTORS—Certain Effects of the Merger; Plans for the Company”

“SPECIAL FACTORS—Financing of the Merger”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

“SPECIAL FACTORS—Appraisal Rights”

“SPECIAL FACTORS—Material U.S. Federal Income Tax Consequences”

“THE SPECIAL MEETING—How Many Votes Are Needed to Approve Each Proposal?”

“THE MERGER AGREEMENT”

Appendix A—Agreement and Plan of Merger

(c) Different Terms. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“SPECIAL FACTORS—Certain Effects of the Merger; Plans for the Company”

“SPECIAL FACTORS—Financing of the Merger”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

“SPECIAL FACTORS—Indemnification of Directors and Officers; Directors’ and Officers’ Insurance”

“SPECIAL FACTORS—Merger Proceeds in Respect of Company Equity-Based Awards”

“THE MERGER AGREEMENT—Conversion of Securities”

“ADVISORY VOTE ON ‘MERGER-RELATED EXECUTIVE COMPENSATION’”

(d) Appraisal Rights. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET—Appraisal Rights”

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Appraisal Rights”

“THE SPECIAL MEETING—Rights of Shareholders Who Object to the Merger”

Appendix C—Sections 607.1301-607.1340 of the Florida Business Corporation Act

 

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(e) Provisions for Unaffiliated Security Holders. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Provisions for Unaffiliated Shareholders’

(f) Eligibility for Listing or Trading. Not Applicable.

 

Item 

5. Past Contacts, Transactions, Negotiations and Agreements.

(a) Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

“THE MERGER AGREEMENT—Conversion of Securities”

“COMMON STOCK TRANSACTION INFORMATION—Transactions by the Acquiring Group Filing Persons”

“COMMON STOCK TRANSACTION INFORMATION—Transactions by the Company”

“COMMON STOCK TRANSACTION INFORMATION—Transactions by the Company’s Directors and Executive Officers”

“WHERE SHAREHOLDERS CAN FIND MORE INFORMATION”

Appendix A—Agreement and Plan of Merger

(b) Significant Corporate Events. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Certain Effects of the Merger”

“SPECIAL FACTORS—Plans for the Company”

“SPECIAL FACTORS—Financing of the Merger”

“SPECIAL FACTORS—Limited Guarantee”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

“SPECIAL FACTORS—Indemnification of Directors and Officers; Directors’ and Officers’ Insurance”

“SPECIAL FACTORS—Merger Proceeds in Respect of Company Equity-Based Awards”

“SPECIAL FACTORS—Voting Agreement”

“THE MERGER AGREEMENT”

“ADVISORY VOTE ON ‘MERGER-RELATED EXECUTIVE COMPENSATION’”

Appendix A—Agreement and Plan of Merger

(c) Negotiations or Contacts. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

(e) Agreements Involving the Subject Company’s Securities. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Certain Effects of the Merger; Plans for the Company”

“SPECIAL FACTORS—Financing of the Merger”

“SPECIAL FACTORS—Limited Guarantee”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

“SPECIAL FACTORS—Merger Proceeds in Respect of Company Equity-Based Awards”

“SPECIAL FACTORS—Voting Agreement”

“SPECIAL FACTORS—Pledge and Security Agreement”

“THE MERGER AGREEMENT”

“ADVISORY VOTE ON ‘MERGER-RELATED EXECUTIVE COMPENSATION’”

 

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“WHERE SHAREHOLDERS CAN FIND MORE INFORMATION”

Appendix A—Agreement and Plan of Merger

 

Item 

6. Purposes of the Transaction and Plans or Proposals.

(b) Use of Securities Acquired. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Certain Effects of the Merger; Plans for the Company”

“SPECIAL FACTORS—Delisting and Deregistration of Company Common Stock”

“SPECIAL FACTORS—Payment of Merger Consideration and Surrender of Stock Certificates”

“THE MERGER AGREEMENT—Conversion of Securities”

(c)(1)-(8) Plans. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Acquiring Group Filing Persons for the Merger”

“SPECIAL FACTORS—Positions of the Kingswood Group Filing Persons Regarding the Fairness of the Merger”

“SPECIAL FACTORS—Positions of the Rollover Investor Regarding the Fairness of the Merger”

“SPECIAL FACTORS—Certain Effects of the Merger; Plans for the Company”

“SPECIAL FACTORS—Delisting and Deregistration of Company Common Stock”

“SPECIAL FACTORS—Financing of the Merger”

“SPECIAL FACTORS—Limited Guarantee”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

“SPECIAL FACTORS—Indemnification of Directors and Officers; Directors’ and Officers’ Insurance”

“SPECIAL FACTORS—Merger Proceeds in Respect of Company Equity-Based Awards”

“SPECIAL FACTORS—Voting Agreement”

“SPECIAL FACTORS—Dividends”

“ADVISORY VOTE ON ‘MERGER-RELATED EXECUTIVE COMPENSATION’”

Appendix A—Agreement and Plan of Merger

 

Item 

7. Purposes, Alternatives, Reasons and Effects.

(a) Purposes. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Acquiring Group Filing Persons for the Merger”

“SPECIAL FACTORS—Certain Effects of the Merger; Plans for the Company”

(b) Alternatives. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Alternatives to the Merger”

(c) Reasons. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Opinion of PJ Solomon Securities, LLC”

 

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“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Positions of the Kingswood Group Filing Persons Regarding the Fairness of the Merger”

“SPECIAL FACTORS—Positions of the Rollover Investor Regarding the Fairness of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Acquiring Group Filing Persons for the Merger”

“SPECIAL FACTORS—Certain Effects of the Merger; Plans for the Company”

“SPECIAL FACTORS—Alternatives to the Merger”

Appendix B—Opinion of PJ Solomon Securities, LLC

(d) Effects. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Acquiring Group Filing Persons for the Merger”

“SPECIAL FACTORS—Certain Effects of the Merger; Plans for the Company”

“SPECIAL FACTORS—Effects on the Company if the Merger is not Completed”

“SPECIAL FACTORS—Financing of the Merger”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

“SPECIAL FACTORS—Indemnification of Directors and Officers; Directors’ and Officers’ Insurance”

“SPECIAL FACTORS—Merger Proceeds in Respect of Company Equity-Based Awards”

“SPECIAL FACTORS—Delisting and Deregistration of Company Common Stock”

“SPECIAL FACTORS—Material U.S. Federal Income Tax Consequences”

“SPECIAL FACTORS—Appraisal Rights”

“SPECIAL FACTORS—Payment of Merger Consideration and Surrender of Stock Certificates”

“SPECIAL FACTORS—Fees and Expenses”

“THE MERGER AGREEMENT—Certificate of Incorporation; Bylaws”

“THE MERGER AGREEMENT—Conversion of Securities”

“ADVISORY VOTE ON ‘MERGER-RELATED EXECUTIVE COMPENSATION’”

Appendix C—Sections 607.1301-607.1340 of the Florida Business Corporation Act

 

Item 

8. Fairness of the Transaction.

(a), (b) Fairness; Factors Considered in Determining Fairness. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Opinion of PJ Solomon Securities, LLC”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Acquiring Group Filing Persons for the Merger”

“SPECIAL FACTORS—Positions of the Kingswood Group Filing Persons Regarding the Fairness of the Merger”

“SPECIAL FACTORS—Positions of the Rollover Investor Regarding the Fairness of the Merger”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

Appendix B—Opinion of PJ Solomon Securities, LLC

The presentations and discussion materials dated August 22, 2019, September 20, 2019, January 20, 2020, January 22, 2020, January 27, 2020, January 29, 2020 and January 30, 2020, each prepared by PJ Solomon Securities, LLC and reviewed by the special committee of the board of directors of the Company or the board of directors of the Company, as applicable, are attached hereto as Exhibits (c)(2) – (c)(8) and are incorporated by reference herein.

(c) Approval of Security Holders. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

 

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“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Background of the Merger”

“THE SPECIAL MEETING—Who is Entitled to Vote at the Special Meeting?”

“THE SPECIAL MEETING—How Many Votes are Needed to Approve Each Proposal?”

“THE SPECIAL MEETING—How Many Shares Must Be Present to Constitute a Quorum for the Special Meeting?”

“THE MERGER AGREEMENT—Conditions to the Completion of the Merger”

(d) Unaffiliated Representative. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Positions of the Kingswood Group Filing Persons Regarding the Fairness of the Merger”

“SPECIAL FACTORS—Positions of the Rollover Investor Regarding the Fairness of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

(e) Approval of Directors. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

(f) Other Offers. The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Alternatives to the Merger”

 

Item 

9. Reports, Opinions, Appraisals and Negotiations.

(a)-(c) Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal; Availability of Documents. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference.

“SUMMARY TERM SHEET”

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Opinion of PJ Solomon Securities, LLC”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“WHERE SHAREHOLDERS CAN FIND MORE INFORMATION”

Appendix B—Opinion of PJ Solomon Securities, LLC

The presentations and discussion materials dated, August 22, 2019, September 20, 2019, January 20, 2020, January 22, 2020, January 27, 2020, January 29, 2020 and January 30, 2020, each prepared by PJS and reviewed by the special committee of the board of directors of the Company or the board of directors of the Company, as applicable, are attached hereto as Exhibits (c)(2) – (c)(8) and are incorporated by reference herein.

 

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Item 

10. Source and Amounts of Funds or Other Consideration.

(a), (b) Source of Funds; Conditions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Financing of the Merger”

“SPECIAL FACTORS—Limited Guarantee”

“SPECIAL FACTORS—Voting Agreement”

“THE MERGER AGREEMENT—Closing and Effective Time of the Merger”

“THE MERGER AGREEMENT—Covenants of the Company”

“THE MERGER AGREEMENT—Covenants of Parent and/or Merger Sub”

“THE MERGER AGREEMENT—Certain Covenants of Each Party”

(c) Expenses. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Fees and Expenses”

“THE SPECIAL MEETING—Expenses of Proxy Solicitation”

“THE MERGER AGREEMENT—Termination”

“THE MERGER AGREEMENT—Effects of Termination; Fees and Expenses”

(d) Borrowed Funds. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Financing of the Merger”

 

Item 

11. Interest in Securities of the Subject Company.

(a) Securities Ownership. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

“THE SPECIAL MEETING—Stock Ownership and Interests of Certain Persons”

“IMPORTANT INFORMATION REGARDING THE COMPANY—Security Ownership of Certain Beneficial Owners and Management”

(b) Securities Transactions. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

“SPECIAL FACTORS—Voting Agreement”

“SPECIAL FACTORS—Background of the Merger”

“COMMON STOCK TRANSACTION INFORMATION—Transactions by the Acquiring Group Filing Persons”

“COMMON STOCK TRANSACTION INFORMATION—Transactions by the Company”

“COMMON STOCK TRANSACTION INFORMATION—Transactions by the Company’s Directors and Executive Officers”

“THE MERGER AGREEMENT”

Appendix A—Agreement and Plan of Merger

 

Item 

12. The Solicitation or Recommendation.

(d) Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Interests of the Company’s Directors and Executive Officers in the Merger”

“SPECIAL FACTORS—Voting Agreement”

“THE SPECIAL MEETING—Stock Ownership and Interests of Certain Persons”

 

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(e) Recommendation of Others. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Acquiring Group Filing Persons for the Merger”

“SPECIAL FACTORS—Positions of the Kingswood Group Filing Persons Regarding the Fairness of the Merger”

“SPECIAL FACTORS—Positions of the Rollover Investor Regarding the Fairness of the Merger”

 

Item 

13. Financial Statements.

(a) Financial Information. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“IMPORTANT INFORMATION REGARDING THE COMPANY—Selected Historical Financial Information”

“WHERE SHAREHOLDERS CAN FIND MORE INFORMATION”

(b) Pro Forma Information. Not Applicable.

 

Item 

14. Persons/Assets, Retained, Employed, Compensated Or Used.

(a) Solicitations or Recommendations. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“SPECIAL FACTORS—Purposes and Reasons of the Company for the Merger”

“SPECIAL FACTORS—Fees and Expenses”

“THE SPECIAL MEETING—Expenses of Proxy Solicitation”

(b) Employees and Corporate Assets. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“QUESTIONS AND ANSWERS ABOUT THE MERGER, THE “MERGER-RELATED EXECUTIVE COMPENSATION” AND THE SPECIAL MEETING”

“SPECIAL FACTORS—Background of the Merger”

“SPECIAL FACTORS—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger”

“THE SPECIAL MEETING—Expenses of Proxy Solicitation”

 

Item 

15. Additional Information.

(b) The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

“SUMMARY TERM SHEET”

“ADVISORY VOTE ON ‘MERGER-RELATED EXECUTIVE COMPENSATION’”

(c) Other Material Information. The entirety of the Proxy Statement, including all appendices thereto, is incorporated herein by reference.

 

Item 

16. Exhibits.

(a), (b), (c), (d), (f), (g). The list of exhibits filed as part of this Schedule 13E-3 is submitted in the Exhibit Index and is incorporated herein by reference.

 

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SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

      STEIN MART, INC.
      By:  

/s/ D. Hunt Hawkins

      Name:   D. Hunt Hawkins
      Title:   Chief Executive Officer
Dated: April 3, 2020        

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

     STRATOSPHERE HOLDCO, LLC
     By: Kingswood Stratosphere Investor, LLC, its sole member
     By: Kingswood Capital Management, L.P., its manager
     By:  

/s/ Alex Wolf

     Name:   Alex Wolf
     Title:   Managing Partner
Dated: April 3, 2020       

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

      STRATOSPHERE MERGER SUB, INC.
      By:  

/s/ Alex Wolf

      Name:   Alex Wolf
      Title:   President
Dated: April 3, 2020        

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

     KINGSWOOD CAPITAL MANAGEMENT, L.P.
     By:  

/s/ Alex Wolf

     Name:   Alex Wolf
     Title:   Managing Partner
Dated: April 3, 2020       

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

     KINGSWOOD STRATOSPHERE INVESTOR, LLC
     By: Kingswood Capital Management, L.P., its manager
     By:  

/s/ Alex Wolf

     Name:   Alex Wolf
     Title:   Managing Partner
Dated: April 3, 2020       

 

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After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

      KINGSWOOD INTERMEDIARY I, INC.
      By:  

/s/ Alex Wolf

      Name:   Alex Wolf
      Title:   President
Dated: April 3, 2020        

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

      KINGSWOOD INTERMEDIARY II, INC.
      By:  

/s/ Alex Wolf

      Name:   Alex Wolf
      Title:   President
Dated: April 3, 2020        

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

      KINGSWOOD CAPITAL OPPORTUNITIES FUND I, L.P.
      By:  

/s/ Alex Wolf

      Name:   Alex Wolf
      Title:   Partner
Dated: April 3, 2020        

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

      KINGSWOOD CAPITAL OPPORTUNITIES FUND I-A, L.P.
      By:  

/s/ Alex Wolf

      Name:   Alex Wolf
      Title:   Partner
Dated: April 3, 2020        

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

      KINGSWOOD CAPITAL OPPORTUNITIES FUND I GP, L.P.
      By:  

/s/ Alex Wolf

      Name:   Alex Wolf
      Title:   Managing Partner
Dated: April 3, 2020        

 

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After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

     

/s/ Jay Stein

      Name:    Jay Stein
Dated: April 3, 2020         

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

      STEIN FAMILY HOLDCO LLC
      By:  

/s/ Jay Stein

        Name: Jay Stein
        Title: Manager
Dated: April 3, 2020        

 

 

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EXHIBIT INDEX

(a)(2)(i) Preliminary Proxy Statement of Stein Mart, Inc. (included in the Schedule 14A filed on March 2, 2020, and incorporated herein by reference) (the “Preliminary Proxy Statement”).

(a)(2)(ii) Form of Proxy Card (included in the Preliminary Proxy Statement and incorporated herein by reference).

(a)(5) Press release issued by Stein Mart, Inc., dated January 31, 2020 (included as Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed on January 31, 2020, and incorporated herein by reference).

(a)(6) Annual Report on Form 10-K for the fiscal year ended February 2, 2019, filed on March 28, 2019, and incorporated herein by reference.

(a)(7) Quarterly Report on Form 10-Q for the quarter ended November 2, 2019, filed on December 4, 2019, and incorporated herein by reference.

(b)(1) Debt Commitment Letter, dated as of January 30, 2020, by and between Pathlight Capital LP, Stratosphere Merger Sub, Inc. and Stratosphere Holdco, LLC.*

(b)(2) Debt Commitment Letter, dated as of January 30, 2020, by and between Wells Fargo Bank, National Association, Stratosphere Merger Sub, Inc. and Stratosphere Holdco, LLC.*

(c)(1) Opinion of PJ SOLOMON, dated January 30, 2020 (included as Appendix B to the Preliminary Proxy Statement, and incorporated herein by reference).

(c)(2) Project Stratosphere Update, dated August  22, 2019, of PJ SOLOMON to the Special Committee of the Board of Directors of the Company.

(c)(3) August Update, dated September  20, 2019, of PJ SOLOMON to the Special Committee of the Board of Directors of the Company.

(c)(4) Special Committee Discussion Materials, dated January 20, 2020, of PJ SOLOMON to the Special Committee of the Board of Directors of the Company.

(c)(5) Discussion Materials, dated January  22, 2020, of PJ SOLOMON to Lisa Galanti and Burton M. Transky of the Board of Directors of the Company and Richard L. Sisisky of the Special Committee of the Board of Directors of the Company.

(c)(6) Discussion Materials, dated January 27, 2020, of PJ SOLOMON to the Board of Directors of the Company.

(c)(7) Discussion Materials, dated January  29, 2020, of PJ SOLOMON to the Special Committee of the Board of Directors of the Company and the Board of Directors of the Company.

(c)(8) Discussion Materials, dated January  30, 2020, of PJ SOLOMON to the Board of Directors of the Company.*

(d)(1) Agreement and Plan of Merger, dated as of January  30, 2020, by and among Stratosphere Holdco, LLC, Stratosphere Merger Sub, Inc. and Stein Mart, Inc. (included as Appendix A to the Preliminary Proxy Statement, and incorporated herein by reference).

(d)(2) Equity Rollover Agreement, dated as of January 30, 2020, by and between Stein Family Holdco LLC and Stratosphere Holdco, LLC.*

(d)(3) Equity Commitment Letter, dated as of January 30, 2020, by and among Stratosphere Holdco, LLC, Stratosphere Investor, LLC, Kingswood Capital Opportunities Fund I, L.P. and Kingswood Capital Opportunities Fund I-A, L.P.*

(d)(4) Voting Agreement, dated as of January  30, 2020, by and among Stratosphere Holdco, LLC and Stein Family Holdco LLC (included as Exhibit 2.2 to the Company’s Current Report on Form 8-K, filed on January  31, 2020, and incorporated herein by reference).

(d)(5) Limited Guarantee, dated as of January 30, 2020, by Kingswood Capital Opportunities Fund I, L.P. and Kingswood Capital Opportunities Fund I-A, L.P. in favor of Stein Mart, Inc.*

(f) Sections 607.1301-607.1340 of the Florida Business Corporation Act (included as Appendix C to the Preliminary Proxy Statement, and incorporated herein by reference).

(g) None.

 

*

Previously filed as an exhibit to the Schedule 13E-3 filed on March 2, 2020.

Exhibit (c)(2)

Exhibit 99(C)(2)

 

LOGO

PROJECT STRATOSPHERE UPDATE August 22, 2019


LOGO

DISCLAIMER The following pages contain material provided to the Special Committee of the Board of Directors (the “Special Committee”) of Stein Mart, Inc. (the “Company”) by PJ Solomon, L.P. and its affiliates, including, without limitation, PJ Solomon Securities, LLC (collectively, “PJ Solomon” or “Solomon”) in connection with Project Stratosphere. These materials were prepared on a confidential basis in connection with an oral presentation to the Special Committee and not with a view toward complying with the disclosure standards under state or federal securities laws or otherwise. The information contained in this presentation was based solely on publicly available information or information furnished to PJ Solomon by the Company. PJ Solomon has relied, without independent investigation or verification, on the accuracy, completeness and fair presentation of all such information and the conclusions contained herein are conditioned upon such information (whether written or oral) being accurate, complete and fairly presented in all respects. This presentation includes certain statements, estimates and projections provided by the Company with respect to the historical and anticipated future performance of the Company. Such statements, estimates and projections contain or are based on significant assumptions and subjective judgments made by the Company’s management. None of PJ Solomon, its affiliates or its or their respective employees, directors, officers, contractors, advisors, members, successors or agents makes any representation or warranty in respect of the accuracy, completeness or fair presentation of any information, projections or any conclusion contained herein. PJ Solomon, its affiliates and its and their respective employees, directors, officers, contractors, advisors, members, successors and agents shall have no liability with respect to any information, projections or matter contained herein, or any oral information provided herewith or data any of them generates. The information contained herein should not be assumed to have been updated at any time subsequent to date shown on the first page of the presentation and the delivery of the presentation does not constitute a representation by PJ Solomon that such information will be updated at any time after the date of the presentation. Neither PJ Solomon nor any of its affiliates is an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction. The Company acknowledges that PJ Solomon is an affiliate of Natixis, a global full service commercial and investment bank.


