Filed Pursuant to Rule 424(b)(1)
Registration Statement No. 333-264692
PROSPECTUS
$25,000,000
Great Elm Group, Inc.
PROSPECTUS
7.25% Notes due 2027
We are a publicly traded holding company seeking to acquire assets and businesses where our people and other assets provide a competitive advantage and currently operate two business segments: investment management and durable medical equipment. Within investment management, Great Elm Capital Management, Inc. (“GECM”), our wholly-owned registered investment adviser subsidiary, is an investment adviser providing investment management services to Great Elm Capital Corp. (“GECC”), as well as private funds, and separate accounts for an institutional investor. GECM earns revenue through investment management agreements with each investment vehicle which provide for management fees, incentive fees and/or administrative fees. These fees are generally based on assets under management, investment performance and allocable expenses incurred in the administration of these investment vehicles. We launched our durable medical equipment segment in September 2018 by acquiring two durable medical equipment businesses that specialize in the distribution of respiratory care equipment, including positive air pressure equipment and supplies, ventilators and oxygen equipment, and provide sleep study services. Since then, we have grown the business organically through investments in scalability as well as inorganically through tuck-in acquisitions.
We are offering $25,000,000 in aggregate principal amount of 7.25% notes due 2027 (the “Notes”). The Notes will mature on June 30, 2027. We will pay interest on the Notes on March 31, June 30, September 30 and December 31 of each year, beginning on June 30, 2022. We may redeem the Notes, in whole or in part, at any time or from time to time on or after June 30, 2024 at our option, at the redemption price equal to 100% of the aggregate principal amount, plus any accrued and unpaid interest, as discussed under the section titled “Description of the Notes—Optional Redemption” in this prospectus. Holders of the Notes will not have the option to have the Notes repaid prior to the stated maturity date. The Notes will be issued in minimum denominations of $25 and integral multiples of $25 in excess thereof.
The Notes will be our direct unsecured obligations and rank pari passu, or equal, with any outstanding unsecured unsubordinated indebtedness and senior to any of our future indebtedness that expressly provides it is subordinated to the Notes. The Notes will be effectively subordinated to any future secured indebtedness that we may incur, which means that the Notes would be junior in right of payment to any such secured indebtedness.
We intend to list the Notes on The Nasdaq Global Market (“Nasdaq”), and we expect trading to commence on Nasdaq within 30 days of the original issue date under the trading symbol “GEGGL.” The Notes are expected to trade “flat,” which means that purchasers will not pay, and sellers will not receive, any accrued and unpaid interest on the Notes that is not included in the trading price. Currently, there is no public market for the Notes.
An investment in the Notes is subject to risks, including a heightened risk of total loss of investment. The Notes may be illiquid and difficult to value and typically do not require repayment of principal before maturity, which potentially heightens the risk that you may lose all or part of your investment.
Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 12 of this prospectus to read about factors you should consider, including the risk of leverage, before investing in the Notes.
This prospectus sets forth important information you should know before investing in the Notes. Please read it and the documents we refer you to carefully in their entirety before you invest and keep it for future reference.
Neither the SEC nor any state securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
| | Per Note | | | Total | |
Public offering price | | | $25.00 | | | $25,000,000 |
Underwriting discount and commissions | | | $0.78125 | | | $781,250 |
Proceeds to us, before expenses(1) | | | $24.21875 | | | $24,218,750 |
(1) | Before deducting expenses payable by us related to this offering, estimated at approximately $638,000, or approximately $0.638 per note. See “Underwriting” on page 34 for additional information regarding underwriting compensation. The underwriters may also purchase up to an additional $3,750,000 aggregate principal amount of the Notes offered hereby to cover over-allotments, if any, within 30 days of the date of this prospectus. If the underwriters exercise this option in full, the total public offering amount would be $28,750,000, the total underwriting discount and commissions paid by us would be $898,437, and total proceeds to us, before expenses, would be $27,851,563. |
Delivery of the Notes in book-entry form only through The Depository Trust Company will be made on or about June 9, 2022.
Oppenheimer & Co. | | | B. Riley Securities | | | Janney Montgomery Scott | | | Ladenburg Thalmann |
The date of this prospectus is June 7, 2022.