Great Elm Capital Group Proposes Rights Offering
September 14 2016 - 4:39AM
Great Elm Capital Group, Inc. (NASDAQ:GEC), announced today that it
has filed a registration statement with the Securities and Exchange
Commission for a proposed rights offering to holders of its common
stock. If the rights offering is fully subscribed, Great Elm
Capital Group expects $45 million of gross proceeds that will be
used for general corporate purposes, which may include acquisitions
and investments.
Upon the effectiveness of the registration
statement, Great Elm Capital Group intends to distribute to common
stockholders of record as of the record date (which has not yet
been determined) non-transferable rights to subscribe for and
purchase shares of Great Elm Capital Group common stock. Each
stockholder will receive one right for every share of common stock
owned as of the record date. Each right’s basic subscription
privilege will entitle the holder to purchase a fraction of a share
of Great Elm Capital Group common stock. Stockholders who
exercise their basic subscription privilege in full will also be
entitled to an over-subscription privilege to purchase additional
shares to the extent the offering is not fully subscribed through
exercise of basic subscription privileges. The exercise price
for the rights will be 85% of the volume weighted average price of
Great Capital Group common stock for the 30 trading days ending on
and including the record date.
Great Elm Capital Group entered into a backstop
agreement with a consortium of investors, led by Gracie Investing
LLC, a private investment fund unaffiliated with any of Great Elm
Capital Group’s officers or directors, as well as all of the
members of Great Elm Capital Group’s board of directors.
Subject to the conditions in the backstop agreement, if the gross
proceeds from exercise of the subscription rights are less than $45
million, the backstop investors will purchase the lesser of (a) $45
million minus the aggregate gross proceeds from the exercise of
subscription rights and (b) $36.6 million, at the same price per
share as offered to rights holders, subject to the terms and
conditions of the backstop agreement.
Private investment funds managed by MAST Capital
Management, LLC, owning in the aggregate approximately 18.6% of the
outstanding shares of Great Elm Capital Group common stock, have
indicated their current intention to participate in the rights
offering in amounts at least equal to their basic subscription
privileges. Nevertheless, such funds reserve the right, in their
sole discretion, not to participate in this offering.
Great Elm Capital Group’s common stock will
trade ex-rights on the second trading day prior to the record date.
The record date will be publicly announced on the date the
registration statement becomes effective, which will be at least
ten days in advance of the record date. Upon commencement of
the rights offering, stockholders will be able to exercise their
rights until the expiration date, which will be between 16 and 20
calendar days after the issuance of the rights, unless
extended.
Great Elm Capital Group reserves the right to
cancel or terminate the rights offering at any time prior to the
expiration date of the rights offering.
Safe Harbor Statement in Connection With
the Offer and Sale
A registration statement relating to the rights
offering has been filed with the Securities and Exchange Commission
but has not yet become effective. The securities may not be
sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. A copy of the
prospectus relating to the rights offering meeting the requirements
of Section 10 of the Securities Act of 1933, as amended, and
additional materials relating to the rights offering will be mailed
to stockholders as of the record date. When they become
available, stockholders may also obtain a copy of the prospectus
from the Information Agent for the offering.
This press release does not constitute an offer
to sell or the solicitation of an offer to buy the securities
discussed herein, and there shall not be any offer, solicitation or
sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
About Great Elm Capital
Group
Great Elm Capital Group is a Nasdaq listed
holding company headquartered in Boston, Massachusetts.
Additional information on Great Elm Capital Group is
available on its website at www.greatelmcap.com.
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995.
With the exception of the historical information
contained in this news release, the matters described herein
contain "forward-looking" statements that involve risk and
uncertainties that may individually or collectively impact the
matters herein described. These are detailed in the "Risk
Factors" section of the registration statement and in Great Elm
Capital Group’s SEC reports filed from time to time. Further
information relating to Great Elm Capital Group’s financial
position, results of operations, and investor information is
contained in the Company's annual and quarterly reports filed with
the SEC and available for download at its website
www.greatelmcap.com or at the SEC website www.sec.gov.
Media & Investor Contact:
Meaghan Mahoney
+1 617 375-3005
meaghan@mastcapllc.com
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