LOGO

PROCESS UPDATE SINCE LOI SUBMISSION Following the submission of its Letter of Intent (“LOI”, “Reaffirmed Proposal”) on July 24, the Special Committee, advised by PJ Solomon, analyzed and discussed the LOI and decided to grant Kingswood exclusivity conditioned upon (i) a higher price per share offer than the $1.10 per share price indicated (ii) further evidence that Kingswood’s $100M fundraising would be successful PJ Solomon spoke with M2O (Kingswood’s fund placement agent) and learned the fundraising was going well and targeting a mid-late August close Additionally, PJ Solomon negotiated with Kingswood and on July 30, Kingswood submitted an updated LOI (“Updated LOI”) increasing the purchase price to $1.15 per share Satisfying the Special Committee’s two conditions, Kingswood and Stratosphere executed an Exclusivity Agreement on July 31, which grants Kingswood exclusivity until 11:59pm August 31, 2019 (and terminates if Kingswood stops pursuing the transaction or signs a definitive agreement) On August 1, PJ Solomon sent a Foley-prepared draft of the Merger Agreement and Disclosure Schedules, Voting Agreement and Guarantee to Kingswood From August 6-8, Kingswood and its new Operating Partner [Third Party] traveled to Jacksonville to conduct on-site diligence, which included meetings with key management and a store visit Following the on-site diligence meetings, Kingswood hired several advisors including Goodwin Procter (Legal), Aon (Insurance & Benefits), Alix Partners (Operational) and A&G (Real Estate) ? These advisors have been active in the data room and are providing supplemental document requests Additionally, Kingswood has narrowed down its financing process to five ABL providers (RBC, PNC, Fifth Third, BAML, JPM) and two FILO / Term Loan providers (Great American, Pathlight) ? PJ Solomon (with the Special Committee’s permission) also granted Kingswood access to Wells Fargo and Gordon Brothers and is inviting them to defend their incumbent position as the current ABL / FILO provider


LOGO

PROCESS UPDATE SINCE LOI SUBMISSION (CONT’D) On August 22, PJ Solomon spoke with Kingswood, who mentioned the diligence process has been going well so far. Michael Niegsch, the lead Partner on the deal, provided the following commentary: ? Currently, Kingswood’s main focus is developing a business plan with Alix Partners that anticipates potential savings and opportunities under its ownership ? Before signing a definitive agreement, Kingswood also plans to hire a third-party accounting advisor that would conduct a workpaper review, but anticipates it would be largely confirmatory in nature ? With respect to the Merger Agreement (and related transaction documents), Goodwin Procter (Kingswood’s legal advisor) has specialists reviewing the data room and the Merger Agreement to provide a fulsome markup next week ? The financing process has been going well, but Kingswood anticipates keeping the incumbent lenders (Wells Fargo and Gordon Brothers) based on their aggressive borrowing rates, lower closing / pre-payment fees and knowledge of the business ? Jay Stein is current on Kingswood’s progress and remains excited about the potential transaction ? Kingswood’s anticipates its inaugural $100M fundraising will close tomorrow (Friday, August 23)


LOGO

DUE DILIGENCE UPDATE Business due diligence is largely complete and several third party workstreams well underway with 72% requests addressed to date (although follow-up requests are likely) Kingswood has communicated it is likely to hire more advisors (e.g., accounting / tax) Kingswood anticipates providing a markup of the Merger Agreement next week Stratosphere Data Room Number of Documents: 7,226 Page Total: 86,286 Goodwin Procter Aon (Insurance + Alix Partners Kingswood Total (Legal) Benefits) (Operational) Diligence Requests / Questions Open 0 19 21 7 47 In Process 3 8 4 0 15 Closed 100 34 16 11 161 Total Requests 103 61 41 18 223 % Closed 97% 56% 36% 61% 72% Meetings 1 Pre-LOI meeting None None None 2 1 Post-LOI on-site diligence meeting Calls 1 pre-LOI financial call None 1 diligence call None 5 3 post-LOI diligence calls Note: Updated as of August 21, 2019.


LOGO

COMP STORE SALES PERFORMANCE VS. FORECAST Comps underperformed forecasts in 18 of the last 24 observable months 2017 Actual Monthly Comp Store Sales Performance vs. 2017 2+10 Forecast (0.1%) (0.6%) (3.1%) (5.2%) (5.0%) (4.7%) (4.5%) (5.6%) (4.1%) (7.0%) (6.2%) (7.2%) (6.0%) (7.0%) (6.5%) (8.8%) (8.5%) (10.3%) (9.5%) (12.7%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2017 2+10 Forecast Actual 2018 Actual Monthly Comp Store Sales Performance vs. 2018 2+10 Forecast 1.8% 3.4% 3.7% 1.5% 2.6% 1.8% 2.7% 0.8% 0.0% (0.3%) (1.6%) (0.2%) (1.5%) (1.0%) (1.8%) (3.4%) (6.6%) (7.8%) (6.9%) (11.9%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2018 2+10 Forecast Actual 2019 Actual Monthly Comp Store Sales Performance vs. Management Plan (2+10 Forecast) 10.5% 5.3% 2.0% 3.6% 3.3% 5.0% 2.8% 4.7% 4.4% (5.6%) (0.6%) (2.9%) (1.7%) (10.4%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan Management Plan (2019 2+10 Forecast) Actual Note: Comp Store Sales include eCommerce sales but exclude LXR and DSW commissioned sales. 5

Exhibit (c)(3)

Exhibit 99(C)(3)

 

LOGO

PROJECT STRATOSPHERE September 20, 2019


LOGO

DISCLAIMER The following pages contain material provided to the Special Committee of the Board of Directors (the “Special Committee”) of Stein Mart, Inc. (the “Company”) by PJ Solomon, L.P. and its affiliates, including, without limitation, PJ Solomon Securities, LLC (collectively, “PJ Solomon” or “Solomon”) in connection with Project Stratosphere. These materials were prepared on a confidential basis in connection with an oral presentation to the Special Committee and not with a view toward complying with the disclosure standards under state or federal securities laws or otherwise. The information contained in this presentation was based solely on publicly available information or information furnished to PJ Solomon by the Company. PJ Solomon has relied, without independent investigation or verification, on the accuracy, completeness and fair presentation of all such information and the conclusions contained herein are conditioned upon such information (whether written or oral) being accurate, complete and fairly presented in all respects. This presentation includes certain statements, estimates and projections provided by the Company with respect to the historical and anticipated future performance of the Company. Such statements, estimates and projections contain or are based on significant assumptions and subjective judgments made by the Company’s management. None of PJ Solomon, its affiliates or its or their respective employees, directors, officers, contractors, advisors, members, successors or agents makes any representation or warranty in respect of the accuracy, completeness or fair presentation of any information, projections or any conclusion contained herein. PJ Solomon, its affiliates and its and their respective employees, directors, officers, contractors, advisors, members, successors and agents shall have no liability with respect to any information, projections or matter contained herein, or any oral information provided herewith or data any of them generates. The information contained herein should not be assumed to have been updated at any time subsequent to date shown on the first page of the presentation and the delivery of the presentation does not constitute a representation by PJ Solomon that such information will be updated at any time after the date of the presentation. Neither PJ Solomon nor any of its affiliates is an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction. The Company acknowledges that PJ Solomon is an affiliate of Natixis, a global full service commercial and investment bank. DRAFT 1


LOGO

THE “SHAKEOUT” IS IN FULL SWING Selected retailers who have filed, liquidated or shut-down over the last few years, or are currently distressed 2019 will likely see more liquidations as non-ABL financing dries up July ‘142014 Dec ‘14 2015 * * * * * * * * (a) * * 2016 * * (a) * * * * * (a) 2017 * * * * * * * * *(a) * (a) 2018 * * 2019 * * * * * * * * Distressed Retailers DRAFT Note: * indicates liquidated and (a) indicates pure play digital. As of September 16, 2019. 2


LOGO

COMP SALES(a) PERFORMANCE VS. FORECAST Comps underperformed forecasts in 13 of the last 15 observable months 2018 Actual Monthly Comp Store Sales Performance vs. 2018 2+10 Forecast 3.6% 5.4% 5.7% 4.8% 3.9% 5.7% 1.4% 2.3% 1.7% 3.0% 0.8% 2.3% (0.0%) (0.4%) (0.2%) (0.2%) (5.0%)(5.0%) (5.5%) (11.6%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2018 2+10 Forecast Actual 2019 Actual Monthly Comp Store Sales Performance vs. Management Five Year Plan (2+10 Forecast for 2019) 11.2% 5.2% 2.8% 4.1% 2.9% 1.4% 3.9% 3.2% 4.8% 3.7% 0.0% (4.4%) (2.9%) (0.6%) (10.1%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan Management Five Year Plan (2019 2+10 Forecast) (b) Actual DRAFT (a) Comp figures for 2019 represent Store + eCommerce comparable sales. Comp figures for 2018 represent total comp, representative of Store, eCommerce and Licensed comparable sales. (b) Management Five Year Plan approved by the Board of Directors on May 14, 2019. 3


LOGO

FY 2019 COMPARISON OF ACTUALS TO PLAN ($ in millions) Management Five Year Plan Management Reforecast (6+6) Actual REVENUE $168 $166 $114 $120 $118 $112 $109 $117 $119 $108 $107 $102 $98 $97 $78 $76 $81 $77 $80 $64 $64 Apr-2019 May-2019 Jun-2019 Jul-2019 Aug-2019Aug-19 Sep-2019 Oct-2019 Nov-2019 Dec-2019 Jan-2020 Comp Sales % 11.2% 5.2% (4.4%) (10.1%) 2.8% 0.0% 4.1% (2.9%) 2.9% (1.7%) 1.4% 3.9% 3.2% (0.6%) 4.8% 3.7% ADJUSTED EBITDA Five Year Plan approved on 5/14/19 EBITDA missed Management Management included actual March and was informed Reforecast (6+6) in August by Five Year Plan by April preliminary results $2.8M, largely as a result of $23.3 $21.7 (5/14/19) permanent markdown timing shifts 2019E EBITDA = $14.5 $15.3 which reduced merchandise $35.7M margin by ~$2M Management $8.4 $9.5 Reforecast (6+6) $6.7 $5.4 $4.9 2019E EBITDA = $0.1 $2.0 $1.5 $0.9 $31.3M ($0.5) ($2.0) ($4.7) ($7.5) ($8.5) ($11.3) ($9.9) ($14.1) Apr-2019 May-2019 Jun-2019 Jul-2019 Aug-2019 Sep-2019 Oct-2019 Nov-2019 Dec-2019 Jan-2020 Rolling LTM EBITDA: $34.9 $27.3 $25.6 $31.7 $24.1 Management Reforecast (6+6) not adjusted to reflect timing shift of LTM EBITDA at LTM EBITDA at markdowns pulled forward into August – Management believes this DRAFT first-round IOI Reaffirmed Proposal shift should result in higher merchandise margin through remainder of Q3 and early Q4 Sources: Management Five Year Plan approved by the Board of Directors on May 14, 2019; Management 6+6 Reforecast provided on August 15, 2019. 4

Exhibit (c)(4)

Exhibit 99(C)(4)

 

LOGO

Project Stratosphere Special Committee Discussion Materials January 20, 2020 Private and Confidential


LOGO

Disclaimer The following pages contain material provided to the Special Committee of the Board of Directors (the “Special Committee”) of Stein Mart, Inc. (the “Company”) by PJ Solomon, L.P. and its affiliates, including, without limitation, PJ Solomon Securities, LLC (collectively, “PJ Solomon” or “Solomon”) in connection with Project Stratosphere. These materials were prepared on a confidential basis in connection with an oral presentation to the Special Committee and not with a view toward complying with the disclosure standards under state or federal securities laws or otherwise. The information contained in this presentation was based solely on publicly available information or information furnished to PJ Solomon by the Company. PJ Solomon has relied, without independent investigation or verification, on the accuracy, completeness and fair presentation of all such information and the conclusions contained herein are conditioned upon such information (whether written or oral) being accurate, complete and fairly presented in all respects. This presentation includes certain statements, estimates and projections provided by the Company with respect to the historical and anticipated future performance of the Company. Such statements, estimates and projections contain or are based on significant assumptions and subjective judgments made by the Company’s management. None of PJ Solomon, its affiliates or its or their respective employees, directors, officers, contractors, advisors, members, successors or agents makes any representation or warranty in respect of the accuracy, completeness or fair presentation of any information, projections or any conclusion contained herein. PJ Solomon, its affiliates and its and their respective employees, directors, officers, contractors, advisors, members, successors and agents shall have no liability with respect to any information, projections or matter contained herein, or any oral information provided herewith or data any of them generates. The information contained herein should not be assumed to have been updated at any time subsequent to date shown on the first page of the presentation and the delivery of the presentation does not constitute a representation by PJ Solomon that such information will be updated at any time after the date of the presentation. Neither PJ Solomon nor any of its affiliates is an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction. The Company acknowledges that PJ Solomon is an affiliate of Natixis, a global full service commercial and investment bank. Private and Confidential 1


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Executive Summary • Following a weak November, Kingswood decided to slow the process to be able to observe December performance In November, actual adjusted EBITDA was ($4.9) million vs. the 6+6 projection of ($0.5) million In December, actual adjusted EBITDA was $18.0 million vs. the 6+6 projection of $21.7 million • In the interim, Kingswood sent drafts of key transaction documentation including the Merger Agreement, Voting Agreement, Equity and Debt Commitments and Rollover Agreement as it progressed on non-value workstreams • On January 17, 2020, PJ Solomon received an email from Kingswood detailing their response on the three remaining open items in the draft Merger Agreement: Purchase Price per Share: $0.75 Excess Availability at Close: Not less than 32.5% of the Loan Cap Parent Termination Fee and Company Termination Fee: 5% of equity value / equity purchase price • PJ Solomon called Kingswood in response to confirm receipt and clarify the Excess Availability definition Per Kingswood, the definition is as per existing Wells Fargo Credit Facility loan documents • Wells Fargo and Pathlight (Kingswood’s new lenders) are both finalizing the Debt Commitment Agreements on Tuesday, January 21 Private and Confidential 2


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2019E Management Forecasts Over Time Outlook for 2019E has worsened over time as Stratosphere missed forecasts ($ in Millions) FY 2019E % Difference 2+10 (a) 6+6 (b) 11+1 (c) 11+1 vs. 2+10 11+1 vs. 6+6 Total Revenue $1,270.0 $1,256.0 $1,234.2 (2.8%) (1.7%) % Store Comp 0.6% (0.8%) (1.2%) % Total Comp 1.8% 0.4% (1.5%) Gross Profit (d) $348.5 $343.9 $335.3 (3.8%) (2.5%) % Margin 27.4% 27.4% 27.2% Adjusted EBITDA $35.7 $31.3 $24.9 (30.2%) (20.2%) % Margin 2.8% 2.5% 2.0% a) Source: Management 2019 2+10 Forecast approved by the Board of Directors on May 14, 2019. b) Source: Management 2019 6+6 Forecast approved by the Board of Directors on August 27, 2019. c) Source: Management internal 2019 11+1 Forecast. d) Includes credit card, breakage and other income. Private and Confidential 3


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Comp Sales(a) Performance vs. Forecast Comps underperformed forecasts for 17 of the last 19 observable months 2018 Actual Monthly Comp Store Sales Performance vs. 2018 2+10 Forecast 3.6% 5.4% 5.7% 4.8% 3.9% 5.7% 1.4% 2.3% 1.7% 3.0% 0.8% 2.3% (0.0%) (0.4%) (0.2%) (0.2%) (5.0%)(5.0%) (5.5%) (11.6%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2018 2+10 Forecast Actual 2019 Actual Monthly Comp Store Sales Performance vs. Management Five Year Plan (2+10 Forecast for 2019) 11.2% 5.2% 2.8% 4.1% 2.9% 1.5% 3.9% 0.2% 3.2% 4.8% 1.4% 3.7% 0.0% (0.9%) (0.6%) (4.4%) (2.9%) (4.1%) (10.1%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan Management Five Year Plan (2019 2+10 Forecast) Actual a) Comp figures for 2019 represent Store + eCommerce comparable sales. Comp figures for 2018 represent total comp, representative of Store, Private and eCommerce and Licensed comparable sales. Confidential 4


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Retailing Environment Update Private and Confidential 5


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The “Shakeout” Is In Full Swing Selected retailers who have filed, liquidated, shut-down or are distressed July ‘142014 Dec ‘14 2015 * * * * * * * * (a) * * 2016 * * (a) * * * * * (a) 2017 * * * * * * * * *(a) * (a) 2018 * * 2019 * * * * * * * * * Distressed Retailers Private and Note: * indicates liquidated and (a) indicates pure play digital. Red box indicates department store / off-price retailer. Confidential 6


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In 2019, U.S. Retailers Announced ~9,300 closures • Closures were more than double the number of openings • Excluding Discount and Dollar stores, closures were approximately three times the number of openings 2019 Store Closure Announcements 2,100 800 650 557 512 390 363 261 250 230 222 210 200 200 178 170 150 140 1,719 Total = 9,302 Total (excl. Discount / Dollar) = 7,992 (a) 2019 Store Opening Announcements 975 500 210 200 200 155 150 145 116 100 1,641 Total = 4,392 Total (excl. Discount / Dollar) = 2,672 (a) Source: Coresight h and other publicly available information as of January 2020. Private and a) Discount / Dollar includes Aldi, Dollar General, Dollar Tree, Family Dollar, Five Below, Fred’s and Shopko. Confidential 7


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2019 Preliminary Retail Holiday Overview Online was the bright spot as in-store traffic continued to weaken Holiday Retail Overview • Holiday sales rose 3.4% (including online) as e-commerce sales rose 18.8% over 2018 (Mastercard SpendingPulse) • Full holiday season online sales reached $142.5 billion (Digital Media Solutions) Global digital spending grew 8% to $723 billion, driven by mobile devices • In-store traffic fell 6.1% in December compared to December 2018 (ShopperTrak) • Holiday Survey: 27% spending increased, 56% spending unchanged, 17% spending reduced (Shopify) • Holiday Sales – Apparel: +1.0% overall (11/1 – 12/26) Brick & Mortar: ND Online: +17.0% (Mastercard) • 190 million people (142 million online) shopped during Cyber 5 (b), representing a record number and 14% increase over 2018 (NRF) Black Friday online sales hit a record $7.4 billion, up 19% from 2018 (Adobe) Cyber Monday hit $9.2 billion with the “golden hours of retail” (10PM – 2AM) driving 30% of revenue (Adobe) Sales for the four-day Thanksgiving weekend grew 5.4% to $68.9 billion (Customer Growth Partners) a) Mastercard SpendingPulse. b) Thanksgiving Day through Cyber Monday. c) Digital Media Solutions. d) Mastercard SpendingPulse. Compared to 14.4% and 12.3% in 2018 and 2017, respectively. Holiday Spending YoY Changes (a) 6.8% 5.5% 4.9% 5.1% 4.1% 3.8% 3.2% 3.2% 3.4% 2.3% 2.4% ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 (6.4%) Holiday E-Commerce Key Statistics $144B 80% 14.6% Global Online Holiday of traffic driven by E-Commerce percentage Sales Volume (c) mobile devices (a) of total retail sales (d) “E-commerce sales hit a record high this year with more people doing their holiday shopping online. Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices.”—Steve Sadove, former CEO and Chairman of Saks Incorporated Private and Confidential 8


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Mall Traffic in 2019 was ~25+% Lower than in 2013 105 100 2013 2014 95 90 2015 85 2016 80 2018 2017 75 2019 2019 traffic continued to be challenged 70 Jan Feb March April May June July Aug Sep Oct Nov Dec Private and Source: Shoppertrak as of January 13, 2020. Confidential 9


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Updated 1/17/2020 Indication Summary Private and Confidential 10


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Analysis At Various Prices ($ in Millions, Except Per Share Data) Current Kingswood Market (Public Net Debt) Market (Private Net Debt) Indication 1/17/2020 1/17/2020 1/17/2020 Stock Price / Proposed Offer Price $0.69 $0.69 $0.75 $0.85 $0.95 $1.05 $1.15 Shares Outstanding (a) 47.6 47.6 47.6 47.6 47.6 47.6 47.6 Unvested Restricted Stock Units (b) — — 1.3 1.3 1.3 1.3 1.3 Option Equivalent Shares (c) — — — — — — — Diluted Shares Outstanding 47.6 47.6 48.9 48.9 48.9 48.9 48.9 Total Equity Value $32.8 $32.8 $36.6 $41.5 $46.4 $51.3 $56.2 Plus: Net Debt 157.3 (d) 104.0 (e) 104.0 (e) 104.0 (e) 104.0 (e) 104.0 (e) 104.0 (e) Total Enterprise Value $190.2 $136.8 $140.6 $145.5 $150.4 $155.3 $160.1 Premium / (Discount) to: Current Price 1/17/2020 $0.69 — % — % 8.7 % 23.2 % 37.7 % 52.2 % 66.7 % 30-Day VWAP 0.68 1.5 1.5 10.4 25.1 39.8 54.5 69.2 60-Day VWAP 0.71 (2.7) (2.7) 5.7 19.8 33.9 48.0 62.1 90-Day VWAP 0.73 (6.1) (6.1) 2.1 15.7 29.3 43.0 56.6 180-Day VWAP 0.76 (8.8) (8.8) (0.8) 12.4 25.6 38.8 52.1 52-Week High 2/14/2019 1.23 (43.9) (43.9) (39.0) (30.9) (22.8) (14.6) (6.5) 52-Week Low 1/3/2020 0.66 4.5 4.5 13.6 28.8 43.9 59.1 74.2 Enterprise Value as a Multiple of: Total Revenue LTM (Q3 ‘19)—Public $1,240.6 15.3 % 11.0 % 11.3 % 11.7 % 12.1 % 12.5 % 12.9 % LTM (Dec. ‘19)—Private 1,234.4 15.4 11.1 11.4 11.8 12.2 12.6 13.0 Adj. EBITDA LTM (Q3 ‘19)—Public $30.0 6.3 x 4.6 x 4.7 x 4.8 x 5.0 x 5.2 x 5.3 x LTM (Dec. ‘19)—Private 27.9 6.8 4.9 5.0 5.2 5.4 5.6 5.7 FY 2019B (f) 24.9 7.6 5.5 5.6 5.8 6.0 6.2 6.4 Price as a Multiple of: Diluted Adj. EPS FY 2019B (f) ($0.26) NM NM NM NM NM NM NM FY 2020E (f) 0.02 44.0 x 44.0 x 47.8 x 54.2 x 60.5 x 66.9 x 73.3 x (a) Total shares outstanding of 47.6M as of January 4, 2020, per Computershare Capital Breakdown Report, which includes 0.6M Restricted Stock Awards, which have voting rights. (b) Unvested Restricted Stock Units (RSUs) as of January 6, 2020, which are not included in shares outstanding and have a double trigger change-incontrol provision. (c) Assumes treasury stock method with no options in the money as of January 6, 2020. PSUs not included as Total Shareholder Return (TSR) target as of January 20, 2020 has not been achieved. (d) Based on cash of $13.0M and total debt of $170.3M as of November 2, 2019 per Company FY 2019 Q3 10-Q filing. (e) Based on cash of $8.5M and total debt of $112.4M as of January 4, 2020 per Management 11+1 Forecast. Private and (f) Source: Management Five Year Plan approved by the Special Committee on January 15, 2020. 2019 based on Management 11+1 Forecast. Confidential 11


