4/A: Northern Right Capital Rebalances Great Elm Group Holdings, Transfers Shares and Notes to NRC LO

Northern Right Capital Management rebalanced its holdings in Great Elm Group, transferring shares and convertible notes to Northern Right Long Only Master Fund LP (NRC LO), which will now join the 13D group.

Summary

• Northern Right Capital Management, L.P. filed an amendment to a previous Form 4 regarding changes in beneficial ownership of Great Elm Group, Inc. securities.
• The amendment reflects a rebalancing transaction where Northern Right Capital (QP), L.P. transferred 409,577 shares of Great Elm Group's common stock to Northern Right Long Only Master Fund LP (NRC LO) at $1.81 per share on January 13, 2025.
• NRC LO will be joining the 13D group, which includes the reporting persons.
• Northern Right QP also transferred $612,413 of 5.0% Convertible Senior PIK Notes due 2030 to NRC LO, representing a conversionary interest in 176,376 shares of common stock.
• Northern Right QP entered into a Forbearance Agreement with Great Elm Group, NRC LO, and Matthew A. Drapkin, agreeing to forbear from exercising its rights to convert the notes into common stock until January 13, 2026.
• Following the transaction, Northern Right QP beneficially owns 1,869,901 shares of common stock, and managed accounts beneficially own 1,963,690 shares.
• Northern Right Management, as the general partner and investment manager of Northern Right QP and the investment manager of the managed accounts, may be deemed the beneficial owner of the securities held by these entities.
• BC Advisors, LLC, as the general partner of Northern Right Management, may also be deemed the beneficial owner of the securities beneficially owned by Northern Right Management.

Sentiment

Score: 6

Explanation: The document describes a routine portfolio rebalancing and a forbearance agreement, which are neutral events. There is no indication of significant positive or negative sentiment.

Industry Context

This filing reflects ongoing portfolio management and strategic positioning by Northern Right Capital within its investments. The formation of a 13D group suggests a coordinated effort among the involved parties regarding their investment in Great Elm Group.

Comparison to Industry Standards

• Rebalancing transactions are common among investment firms to manage risk and optimize portfolio performance.
• The use of convertible notes is a typical financing strategy for companies seeking capital, and the forbearance agreement indicates a negotiated understanding between the noteholder and the issuer.
• The formation of a 13D group is a standard practice when investors seek to collectively influence the management or direction of a company, similar to actions taken by activist investors in other publicly traded companies.

Stakeholder Impact

• The rebalancing transaction and formation of a 13D group could potentially influence shareholder sentiment and the company's stock price.
• The forbearance agreement provides Great Elm Group with a period of stability by preventing the conversion of notes into common stock until January 2026.

Key Dates

Keywords

Great Elm Group, Northern Right Capital, NRC LO, Beneficial Ownership, Form 4, Rebalancing, Convertible Notes, Common Stock, 13D Group, Forbearance Agreement