SCHEDULE: Great Elm Group Updates 9.7% Stake in Great Elm Capital

Great Elm Group, Inc. filed an amendment to its beneficial ownership in Great Elm Capital Corp., now holding 9.7% of common stock.

Summary

• Great Elm Group, Inc. (the "Reporting Person") beneficially owns 1,358,276 shares of Great Elm Capital Corp. (the "Issuer") common stock.
• This ownership represents approximately 9.7% of the Issuer's total outstanding common stock.
• The percentage is based on 13,998,168 shares of common stock outstanding.
• The total outstanding shares include 11,568,378 shares reported on the Issuer's Q2 2025 10-Q, 1,139,790 shares issued via an ATM Facility, and 1,290,000 shares issued to Poor Richard LLC.
• Since August 27, 2025, the Reporting Person granted 79,803 shares as compensation to certain employees, which vested and were delivered between September 19, 2025, and September 23, 2025.
• Directors and executive officers of the Reporting Person collectively own 1,021,099 shares, representing approximately 7.9% of the Issuer's outstanding common stock.

Sentiment

Score: 5

Explanation: The filing is a routine update of beneficial ownership, reflecting standard corporate actions like share issuances and employee compensation. It does not present overwhelmingly positive or negative news, maintaining a neutral sentiment.

Positives

• Granting of 79,803 shares as compensation to employees may align employee incentives with company performance and aid in retention.

Negatives

• The Reporting Person's beneficial ownership percentage decreased to 9.7% from a previous undisclosed higher percentage (implied by Amendment No. 14 and share grants).

Future Outlook

The filing does not contain specific forward-looking statements or guidance beyond the reporting of current beneficial ownership and recent share transactions.

Industry Context

This filing is a routine update of beneficial ownership by a significant shareholder, Great Elm Group, Inc., in Great Elm Capital Corp. Such updates are standard practice for institutional investors and typically reflect portfolio adjustments or changes in the underlying share count of the investee company. The issuance of shares via an ATM facility and to a specific entity (Poor Richard LLC) indicates ongoing capital management activities by Great Elm Capital Corp., which is common for publicly traded companies seeking to raise capital or manage their equity structure.

Comparison to Industry Standards

• The beneficial ownership percentage of 9.7% by Great Elm Group, Inc. is a significant stake, indicating a substantial investment and potential influence, consistent with active institutional investors in the financial services sector.
• The use of an At-The-Market (ATM) facility to issue 1,139,790 shares is a common and flexible capital-raising tool utilized by many public companies, particularly in sectors requiring ongoing capital deployment or seeking to manage dilution over time. This is comparable to practices seen in other BDCs or investment firms.
• The issuance of 1,290,000 shares to Poor Richard LLC suggests a targeted capital infusion or strategic partnership, a method also employed by companies to secure funding outside of broader market offerings, similar to private placements or strategic investments seen across various industries.

Stakeholder Impact

• Shareholders: The increase in total outstanding shares (from ATM facility and Poor Richard LLC issuance) implies dilution for existing shareholders, while the decrease in Great Elm Group's percentage ownership might be viewed neutrally or slightly negatively depending on their strategic intent.
• Employees: The granting of 79,803 shares as compensation to certain employees is a positive for those recipients, aligning their interests with the company's performance and potentially enhancing retention.

Key Dates

Recommendation

This filing is a routine update of beneficial ownership by a significant shareholder and does not contain new material information that would fundamentally alter the investment thesis for Great Elm Capital Corp. While there's a slight reduction in the reporting person's percentage ownership and some dilution from recent share issuances, these are common corporate activities. A seasoned investor would likely 'hold' based solely on this filing, awaiting more comprehensive financial or strategic updates before making a definitive 'buy' or 'sell' decision.

Keywords

Great Elm Capital Corp., Great Elm Group Inc., Schedule 13D, beneficial ownership, common stock, equity distribution, share issuance, SEC filing