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Volume Weighted Average Price By Range (Shares in Millions) Volume Per Price Range – Last 6 Months Average Daily Volume 0.12 M 3.6 3.9 3.8 2.7 0.6 0.5 — $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 ? x < ? x < ? x < ? x < ? x < ? x < ? x $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 % of Total Volume: 23.5% 25.7% 17.9% 25.3% 4.0% 3.5% 0.0% 49% Volume Per Price Range – Last Month Average Daily Volume 0.16 M 2.7 0.8 — — — — — $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 ? x < ? x < ? x < ? x < ? x < ? x < ? x $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 % of Total Volume: 77.8% 22.2% 0.0% 0.0% 0.0% 0.0% 0.0% 100% Source: Capital IQ as of January 17, 2020. Volume Per Price Range – Last 3 Months Average Daily Volume 0.13 M 2.8 2.5 1.9 1.4 — — — $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 ? x < ? x < ? x < ? x < ? x < ? x < ? x $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 % of Total Volume: 32.7% 28.6% 16.8% 21.9% 0.0% 0.0% 0.0% 61% Volume Per Price Range – CY2020 YTD Average Daily Volume 0.13 M 1.0 0.6 — — — — — $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 ? x < ? x < ? x < ? x < ? x < ? x < ? x $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 % of Total Volume: 62.4% 37.6% 0.0% 0.0% 0.0% 0.0% 0.0% 100% Private and Confidential 12


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Premiums Paid Analysis ($ in Millions) Announce Enterprise One Day 30-Day Date Acquirer Target Value Premium Premium Dec-19 Lumos Networks; EQT Partners North State Telecommunications $236.5 29.6% 23.1% Nov-19 ICV Partners Diversified Restaurant Holdings 176.4 123.4% 75.0% Sep-19 Greenbriar Equity Group Arotech Corp. 102.1 32.7% 38.2% Sep-19 Accel-KKR et al. MAM Software Group 152.1 15.4% 13.7% Aug-19 Assurance Global Services Computer Task Group 106.8 33.8% 47.8% Aug-19 Austin Nichols & Co. Castle Brands 263.3 92.1% 136.1% Jun-19 Atlantis Acquisitionco Canada Corp. Hydrogenics Corp. 279.4 (3.1%) 55.3% Jun-19 YANMAR America Corp. ASV Holdings 104.0 332.5% 200.0% Jun-19 Extreme Networks, Inc. Aerohive Networks 198.7 39.5% 25.7% May-19 Vintage Capital Management Liberty Tax 160.8 31.1% 19.9% Apr-19 MTY Food Group, Inc. Papa Murphy’s Holdings 197.4 31.9% 15.8% Apr-19 The Ancora Group J. Alexander’s Holdings 262.4 12.5% 22.7% Apr-19 Cresco Labs CannaRoyalty Corp. 276.6 (54.1%) (41.2%) Mar-19 HEXO Corp. Newstrike Brands 125.0 4.1% (11.6%) Feb-19 Tesla Maxwell Technologies 293.6 96.3% 234.8% Dec-18 Cerberus Capital Management Sparton Corp. 253.9 41.0% 47.8% Nov-18 Altair Engineering Datawatch Corp. 162.6 35.2% 13.9% Oct-18 General Catalyst et al. Intersections 102.6 107.3% 111.5% Oct-18 Z Capital Group; Affinity Gaming Full House Resorts 211.9 79.6% 67.3% Sep-18 Stryker Corp. Invuity 188.7 28.7% 87.3% Aug-18 Moody’s Analytics Maryland Corp. Reis 251.1 32.2% 2.7% Aug-18 The Invus Group et al. Zoe’s Kitchen 295.3 33.4% 27.9% Aug-18 Roark Capital Group; FOCUS Brands Jamba 194.5 16.3% 20.8% Apr-18 NICE Systems, Inc. Mattersight Corp. 105.0 25.6% 17.4% Apr-18 SPX Corp. ELXSI Corp. 152.6 30.4% 29.9% Mar-18 William Morris Endeavor et al. NeuLion 203.0 116.5% 103.9% Mar-18 GP Investimentos Ltda. Bravo Brio Restaurant Group 100.1 16.8% 35.0% Feb-18 AMC Networks, Inc. RLJ Entertainment 163.7 61.5% 59.4% Jan-18 Duravant LLC Key Technology 172.0 50.6% 34.1% Median 32.7% 34.1% Source: FactSet. Represents transactions of $100-$300M in enterprise value with North American targets, in which at least a 50% stake was acquired. Private and Excludes financial services, healthcare, real estate and energy/mining/minerals industries. Confidential 13


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Preliminary Liquidity Observations Private and Confidential 14


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Forecasted January – July 2020 Liquidity Note: Line Cap, as defined in the current Wells Fargo ABL credit agreement, is the lesser of the net ABL Borrowing Base and the Credit Facility Size • Kingswood indicated a minimum available requirement of 32.5% of the Line Cap on January 17, 2020 ($ in Thousands) January, Week Ended February, Week Ended March, Week Ended April, Week Ended Month Ended 24-Jan 31-Jan 7-Feb 14-Feb 21-Feb 28-Feb 6-Mar 13-Mar 20-Mar 27-Mar 3-Apr 10-Apr 30-Apr (a) 31-May (a) 30-Jun (a) 31-Jul (a) Eligible Inventory $220,384 $220,384 $220,384 $227,464 $227,464 $227,464 $227,464 $249,447 $249,447 $249,447 $249,447 $249,447 $247,492 $248,876 $236,622 $210,587 Eligible Credit Card Receivables 5,652 5,652 5,652 6,378 6,378 6,378 6,378 9,164 9,164 9,164 9,164 9,164 10,021 17,943 10,492 9,918 Eligible FF&E 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,701 2,701 2,701 2,599 Less: Reserves (18,294) (18,294) (18,294) (18,005) (18,005) (18,005) (18,005) (15,505) (15,505) (15,505) (15,505) (15,505) (15,661) (15,408) (15,361) (16,494) Net Credit Facility Borrowing Base $210,544 $210,544 $210,544 $218,640 $218,640 $218,640 $218,640 $245,909 $245,909 $245,909 $245,909 $245,909 $244,552 $254,112 $234,454 $206,610 Borrowing (157,872) (155,472) (155,472) (170,172) (163,672) (158,705) (157,559) (174,303) (170,939) (152,689) (146,878) (166,741) (137,216) (125,989) (120,947) (128,612) Excess Above Available Minimum $52,672 $55,072 $55,072 $48,468 $54,968 $59,935 $61,081 $71,606 $74,970 $93,220 $99,031 $79,168 $107,336 $128,123 $113,507 $77,998 Net Credit Facility Borrowing Base $210,544 $210,544 $210,544 $218,640 $218,640 $218,640 $218,640 $245,909 $245,909 $245,909 $245,909 $245,909 $244,552 $254,112 $234,454 $206,610 Less: Term Loan (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) Line Cap (ABL Credit Facility Borrowing Base) $175,544 $175,544 $175,544 $183,640 $183,640 $183,640 $183,640 $210,909 $210,909 $210,909 $210,909 $210,909 $209,552 $219,112 $199,454 $171,610 % of Line Cap 30.0% 31.4% 31.4% 26.4% 29.9% 32.6% 33.3% 34.0% 35.5% 44.2% 47.0% 37.5% 51.2% 58.5% 56.9% 45.5% Comparison to Minimum Avail. Req. ($) ($4,380) ($1,980) ($1,980) ($11,215) ($4,715) $252 $1,398 $3,061 $6,425 $24,675 $30,486 $10,623 $39,231 $56,912 $48,684 $22,225 Comparison to Minimum Avail. Req. (%) -2.5% -1.1% -1.1% -6.1% -2.6% 0.1% 0.8% 1.5% 3.0% 11.7% 14.5% 5.0% 18.7% 26.0% 24.4% 13.0% Memo: Adjusted EBITDA (b) ($4,612) ($6,754) $10,946 $12,250 $5,049 $7,406 ($1,372) Source: 13-Week Cash Flow Forecast as of January 13, 2020 and Company’s preliminary 2020 monthly budget as of January 16, 2020. a) Month-end borrowing base calculation represents projected certificate from the third Monday of the previous month. Private and b) Monthly Adjusted EBITDA per Management internal 2019 11+1 Forecast and Company’s preliminary 2020 monthly budget as of January 16, 2020. Confidential 15


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Historical and Projected Availability as a % of Line Cap 2018A (a) 2019A 2020E Minimum Availability Requirement (32.5%) 32.5% February and July are typically liquidity low points February March April May June July Source: Historical borrowing base calculations and Company’s preliminary 2020 monthly budget as of January 16, 2020. Private and a) Calculated using $50M Wells Fargo FILO Term Loan. Replaced by the Gordon Brothers $35M term loan in August 2018. Confidential 16

Exhibit (c)(5)

Exhibit 99(C)(5)

 

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Project Stratosphere Discussion Materials January 22, 2020 Private and Confidential


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Disclaimer The following pages contain material provided to the Special Committee of the Board of Directors (the “Special Committee”) of Stein Mart, Inc. (the “Company”) by PJ Solomon, L.P. and its affiliates, including, without limitation, PJ Solomon Securities, LLC (collectively, “PJ Solomon” or “Solomon”) in connection with Project Stratosphere. These materials were prepared on a confidential basis in connection with an oral presentation to the Special Committee and not with a view toward complying with the disclosure standards under state or federal securities laws or otherwise. The information contained in this presentation was based solely on publicly available information or information furnished to PJ Solomon by the Company. PJ Solomon has relied, without independent investigation or verification, on the accuracy, completeness and fair presentation of all such information and the conclusions contained herein are conditioned upon such information (whether written or oral) being accurate, complete and fairly presented in all respects. This presentation includes certain statements, estimates and projections provided by the Company with respect to the historical and anticipated future performance of the Company. Such statements, estimates and projections contain or are based on significant assumptions and subjective judgments made by the Company’s management. None of PJ Solomon, its affiliates or its or their respective employees, directors, officers, contractors, advisors, members, successors or agents makes any representation or warranty in respect of the accuracy, completeness or fair presentation of any information, projections or any conclusion contained herein. PJ Solomon, its affiliates and its and their respective employees, directors, officers, contractors, advisors, members, successors and agents shall have no liability with respect to any information, projections or matter contained herein, or any oral information provided herewith or data any of them generates. The information contained herein should not be assumed to have been updated at any time subsequent to date shown on the first page of the presentation and the delivery of the presentation does not constitute a representation by PJ Solomon that such information will be updated at any time after the date of the presentation. Neither PJ Solomon nor any of its affiliates is an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction. The Company acknowledges that PJ Solomon is an affiliate of Natixis, a global full service commercial and investment bank. Private and Confidential 1


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Process Update • On August 1, 2019, Stratosphere entered into exclusivity with Kingswood following the buyer’s $1.15 per share indication submitted July 30, 2019 At the time, the prevailing projections were the “4+8” forecast indicating FY 2019E EBITDA of $35.1 million • On August 27, 2019, the full Stratosphere Board of Directors (excluding Jay Stein) approved the 6+6 projections and the revised Five Year Plan, which PJ Solomon thereafter sent to Kingswood; the 6+6 indicated revised FY 2019E EBITDA of $31.3 million • On August 30, 2019, Kingswood sent Stratosphere’s advisors a markup of the Merger Agreement • Foley sent a revised draft of the Merger Agreement on September 7, 2019, which, among other revisions, reinstated the provision to make the transaction contingent on approval of the majority of the minority shareholders • In several subsequent conversations between PJ Solomon and Kingswood on the open points in the Merger Agreement, PJ Solomon insisted on keeping the transaction contingent on approval of the majority of the minority shareholders, which led to the parties breaking off discussions • In October, after hiring a new operating partner [Third Party], Kingswood and the Company decided to re-engage [Third Party] met with Management in-person in Jacksonville on October 7-8, 2019 and then visited stores in Dallas on November 7, 2019 and in Orlando on November 20, 2019 • As Kingswood continued its diligence, several key issues arose: Stratosphere’s financial performance continued to deteriorate, ultimately revising its year end Adj. EBITDA down to $24.9 million from $31.3 million in its 6+6 Board-approved plan Kingswood believed several agreements signed by Management [vendor] were expensive and not additive to the business Kingswood vocalized concerns over the large severance liability for the 11 EVPs / SVPs and 24 VPs, currently estimated at ~$11 million of impact (according to the buyers) Private and Confidential 2


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Process Update (Cont’d) • Following a weak November, Kingswood decided to slow the process to be able to observe December performance In November, actual adjusted EBITDA was ($4.9) million vs. the 6+6 projection of ($0.5) million In December, actual adjusted EBITDA was $18.0 million vs. the 6+6 projection of $21.7 million • Following this poor performance, Management reforecasted its FY 2019E estimate (11+1) and created an updated version of the 5 Year Plan which was approved by the Special Committee on January 15, 2020 • In the interim, Kingswood sent drafts of key transaction documentation including the Merger Agreement, Voting Agreement, Equity and Debt Commitments and Rollover Agreement as it progressed on non-value workstreams • On January 17, 2020, PJ Solomon received an email from Kingswood detailing their response on the three remaining open items in the draft Merger Agreement: Purchase Price per Share: $0.75 Excess Availability at Close: Not less than 32.5% of the Line Cap Parent Termination Fee and Company Termination Fee: 5% of equity value / equity purchase price • PJ Solomon called Kingswood in response to confirm receipt and clarify the Excess Availability definition Per Kingswood, the definition is as per existing Wells Fargo Credit Facility loan documents • On January 20, 2020, the Special Committee rejected the $0.75 per share purchase price with no counter-offer as it determines what, if any, next steps are to be taken • Wells Fargo and Pathlight (Kingswood’s new lenders) are both finalizing the Debt Commitment Agreements and indicated an anticipated delivery date to Stratosphere of Wednesday, January 22, 2020 Private and Confidential 3


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2019E Management Forecasts Over Time Outlook for 2019E has worsened over time as Stratosphere missed forecasts ($ in Millions) FY 2019E % Difference 2+10 (a) 4+8 (b) 6+6 (c) 11+1 (d) 11+1 vs. 2+10 11+1 vs. 4+8 11+1 vs. 6+6 Total Revenue $1,270.0 $1,259.8 $1,256.0 $1,234.2 (2.8%) (2.0%) (1.7%) % Store Comp 0.6% (0.7%) (0.8%) (1.2%) % Total Comp 1.8% 0.4% 0.4% (1.5%) Gross Profit (e) $348.5 $346.3 $343.9 $335.3 (3.8%) (3.2%) (2.5%) % Margin 27.4% 27.5% 27.4% 27.2% Adjusted EBITDA $35.7 $35.1 $31.3 $24.9 (30.2%) (29.0%) (20.2%) % Margin 2.8% 2.8% 2.5% 2.0% a) Source: Management 2019 2+10 Forecast approved by the Board of Directors on May 14, 2019. b) Source: Management internal 2019 4+8 Forecast c) Source: Management 2019 6+6 Forecast approved by the Board of Directors on August 27, 2019. d) Source: Management internal 2019 11+1 Forecast. e) Includes credit card, breakage and other income. Private and Confidential 4


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Comp Sales(a) Performance vs. Forecast Comps underperformed forecasts for 17 of the last 19 observable months 2018 Actual Monthly Comp Store Sales Performance vs. 2018 2+10 Forecast 3.6% 5.4% 5.7% 4.8% 3.9% 5.7% 1.4% 2.3% 1.7% 3.0% 0.8% 2.3% (0.0%) (0.4%) (0.2%) (0.2%) (5.0%)(5.0%) (5.5%) (11.6%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2018 2+10 Forecast Actual 2019 Actual Monthly Comp Store Sales Performance vs. Management Five Year Plan (2+10 Forecast for 2019) 11.2% 5.2% 2.8% 4.1% 2.9% 1.5% 3.9% 0.2% 3.2% 4.8% 1.4% 3.7% 0.0% (0.9%) (0.6%) (4.4%) (2.9%) (4.1%) (10.1%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan Management Five Year Plan (2019 2+10 Forecast) Actual a) Comp figures for 2019 represent Store + eCommerce comparable sales. Comp figures for 2018 represent total comp, representative of Store, eCommerce and Licensed comparable sales. Private and Confidential 5


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Retailing Environment Update Private and Confidential 6


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The “Shakeout” Is In Full Swing Selected retailers who have filed, liquidated, shut-down or are distressed July ‘142014 Dec ‘14 2015 * * * * * * * * (a) * * 2016 * * (a) * * * * * (a) 2017 * * * * * * * * *(a) * (a) 2018 * * 2019 * * * * * * * * * Distressed Retailers Note: * indicates liquidated and (a) indicates pure play digital. Red box indicates department store / broadlines retailer. Private and Confidential 7


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In 2019, U.S. Retailers Announced ~9,300 closures • Closures were more than double the number of openings • Excluding Discount and Dollar stores, closures were approximately three times the number of openings 2019 Store Closure Announcements 2,100 800 650 557 512 390 363 261 250 230 222 210 200 200 178 170 150 140 1,719 Total = 9,302 Total (excl. Discount / Dollar) = 7,992 (a) 2019 Store Opening Announcements 975 500 210 200 200 155 150 145 116 100 1,641 Total = 4,392 Total (excl. Discount / Dollar) = 2,672 (a) Source: Coresight h and other publicly available information as of January 2020. a) Discount / Dollar includes Aldi, Dollar General, Dollar Tree, Family Dollar, Five Below, Fred’s and Shopko. Private and Confidential 8


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2019 Preliminary Retail Holiday Overview Online was the bright spot as in-store traffic continued to weaken Holiday Retail Overview • Holiday sales rose 3.4% (including online) as e-commerce sales rose 18.8% over 2018 (Mastercard SpendingPulse) • Full holiday season online sales reached $142.5 billion (Digital Media Solutions) Global digital spending grew 8% to $723 billion, driven by mobile devices • In-store traffic fell 6.1% in December compared to December 2018 (ShopperTrak) • Holiday Survey: 27% spending increased, 56% spending unchanged, 17% spending reduced (Shopify) • Holiday Sales – Apparel: +1.0% overall (11/1 – 12/26) Brick & Mortar: ND Online: +17.0% (Mastercard) • 190 million people (142 million online) shopped during Cyber 5 (b), representing a record number and 14% increase over 2018 (NRF) Black Friday online sales hit a record $7.4 billion, up 19% from 2018 (Adobe) Cyber Monday hit $9.2 billion with the “golden hours of retail” (10PM – 2AM) driving 30% of revenue (Adobe) Sales for the four-day Thanksgiving weekend grew 5.4% to $68.9 billion (Customer Growth Partners) a) Mastercard SpendingPulse. b) Thanksgiving Day through Cyber Monday. c) Digital Media Solutions. d) Mastercard SpendingPulse. Compared to 14.4% and 12.3% in 2018 and 2017, respectively. Holiday Spending YoY Changes (a) 6.8% 5.5% 4.9% 5.1% 4.1% 3.8% 3.2% 3.2% 3.4% 2.3% 2.4% ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 (6.4%) Holiday E-Commerce Key Statistics $144B 80% 14.6% Global Online Holiday of traffic driven by E-Commerce percentage Sales Volume (c) mobile devices (a) of total retail sales (d) “E-commerce sales hit a record high this year with more people doing their holiday shopping online. Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices.”—Steve Sadove, former CEO and Chairman of Saks Incorporated Private and Confidential 9


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Mall Traffic in 2019 was ~25+% Lower than in 2013 105 100 2013 2014 95 90 2015 85 2016 80 2018 2017 75 2019 2019 traffic continued to be challenged 70 Jan Feb March April May June July Aug Sep Oct Nov Dec Source: Shoppertrak as of January 13, 2020. Private and Confidential 10


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Updated 1/17/2020 Indication Summary Private and Confidential 11


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Projected Financials – 11+1 Forecast and Five Year Plan (Amounts in Millions, Except Per Share Data) LTM Fiscal Year CAGR Income Statement Data Dec-19 2019B 2020P 2021P 2022P 2023P 2024P FY19-FY24 Total Revenue $1,234.4 $1,234.2 $1,255.5 $1,277.6 $1,297.3 $1,321.5 $1,366.2 2.1% Gross Profit 337.2 335.3 349.6 353.9 358.4 365.4 376.6 2.4 Adj. SG&A 309.3 310.3 312.0 319.7 324.7 330.0 338.5 1.8 Adj. EBITDA 27.9 24.9 37.5 34.2 33.7 35.4 38.1 8.9 Adj. EBIT (0.6) (3.3) 10.2 9.7 12.3 17.0 21.3 NM Diluted EPS ($0.17) ($0.25) $0.00 $0.01 $0.05 $0.12 $0.22 NM Adjusted Diluted EPS ($0.22) ($0.26) $0.02 $0.03 $0.07 $0.15 $0.25 NM Number of Stores 283 283 281 277 274 276 280 Margins Gross Profit 27.3% 27.2% 27.8% 27.7% 27.6% 27.7% 27.6% Adj. EBITDA 2.3 2.0 3.0 2.7 2.6 2.7 2.8 Adj. EBIT (0.0) (0.3) 0.8 0.8 0.9 1.3 1.6 Comparable Sales Store Sales (2.0%) (a) (1.2%) 2.4% 1.5% 1.5% 1.4% 1.5% ECommerce 9.0 (a) (b) (16.3%) (2.3%) 14.4% 13.5% 10.0% 10.0% Total Comp Sales (excl. DSW & LXR) (1.7) (a) (1.5%) 2.2% 1.9% 2.0% 1.8% 1.9% Growth Rates Total Revenue (4.4%) (3.0%) 1.7% 1.8% 1.5% 1.9% 3.4% Adj. EBITDA (32.8%) (36.8) 50.5 (9.0) (1.3) 4.9 7.8 Adj. EBIT (106.6%) NM NM (4.9) 26.2 38.7 25.2 Balance Sheet and Cash Flow Data Cash $8.5 $12.0 $12.0 $12.0 $12.0 $12.0 $12.0 Total Debt 112.4 147.5 129.0 121.6 113.3 104.7 97.8 Depreciation and Amortization 28.5 28.2 27.3 24.4 21.4 18.3 16.8 Cum. FY20-FY24 Capital Expenditures (6.1) (7.7) (10.6) (16.0) (14.8) (15.8) (15.2) (72.4) Change in Net Working Capital (12.5) (3.7) (2.0) (2.7) (1.8) (2.9) (8.8) Free Cash Flow (c) 7.3 7.6 17.8 9.4 10.4 8.7 6.7 60.5 Leverage and Interest Coverage Ratios Adj. Debt / Adj. EBITDAR (d) 7.1 x N/A N/A N/A N/A N/A N/A Total Debt / Adj. EBITDA 4.0 5.9 x 3.4 x 3.6 x 3.4 x 3.0 x 2.6 x Source: Management Five Year Plan and 2019 11+1 Forecast approved by the Special Committee on January 15, 2020. Adjusted EBITDA, EBIT and Diluted EPS exclude store impairments, gain from credit card settlement and pre-opening costs identified by Management. a) Represents year-to-date comparable store sales. b) Represents omni-channel comparable sales, which are not comparable with historical periods. With the rollout of Smart Fulfillment in August 2019 and BOPIS in September 2019, a significant portion of eComm sales have shifted to ship-from-store, and to a lesser extent, BOPIS. As a result, ECommerce comparable sales are down (15.6%) YTD. c) Defined as Cash Flow from Operating Activities less Capital Expenditures. d) Assumes 8.0x rent methodology as it is not yet clear that the lender and credit analyst communities have altered their leverage measurement methodologies for revised lease accounting rules. Private and Confidential 12


