SCHEDULE 13D/A: Edenbrook Capital Significantly Reduces Stake in PHX Minerals Inc., Divesting Over 2.4 Million Shares

Edenbrook Capital, LLC and Jonathan Brolin have filed an amendment to their Schedule 13D, disclosing a reduced beneficial ownership of 3.2% in PHX Minerals Inc. following substantial share sales in May 2025.

Summary

• Edenbrook Capital, LLC and Jonathan Brolin filed Amendment No. 1 to their Schedule 13D regarding PHX Minerals Inc. common stock, amending Items 3 and 5 of the original filing from November 14, 2024.
• As of the filing date, the reporting persons beneficially own 1,200,856 shares of PHX Minerals Inc. common stock, which constitutes 3.2% of the outstanding shares.
• This percentage is based on 37,922,368 shares of common stock outstanding as of May 5, 2025, as reported in PHX Minerals Inc.'s Quarterly Report on Form 10-Q filed on May 8, 2025.
• The net investment costs for the common stock directly owned by private investment funds advised by Edenbrook is approximately $3,484,000, with shares purchased using investment capital from these funds.
• The filing details significant sales transactions in May 2025, including 365,431 shares sold at $4.32, 1,225,000 shares sold at $4.32, and 50,000 shares sold at $4.33 on May 22, 2025.
• Further sales on May 23, 2025, included 504,800 shares at $4.32 and 300,000 shares at $4.32, totaling 2,445,231 shares sold.
• Minor purchases were also reported in April 2025, including 20,000 shares at $3.58 on April 4, 2025, 20,000 shares at $3.50 on April 7, 2025, and 2 shares at $3.37 on April 8, 2025.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the significant reduction in stake by a major investor, which often signals a lack of confidence or a decision to exit a position, potentially putting downward pressure on the stock.

Positives

• The sales by Edenbrook Capital occurred at prices ($4.32-$4.33) significantly higher than their recent purchases in April 2025 ($3.37-$3.58), indicating a profitable exit for the divested shares.

Negatives

• Edenbrook Capital, LLC and Jonathan Brolin significantly reduced their beneficial ownership in PHX Minerals Inc. by selling 2,445,231 shares in May 2025.
• Their stake decreased to 3.2% of the outstanding common stock, indicating a substantial divestment from the company.

Risks

• The significant reduction in stake by a major institutional investor like Edenbrook Capital could be interpreted by the market as a loss of confidence in PHX Minerals Inc.'s future prospects or valuation.
• Large block sales of shares can create downward pressure on the company's stock price due to increased supply in the market.

Future Outlook

The document does not provide any forward-looking statements or guidance from PHX Minerals Inc. or the reporting persons regarding the issuer's future performance or strategic direction. It primarily details changes in beneficial ownership by an institutional investor.

Management Comments

• Jonathan Brolin, as Managing Member of Edenbrook Capital, LLC, certified that the information set forth in the statement is true, complete, and correct to the best of his knowledge and belief.

Industry Context

This filing reflects a significant reduction in stake by an institutional investor in a mineral rights company. Such divestments can occur for various reasons, including portfolio rebalancing, profit-taking, or a revised outlook on the sector or specific company. The broader oil and gas and mineral rights industry is subject to commodity price volatility, regulatory changes, and evolving energy transition trends, which can influence investor positions.

Stakeholder Impact

• Shareholders: The significant share sales by a major investor could lead to increased selling pressure and potentially a decrease in share price. It might also raise concerns about the company's future prospects among other investors.
• Company Management: May need to address investor concerns arising from the large divestment by a significant shareholder.

Next Steps

• PHX Minerals Inc. will continue its regular SEC reporting (e.g., 10-Q, 10-K) as required.
• Edenbrook Capital, LLC and Jonathan Brolin will file further amendments to Schedule 13D if their beneficial ownership changes by more than 1% or if their investment intent changes.

Key Dates

Recommendation

Keywords

PHX Minerals Inc., Edenbrook Capital, Jonathan Brolin, Schedule 13D/A, Beneficial Ownership, Share Sales, Institutional Investor, SEC Filing, Mineral Rights, Oil and Gas