Great Elm (US:GEG)2024-08-29 20:00Business Transactions - The company sold its Durable Medical Equipment (DME) business on January 3, 2023, after launching it in September 2018[10]. - The company sold a 61% controlling interest in Forest Investments, Inc. for approximately $18.4 million in cash on December 30, 2022, and subsequently sold its remaining 19% interest for approximately $26.5 million on January 17, 2023[10]. Financial Management - The company raised $26.9 million through the issuance of 7.25% Notes due 2027 in June 2022[26]. - The company continues to explore investment management opportunities that provide attractive risk-adjusted returns on invested capital[12]. - The company may incur substantial debt to finance growth plans, which could negatively impact its financial condition and stockholder value[26]. - The company evaluates its assets and investments relative to market opportunities to maximize shareholder value, which may involve purchasing or selling assets[17]. Competition and Market Conditions - The company faces competition from larger organizations, including global asset managers and private equity funds, which may impact its market position[13]. - Difficult market conditions may reduce the value and performance of funds, negatively impacting income and cash flow[37]. - Adverse changes in market conditions could lead to lower investment management revenues and reputational damage[38]. Regulatory Environment - The company is subject to extensive regulation in the financial services industry, which may affect its business operations and profitability[28]. - The company may be subject to additional regulatory requirements if deemed an investment company under the Investment Company Act, which could hinder growth plans[39]. Operational Risks - Operational risks, including failures in data processing systems, could disrupt the company's business and lead to regulatory action[30]. - The company may face significant financial losses due to uninsured risks, which could adversely impact financial performance[34]. - Investment management agreements can be terminated at the discretion of counterparties, potentially affecting business continuity[36]. Shareholder Considerations - The issuance of additional shares could significantly dilute existing shareholders' equity interests and affect market prices[45]. - Anti-takeover provisions may impair acquisition attempts, potentially limiting shareholder opportunities for premium returns[46]. - Significant dilution may occur upon the conversion of 5.0% Convertible Senior Notes due 2030, impacting stock price[48]. - Conflicts of interest may arise from business opportunities presented to officers and directors, potentially affecting decision-making[41]. - The company carries directors and officers liability insurance, but it may not fully protect against all potential liabilities[35]. Employment - The company had 31 employees as of June 30, 2024[14].