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Analysis At Various Prices ($ in Millions, Except Per Share Data) Current Kingswood Market (Public Net Debt) Market (Avg. Net Debt) Market (Private Net Debt) Indication 1/17/2020 1/17/2020 1/17/2020 1/17/2020 Stock Price / Proposed Offer Price $0.69 $0.69 $0.69 $0.75 $0.85 $0.95 $1.05 $1.15 Shares Outstanding (a) 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 Unvested Restricted Stock Units (b) — — — 1.3 1.3 1.3 1.3 1.3 Option Equivalent Shares (c) — — — — — — — — Diluted Shares Outstanding 47.6 47.6 47.6 48.9 48.9 48.9 48.9 48.9 Total Equity Value $32.8 $32.8 $32.8 $36.6 $41.5 $46.4 $51.3 $56.2 Plus: Net Debt 157.3 (d) 136.1 (e) 104.0 (f) 104.0 (f) 104.0 (f) 104.0 (f) 104.0 (f) 104.0 (f) Total Enterprise Value $190.2 $168.9 $136.8 $140.6 $145.5 $150.4 $155.3 $160.1 Premium / (Discount) to: Current Price 1/17/2020 $0.69 — % — % — % 8.7 % 23.2 % 37.7 % 52.2 % 66.7 % 30-Day VWAP 0.68 1.5 1.5 1.5 10.4 25.1 39.8 54.5 69.2 60-Day VWAP 0.71 (2.7) (2.7) (2.7) 5.7 19.8 33.9 48.0 62.1 90-Day VWAP 0.73 (6.1) (6.1) (6.1) 2.1 15.7 29.3 43.0 56.6 180-Day VWAP 0.76 (8.8) (8.8) (8.8) (0.8) 12.4 25.6 38.8 52.1 13-Week High 11/18/2019 0.85 (18.3) (18.3) (18.3) (11.2) 0.6 12.4 24.3 36.1 26-Week High 8/21/2019 0.95 (27.0) (27.0) (27.0) (20.6) (10.1) 0.5 11.1 21.7 52-Week High 2/14/2019 1.23 (43.9) (43.9) (43.9) (39.0) (30.9) (22.8) (14.6) (6.5) 52-Week Low 1/3/2020 0.66 4.5 4.5 4.5 13.6 28.8 43.9 59.1 74.2 Enterprise Value as a Multiple of: Total Revenue LTM (Q3 ‘19)—Public $1,240.6 15.3 % 13.6 % 11.0 % 11.3 % 11.7 % 12.1 % 12.5 % 12.9 % LTM (Dec. ‘19)—Private 1,234.4 15.4 13.7 11.1 11.4 11.8 12.2 12.6 13.0 Adj. EBITDA LTM (Q3 ‘19)—Public $30.0 6.3 x 5.6 x 4.6 x 4.7 x 4.8 x 5.0 x 5.2 x 5.3 x LTM (Dec. ‘19)—Private 27.9 6.8 6.1 4.9 5.0 5.2 5.4 5.6 5.7 FY 2019B (g) 24.9 7.6 6.8 5.5 5.6 5.8 6.0 6.2 6.4 Price as a Multiple of: Diluted Adj. EPS FY 2019B (g) ($0.26) NM NM NM NM NM NM NM NM FY 2020E (g) 0.02 44.0 x 44.0 x 44.0 x 47.8 x 54.2 x 60.5 x 66.9 x 73.3 x a) Total shares outstanding of 47.6M as of January 4, 2020, per Computershare Capital Breakdown Report, which includes 0.6M Restricted Stock Awards, which have voting rights. b) Unvested Restricted Stock Units (RSUs) as of January 6, 2020, which are not included in shares outstanding and have a double trigger change-incontrol provision. c) Assumes treasury stock method with no options in the money as of January 6, 2020. PSUs not included as Total Shareholder Return (TSR) target as of January 20, 2020 has not been achieved. d) Based on cash of $13.0M and total debt of $170.3M as of November 2, 2019 per Company FY 2019 Q3 10-Q filing. e) Based on average month-end net debt balances for the last twelve months from January 2019 through December 2019. f) Based on cash of $8.5M and total debt of $112.4M as of January 4, 2020 per Management 11+1 Forecast. g) Source: Management Five Year Plan approved by the Special Committee on January 15, 2020. 2019 based on Management 11+1 Forecast. Private and Confidential 13


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Volume Weighted Average Price By Range (Shares in Millions) Volume Per Price Range – Last 6 Months Average Daily Volume 0.12 M 3.6 3.9 3.8 2.7 0.6 0.5 — $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 ? x < ? x < ? x < ? x < ? x < ? x < ? x $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 % of Total Volume: 23.5% 25.7% 17.9% 25.3% 4.0% 3.5% 0.0% 49% Volume Per Price Range – Last Month Average Daily Volume 0.16 M 2.7 0.8 — — — — — $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 ? x < ? x < ? x < ? x < ? x < ? x < ? x $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 % of Total Volume: 77.8% 22.2% 0.0% 0.0% 0.0% 0.0% 0.0% 100% Source: Capital IQ as of January 17, 2020. Volume Per Price Range – Last 3 Months Average Daily Volume 0.13 M 2.8 2.5 1.9 1.4 — — — $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 ? x < ? x < ? x < ? x < ? x < ? x < ? x $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 % of Total Volume: 32.7% 28.6% 16.8% 21.9% 0.0% 0.0% 0.0% 61% Volume Per Price Range – CY2020 YTD Average Daily Volume 0.13 M 1.0 0.6 — — — — — $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 ? x < ? x < ? x < ? x < ? x < ? x < ? x $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 % of Total Volume: 62.4% 37.6% 0.0% 0.0% 0.0% 0.0% 0.0% 100% Private and Confidential 14


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($ in Millions) Announce Enterprise One Day 30-Day Date Acquirer Target Value Premium Premium Dec-19 Lumos Networks; EQT Partners North State Telecommunications $236.5 29.6% 23.1% Nov-19 ICV Partners Diversified Restaurant Holdings 176.4 123.4% 75.0% Sep-19 Greenbriar Equity Group Arotech Corp. 102.1 32.7% 38.2% Sep-19 Accel-KKR et al. MAM Software Group 152.1 15.4% 13.7% Aug-19 Assurance Global Services Computer Task Group 106.8 33.8% 47.8% Aug-19 Austin Nichols & Co. Castle Brands 263.3 92.1% 136.1% Jun-19 Atlantis Acquisitionco Canada Corp. Hydrogenics Corp. 279.4 (3.1%) 55.3% Jun-19 YANMAR America Corp. ASV Holdings 104.0 332.5% 200.0% Jun-19 Extreme Networks, Inc. Aerohive Networks 198.7 39.5% 25.7% May-19 Vintage Capital Management Liberty Tax 160.8 31.1% 19.9% Apr-19 MTY Food Group, Inc. Papa Murphy’s Holdings 197.4 31.9% 15.8% Apr-19 The Ancora Group J. Alexander’s Holdings 262.4 12.5% 22.7% Apr-19 Cresco Labs CannaRoyalty Corp. 276.6 (54.1%) (41.2%) Mar-19 HEXO Corp. Newstrike Brands 125.0 4.1% (11.6%) Feb-19 Tesla Maxwell Technologies 293.6 96.3% 234.8% Dec-18 Cerberus Capital Management Sparton Corp. 253.9 41.0% 47.8% Nov-18 Altair Engineering Datawatch Corp. 162.6 35.2% 13.9% Oct-18 General Catalyst et al. Intersections 102.6 107.3% 111.5% Oct-18 Z Capital Group; Affinity Gaming Full House Resorts 211.9 79.6% 67.3% Sep-18 Stryker Corp. Invuity 188.7 28.7% 87.3% Aug-18 Moody’s Analytics Maryland Corp. Reis 251.1 32.2% 2.7% Aug-18 The Invus Group et al. Zoe’s Kitchen 295.3 33.4% 27.9% Aug-18 Roark Capital Group; FOCUS Brands Jamba 194.5 16.3% 20.8% Apr-18 NICE Systems, Inc. Mattersight Corp. 105.0 25.6% 17.4% Apr-18 SPX Corp. ELXSI Corp. 152.6 30.4% 29.9% Mar-18 William Morris Endeavor et al. NeuLion 203.0 116.5% 103.9% Mar-18 GP Investimentos Ltda. Bravo Brio Restaurant Group 100.1 16.8% 35.0% Feb-18 AMC Networks, Inc. RLJ Entertainment 163.7 61.5% 59.4% Jan-18 Duravant LLC Key Technology 172.0 50.6% 34.1% Median 32.7% 34.1% Source: FactSet. Represents transactions of $100-$300M in enterprise value with North American targets, in which at least a 50% stake was acquired. Excludes financial services, healthcare, real estate and energy/mining/minerals industries. Private and Confidential 15


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Preliminary Liquidity Observations Private and Confidential 16


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Forecasted January – July 2020 Liquidity Note: Line Cap, as defined in the current Wells Fargo ABL credit agreement, is the lesser of the net ABL Borrowing Base and the Credit Facility Size • Kingswood indicated a minimum available requirement of 32.5% of the Line Cap on January 17, 2020 ($ in Thousands) January, Week Ended February, Week Ended March, Week Ended April, Week Ended Month Ended 24-Jan 31-Jan 7-Feb 14-Feb 21-Feb 28-Feb 6-Mar 13-Mar 20-Mar 27-Mar 3-Apr 10-Apr 17-Apr 30-Apr (a) 31-May (a) 30-Jun (a) 31-Jul (a) Eligible Inventory $213,843 $213,843 $213,843 $226,464 $226,464 $226,464 $226,464 $249,568 $249,568 $249,568 $249,568 $249,568 $249,568 $247,492 $248,876 $236,622 $210,587 Eligible Credit Card Receivables 5,028 5,028 5,028 6,210 6,210 6,210 6,210 9,092 9,092 9,092 9,092 9,092 9,092 10,021 17,943 10,492 9,918 Eligible FF&E 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,701 2,701 2,701 2,599 Less: Reserves (17,462) (17,462) (17,462) (18,005) (18,005) (18,005) (18,005) (15,505) (15,505) (15,505) (15,505) (15,505) (15,505) (15,661) (15,408) (15,361) (16,494) Net Credit Facility Borrowing Base $204,212 $204,212 $204,212 $217,472 $217,472 $217,472 $217,472 $245,958 $245,958 $245,958 $245,958 $245,958 $245,958 $244,552 $254,112 $234,454 $206,610 Less: Term Loan (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) Line Cap (ABL Credit Facility Borrowing Base) $169,212 $169,212 $169,212 $182,472 $182,472 $182,472 $182,472 $210,958 $210,958 $210,958 $210,958 $210,958 $210,958 $209,552 $219,112 $199,454 $171,610 Net Credit Facility Borrowing Base $204,212 $204,212 $204,212 $217,472 $217,472 $217,472 $217,472 $245,958 $245,958 $245,958 $245,958 $245,958 $245,958 $244,552 $254,112 $234,454 $206,610 Borrowing (152,972) (151,572) (151,872) (166,072) (160,272) (158,440) (157,613) (174,728) (171,378) (153,092) (147,320) (167,219) (153,773) (137,216) (125,989) (120,947)  (128,612) A Excess Above Available Minimum $51,240 $52,640 $52,340 $51,400 $57,200 $59,032 $59,859 $71,230 $74,580 $92,866 $98,638 $78,739 $92,185 $107,336 $128,123 $113,507 $77,998 B KW Minimum Availability Requirement (32.5% of Line Cap) $54,994 $54,994 $54,994 $59,303 $59,303 $59,303 $59,303 $68,561 $68,561 $68,561 $68,561 $68,561 $68,561 $68,104 $71,212 $64,822 $55,773 A—B Comparison to Minimum Avail. Req. ($) ($3,754) ($2,354) ($2,654) ($7,903) ($2,103) ($271) $556 $2,669 $6,019 $24,305 $30,077 $10,178 $23,624 $39,231 $56,912 $48,684 $22,225 Comparison to Minimum Avail. Req. (%) -2.2% -1.4% -1.6% -4.3% -1.2% -0.1% 0.3% 1.3% 2.9% 11.5% 14.3% 4.8% 11.2% 18.7% 26.0% 24.4% 13.0% Memo: Adjusted EBITDA (b) ($4,612) ($6,754) $10,946 $12,250 $5,049 $7,406 ($1,372) Source: 13-Week Cash Flow Forecast as of January 21, 2020 and Company’s preliminary 2020 monthly budget as of January 16, 2020. a) Month-end borrowing base calculation represents projected certificate from the third Monday of the previous month. b) Monthly Adjusted EBITDA per Management internal 2019 11+1 Forecast and Company’s preliminary 2020 monthly budget as of January 16, 2020. Private and Confidential 17


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Historical and Projected Availability as a % of Line Cap 2018A (a) 2019A 2020E Minimum Availability Requirement (32.5%) 32.5% February and July are typically liquidity low points February March April May June July Source: Historical borrowing base calculations and Company’s preliminary 2020 monthly budget as of January 16, 2020. a) Calculated using $50M Wells Fargo FILO Term Loan. Replaced by the Gordon Brothers $35M term loan in August 2018. Private and Confidential 18

Exhibit (c)(6)

Exhibit 99(C)(6)

 

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Project Stratosphere Discussion Materials January 27, 2020 AN AFFILIATE OF


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Disclaimer The following pages contain material provided to the Board of Directors (the “Board of Directors”) of Stein Mart, Inc. (the “Company”) by PJ Solomon, L.P. and its affiliates, including, without limitation, PJ Solomon Securities, LLC (collectively, “PJ Solomon” or “Solomon”) in connection with Project Stratosphere. These materials were prepared on a confidential basis in connection with an oral presentation to the Board of Directors and not with a view toward complying with the disclosure standards under state or federal securities laws or otherwise. The information contained in this presentation was based solely on publicly available information or information furnished to PJ Solomon by the Company. PJ Solomon has relied, without independent investigation or verification, on the accuracy, completeness and fair presentation of all such information and the conclusions contained herein are conditioned upon such information (whether written or oral) being accurate, complete and fairly presented in all respects. This presentation includes certain statements, estimates and projections provided by the Company with respect to the historical and anticipated future performance of the Company. Such statements, estimates and projections contain or are based on significant assumptions and subjective judgments made by the Company’s management. None of PJ Solomon, its affiliates or its or their respective employees, directors, officers, contractors, advisors, members, successors or agents makes any representation or warranty in respect of the accuracy, completeness or fair presentation of any information, projections or any conclusion contained herein. PJ Solomon, its affiliates and its and their respective employees, directors, officers, contractors, advisors, members, successors and agents shall have no liability with respect to any information, projections or matter contained herein, or any oral information provided herewith or data any of them generates. The information contained herein should not be assumed to have been updated at any time subsequent to date shown on the first page of the presentation and the delivery of the presentation does not constitute a representation by PJ Solomon that such information will be updated at any time after the date of the presentation. Neither PJ Solomon nor any of its affiliates is an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction. The Company acknowledges that PJ Solomon is an affiliate of Natixis, a global full service commercial and investment bank. Private and Confidential


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Table of Contents SECTION I Process Summary to Date 3 II Retailing Environment Update 10 III Market Perspective 14 IV Financial Performance 19 V Updated 1/22/2020 Indication Summary 24 VI Valuation Summary 27 VII Process Timeline 35 APPENDIX 37 A Preliminary Liquidity Observations 38 B Additional Analyses 41 Private and Confidential


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Process Summary to Date


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2018 Process Summary • In January 2018, PJ Solomon (“PJS”) conducted a process to evaluate strategic alternatives for Stratosphere, including a potential sale 19 parties in total were contacted, of which 5 signed NDAs and 4 received data room access Firm A, a private equity fund, initially submitted a preliminary indication of interest and met with the Management team, but offered no price or structural specifics All other parties contacted declined to submit an offer for an acquisition of Stratosphere • With no buyers emerging from the initial outreach, PJS advised the Special Committee on securing a $50 million FILO Loan from Gordon Brothers in March 2018 to provide the Company with liquidity to operate • PJS also ran a Tailored Capital Process to raise $100 million through an equity-linked term loan in March 2018 and ultimately received one proposal for a $60-70 million Senior Secured Term Loan from Firm A, which was “off-market” in the judgement of PJS • On May 1, 2018, Firm A, together with operating partner [Third Party], contacted the Special Committee revisiting their interest in buying the whole company (closing stock price was $2.04 per share on that date) Firm A met the Special Committee and PJS on May 3, 2018, to discuss their views on the Company’s valuation and the acquisition opportunity indicated that subject to further diligence, they (together with Jay Stein) were willing to pay $2.25 to $2.50 per share to acquire 100% of Stratosphere However, on May 7, 2018, Firm A called to say they did not see a take-private deal as possible at the current market price ($2.48 per share) and instead reverted to the refinancing solution, which, again, PJS did not view as a viable solution and thought was not in the best interest of the shareholders Private and Confidential 4


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2018 – 2019 Process Summary Financing • In August 2018, PJS ran a marketing process to refinance Stratosphere’s ABL Facility, but ultimately negotiated with its incumbent lenders, Wells Fargo and Gordon Brothers to increase the advance rates and right-size its existing credit facility to reduce interest expense and increase Excess Availability Strategic Alternatives – 2019 • On March 28, 2019, Moelis, Jay Stein’s investment bank, relayed to PJS that Jay Stein was potentially interested in taking Stratosphere private and that they had reached out to several potential equity partners using public information Moelis identified three parties (Kingswood, [Third Party] and Firm B), which expressed serious interest • On April 2, 2019, PJS communicated to Moelis that the Special Committee would control discussions with any potential third-party acquirors, as well as the dissemination of any necessary confidential information • On April 5, 2019, Moelis called PJS to convey that Jay Stein had agreed to: Sign an NDA to receive confidential information, distinct from those sent to the private equity firms Forgo contact with any potential debt or equity investors (without prior Special Committee approval) Roll his shares as part of a take-private of Stratosphere Follow a sale process led by the Special Committee Subject any take-private deal to an approval vote by the majority of the disinterested shareholders(a) • On April 5, 2019, PJS reached out to the three initial private equity firms to discuss process and rules of the road • The Special Committee held a telephone meeting with PJS and Foley on April 11, 2019, to discuss inbound interest conveyed through Jay Stein and subsequently shared by Moelis, Jay Stein’s advisor, to PJS Private and a) Moelis noted, however, that if Jay Stein ends up selling his shares, he would want to retain his voting rights. Confidential 5


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2019 Process Summary Process • PJS began contacting the strategic and financial buyer universe on April 15, 2019 71 parties were contacted (13 strategics and 58 financial sponsors), of which Moelis had previously contacted 30 29 parties requested an NDA (41% of buyers contacted) • 16 parties executed an NDA and, after May 7, 2019, received data room access and the public company “wrapper” (55% of buyers who received an NDA / 23% of buyers contacted) The parties also received a Process Letter which requested Indications of Interest (“IOI”) by May 30, 2019 13 parties declined after executing NDAs • On May 30, 2019, two parties, Firm B and Kingswood, submitted IOIs which proposed $1.20 and $1.50 purchase prices per share, respectively [Third Party] did not submit an IOI but verbally indicated it was interested in being matched with an equity partner Strategic Buyers Financial Sponsors Total Contacted 13 58 71 Signed NDA / Received Data Room 2 14 16 Access and Wrapper Received Process Letter 2 12 14 Submitted IOI 0 2 2 Private and Confidential


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2019 Process Summary (Cont’d) • After deliberating and evaluating the IOIs, the Special Committee decided to grant Firm B and Kingswood further access to Management and Company information to continue due diligence • Both Firm B and Kingswood traveled to Jacksonville for Management meetings on June 18-19, 2019, and conducted extensive diligence over the next two months, leading up to a July 24, 2019, bid deadline Additionally, both parties had multiple calls with Jay Stein and Moelis, chaperoned by PJS, to provide updates on their respective diligence processes • PJS sent a Process Letter on July 17, 2019, to both parties asking for a Letter of Intent (“LOI”, “Reaffirmed Proposal”) on July 24, 2019 • On July 22, 2019, Firm B submitted a presentation to PJS intended for the Special Committee detailing its findings from its diligence process (which PJS shared with the Special Committee on July 23, 2019) Firm B noted in the presentation that it had spent considerable time and resources evaluating Stratosphere and the transaction, but that, because of the continued pressure on the Company’s financials and the inability of Stratosphere’s Management to improve performance, Firm B would need to employ additional resources to understand the Company and create a strategy for improving the business As a result, Firm B asked the Special Committee to pay for an estimated $550,000 of intensive third-party consulting workstreams over the course of four to six weeks to further understand Firm B’s questions and identify a go-forward strategy for improving the business Firm B confirmed that it would need the compensation and to complete this diligence before it would consider whether or not it would put forth an LOI and confirmed it would not be submitting one by the July 24, 2019, deadline • On July 24, 2019, PJS received one LOI from Kingswood Kingswood reduced its purchase price to $1.10 from $1.50 per share in its IOI The purchase price was based on a 21% premium to trailing VWAP since Stratosphere’s then most recent earnings release Kingswood planned on financing its portion of the equity through a new fund or its existing relationship with Global Endowment Management (“GEM”) Kingswood asked for exclusivity until the earlier of signing a definitive agreement or August 30, 2019 Private and


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2019 Process Summary (Cont’d) • The Special Committee, advised by PJS, analyzed and discussed the LOI and decided to grant Kingswood exclusivity after PJS (i) negotiated an increase in price to $1.15 per share and (ii) spoke with Kingswood’s placement agent (M20) to ensure it would raise its $100 million inaugural fund in August 2019 Kingswood • On August 1, 2019, Stratosphere entered into exclusivity with Kingswood At the time, the prevailing projections were the “4+8” forecast indicating FY 2019E Adj. EBITDA of $35.1 million • On the same day, PJS sent Foley-prepared drafts of the Merger Agreement, Disclosure Schedules, Voting Agreement and Guarantee to Kingswood • From August 6-8, 2019, Kingswood and its new Operating Partner [third Party] traveled to Jacksonville to conduct on-site diligence, which included meetings with key Management and a store visit • Following the on-site diligence meetings, Kingswood hired several advisors including Goodwin Procter (Legal), Aon (Insurance & Benefits), Alix Partners (Operational) and A&G (Real Estate) • On August 27, 2019, the full Stratosphere Board of Directors (excluding Jay Stein) approved the 6+6 projections and the revised Five Year Plan, which PJS thereafter sent to Kingswood; the 6+6 indicated revised FY 2019E Adj. EBITDA of $31.3 million • On August 30, 2019, Kingswood sent Stratosphere’s advisors a markup of the Merger Agreement • Foley sent a revised draft of the Merger Agreement on September 7, 2019, which, among other revisions, reinstated the provision to make the transaction contingent on approval of the majority of the disinterested shareholders • In several subsequent conversations between PJS and Kingswood on the open points in the Merger Agreement, PJS insisted on keeping the transaction contingent on approval of the majority of the disinterested shareholders, which led to the parties breaking off discussions • In October 2019, after hiring a new Operating Partner [Third Party], Kingswood and the Company decided to re-engage [Third Party] met with Management in-person in Jacksonville on October 7-8, 2019 and then visited stores in Dallas on November 7, 2019 and in Orlando on November 20, 2019 Private and Confidential 8


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2019 Process Summary (Cont’d) • As Kingswood continued its diligence, several key issues arose: Stratosphere’s financial performance continued to deteriorate, ultimately revising its year end Adj. EBITDA down to $24.9 million from $31.3 million in its 6+6 Board-approved plan Kingswood believed several agreements signed by Management (e.g., Vendor) were expensive and not additive to the business Kingswood vocalized concerns over the large severance liability for the 11 EVPs / SVPs and 24 VPs, currently estimated at ~$11 million of impact (according to the buyers) • Following a weak November, Kingswood decided to slow the process to be able to observe December performance In November, actual adjusted Adj. EBITDA was ($4.9) million vs. the 6+6 projection of ($0.5) million In December, actual adjusted Adj. EBITDA was $18.0 million vs. the 6+6 projection of $21.7 million • After this poor performance, Management reforecasted its FY 2019E estimate (11+1) and created an updated version of the 5 Year Plan which was approved by the Special Committee on January 15, 2020 • In the interim, Kingswood sent drafts of key transaction documentation including the Merger Agreement, Voting Agreement, Equity and Debt Commitments and Rollover Agreement as it progressed on non-value workstreams • On January 17, 2020, PJS received an email from Kingswood detailing their response on the three remaining open items in the draft Merger Agreement: $0.75 per share purchase price, Excess Availability at close of 32.5% of the ABL Loan Cap and 5% equity value parent / Company termination fee • On January 20, 2020, the Special Committee rejected the $0.75 per share purchase price with no counter-offer provided as it determines what, if any, next steps are to be taken • On January 22, 2020, Kingswood reached out to PJS to raise its purchase price to $0.85 per share and provided PJS with its executed Debt Commitments with Wells Fargo and Pathlight The debt commitment agreements indicated that minimum Excess Availability at close would be $75 million Kingswood informed PJS on January 24, 2020, that its revised Debt Commitments would include a minimum Excess Availability at close of 35% of the Loan Cap and that the Merger Agreement’s Material Adverse Effect clause would reflect the same 35% Private and Confidential 9


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Retailing Environment Update


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The “Shakeout” is in Full Swing Selected retailers who have filed, liquidated, shut-down or are distressed July ‘142014 Dec ‘14 2015 * * * * * * * * (a) * * 2016 * * (a) * * * * * (a) 2017 * * * * * * * * *(a) * (a) 2018 * * 2019 2020 * * * * * * * * * * Distressed Retailers Note: * indicates liquidated and (a) indicates pure play digital. Red box indicates department store / broadlines retailer. Confidential


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In 2019, U.S. Retailers Announced ~9,300 closures • Closures were more than double the number of openings • Excluding Discount and Dollar stores, closures were approximately three times the number of openings 2019 Store Opening Announcements 975 500 210 200 200 155 150 145 116 100 1,641 Total = 4,392 Total (excl. Discount / Dollar) = 2,672 (a) Source: Coresight h and other publicly available information as of January 2020. a) Discount / Dollar includes Aldi, Dollar General, Dollar Tree, Family Dollar, Five Below, Fred’s and Shopko. Private and Confidential 12


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Mall Traffic in 2019 was ~25+% Lower than in 2013 105 100 2013 2014 95 90 2015 85 2016 80 2018 2017 75 2019 2019 traffic continued to be challenged 70 Jan Feb March April May June July Aug Sep Oct Nov Dec Source: Shoppertrak as of January 13, 2020. Private and Confidential 13


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Market Perspective


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Stratosphere Summary Capitalization and Market Data (Amounts in Millions, Except Per Share Data) Stock Information Financial Information Credit Statistics Ticker Symbol STRAT Fiscal Year End Feb 2, 2019 As of Stock Exchange NasdaqGS LTM Date—Public Nov 2, 2019 Dec-19 (b) Stock Price as of 1/24/20 $0.66 LTM Date—Private Jan 4, 2020 Adj. Debt / Adj. EBITDAR (c) 7.1 x Total Debt / Adj. EBITDA 4.0 x 52-Week Stock Price LTM Revenue (Q3 ‘19)—Public $1,240.6 Net Debt / Adj. EBITDA 3.7 x High 2/14/19 $1.23 LTM Revenue (Dec. ‘19)—Private (b) 1,234.4 Adj. EBITDA / Interest, Net 3.0 x Low 1/3/20 0.66 LTM Adj. EBITDA (Q3 ‘19)—Public 30.0 LTM Adj. EBITDA (Dec. ‘19)—Private (b) 27.9 5-Year Stock Price FY 2019B Adj. EBITDA—Private (b) 24.9 High 2/26/15 $16.46 Total Debt / Total Capitalization 78.1% Low 2/8/18 0.51 LTM Adj. EPS (Q3 ‘19)—Public ($0.17) Net Debt / Net Capitalization 76.7% FY 2019B Adj. EPS—Private (b) (0.26) Average Daily Volume (3 Mo.) 0.1 FY 2020E Adj. EPS—Private (b) 0.02 Shares Sold Short 3.1 FY 2021E Adj. EPS—Private (b) 0.03 Short Int. as % of Public Float (a) 9.5% Market Capitalization and Firm Value Market Valuation Beneficial Ownership by Category (g) Stock Price as of 1/24/20 $0.66 Enterprise Value as a Multiple of: Beneficial Percent of Shares Outstanding (d) 47.6 LTM Revenue (Q3 ‘19)—Public 15.2% Ownership Total Option Equivalent Shares (e) — LTM Adj. EBITDA (Q3 ‘19)—Public 6.3 x Jay Stein 15.3 31.1% Equity Value $31.5 FY 2019B Adj. EBITDA—Private (b) 7.6 x Other Insiders 2.1 4.3% Plus: Total Debt (f) 170.3 Stock Price as a Multiple of: Top 10 Institutions 2.9 5.9% Less: Cash & Cash Equivalents (13.0) FY 2020E Adj. EPS—Private (b) 31.4 x Public and Other 28.9 58.7% Enterprise Value $188.8 FY 2021E Adj. EPS—Private (b) 22.0 x Total 49.2 100.0% a) Excludes shares beneficially owned by Jay Stein. b) Source: Management Five Year Plan approved by the Special Committee on January 15, 2020, Management internal 2019 11+1 Forecast as of January 15, 2020 and Management preliminary 2020 monthly budget as of January 16, 2020. c) Assumes 8.0x rent methodology as it is not yet clear that the lender and credit analyst communities have altered their leverage measurement methodologies for revised lease accounting rules. d) Total shares outstanding of 47.6M as of January 4, 2020. Excludes 62K RSUs which vested on January 22, 2020. Source: Computershare Capital Breakdown Report. e) Assumes the treasury stock method with no options in the money. f) Total financial debt – does not include operating lease liabilities. As of November 2, 2019 per Company FY 2019 Q3 10-Q filing. g) Includes exercisable options held by directors and executive officers. Source: Company’s Proxy Statement dated May 7, 2019. Private and Confidential 15


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Stock Price Performance Stock Price Performance (January 24, 2017 – January 24, 2020) $ 8.00 Median March 2018: Stratosphere 3-Yr 2-Yr 6-Mo January 2017: Hunt announces stronger $1.20 $0.82 $0.76 $ 6.00 Hawkins takes over than expected earnings; September 2018: Wells as permanent CEO closes new $50mm term Fargo, Gordon Brothers loan facility amend and upsize May 2019: Stratosphere Stratosphere ABL announces installment $ 4.00 March 2017: facility to $275mm of self-service Amazon Suspends lockers in nearly 200 quarterly dividend stores $ 2.00 $0.66 $ 0.00 Jan-17 Jan-18 Jan-19 Jan-20 Indexed Stock Performance (January 24, 2017 – January 24, 2020) 100% Stratosphere Select Broadlines(a) Off-Price(b) S&P Adjusted Retail (c) Note: Select Broadlines does not 84.6% ) ge Bon-Ton include Sears, due to Gordmans the fact they and 57.1% an 50% entered bankruptcy during this Ch period (% ce 0% an rform (10.5%) Pe (50%) e Pric (83.2%) (100%) Jan-17 Jan-18 Jan-19 Jan-20 Source: Capital IQ as of January 24, 2020. a) Comprised of JWN, M, KSS, DDS, JCP, SSI and CATO. b) Comprised of CTRN, ROST, TJX, BURL and FIVE. c) Comprised of AAP, AN, AZO, BBBY, BBY, KMX, DG, DLTR, FL, GPC, KSS, JWN, ROST, SIG, TGT, GPS, TJX, TIF, ULTA, URBN, TSCO, ORLY, LB, LKQ, M, HD and LOW. Private and Confidential 16


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Operating Performance Off-Price retailers’ growth and margins generally exceed those of Broadlines Same Store Sales Last two fiscal years Select Broadlines Off—Price stacked Two-Year Median: (0.5%) Two-Year Median: 8.0% Last quarter two-year Two-Quarter Median: 2.9% Two-Quarter Median: 7.7% stacked 14.6% 10.4% 8.0% 8.0% 11.0% 7.7% 8.0% 7.1% 5.0% 6.6% 6.1% 1.9% 1.2% 3.2% 2.9% 2.5%ND 2.0% 3.0% 3.2% (0.5%) (0.2%) (3.0%) (5.5%) (6.6%) (9.7%) (12.0%) (12.0%) STRAT. STRAT. KSS (a) JWN (a) DDS M (a) JCP (a) SSI (b) CATO FIVE (a) ROST TJX BURL (a) CTRN (Stores) (Total) LTM Adj. EBITDA Margin Select Broadlines Off—Price Median: 6.5% Median: 11.9% 15.5% 14.1% 11.9% 11.8% 10.6% 10.1% 9.0% 6.5% 6.3% 5.3% 4.5% 2.3% 1.0% STRAT. KSS M JWN DDS CATO JCP SSI ROST FIVE BURL TJX CTRN Source: Company filings. Note: Medians excludes Stratosphere. a) Comparable store sales for these companies are calculated inclusive of eCommerce / Digital sales. b) Comparable department store sales for SSI are calculated inclusive of eCommerce / Digital sales, while its Off-Price comparable sales are not calculated inclusive of eCommerce / Digital sales. Private and Confidential 17


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Relative Stock Price Performance Given divergent performance trends, Off-Price stores’ stocks outperformed Broadlines’ 1 Year Select Broadlines Off—Price 311.6% Median: (24.4%) Median: 25.7% 32.0% 26.9% 25.7% 9.9% 4.2% NA NA 11.9% (17.2%) (4.3%) (40.9%) (31.5%) (33.4%) (37.8%) (54.3%) STRAT. SSI DDS CATO JWN M KSS JCP Sears (a) Bon-Ton (a) Gordman’s BURL ROST TJX CTRN FIVE 3 Years Select Broadlines Off—Price Median: (42.4%) Median: 75.1% 201.4% 164.1% 75.1% 64.1% 22.5% 14.5% 13.0% 34.6% (14.0%) (40.8%) (44.0%) (83.2%) (88.5%) (97.3%) (99.0%) (100.0%) STRAT. DDS SSI KSS JWN CATO M JCP Sears (a) Bon-Ton (a) Gordman’s FIVE BURL ROST TJX CTRN 5 Years Select Broadlines Off—Price Median: (78.9%) 327.8% Median: 143.1% 245.2% 143.1% 79.6% (25.9%) (40.5%) (50.4%) (64.3%) (74.6%) (4.7%) (95.5%) (83.2%) (89.6%) (99.3%) (99.8%) (100.0%) STRAT. KSS DDS JWN CATO M SSI JCP Sears (a) Bon-Ton (a) Gordman’s BURL FIVE ROST TJX CTRN Source: Capital IQ as of January 24, 2020. Note: Medians excludes Stratosphere. a) Over-the-counter trading value – potentially represents reconstituted equity. Private and Confidential 18


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Financial Performance Private and Confidential


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Historical Financials (Amounts in Millions, Except Per Share Data) Fiscal Year LTM LTM CAGR Income Statement Data 2014A 2015A 2016A 2017A 2018A Oct-19 Dec-19 FY14-FY18 Total Revenue $1,323.7 $1,367.0 $1,374.6 $1,332.6 $1,272.7 $1,240.6 $1,234.4 (1.0%) Gross Profit 392.8 392.4 373.1 344.9 352.9 341.1 337.2 (2.6) Adj. SG&A 305.7 315.7 328.5 337.3 313.4 311.1 309.3 0.6 Adj. EBITDA 87.0 76.7 44.6 7.6 39.5 30.0 27.9 (17.9) Adj. EBIT 53.9 43.8 8.4 (26.9) 7.3 1.1 (0.6) (39.4) Diluted EPS $0.59 $0.51 $0.01 ($0.52) ($0.13) ($0.14) ($0.17) NM Adjusted Diluted EPS $0.68 $0.54 $0.07 ($0.43) ($0.10) ($0.17) ($0.22) NM Number of Stores 270 278 290 293 287 283 283 Margins Gross Profit 29.7% 28.7% 27.1% 25.9% 27.7% 27.5% 27.3% Adj. EBITDA 6.6 5.6 3.2 0.6 3.1 25.1 2.3 Adj. EBIT 4.1 3.2 0.6 (2.0) 0.5 2.4 (0.0) Comparable Sales Store Sales N/A N/A N/A (7.1%) (2.6%) (2.3%) (a) (2.0%) (a) ECommerce N/A N/A N/A 33.5 38.8 10.2 (a) (b) 9.0 (a) (b) Total Comp Sales (excl. DSW & LXR) 3.3% 1.0% (3.8%) (5.5) (1.1) (1.9) (a) (c) (1.7) (a) (c) Growth Rates Total Revenue 4.8% 3.3% 0.6% (3.1%) (4.5%) (5.8%) (4.4%) Adj. EBITDA 65.5 (11.9) (41.9) (82.9) 418.4 (27.2) (32.8) Adj. EBIT 2.5 (18.7) (80.7) NM NM (87.9) NM Balance Sheet and Cash Flow Data Cash $65.3 $11.8 $10.6 $10.4 $9.0 $13.0 $8.5 Total Debt — 190.2 181.8 156.1 153.3 170.3 112.4 Depreciation and Amortization 29.1 29.9 32.6 32.3 32.4 21.2 28.5 Cum. FY14-YTD19 Capital Expenditures (40.2) (44.4) (42.4) (21.2) (9.0) (6.8) (6.1) ($163.3) Change in Net Working Capital (14.1) (18.5) 17.0 32.9 (25.4) (4.5) (12.5) Free Cash Flow (d) 12.2 (6.0) 18.2 26.5 (0.1) 17.8 7.3 58.2 Leverage and Interest Coverage Ratios Adj. Debt / Adj. EBITDAR (e) 3.8 x 5.4 x 6.9 x 9.1 x 6.8 x 7.4 x 7.1 x Total Debt / Adj. EBITDA — 2.5 4.1 20.5 3.9 5.7 4.0 Note: Stratosphere paid a $5.00 / share special dividend in FY 2015. Source: Company Management and SEC filings. LTM includes results through October per publicly available financials and through December per Company internal financials. a) Represents year-to-date comparable store sales. b) Represents omni-channel comparable sales, which are not comparable with historical periods. With the rollout of Smart Fulfillment in August 2019 and BOPIS in September 2019, a significant portion of ECommerce sales have shifted to ship-from-store, and to a lesser extent, BOPIS. As a result, ECommerce comparable sales are down (15.6%) as of December YTD. c) Represents Total Comp, inclusive of leased departments (DSW & LXR). d) Defined as Cash Flow from Operating Activities less Capital Expenditures. e) Assumes 8.0x rent methodology as it is not yet clear that the lender and credit analyst communities have altered their leverage measurement methodologies for revised lease accounting rules. Private and Confidential 20


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FY 2019E Management Forecasts Over Time Outlook for FY 2019E has worsened over time as Stratosphere missed forecasts ($ in Millions) FY 2019E % Difference 2+10 (a) 4+8 (b) 6+6 (c) 11+1 (d) 11+1 vs. 2+10 11+1 vs. 4+8 11+1 vs. 6+6 Total Revenue $1,270.0 $1,259.8 $1,256.0 $1,234.2 (2.8%) (2.0%) (1.7%) % Store Comp 0.6% (0.7%) (0.8%) (1.2%) % Total Comp (excl. DSW & LXR) 1.5% (0.0%) (0.1%) (1.8%) Gross Profit (e) $348.5 $346.3 $343.9 $335.3 (3.8%) (3.2%) (2.5%) % Margin 27.4% 27.5% 27.4% 27.2% Adjusted EBITDA $35.7 $35.1 $31.3 $24.9 (30.2%) (29.0%) (20.2%) % Margin 2.8% 2.8% 2.5% 2.0% Prevailing forecast when Kingswood submitted revised LOI at $1.15 / share a) Source: Management 2019 2+10 Forecast approved by the Board of Directors on May 14, 2019. b) Source: Management internal 2019 4+8 Forecast. c) Source: Management 2019 6+6 Forecast approved by the Board of Directors on August 27, 2019. d) Source: Management internal 2019 11+1 Forecast. e) Includes credit card, breakage and other income. Private and Confidential 21


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Comp Sales(a) Performance vs. Forecast Comps underperformed forecasts for 17 of the last 19 observable months 2018 Actual Monthly Comp Store Sales Performance vs. 2018 2+10 Forecast 3.6% 5.4% 5.7% 4.8% 3.9% 5.7% 1.4% 2.3% 1.7% 3.0% 0.8% 2.3% (0.0%) (0.4%) (0.2%) (0.2%) (5.0%)(5.0%) (5.5%) (11.6%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2018 2+10 Forecast Actual 2019 Actual Monthly Comp Store Sales Performance vs. Management Five Year Plan (2+10 Forecast for 2019) 11.2% 5.2% 2.8% 4.1% 2.9% 1.5% 3.9% 0.2% 3.2% 4.8% 1.4% 3.7% 0.0% (0.9%) (0.6%) (4.4%) (2.9%) (4.1%) (10.1%) Apr May Jun Jul Aug Sep Oct Nov Dec Jan Management Five Year Plan (2019 2+10 Forecast) Actual a) Comp figures for 2019 represent Store + eCommerce comparable sales. Comp figures for 2018 represent total comp, representative of Store, eCommerce and Licensed comparable sales. Private and Confidential 22


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Projected Financials – 11+1 Forecast and Five Year Plan (Amounts in Millions, Except Per Share Data) LTM Fiscal Year CAGR Income Statement Data Dec-19 2019B 2020P 2021P 2022P 2023P 2024P FY19-FY24 Total Revenue $1,234.4 $1,234.2 $1,254.8 $1,277.6 $1,297.3 $1,321.5 $1,366.2 2.1% Gross Profit 337.2 335.3 348.8 353.9 358.4 365.4 376.6 2.4 Adj. SG&A 309.3 310.3 311.2 319.7 324.7 330.0 338.5 1.8 Adj. EBITDA 27.9 24.9 37.5 34.2 33.7 35.4 38.1 8.9 Adj. EBIT (0.6) (3.3) 10.2 9.7 12.3 17.0 21.3 NM Diluted EPS ($0.17) ($0.25) ($0.00) $0.01 $0.05 $0.12 $0.22 NM Adjusted Diluted EPS ($0.22) ($0.26) $0.02 $0.03 $0.07 $0.15 $0.25 NM Number of Stores 283 283 281 277 274 276 280 Margins Gross Profit 27.3% 27.2% 27.8% 27.7% 27.6% 27.7% 27.6% Adj. EBITDA 2.3 2.0 3.0 2.7 2.6 2.7 2.8 Adj. EBIT (0.0) (0.3) 0.8 0.8 0.9 1.3 1.6 Comparable Sales Store Sales (2.0%) (a) (1.2%) 2.5% 1.5% 1.5% 1.4% 1.5% ECommerce 9.0 (a) (b) (16.3) (4.2) 14.4 13.5 10.0 10.0 Total Comp Sales (excl. DSW & LXR) (1.7) (a) (c) (1.8) 2.2 1.9 2.0 1.8 1.9 Growth Rates Total Revenue (4.4%) (3.0%) 1.7% 1.8% 1.5% 1.9% 3.4% Adj. EBITDA (32.8) (36.8) 50.5 (9.0) (1.3) 4.9 7.8 Adj. EBIT NM NM NM (4.9) 26.2 38.7 25.2 Balance Sheet and Cash Flow Data Cash $8.5 $12.0 $12.0 $12.0 $12.0 $12.0 $12.0 Total Debt 112.4 147.5 129.0 121.6 113.3 104.7 97.8 Depreciation and Amortization 28.5 28.2 27.3 24.4 21.4 18.3 16.8 Cum. FY20-FY24 Capital Expenditures (6.1) (7.7) (10.6) (16.0) (14.8) (15.8) (15.2) (72.4) Change in Net Working Capital (12.5) (3.7) 1.8 (2.7) (1.8) (2.9) (8.8) Free Cash Flow (d) 7.3 7.6 21.6 9.4 10.4 8.7 6.7 56.8 Leverage and Interest Coverage Ratios Adj. Debt / Adj. EBITDAR (e) 7.1 x N/A N/A N/A N/A N/A N/A Total Debt / Adj. EBITDA 4.0 5.9 x 3.4 x 3.6 x 3.4 x 3.0 x 2.6 x Source: Management Five Year Plan approved by the Special Committee on January 15, 2020, Management internal 2019 11+1 Forecast as of January 15, 2020 and Management preliminary 2020 budget as of January 16, 2020. Note: Adjusted EBITDA, EBIT and Diluted EPS exclude store impairments, gain from credit card settlement and pre-opening costs identified by Management. a) Represents year-to-date comparable store sales. b) Represents omni-channel comparable sales, which are not comparable with historical periods. With the rollout of Smart Fulfillment in August 2019 and BOPIS in September 2019, a significant portion of ECommerce sales have shifted to ship-from-store, and to a lesser extent, BOPIS. As a result, ECommerce comparable sales are down (15.6%) as of December YTD. c) Represents Total Comp, inclusive of leased departments (DSW & LXR). d) Defined as Cash Flow from Operating Activities less Capital Expenditures. e) Assumes 8.0x rent methodology as it is not yet clear that the lender and credit analyst communities have altered their leverage measurement Private and methodologies for revised lease accounting rules. Confidential 23


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Updated 1/22/2020 Indication Summary


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Analysis at Various Prices ($ in Millions, Except Per Share Data) Current Kingswood Market (Public Net Debt) Market (Avg. Net Debt) Market (Private Net Debt) Revised Indication 1/24/2020 1/24/2020 1/24/2020 1/22/2020 Stock Price / Proposed Offer Price $0.66 $0.66 $0.66 $0.85 $0.90 $1.00 $1.15 Shares Outstanding (a) 47.6 47.6 47.6 47.6 47.6 47.6 47.6 Unvested Restricted Stock Units (b) — — — 1.3 1.3 1.3 1.3 Option Equivalent Shares (c) — — — — — — — Diluted Shares Outstanding 47.6 47.6 47.6 48.9 48.9 48.9 48.9 Total Equity Value $31.5 $31.5 $31.5 $41.5 $44.0 $48.9 $56.2 Plus: Net Debt 157.3 (d) 136.8 (e) 104.0 (f) 104.0 (f) 104.0 (f) 104.0 (f) 104.0 (f) Total Enterprise Value $188.8 $168.3 $135.5 $145.5 $147.9 $152.8 $160.1 Premium / (Discount) to: Current Price 1/24/2020 $0.66 — % — % — % 28.4 % 36.0 % 51.1 % 73.7 % 30-Day VWAP 0.68 (2.0) (2.0) (2.0) 25.8 33.2 48.0 70.2 60-Day VWAP 0.69 (4.7) (4.7) (4.7) 22.3 29.5 43.9 65.5 90-Day VWAP 0.73 (8.7) (8.7) (8.7) 17.2 24.1 37.9 58.6 180-Day VWAP 0.75 (11.8) (11.8) (11.8) 13.3 20.0 33.3 53.3 52-Week High 2/14/2019 1.23 (46.2) (46.2) (46.2) (30.9) (26.8) (18.7) (6.5) 52-Week Low 1/3/2020 0.66 0.3 0.3 0.3 28.8 36.4 51.5 74.2 Enterprise Value as a Multiple of: Total Revenue LTM (Q3 ‘19)—Public $1,240.6 15.2 % 13.6 % 10.9 % 11.7 % 11.9 % 12.3 % 12.9 % LTM (Dec. ‘19) (g) 1,234.4 15.3 13.6 11.0 11.8 12.0 12.4 13.0 Adj. EBITDA LTM (Q3 ‘19)—Public $30.0 6.3 x 5.6 x 4.5 x 4.8 x 4.9 x 5.1 x 5.3 x LTM (Dec. ‘19) (g) 27.9 6.8 6.0 4.9 5.2 5.3 5.5 5.7 FY 2019B (g) 24.9 7.6 6.7 5.4 5.8 5.9 6.1 6.4 Price as a Multiple of: Diluted Adj. EPS FY 2020E (g) $0.02 31.4 x 31.4 x 31.4 x 40.4 x 42.8 x 47.5 x 54.6 x FY 2021E (g) 0.03 22.0 22.0 22.0 28.3 30.0 33.3 38.3 a) Total shares outstanding of 47.6M as of January 4, 2020, per Computershare Capital Breakdown Report, which includes 0.6M Restricted Stock Awards, which have voting rights. Excludes 62K RSUs which vested on January 22, 2020. b) Unvested Restricted Stock Units (RSUs) as of January 6, 2020, which are not included in shares outstanding and have a double trigger change-incontrol provision. Includes 62K RSUs which vested on January 22, 2020. c) Assumes treasury stock method with no options in the money as of January 6, 2020. PSUs not included as Total Shareholder Return (TSR) target as of January 20, 2020 has not been achieved. d) Based on cash of $13.0M and total debt of $170.3M as of November 2, 2019 per Company FY 2019 Q3 10-Q filing. e) Based on average month-end net debt balances for the last twelve months from January 2019 through December 2019. f) Based on cash of $8.5M and total debt of $112.4M as of January 4, 2020 per Management internal 2019 11+1 Forecast. g) Source: Management Five Year Plan approved by the Special Committee on January 15, 2020, Management internal 2019 11+1 Forecast as of Private and January 15, 2020 and Management preliminary 2020 budget as of January 16, 2020. Confidential 25


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Volume Weighted Average Price by Range (Shares in Millions) Volume Per Price Range – Last 6 Months Volume Per Price Range – Last 3 Months Average Daily Volume 0.12 M Average Daily Volume 0.14 M 3.9 3.9 3.8 3.2 2.5 2.7 1.4 1.7 0.5 0.1 — — — — $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 ? x < ? x < ? x < ? x < ? x < ? x < ? x ? x < ? x < ? x < ? x < ? x < ? x < ? x $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 % of % of Total Total Volume: 26.0% 26.0% 18.2% 25.7% 0.5% 3.6% 0.0% Volume: 36.1% 28.2% 16.6% 19.0% 0.0% 0.0% 0.0% 96% 100% Volume Per Price Range – Last Month Volume Per Price Range – CY2020 YTD Average Daily Volume 0.16 M Average Daily Volume 0.12 M 1.3 2.6 0.6 0.7 — — — — — — — — — — $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 $0.65 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 ? x < ? x < ? x < ? x < ? x < ? x < ? x ? x < ? x < ? x < ? x < ? x < ? x < ? x $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 $0.70 $0.75 $0.80 $0.85 $0.90 $0.95 % of % of Total Total Volume: 78.3% 21.7% 0.0% 0.0% 0.0% 0.0% 0.0% Volume: 68.9% 31.1% 0.0% 0.0% 0.0% 0.0% 0.0% 100% 100% Note: Stratosphere float represents 64.7% of total shares outstanding per Company’s Proxy Statement dated May 7, 2019. Private and Source: Capital IQ as of January 24, 2020. Confidential 26


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Valuation Summary


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Summary Financial Valuation Overview 1/24/20 1/22/20 1/24/20 Current Price Revised Indication Price w/ Control Premium(a) $0.66 $0.85 $0.88 Selected Public Companies $1.54 Selected Precedent Transactions $4.80 Discounted Cash Flow (b) $1.51 52-Week Trading Range $0.66 $1.23 — $1.00 $2.00 $3.00 $4.00 $5.00 Note: 52-Week Trading Range is for informational purposes only. a) Source: FactSet. 32.7% based on a median one-day premium for transactions of $100M to $300M enterprise value with North American targets, in which at least a 50% stake was acquired. Excludes financial services, healthcare, real estate and energy/mining/minerals industries. b) Assumes terminal value EBITDA multiple of 3.5x—6.0x for the terminal value method, perpetuity growth rate of 0.0%—2.0% for the perpetuity growth Private and rate method and WACC of 9.5% to 11.5% for both methods. Confidential 28


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Public Companies EV/EBITDA and P/E Performance EV / EBITDA Multiples (a) EV / LTM EBITDA EV / LTM EBITDA Median: 5.1x EV / CY 2019E EBITDA EV / CY 2019E EBITDA Median: 5.5x 8.3 x 7.1 x 5.9 x 5.5 x 5.5 x 5.6 x 4.7 x 4.7 x 4.3 x 3.7 x 3.2 x NM NM(b) NM JCP JWN DDS KSS M CATO SSI Market Capitalization ($mm): $255 $6,004 $1,735 $7,122 $5,184 $390 $105 LTM Adj. EBITDA % Margin: 5.3% 9.0% 6.5% 10 .6% 10 .1% 6.3% 1.0% Total Debt / Adj. EBITDA: 6.9x 1.9x 1.6x 1.6x 1.8x 0.0x NM P / E Multiples CY 2020E P/E Ratio CY 2020E P/E Ratio Median: 10.4x CY 2021E P/E Ratio CY 2021E P/E Ratio Median: 10.7x 21.1 x 19.8 x 11.0 x 11.5 x 9.8 x 10.0 x 6.9 x 7.4 x NM NM NM NM NM NM DDS JWN KSS M SSI CATO JCP Source: Public filings, Capital IQ as of January 24, 2020. a) Note: Enterprise value does not include capitalized operating leases (per IFRS 16, effective January 2019) as debt. b) EV / LTM Adjusted EBITDA multiple for SSI is 27.0x due to a low positive EBITDA and is deemed non-material for trading purposes. Private and Confidential 29


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Summary Valuation Based on Selected Public Companies (Amounts in Millions, Except Per Share Data) Adjusted EBITDA Valuation Multiples Implied Equity Value (a) Implied Per Share Value (b) LTM Q3 FY 2019A $30.0 3.2 x—5.9 x ($8)—$73 ($ 0.17)—$1.54 CY 2019E / LTM (Dec. ‘19) 27.9 4.3 x—5.6 x 16—52 0.33—1.10 Adjusted EPS Valuation Multiples Implied Equity Value Implied Per Share Value (b) CY 2020E $0.02 6.9 x—21.1 x $6—$18 $ 0.13—$0.38 CY 2021E 0.03 7.4 x—19.8 x 10—28 0.22—0.58 Source: Management Five Year Plan approved by the Special Committee on January 15, 2020 and Management internal 2019 11+1 Forecast. a) Net debt of $104.0M represents total debt less cash as of January 4, 2020 per Management internal 2019 11+1 Forecast. b) Total shares outstanding of 47.6M as of January 4, 2020 per Computershare Capital Breakdown Report. Excludes 62K RSUs which vested on Private and January 22, 2020. Confidential 30


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Selected Precedent Transactions (Amounts in USD, Millions) Date Enterprise EV as a Multiple of LTM: Announced Acquiror Target Value Sales EBITDA Aug-19 Liberty Tax Sears Outlet $133 27.4% 3.7 x Aug-19 Le Tote Lord & Taylor C$133 (a) NM NM Jun-19 Elliott Management Barnes & Noble Inc. $683 19.2% 4.6 x May-17 Camping World Gander Mountain (b) 34 25.6% ND Oct-16 Dick’s Golfsmith (b) 43 8.7% ND Aug-16 Versa Capital Management Vestis Retail Group (b) 37 9.1% NM Source: Company fillings and other publicly available information. a) Total deal value includes C$99.5M upfront cash consideration, C$33.2M in the form of a promissory note payable in cash two years from closing and a minority equity stake in Le Tote. Private and b) Companies sold in 363 sale process. Confidential 31


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Summary Valuation Based on Selected Precedent Transactions (Amounts in Millions, Except Per Share Data) Total Revenue Valuation Multiples Implied Equity Value (a) Implied Per Share Value (b) LTM (Dec. ‘19) $1,234.4 8.7%—27.4% $ 3—$234 $ 0.07—$4.80 Adj. EBITDA Valuation Multiples Implied Equity Value (a) Implied Per Share Value (b) LTM (Dec. ‘19) $27.9 3.7 x—4.6 x ($ 1)—$24 ($ 0.02)—$0.50 Source: Management Five Year Plan approved by the Special Committee on January 15, 2020 and Management internal 2019 11+1 Forecast. a) Net debt of $104.0M represents total debt less cash as of January 4, 2020 per Management internal 2019 11+1 Forecast. b) Total shares outstanding of 48.9 as of January 4, 2020, which includes 1.3M Unvested RSUs (including the 62K that vested on January 22, 2020) as Private and of January 6, 2020 per Computershare Capital Breakdown Report. Confidential 32


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Discounted Cash Flow Analysis (Amounts in Millions, Except Per Share Data) Fiscal Year 1 Mo. 2019B 2020E 2021E 2022E 2023E 2024E Total Revenue $64.4 $1,254.8 $1,277.6 $1,297.3 $1,321.5 $1,366.2 % Growth (0.2%) 1.7% 1.8% 1.5% 1.9% 3.4% Adj. EBITDA (a) (4.6) 37.5 34.2 33.7 35.4 38.1 % of Net Sales (7.2%) 3.0% 2.7% 2.6% 2.7% 2.8% Adj. EBIT (a) (7.0) 10.2 9.7 12.3 17.0 21.3 % of Net Sales (10.8%) 0.8% 0.8% 0.9% 1.3% 1.6% Taxes @ 25.0% 1.7 (2.6) (2.4) (3.1) (4.3) (5.3) Tax-Effected Adj. EBIT (5.2) 7.7 7.3 9.2 12.8 16.0 Depreciation & Amortization 2.3 27.3 24.4 21.4 18.3 16.8 Capital Expenditures (2.2) (10.6) (16.0) (14.8) (15.8) (15.2) Change in Net Working Capital (23.8) 1.8 (2.7) (1.8) (2.9) (8.8) Free Cash Flow ($28.9) $26.1 $13.0 $14.0 $12.4 $8.9 Growth in Free Cash Flow 81.8% (50.1%) 7.1% (11.3%) (28.5%) Terminal Value / Adj. EBITDA Multiple 3.5 x 3.50 x 3.5 x 4.8 x 4.75 x 4.8 x 6.0 x 6.00 x 6.0 x Discount Rate 9.5% 10.5% 11.5% 9.5% 10.5% 11.5% 9.5% 10.5% 11.5% Present Value of Free Cash Flow $30.6 $29.3 $28.1 $30.6 $29.3 $28.1 $30.6 $29.3 $28.1 Present Value of Terminal Value 84.6 80.8 77.2 114.8 109.7 104.8 145.0 138.5 132.4 Total Enterprise Value $115.2 $110.1 $105.3 $145.4 $139.0 $132.9 $175.6 $167.9 $160.5 Less: Net Debt (b) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) Total Equity Value $11.2 $6.2 $1.4 $41.4 $35.0 $29.0 $71.6 $63.9 $56.6 Total Equity Value Per Share (c) $0.24 $0.13 $0.03 $0.87 $0.73 $0.61 $1.51 $1.34 $1.19 Terminal Value as a % of Total Value 73.4% 73.4% 73.3% 78.9% 78.9% 78.8% 82.6% 82.5% 82.5% Implied Perpetuity Growth Rate 2.7% 3.6% 4.6% 4.4% 5.4% 6.3% 5.4% 6.4% 7.3% Perpetuity Growth Rate 0.0% 0.0% 0.0% 1.0% 1.0% 1.0% 2.0% 2.0% 2.0% Discount Rate 9.5% 10.5% 11.5% 9.5% 10.5% 11.5% 9.5% 10.5% 11.5% Present Value of Free Cash Flow $30.6 $29.3 $28.1 $30.6 $29.3 $28.1 $30.6 $29.3 $28.1 Present Value of Terminal Value 59.0 51.0 44.5 66.7 57.0 49.3 76.3 64.3 55.0 Total Enterprise Value $89.7 $80.4 $72.7 $97.3 $86.3 $77.4 $106.9 $93.7 $83.1 Less: Net Debt (b) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) Total Equity Value ($14.3) ($23.6) ($31.3) ($6.7) ($17.6) ($26.6) $2.9 ($10.3) ($20.8) Total Equity Value Per Share (c) ($0.30) ($0.50) ($0.66) ($0.14) ($0.37) ($0.56) $0.06 ($0.22) ($0.44) Terminal Value as a % of Total Value 65.9% 63.5% 61.3% 68.5% 66.0% 63.7% 71.4% 68.7% 66.2% Implied Terminal Value / Adj. EBITDA 2.4 x 2.2 x 2.0 x 2.8 x 2.5 x 2.2 x 3.2 x 2.8 x 2.5 x Source: Management Five Year Plan approved by the Special Committee on January 15, 2020 and Management internal 2019 11+1 Forecast . Note: Discounted to January 24, 2020. a) Adj. EBITDA and Adj. EBIT exclude pre-opening expenses and relocated/closed stores impairments. b) Net debt of $104.0M represents total debt less cash as of January 4, 2020 per Management internal 2019 11+1 Forecast. c) Per share data based on share count of 47.6M as of January 4, per Computershare Capital Breakdown Report, which does not include unvested RSUs. Excludes 62K RSUs which vested on January 22, 2020. Private and Confidential


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Premiums Paid Analysis ($ in Millions) Announce Enterprise One Day 30-Day Date Acquirer Target Value Premium Premium Dec-19 Lumos Networks; EQT Partners North State Telecommunications $236.5 29.6% 23.1% Nov-19 ICV Partners Diversified Restaurant Holdings 176.4 123.4% 75.0% Sep-19 Greenbriar Equity Group Arotech Corp. 102.1 32.7% 38.2% Sep-19 Accel-KKR et al. MAM Software Group 152.1 15.4% 13.7% Aug-19 Assurance Global Services Computer Task Group 106.8 33.8% 47.8% Aug-19 Austin Nichols & Co. Castle Brands 263.3 92.1% 136.1% Jun-19 Atlantis Acquisitionco Canada Corp. Hydrogenics Corp. 279.4 (3.1%) 55.3% Jun-19 YANMAR America Corp. ASV Holdings 104.0 332.5% 200.0% Jun-19 Extreme Networks, Inc. Aerohive Networks 198.7 39.5% 25.7% May-19 Vintage Capital Management Liberty Tax 160.8 31.1% 19.9% Apr-19 MTY Food Group, Inc. Papa Murphy’s Holdings 197.4 31.9% 15.8% Apr-19 The Ancora Group J. Alexander’s Holdings 262.4 12.5% 22.7% Apr-19 Cresco Labs CannaRoyalty Corp. 276.6 (54.1%) (41.2%) Mar-19 HEXO Corp. Newstrike Brands 125.0 4.1% (11.6%) Feb-19 Tesla Maxwell Technologies 293.6 96.3% 234.8% Dec-18 Cerberus Capital Management Sparton Corp. 253.9 41.0% 47.8% Nov-18 Altair Engineering Datawatch Corp. 162.6 35.2% 13.9% Oct-18 General Catalyst et al. Intersections 102.6 107.3% 111.5% Oct-18 Z Capital Group; Affinity Gaming Full House Resorts 211.9 79.6% 67.3% Sep-18 Stryker Corp. Invuity 188.7 28.7% 87.3% Aug-18 Moody’s Analytics Maryland Corp. Reis 251.1 32.2% 2.7% Aug-18 The Invus Group et al. Zoe’s Kitchen 295.3 33.4% 27.9% Aug-18 Roark Capital Group; FOCUS Brands Jamba 194.5 16.3% 20.8% Apr-18 NICE Systems, Inc. Mattersight Corp. 105.0 25.6% 17.4% Apr-18 SPX Corp. ELXSI Corp. 152.6 30.4% 29.9% Mar-18 William Morris Endeavor et al. NeuLion 203.0 116.5% 103.9% Mar-18 GP Investimentos Ltda. Bravo Brio Restaurant Group 100.1 16.8% 35.0% Feb-18 AMC Networks, Inc. RLJ Entertainment 163.7 61.5% 59.4% Jan-18 Duravant LLC Key Technology 172.0 50.6% 34.1% Median 32.7% 34.1% Source: FactSet. Represents transactions of $100-$300M in enterprise value with North American targets, in which at least a 50% stake was acquired. Excludes financial services, healthcare, real estate and energy/mining/minerals industries. Private and Confidential


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Process Timeline


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Illustrative Process Timeline • If the Board were to agree to a transaction, we would estimate it would take ~4.5 months to close January February March April May June S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S 1 2 3 4 1 1 2 3 4 5 6 7 1 2 3 4 1 2 1 2 3 4 5 6 5 6 7 8 9 10 11 2 3 4 5 6 7 8 8 9 10 11 12 13 14 5 6 7 8 9 10 11 3 4 5 6 7 8 9 7 8 9 10 11 12 13 12 13 14 15 16 17 18 9 10 11 12 13 14 15 15 16 17 18 19 20 21 12 13 14 15 16 17 18 10 11 12 13 14 15 16 14 15 16 17 18 19 20 19 20 21 22 23 24 25 16 17 18 19 20 21 22 22 23 24 25 26 27 28 19 20 21 22 23 24 25 17 18 19 20 21 22 23 21 22 23 24 25 26 27 26 27 28 29 30 31 23 24 25 26 27 28 29 29 30 31 26 27 28 29 30 24 25 26 27 28 29 30 28 29 30 31 Month Action Items Role • Sign and announce transaction (pre-opening announcement on January 30) Strat., BoD January • Begin preparing preliminary Proxy Foley, PJS February • Continue preparing preliminary Proxy Foley, PJS • Send preliminary Proxy to SEC for comment (March 11) Foley March • Distribute revised Proxy to shareholders Foley • Begin shareholder outreach Kingsdale • Continue shareholder outreach Kingsdale April • Begin preparing flow of funds PJS • Prepare closing balance sheet and documentation for buyer Strat., PJS • Special Shareholder Meeting Strat., BoD, Foley May / June • Close transaction PJS, Foley Private and Confidential


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Appendix Private and Confidential


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A. Preliminary Liquidity Observations Private and Confidential


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Forecasted January – April 2020 Liquidity Note: Loan Cap, as defined in the new Wells Fargo ABL credit agreement, is the lesser of the net ABL Borrowing Base and the Aggregate Commitments ($240 million) • On January 24, 2020, Kingswood indicated that its revised Debt Commitments would include a minimum Excess Availability of 35% of the Loan Cap ($ in Thousands) January, Week Ended February, Week Ended March, Week Ended April, Week Ended 24-Jan 31-Jan 7-Feb 14-Feb 21-Feb 28-Feb 6-Mar 13-Mar 20-Mar 27-Mar 3-Apr 10-Apr 17-Apr 24-Apr Eligible Inventory $213,843 $213,843 $213,843 $226,464 $226,464 $226,464 $226,464 $249,568 $249,568 $249,568 $249,568 $249,568 $249,568 $247,492 Eligible Credit Card Receivables $2,803 $2,803 $2,803 $2,803 $2,803 $2,803 $2,803 $2,803 $2,803 $2,803 $2,803 $2,803 $2,803 $2,701 Eligible FF&E $5,028 $5,028 $5,028 $6,210 $6,210 $6,210 $6,210 $9,092 $9,092 $9,092 $9,092 $9,092 $9,092 $10,021 Less: Reserves (17,462) (17,462) (17,462) (18,005) (18,005) (18,005) (18,005) (15,505) (15,505) (15,505) (15,505) (15,505) (15,505) (15,661) Net Credit Facility Borrowing Base $204,212 $204,212 $204,212 $217,472 $217,472 $217,472 $217,472 $245,958 $245,958 $245,958 $245,958 $245,958 $245,958 $244,552 Less: Term Loan (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) Loan Cap (ABL Credit Facility Borrowing Base) $169,212 $169,212 $169,212 $182,472 $182,472 $182,472 $182,472 $210,958 $210,958 $210,958 $210,958 $210,958 $210,958 $209,552 Net Credit Facility Borrowing Base $204,212 $204,212 $204,212 $217,472 $217,472 $217,472 $217,472 $245,958 $245,958 $245,958 $245,958 $245,958 $245,958 $244,552 Less: Borrowing (152,972) (151,572) (151,872) (166,072) (160,272) (158,440) (157,613) (174,728) (171,378) (153,092) (147,320) (166,207) (149,508) (146,676) A Excess Availability $51,240 $52,640 $52,340 $51,400 $57,200 $59,032 $59,859 $71,230 $74,580 $92,866 $98,638 $79,751 $96,450 $97,876 KW Minimum Availability Requirement B Revised 1/24—35% of Loan Cap $59,224 $59,224 $59,224 $63,865 $63,865 $63,865 $63,865 $73,835 $73,835 $73,835 $73,835 $73,835 $73,835 $73,343 A—B Comparison to Revised Minimum Avail. Req. ($) ($7,984) ($6,584) ($6,884) ($12,465) ($6,665) ($4,833) ($4,006) ($2,606) $745 $19,031 $24,803 $5,916 $22,615 $24,532 Memo: Adjusted EBITDA (a) ($4,612) ($6,754) $10,946 $12,250 Source: 26-Week Cash Flow Forecast as of January 23, 2020. a) Monthly Adjusted EBITDA per Management internal 2019 11+1 Forecast and Management preliminary 2020 monthly budget as of January 16, 2020. Private and Confidential 39


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Forecasted May – July 2020 Liquidity Note: Loan Cap, as defined in the new Wells Fargo ABL credit agreement, is the lesser of the net ABL Borrowing Base and the Aggregate Commitments ($240 million) • On January 24, 2020, Kingswood indicated that its revised Debt Commitments would include a minimum Excess Availability of 35% of the Loan Cap ($ in Thousands) May, Week Ended Ended June, Week Ended Ended July, Week Ended Ended 1-May 8-May 15-May 22-May 29-May 5-Jun 12-Jun 19-Jun 26-Jun 3-Jul 10-Jul 17-Jul 24-Jul Eligible Inventory $247,492 $247,492 $248,876 $248,876 $248,876 $248,876 $248,876 $236,622 $236,622 $236,622 $236,622 $236,622 $210,587 Eligible Credit Card Receivables $2,701 $2,701 $2,701 $2,701 $2,701 $2,701 $2,701 $2,701 $2,701 $2,701 $2,701 $2,701 $2,599 Eligible FF&E $10,021 $10,021 $12,960 $12,960 $12,960 $12,960 $12,960 $10,492 $10,492 $10,492 $10,492 $10,492 $7,134 Less: Reserves (15,661) (15,661) (15,408) (15,408) (15,408) (15,408) (15,408) (15,361) (15,361) (15,361) (15,361) (15,361) (16,494) Net Credit Facility Borrowing Base $244,552 $244,552 $249,129 $249,129 $249,129 $249,129 $249,129 $234,454 $234,454 $234,454 $234,454 $234,454 $203,825 Less: Term Loan (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) (35,000) Loan Cap (ABL Credit Facility Borrowing Base) $209,552 $209,552 $214,129 $214,129 $214,129 $214,129 $214,129 $199,454 $199,454 $199,454 $199,454 $199,454 $168,825 Net Credit Facility Borrowing Base $244,552 $244,552 $249,129 $249,129 $249,129 $249,129 $249,129 $234,454 $234,454 $234,454 $234,454 $234,454 $203,825 Less: Borrowing (134,873) (129,983) (140,456) (135,887) (124,889) (123,416) (130,704) (123,590) (120,378) (120,747) (139,069) (137,347) (132,027) A Excess Availability $109,679 $114,569 $108,673 $113,242 $124,240 $125,713 $118,425 $110,863 $114,076 $113,706 $95,385 $97,107 $71,799 KW Minimum Availability Requirement B Revised 1/24—35% of Loan Cap $73,343 $73,343 $74,945 $74,945 $74,945 $74,945 $74,945 $69,809 $69,809 $69,809 $69,809 $69,809 $59,089 A—B Comparison to Revised Minimum Avail. Req. ($) $36,336 $41,226 $33,728 $38,297 $49,295 $50,768 $43,480 $41,055 $44,267 $43,898 $25,576 $27,298 $12,710 Memo: Adjusted EBITDA (a) $5,049 $7,406 ($1,372) Source: 26-Week Cash Flow Forecast as of January 23, 2020. a) Monthly Adjusted EBITDA per Management internal 2019 11+1 Forecast and Management preliminary 2020 monthly budget as of January 16, 2020. Private and Confidential 40


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B. Additional Analyses


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Weighted Average Cost of Capital ($ in Millions) LTM Interest Total Implied Market Levered Debt / Unlevered Name Expense Debt (a) Cost of Debt Cap. Beta (b) Equity Beta (c) Stratosphere ($9) $112 8.2% $31 1.32 356.9% 0.36 Kohl’s ($216) $3,298 6.5% $7,122 1.08 46.3% 0.80 Macy’s (192) 4,683 4.1% 5,184 1.05 90.3% 0.63 Nordstrom (89) 2,679 3.3% 6,004 1.01 44.6% 0.76 Dillard’s (47) 666 7.1% 1,735 1.03 38.4% 0.80 Cato — — NM 390 0.74 — 0.74 J. C. Penney (298) 4,205 7.1% 255 1.31 1,649.2% 0.10 Stage Stores (16) 365 4.3% 105 0.96 347.0% 0.27 Select Broadlines Median (excl. Stratosphere) 5.4% 1.03 46.3% 0.74 WACC Calculation (Assuming Select Broadlines Median Beta of Comps and D/E of Comps) Assumptions Cost of Equity Calculation Risk Free Rate of Return (d) 1.7% Risk Free Rate of Return (d) 1.7% Historical Market Risk Premium (e) 6.9% Historical Market Risk Premium (e) 6.9% Supply-Side Market Risk Premium (e) 6.1% Levered Beta (b) 1.00 Size Premium (e) (f) 5.2% Size Premium (e) (f) 5.2% Marginal Tax Rate 25.0% Cost of Equity 13.8% Other Inputs WACC Calculation Before Tax Cost of Debt 5.4% Cost of Equity 13.8% After-Tax Cost of Debt 4.1% Equity / Total Capitalization 68.4% Debt / Equity 46.3% After-Tax Cost of Debt 4.1% Debt / Total Capitalization 31.6% Debt / Total Capitalization 31.6% Levered Beta (b) 1.00 WACC 10.7% Unlevered Beta (c) 0.74 a) Assumes book value of debt approximates market value. Does not include capitalized operating leases (per IFRS 16, effective January 2019) as debt. b) Source: Bloomberg 5-year adjusted weekly beta as reported on January 24, 2020. c) Unlevered Beta = Levered Beta / {1+(Debt/Market Equity)*(1-Tax Rate)}. d) 10-year Treasury Note yield as of January 24, 2020. e) Source: Duff & Phelps 2018 Valuation Handbook. f) Size premium of 5.22% for companies with market capitalizations between $2.5M and $321.6M. Private and Confidential 42

Exhibit (c)(7)

Exhibit 99(C)(7)

 

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Project Stratosphere January 29, 2020 Private and Confidential


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Disclaimer The following pages contain material provided to the Special Committee of the Board of Directors (the “Special Committee”) of Stein Mart, Inc. (the “Company”) by PJ Solomon, L.P. and its affiliates, including, without limitation, PJ Solomon Securities, LLC (collectively, “PJ Solomon” or “Solomon”) in connection with Project Stratosphere. These materials were prepared on a confidential basis in connection with an oral presentation to the Special Committee and not with a view toward complying with the disclosure standards under state or federal securities laws or otherwise. The information contained in this presentation was based solely on publicly available information or information furnished to PJ Solomon by the Company. PJ Solomon has relied, without independent investigation or verification, on the accuracy, completeness and fair presentation of all such information and the conclusions contained herein are conditioned upon such information (whether written or oral) being accurate, complete and fairly presented in all respects. This presentation includes certain statements, estimates and projections provided by the Company with respect to the historical and anticipated future performance of the Company. Such statements, estimates and projections contain or are based on significant assumptions and subjective judgments made by the Company’s management. None of PJ Solomon, its affiliates or its or their respective employees, directors, officers, contractors, advisors, members, successors or agents makes any representation or warranty in respect of the accuracy, completeness or fair presentation of any information, projections or any conclusion contained herein. PJ Solomon, its affiliates and its and their respective employees, directors, officers, contractors, advisors, members, successors and agents shall have no liability with respect to any information, projections or matter contained herein, or any oral information provided herewith or data any of them generates. The information contained herein should not be assumed to have been updated at any time subsequent to date shown on the first page of the presentation and the delivery of the presentation does not constitute a representation by PJ Solomon that such information will be updated at any time after the date of the presentation. Neither PJ Solomon nor any of its affiliates is an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction. The Company acknowledges that PJ Solomon is an affiliate of Natixis, a global full service commercial and investment bank. These materials are not and should not be construed as a fairness opinion. Private and Confidential 1


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Selected Proposed Transaction Terms Acquiror Kingswood Capital Management, LLC Per Share Consideration $0.90 in cash Stock Price Premiums To: Current Price ($ 0.64): 41.0% Offer Premium 30-Days VWAP ($ 0.67): 34.2% 60-Days VWAP ($ 0.69): 30.4% 90-Days VWAP ($ 0.72): 24.9% Implied Equity Value (a) $44.6M Implied Enterprise Value (b) $148.5M $30.7M new equity from Kingswood Financing $13.9M rollover equity from Jay Stein Remainder drawn from new $ 240M Wells Fargo ABL Credit Facility and $ 35M Pathlight FILO Term Loan Go Shop / No Shop No shop with a termination right to pay a 5.0% of equity value (including rollover shares) break fee and accept a Superior Proposal Reverse Termination Fee Parent required to pay 5.0% of equity value (including rollover shares) reverse break fee paid if it fails to close when required to do so Termination Date 6 Months from Date of Agreement Minimum Excess Availability 35.0% of ABL Credit Facility Loan Cap (c) at Close a) Based on 48.4M total shares outstanding and 1.2M Restricted Stock Units (RSUs) as of January 27, 2020 per Company Management. b) Based on cash of $8.5M and total debt of $112.4M as of January 4, 2020 per Management internal 2019 11+1 Forecast. c) Defined as the lesser of the net ABL Borrowing Base and the Credit Facility Size. Private and Confidential 2


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Offer Summary ($ in Millions, Except Per Share Data) Current Kingswood Market (Public Net Debt) Market (Avg. Net Debt) Market (Private Net Debt) Offer 1/28/2020 1/28/2020 1/28/2020 1/27/2020 Stock Price / Proposed Offer Price $0.64 $0.64 $0.64 $0.90 Shares Outstanding (a) 48.4 48.4 48.4 48.4 Restricted Stock Units (b) — — — 1.2 Option Equivalent Shares (c) — — — — Diluted Shares Outstanding 48.4 48.4 48.4 49.5 Total Equity Value $30.9 $30.9 $30.9 $44.6 Plus: Net Debt 157.3 (d) 136.8 (e) 104.0 (f) 104.0 (f) Total Enterprise Value $188.2 $167.6 $134.8 $148.5 Premium / (Discount) to: Current Price 1/28/2020 $0.64 — % — % — % 41.0 % 30-Day VWAP 0.67 (4.8) (4.8) (4.8) 34.2 60-Day VWAP 0.69 (7.6) (7.6) (7.6) 30.4 90-Day VWAP 0.72 (11.5) (11.5) (11.5) 24.9 180-Day VWAP 0.75 (14.5) (14.5) (14.5) 20.6 52-Week High 2/14/2019 1.23 (48.1) (48.1) (48.1) (26.8) 52-Week Low 1/28/2020 0.64 — — — 41.0 Enterprise Value as a Multiple of: Total Revenue LTM (Q3 ‘19)—Public $1,240.6 15.2 % 13.5 % 10.9 % 12.0 % LTM (Dec. ‘19) (g) 1,234.4 15.2 13.6 10.9 12.0 Adj. EBITDA LTM (Q3 ‘19)—Public $30.0 6.3 x 5.6 x 4.5 x 4.9 x LTM (Dec. ‘19) (g) 27.9 6.8 6.0 4.8 5.3 FY 2019B (g) 24.9 7.5 6.7 5.4 6.0 Price as a Multiple of: Diluted Adj. EPS FY 2020E (g) $0.02 30.3 x 30.3 x 30.3 x 42.8 x FY 2021E (g) 0.03 21.2 21.2 21.2 30.0 a) Total shares outstanding of 48.4M as of January 27, 2020, per Company Management, which includes 0.6M Restricted Stock Awards. b) Restricted Stock Units (RSUs) as of January 27, 2020, per Company Management, which are not included in shares outstanding and have a double trigger change-in-control provision. c) Assumes treasury stock method based on 1.4M stock options outstanding with no options in the money as of January 27, 2020, per Company Management. d) Based on cash of $13.0M and total debt of $170.3M as of November 2, 2019 per Company FY 2019 Q3 10-Q filing. e) Based on average month-end net debt balances for the last twelve months from January 2019 through December 2019. f) Based on cash of $8.5M and total debt of $112.4M as of January 4, 2020 per Management internal 2019 11+1 Forecast. g) Source: Management Five Year Plan approved by the Special Committee on January 15, 2020, Management internal 2019 11+1 Forecast as of January 15, 2020, which is not materially different than the 10+2 Forecast approved by the Special Committee on January 15, 2020 and Management preliminary 2020 budget as of January 16, 2020. Private and Confidential 3


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Stratosphere Summary Capitalization and Market Data (Amounts in Millions, Except Per Share Data) Stock Information Financial Information Credit Statistics Ticker Symbol STRAT Fiscal Year End Feb 2, 2019 As of Stock Exchange NasdaqGS LTM Date—Public Nov 2, 2019 Dec-19 (b) Stock Price as of 1/28/20 $0.64 LTM Date—Private Jan 4, 2020 Adj. Debt / Adj. EBITDAR (c) 7.1 x Total Debt / Adj. EBITDA 4.0 x 52-Week Stock Price LTM Revenue (Q3 ‘19)—Public $1,240.6 Net Debt / Adj. EBITDA 3.7 x High 2/14/19 $1.23 LTM Revenue (Dec. ‘19)—Private (b) 1,234.4 Adj. EBITDA / Interest, Net 3.0 x Low 1/28/20 0.64 LTM Adj. EBITDA (Q3 ‘19)—Public 30.0 LTM Adj. EBITDA (Dec. ‘19)—Private (b) 27.9 5-Year Stock Price FY 2019B Adj. EBITDA—Private (b) 24.9 High 2/26/15 $16.46 Total Debt / Total Capitalization 78.2% Low 2/8/18 0.51 LTM Adj. EPS (Q3 ‘19)—Public ($0.17) Net Debt / Net Capitalization 76.8% FY 2019B Adj. EPS—Private (b) (0.26) Average Daily Volume (3 Mo.) 0.1 FY 2020E Adj. EPS—Private (b) 0.02 Shares Sold Short 3.1 FY 2021E Adj. EPS—Private (b) 0.03 Short Int. as % of Public Float (a) 9.3% Market Capitalization and Firm Value Market Valuation Beneficial Ownership by Category (g) Stock Price as of 1/28/20 $0.64 Enterprise Value as a Multiple of: Beneficial Percent of Shares Outstanding (d) 48.4 LTM Revenue (Q3 ‘19)—Public 15.2% Ownership Total Option Equivalent Shares (e) — LTM Adj. EBITDA (Q3 ‘19)—Public 6.3 x Jay Stein 15.3 31.1% Equity Value $30.9 FY 2019B Adj. EBITDA—Private (b) 7.5 x Other Insiders 2.1 4.3% Plus: Total Debt (f) 170.3 Stock Price as a Multiple of: Top 10 Institutions 2.9 5.9% Less: Cash & Cash Equivalents (13.0) FY 2020E Adj. EPS—Private (b) 30.3 x Public and Other 28.9 58.7% Enterprise Value $188.2 FY 2021E Adj. EPS—Private (b) 21.2 x Total 49.2 100.0% a) Excludes shares beneficially owned by Jay Stein. b) Source: Management Five Year Plan approved by the Special Committee on January 15, 2020, Management internal 2019 11+1 Forecast as of January 15, 2020, which is not materially different than the 10+2 Forecast approved by the Special Committee on January 15, 2020 and Management preliminary 2020 monthly budget as of January 16, 2020. c) Assumes 8.0x rent methodology as it is not yet clear that the lender and credit analyst communities have altered their leverage measurement methodologies for revised lease accounting rules. d) Total shares outstanding of 48.4M as of January 27, 2020, per Company Management. e) Assumes treasury stock method based on 1.4M stock options outstanding with no options in the money as of January 27, 2020, per Company Management. f) Total financial debt – does not include operating lease liabilities. As of November 2, 2019 per Company FY 2019 Q3 10-Q filing. g) Includes exercisable options held by directors and executive officers. Source: Company’s Proxy Statement dated May 7, 2019. Private and Confidential 4


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Stock Price Performance Stock Price Performance (January 27, 2017 – January 27, 2020) $ 8.00 Median 3-Yr 2-Yr 6-Mo $1.20 $0.82 $0.76 $ 6.00 $ 4.00 $ 2.00 $0.64 $ 0.00 Jan-17 Jan-18 Jan-19 Jan-20 Indexed Stock Performance (January 27, 2017 – January 27, 2020) 100% Stratosphere Select Broadlines(a) Off-Price(b) S&P Adjusted Retail (c) Note: Select Broadlines does not 86.3% ) ge Bon-Ton include Sears, due to Gordmans the fact they and 59.9% an 50% entered bankruptcy during this Ch period (% ce 0% an rform (9.9%) Pe (50%) e Pric (82.3%) (100%) Jan-17 Jan-18 Jan-19 Jan-20 Source: Capital IQ as of January 28, 2020. a) Comprised of JWN, M, KSS, DDS, JCP, SSI and CATO. b) Comprised of CTRN, ROST, TJX, BURL and FIVE. c) Comprised of AAP, AN, AZO, BBBY, BBY, KMX, DG, DLTR, FL, GPC, KSS, JWN, ROST, SIG, TGT, GPS, TJX, TIF, ULTA, URBN, TSCO, ORLY, LB, LKQ, M, HD and LOW. Private and Confidential 5


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Historical Financials (Amounts in Millions, Except Per Share Data) Fiscal Year LTM LTM CAGR Income Statement Data 2014A 2015A 2016A 2017A 2018A Oct-19 Dec-19 FY14-FY18 Total Revenue $1,323.7 $1,367.0 $1,374.6 $1,332.6 $1,272.7 $1,240.6 $1,234.4 (1.0%) Gross Profit 392.8 392.4 373.1 344.9 352.9 341.1 337.2 (2.6) Adj. SG&A 305.7 315.7 328.5 337.3 313.4 311.1 309.3 0.6 Adj. EBITDA 87.0 76.7 44.6 7.6 39.5 30.0 27.9 (17.9) Adj. EBIT 53.9 43.8 8.4 (26.9) 7.3 1.1 (0.6) (39.4) Diluted EPS $0.59 $0.51 $0.01 ($0.52) ($0.13) ($0.14) ($0.17) NM Adjusted Diluted EPS $0.68 $0.54 $0.07 ($0.43) ($0.10) ($0.17) ($0.22) NM Number of Stores 270 278 290 293 287 283 283 Margins Gross Profit 29.7% 28.7% 27.1% 25.9% 27.7% 27.5% 27.3% Adj. EBITDA 6.6 5.6 3.2 0.6 3.1 2.4 2.3 Adj. EBIT 4.1 3.2 0.6 (2.0) 0.5 0.1 (0.0) Comparable Sales Store Sales N/A N/A N/A (7.1%) (2.6%) (2.3%) (a) (2.0%) (a) ECommerce N/A N/A N/A 33.5 38.8 10.2 (a) (b) 9.0 (a) (b) Total Comp Sales (excl. DSW & LXR) 3.3% 1.0% (3.8%) (5.5) (1.1) (1.9) (a) (c) (1.7) (a) (c) Growth Rates Total Revenue 4.8% 3.3% 0.6% (3.1%) (4.5%) (5.8%) (4.4%) Adj. EBITDA 65.5 (11.9) (41.9) (82.9) 418.4 (27.2) (32.8) Adj. EBIT 2.5 (18.7) (80.7) NM NM (87.9) NM Balance Sheet and Cash Flow Data Cash $65.3 $11.8 $10.6 $10.4 $9.0 $13.0 $8.5 Total Debt — 190.2 181.8 156.1 153.3 170.3 112.4 Depreciation and Amortization 29.1 29.9 32.6 32.3 32.4 21.2 28.5 Cum. FY14-YTD19 Capital Expenditures (40.2) (44.4) (42.4) (21.2) (9.0) (6.8) (6.1) ($163.3) Change in Net Working Capital (14.1) (18.5) 17.0 32.9 (25.4) (4.5) (12.5) Free Cash Flow (d) 12.2 (6.0) 18.2 26.5 (0.1) 17.8 7.3 58.2 Leverage and Interest Coverage Ratios Adj. Debt / Adj. EBITDAR (e) 3.8 x 5.4 x 6.9 x 9.1 x 6.8 x 7.4 x 7.1 x Total Debt / Adj. EBITDA — 2.5 4.1 20.5 3.9 5.7 4.0 Note: Stratosphere paid a $5.00 / share special dividend in FY 2015. Source: Company Management and SEC filings. LTM includes results through October per publicly available financials and through December per Company internal financials. a) Represents year-to-date comparable store sales. b) Represents omni-channel comparable sales, which are not comparable with historical periods. With the rollout of Smart Fulfillment in August 2019 and BOPIS in September 2019, a significant portion of ECommerce sales have shifted to ship-from-store, and to a lesser extent, BOPIS. As a result, ECommerce comparable sales are down (15.6%) as of December YTD. c) Represents Total Comp, inclusive of leased departments (DSW & LXR). d) Defined as Cash Flow from Operating Activities less Capital Expenditures. e) Assumes 8.0x rent methodology as it is not yet clear that the lender and credit analyst communities have altered their leverage measurement methodologies for revised lease accounting rules. Private and Confidential 6


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Projected Financials (Amounts in Millions, Except Per Share Data) LTM Fiscal Year CAGR Income Statement Data Dec-19 2019B 2020P 2021P 2022P 2023P 2024P FY19-FY24 Total Revenue $1,234.4 $1,234.2 $1,254.8 $1,277.6 $1,297.3 $1,321.5 $1,366.2 2.1% Gross Profit 337.2 335.3 348.8 353.9 358.4 365.4 376.6 2.4 Adj. SG&A 309.3 310.3 311.2 319.7 324.7 330.0 338.5 1.8 Adj. EBITDA 27.9 24.9 37.5 34.2 33.7 35.4 38.1 8.9 Adj. EBIT (0.6) (3.3) 10.2 9.7 12.3 17.0 21.3 NM Diluted EPS ($0.17) ($0.25) ($0.00) $0.01 $0.05 $0.12 $0.22 NM Adjusted Diluted EPS ($0.22) ($0.26) $0.02 $0.03 $0.07 $0.15 $0.25 NM Number of Stores 283 283 281 277 274 276 280 Margins Gross Profit 27.3% 27.2% 27.8% 27.7% 27.6% 27.7% 27.6% Adj. EBITDA 2.3 2.0 3.0 2.7 2.6 2.7 2.8 Adj. EBIT (0.0) (0.3) 0.8 0.8 0.9 1.3 1.6 Comparable Sales Store Sales (2.0%) (a) (1.2%) 2.5% 1.5% 1.5% 1.4% 1.5% ECommerce 9.0 (a) (b) (16.3) (4.2) 14.4 13.5 10.0 10.0 Total Comp Sales (excl. DSW & LXR) (1.7) (a) (c) (1.8) 2.2 1.9 2.0 1.8 1.9 Growth Rates Total Revenue (4.4%) (3.0%) 1.7% 1.8% 1.5% 1.9% 3.4% Adj. EBITDA (32.8) (36.8) 50.5 (9.0) (1.3) 4.9 7.8 Adj. EBIT NM NM NM (4.9) 26.2 38.7 25.2 Balance Sheet and Cash Flow Data Cash $8.5 $12.0 $12.0 $12.0 $12.0 $12.0 $12.0 Total Debt 112.4 147.5 129.0 121.6 113.3 104.7 97.8 Depreciation and Amortization 28.5 28.2 27.3 24.4 21.4 18.3 16.8 Cum. FY20-FY24 Capital Expenditures (6.1) (7.7) (10.6) (16.0) (14.8) (15.8) (15.2) (72.4) Change in Net Working Capital (12.5) (3.7) 1.8 (2.7) (1.8) (2.9) (8.8) Free Cash Flow (d) 7.3 7.6 21.6 9.4 10.4 8.7 6.7 56.8 Leverage and Interest Coverage Ratios Adj. Debt / Adj. EBITDAR (e) 7.1 x N/A N/A N/A N/A N/A N/A Total Debt / Adj. EBITDA 4.0 5.9 x 3.4 x 3.6 x 3.4 x 3.0 x 2.6 x Source: Source: Management Five Year Plan approved by the Special Committee on January 15, 2020, Management internal 2019 11+1 Forecast as of January 15, 2020, which is not materially different than the 10+2 Forecast approved by the Special Committee on January 15, 2020 and Management preliminary 2020 monthly budget as of January 16, 2020. Note: Adjusted EBITDA, EBIT and Diluted EPS exclude store impairments, gain from credit card settlement and pre-opening costs identified by Management. a) Represents year-to-date comparable store sales. b) Represents omni-channel comparable sales, which are not comparable with historical periods. With the rollout of Smart Fulfillment in August 2019 and BOPIS in September 2019, a significant portion of ECommerce sales have shifted to ship-from-store, and to a lesser extent, BOPIS. As a result, ECommerce comparable sales are down (15.6%) as of December YTD. c) Represents Total Comp, inclusive of leased departments (DSW & LXR). d) Defined as Cash Flow from Operating Activities less Capital Expenditures. e) Assumes 8.0x rent methodology as it is not yet clear that the lender and credit analyst communities have altered their leverage measurement methodologies for revised lease accounting rules. Private and Confidential 7


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Summary Financial Valuation Overview 1/28/20 1/28/20 1/27/20 Current Price Price w/ Control Premium(a) Offer Price $0.64 $0.85 $0.90 Selected Public Companies $1.45 Selected Precedent Transactions $5.08 Discounted Cash Flow (b) $1.49 52-Week Trading Range $0.64 $1.23 — $1.00 $2.00 $3.00 $4.00 $5.00 Note: 52-Week Trading Range is for informational purposes only. a) Source: FactSet. 32.7% based on a median one-day premium for transactions of $100M to $300M enterprise value with North American targets, in which at least a 50% stake was acquired. Excludes financial services, healthcare, real estate and energy/mining/minerals industries. b) Assumes terminal value EBITDA multiple of 3.5x—6.0x for the terminal value method, perpetuity growth rate of 0.0%—2.0% for the perpetuity growth rate method and WACC of 9.5% to 11.5% for both methods. Private and Confidential 8


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Public Companies EV/EBITDA and P/E Performance EV / EBITDA Multiples (a) EV / LTM EBITDA EV / LTM EBITDA Median: 5.1x EV / CY 2019E EBITDA EV / CY 2019E EBITDA Median: 5.4x 8.3 x 7.1 x 5.8 x 5.4 x 5.5 x 5.6 x 4.7 x 4.7 x 4.3 x 3.7 x 3.2 x NM NM(b) NM JCP JWN DDS KSS M CATO SSI Market Capitalization ($mm): $257 $5,979 $1,718 $7,058 $5,212 $391 $95 LTM Adj. EBITDA % Margin: 5.3% 9.0% 6.5% 10 .6% 10 .1% 6.3% 1.0% Total Debt / Adj. EBITDA: 6.9x 1.9x 1.6x 1.6x 1.8x 0.0x 22 .2x P / E Multiples CY 2020E P/E Ratio CY 2020E P/E Ratio Median: 10.3x CY 2021E P/E Ratio CY 2021E P/E Ratio Median: 10.7x 20.9 x 19.6 x 11.0 x 11.4 x 9.7 x 9.9 x 7.0 x 7.4 x NM NM NM NM NM NM DDS JWN KSS M SSI CATO JCP Source: Public filings, Capital IQ as of January 28, 2020. a) Note: Enterprise value does not include capitalized operating leases (per IFRS 16, effective January 2019) as debt. b) EV / LTM Adjusted EBITDA multiple for SSI is 26.3x due to a low positive EBITDA and is deemed non-material for trading purposes. Private and Confidential 9


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Summary Valuation Based on Selected Public Companies (Amounts in Millions, Except Per Share Data) Adjusted EBITDA Valuation Multiples Implied Equity Value (a) Implied Per Share Value (b) LTM Q3 FY 2019A $30.0 3.2 x—5.8 x ($8)—$70 ($ 0.16)—$1.45 CY 2019E / LTM (Dec. ‘19) 27.9 4.3 x—5.6 x 16—52 0.33—1.08 Adjusted EPS Valuation Multiples Implied Equity Value (b) Implied Per Share Value (b) CY 2020E $0.02 7.0 x—20.9 x $6—$18 $ 0.13—$0.38 CY 2021E 0.03 7.4 x—19.6 x 10—28 0.22—0.57 Source: Management Five Year Plan approved by the Special Committee on January 15, 2020 and Management internal 2019 11+1 Forecast as of January 15, 2020, which is not materially different than the 10+2 Forecast approved by the Special Committee on January 15, 2020. a) Net debt of $104.0M represents total debt less cash as of January 4, 2020 per Management internal 2019 11+1 Forecast. b) Total shares outstanding of 48.4M as of January 27, 2020 per Company Management. Private and Confidential 10


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Selected Precedent Transactions (Amounts in USD, Millions) Date Enterprise EV as a Multiple of LTM: Announced Acquiror Target Value Sales EBITDA Aug-19 Liberty Tax Sears Outlet $133 27.4% 3.7 x Aug-19 Le Tote Lord & Taylor C$133 (a) NM NM Jun-19 Elliott Management Barnes & Noble Inc. $683 19.2% 4.6 x May-17 Camping World Gander Mountain (b) 34 25.6% ND Oct-16 Dick’s Golfsmith (b) 43 8.7% ND Aug-16 Versa Capital Management Vestis Retail Group (b) 115 (c) 28.8% NM Source: Company fillings and other publicly available information. a) Total deal value includes C$99.5M upfront cash consideration, C$33.2M in the form of a promissory note payable in cash two years from closing and a minority equity stake in Le Tote. b) Companies sold in 363 sale process. c) Enterprise Value per implied recoveries from October 9, 2018 Disclosure Statement. Private and Confidential 11


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Summary Valuation Based on Selected Precedent Transactions (Amounts in Millions, Except Per Share Data) Total Revenue Valuation Multiples Implied Equity Value (a) Implied Per Share Value (b) LTM (Dec. ‘19) $1,234.4 8.7%—28.8% $ 3—$252 $ 0.07—$5.08 Adj. EBITDA Valuation Multiples Implied Equity Value (a) Implied Per Share Value (b) LTM (Dec. ‘19) $27.9 3.7 x—4.6 x ($ 1)—$24 ($ 0.02)—$0.49 Source: Management Five Year Plan approved by the Special Committee on January 15, 2020 and Management internal 2019 11+1 Forecast as of January 15, 2020, which is not materially different than the 10+2 Forecast approved by the Special Committee on January 15, 2020. a) Net debt of $104.0M represents total debt less cash as of January 4, 2020 per Management internal 2019 11+1 Forecast. b) Total shares outstanding of 49.5M, which includes 1.2M RSUs, as of January 27, 2020 per Company Management. Private and Confidential 12


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Discounted Cash Flow Analysis (Amounts in Millions, Except Per Share Data) Fiscal Year 1 Mo. 2019B 2020E 2021E 2022E 2023E 2024E Total Revenue $64.4 $1,254.8 $1,277.6 $1,297.3 $1,321.5 $1,366.2 % Growth (0.2%) 1.7% 1.8% 1.5% 1.9% 3.4% Adj. EBITDA (a) (4.6) 37.5 34.2 33.7 35.4 38.1 % of Net Sales (7.2%) 3.0% 2.7% 2.6% 2.7% 2.8% Adj. EBIT (a) (7.0) 10.2 9.7 12.3 17.0 21.3 % of Net Sales (10.8%) 0.8% 0.8% 0.9% 1.3% 1.6% Taxes @ 25.0% 1.7 (2.6) (2.4) (3.1) (4.3) (5.3) Tax-Effected Adj. EBIT (5.2) 7.7 7.3 9.2 12.8 16.0 Depreciation & Amortization 2.3 27.3 24.4 21.4 18.3 16.8 Capital Expenditures (2.2) (10.6) (16.0) (14.8) (15.8) (15.2) Change in Net Working Capital (23.8) 1.8 (2.7) (1.8) (2.9) (8.8) Free Cash Flow ($28.9) $26.1 $13.0 $14.0 $12.4 $8.9 Growth in Free Cash Flow 81.8% (50.1%) 7.1% (11.3%) (28.5%) Terminal Value / Adj. EBITDA Multiple 3.5 x 3.50 x 3.5 x 4.8 x 4.75 x 4.8 x 6.0 x 6.00 x 6.0 x Discount Rate 9.5% 10.5% 11.5% 9.5% 10.5% 11.5% 9.5% 10.5% 11.5% Present Value of Free Cash Flow $30.6 $29.4 $28.2 $30.6 $29.4 $28.2 $30.6 $29.4 $28.2 Present Value of Terminal Value 84.7 80.9 77.3 114.9 109.8 104.9 145.1 138.7 132.5 Total Enterprise Value $115.3 $110.3 $105.5 $145.5 $139.1 $133.1 $175.8 $168.0 $160.7 Less: Net Debt (b) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) Total Equity Value $11.3 $6.3 $1.5 $41.6 $35.2 $29.1 $71.8 $64.1 $56.7 Total Equity Value Per Share (c) $0.23 $0.13 $0.03 $0.86 $0.74 $0.60 $1.49 $1.33 $1.17 Terminal Value as a % of Total Value 73.4% 73.4% 73.3% 78.9% 78.9% 78.8% 82.6% 82.5% 82.5% Implied Perpetuity Growth Rate 2.7% 3.6% 4.6% 4.4% 5.4% 6.3% 5.4% 6.4% 7.3% Perpetuity Growth Rate 0.0% 0.0% 0.0% 1.0% 1.0% 1.0% 2.0% 2.0% 2.0% Discount Rate 9.5% 10.5% 11.5% 9.5% 10.5% 11.5% 9.5% 10.5% 11.5% Present Value of Free Cash Flow $30.6 $29.4 $28.2 $30.6 $29.4 $28.2 $30.6 $29.4 $28.2 Present Value of Terminal Value 59.1 51.1 44.6 66.7 57.0 49.3 76.4 64.4 55.1 Total Enterprise Value $89.7 $80.5 $72.8 $97.4 $86.4 $77.5 $107.0 $93.8 $83.2 Less: Net Debt (b) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) (104.0) Total Equity Value ($14.2) ($23.5) ($31.2) ($6.6) ($17.5) ($26.5) $3.0 ($10.2) ($20.7) Total Equity Value Per Share (c) ($0.29) ($0.49) ($0.65) ($0.14) ($0.36) ($0.55) $0.06 ($0.21) ($0.43) Terminal Value as a % of Total Value 65.9% 63.5% 61.3% 68.5% 66.0% 63.7% 71.4% 68.7% 66.2% Implied Terminal Value / Adj. EBITDA 2.4 x 2.2 x 2.0 x 2.8 x 2.5 x 2.2 x 3.2 x 2.8 x 2.5 x Source: Management Five Year Plan approved by the Special Committee on January 15, 2020 and Management internal 2019 11+1 Forecast as of January 15, 2020, which is not materially different than the 10+2 Forecast approved by the Special Committee on January 15, 2020. Note: Discounted to January 28, 2020. a) Adj. EBITDA and Adj. EBIT exclude pre-opening expenses and relocated/closed stores impairments. b) Net debt of $104.0M represents total debt less cash as of January 4, 2020 per Management internal 2019 11+1 Forecast. c) Per share data based on share count of 48.4M as of January 27, per Company Management. Private and Confidential 13


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Appendix Private and Confidential 14


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Weighted Average Cost of Capital ($ in Millions) LTM Interest Total Implied Market Levered Debt / Unlevered Name Expense Debt (a) Cost of Debt Cap. Beta (b) Equity Beta (c) Stratosphere ($9) $112 8.2% $31 1.32 357.7% 0.36 Kohl’s ($216) $3,298 6.5% $7,058 1.08 46.7% 0.80 Macy’s (192) 4,683 4.1% 5,212 1.05 89.8% 0.63 Nordstrom (89) 2,679 3.3% 5,979 1.01 44.8% 0.76 Dillard’s (47) 666 7.1% 1,718 1.03 38.8% 0.80 Cato — — NM 391 0.74 — 0.74 J. C. Penney (298) 4,205 7.1% 257 1.31 1,634.6% 0.10 Stage Stores (16) 365 4.3% 95 0.96 383.9% 0.25 Median (excl. Stratosphere) 5.4% 1.03 46.7% 0.74 WACC Calculation (Assuming Median Beta and D/E) Assumptions Cost of Equity Calculation Risk Free Rate of Return (d) 1.7% Risk Free Rate of Return (d) 1.7% Historical Market Risk Premium (e) 6.9% Historical Market Risk Premium (e) 6.9% Size Premium (e) (f) 5.2% Levered Beta (b) 1.00 Marginal Tax Rate 25.0% Size Premium (e) (f) 5.2% Cost of Equity 13.8% Other Inputs Before Tax Cost of Debt 5.4% WACC Calculation After-Tax Cost of Debt 4.1% Cost of Equity 13.8% Debt / Equity 46.7% Equity / Total Capitalization 68.2% Debt / Total Capitalization 31.8% After-Tax Cost of Debt 4.1% Levered Beta (b) 1.00 Debt / Total Capitalization 31.8% Unlevered Beta (c) 0.74 WACC 10.7% a) Assumes book value of debt approximates market value. Does not include capitalized operating leases (per IFRS 16, effective January 2019) as debt. b) Source: Bloomberg 5-year adjusted weekly beta as reported on January 28, 2020. c) Unlevered Beta = Levered Beta / {1+(Debt/Market Equity)*(1-Tax Rate)}. d) 10-year Treasury Note yield as of January 28, 2020. e) Source: Duff & Phelps 2018 Valuation Handbook. f) Size premium of 5.22% for companies with market capitalizations between $2.5M and $321.6M. Private and Confidential 15


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Premiums Paid Analysis ($ in Millions) Announce Enterprise One Day 30-Day Date Acquirer Target Value Premium Premium Dec-19 Lumos Networks; EQT Partners North State Telecommunications $236.5 29.6% 23.1% Nov-19 ICV Partners Diversified Restaurant Holdings 176.4 123.4% 75.0% Sep-19 Greenbriar Equity Group Arotech Corp. 102.1 32.7% 38.2% Sep-19 Accel-KKR et al. MAM Software Group 152.1 15.4% 13.7% Aug-19 Assurance Global Services Computer Task Group 106.8 33.8% 47.8% Aug-19 Austin Nichols & Co. Castle Brands 263.3 92.1% 136.1% Jun-19 Atlantis Acquisitionco Canada Corp. Hydrogenics Corp. 279.4 (3.1%) 55.3% Jun-19 YANMAR America Corp. ASV Holdings 104.0 332.5% 200.0% Jun-19 Extreme Networks, Inc. Aerohive Networks 198.7 39.5% 25.7% May-19 Vintage Capital Management Liberty Tax 160.8 31.1% 19.9% Apr-19 MTY Food Group, Inc. Papa Murphy’s Holdings 197.4 31.9% 15.8% Apr-19 The Ancora Group J. Alexander’s Holdings 262.4 12.5% 22.7% Apr-19 Cresco Labs CannaRoyalty Corp. 276.6 (54.1%) (41.2%) Mar-19 HEXO Corp. Newstrike Brands 125.0 4.1% (11.6%) Feb-19 Tesla Maxwell Technologies 293.6 96.3% 234.8% Dec-18 Cerberus Capital Management Sparton Corp. 253.9 41.0% 47.8% Nov-18 Altair Engineering Datawatch Corp. 162.6 35.2% 13.9% Oct-18 General Catalyst et al. Intersections 102.6 107.3% 111.5% Oct-18 Z Capital Group; Affinity Gaming Full House Resorts 211.9 79.6% 67.3% Sep-18 Stryker Corp. Invuity 188.7 28.7% 87.3% Aug-18 Moody’s Analytics Maryland Corp. Reis 251.1 32.2% 2.7% Aug-18 The Invus Group et al. Zoe’s Kitchen 295.3 33.4% 27.9% Aug-18 Roark Capital Group; FOCUS Brands Jamba 194.5 16.3% 20.8% Apr-18 NICE Systems, Inc. Mattersight Corp. 105.0 25.6% 17.4% Apr-18 SPX Corp. ELXSI Corp. 152.6 30.4% 29.9% Mar-18 William Morris Endeavor et al. NeuLion 203.0 116.5% 103.9% Mar-18 GP Investimentos Ltda. Bravo Brio Restaurant Group 100.1 16.8% 35.0% Feb-18 AMC Networks, Inc. RLJ Entertainment 163.7 61.5% 59.4% Jan-18 Duravant LLC Key Technology 172.0 50.6% 34.1% Median 32.7% 34.1% Source: FactSet. Represents transactions of $100-$300M in enterprise value with North American targets, in which at least a 50% stake was acquired. Excludes financial services, healthcare, real estate and energy/mining/minerals industries. Private and Confidential 16