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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2024
or
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 001-39832
Great Elm Group, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
85-3622015 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
3801 PGA Boulevard, Suite 603, Palm Beach Gardens, FL |
33410 |
(Address of principal executive offices) |
(Zip Code) |
(617) 375-3006
(Registrant’s telephone number, including area code)
800 South Street, Suite 230, Waltham MA 02453
(Former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Common Stock, par value $0.001 per share |
GEG |
The Nasdaq Stock Market LLC (Nasdaq Global Select Market) |
7.25% Notes due 2027 |
GEGGL |
The Nasdaq Stock Market LLC (Nasdaq Global Select Market) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
☒ |
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Emerging growth company |
☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 7, 2024, there were 31,875,285 shares of the registrant’s common stock outstanding.
Table of Contents
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PART I. FINANCIAL INFORMATION |
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Item 1. |
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Financial Statements |
3 |
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Unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and June 30, 2023 |
3 |
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Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2024 and 2023 |
4 |
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Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2024, December 31, 2023 and September 30, 2023 |
5 |
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Unaudited Condensed Consolidated Statements of Stockholders’ Equity and Contingently Redeemable Non-Controlling Interest for the three months ended March 31, 2023, December 31, 2022 and September 30, 2022 |
6 |
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Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2024 and 2023 |
7 |
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Unaudited Notes to Condensed Consolidated Financial Statements |
9 |
Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
23 |
Item 3. |
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Quantitative and Qualitative Disclosures About Market Risk |
26 |
Item 4. |
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Controls and Procedures |
26 |
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PART II. OTHER INFORMATION |
27 |
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Item 1. |
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Legal Proceedings |
27 |
Item 1A. |
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Risk Factors |
27 |
Item 5. |
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Other Information |
27 |
Item 6. |
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Exhibits |
28 |
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SIGNATURES |
29 |
Unless the context otherwise requires, “we,” “us,” “our,” “GEG,” the “Company” and terms of similar import refer to Great Elm Group, Inc. and/or its subsidiaries. Our corporate website address is www.greatelmgroup.com. The information contained in, or accessible through, our corporate website does not constitute part of this report.
Cautionary Statement Regarding Forward-Looking Information
This report and certain information incorporated herein by reference contain forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “seek,” “anticipate,” “intend,” “estimate,” “plan,” “target,” “project,” “forecast,” “envision” and other similar phrases. Although we believe the assumptions and expectations reflected in these forward-looking statements are reasonable, these assumptions and expectations may not prove to be correct, and we may not achieve the financial results or benefits anticipated. These forward-looking statements are not guarantees of actual results. Our actual results may differ materially from those suggested in the forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, some of which are beyond our control, including, without limitation:
▪the ability of Great Elm Capital Management, Inc. (GECM) to profitably manage Great Elm Capital Corp. (NASDAQ: GECC), a business development company, and Monomoy UpREIT, LLC (Monomoy UpREIT), the operating subsidiary of a private real estate investment trust with a portfolio of diversified net leased industrial assets;
▪the dividend rate that GECC and Monomoy UpREIT will pay;
▪the results of our investment management activities;
▪our ability to sell the real estate properties we develop at a profit;
▪our ability to raise capital to fund our business plan;
▪our ability to make acquisitions and manage any businesses we may acquire;
▪conditions in the equity capital markets and debt capital markets as well as the economy generally, including market uncertainty regarding changes to interest rates and inflationary pressures;
▪our ability to maintain the security of electronic and other confidential information;
▪serious disruptions and catastrophic events, including, for example, the potential impact of public health emergencies on the global economy;
▪competition, mostly from larger, well-financed organizations (both domestic and foreign), including operating companies, global asset managers, investment banks, commercial banks, and private equity funds;
▪outcomes of litigation and proceedings and the availability of insurance, indemnification and other third-party coverage of any losses suffered in connection therewith;
▪maintaining our contractual arrangements and relationships with third parties;
▪our ability to attract, assimilate, develop and retain key personnel;
▪compliance with laws, regulations and orders;
▪changes in laws and regulations governing our operations; and
▪other factors described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 under “Risk Factors” or as set forth from time to time in our Securities and Exchange Commission (SEC) filings.
These forward-looking statements speak only as of the time of filing of this report and we do not undertake to update or revise them as more information becomes available. You are cautioned not to place undue reliance on these forward-looking statements. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Great Elm Group, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
Dollar amounts in thousands (except per share data)
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ASSETS |
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March 31, 2024 |
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June 30, 2023 |
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Current assets |
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Cash and cash equivalents |
|
$ |
44,085 |
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$ |
60,165 |
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Receivables from managed funds |
|
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4,400 |
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3,308 |
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Investments in marketable securities |
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24,789 |
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24,595 |
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Investments, at fair value (cost $46,199 and $40,387, respectively) |
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38,244 |
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32,611 |
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Prepaid and other current assets |
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2,843 |
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717 |
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Real estate under development |
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8,104 |
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1,742 |
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Assets of Consolidated Funds: |
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Cash and cash equivalents |
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5,414 |
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- |
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Investments, at fair value (cost $8,353) |
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8,561 |
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- |
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Other assets |
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233 |
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- |
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Total current assets |
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136,673 |
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123,138 |
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Identifiable intangible assets, net |
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11,300 |
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12,115 |
|
Right-of-use assets |
|
|
230 |
|
|
|
497 |
|
Other assets |
|
|
150 |
|
|
|
143 |
|
Total assets |
|
$ |
148,353 |
|
|
$ |
135,893 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
608 |
|
|
$ |
191 |
|
Accrued expenses and other current liabilities |
|
|
4,276 |
|
|
|
5,418 |
|
Payable for securities purchased |
|
|
4,914 |
|
|
|
- |
|
Current portion of related party payables |
|
|
618 |
|
|
|
1,409 |
|
Current portion of lease liabilities |
|
|
183 |
|
|
|
359 |
|
Liabilities of Consolidated Funds: |
|
|
|
|
|
|
Payable for securities purchased |
|
|
267 |
|
|
|
- |
|
Accrued expenses and other liabilities |
|
|
124 |
|
|
|
- |
|
Total current liabilities |
|
|
10,990 |
|
|
|
7,377 |
|
Lease liabilities, net of current portion |
|
|
26 |
|
|
|
142 |
|
Long-term debt (face value $26,945) |
|
|
26,019 |
|
|
|
25,808 |
|
Related party payables, net of current portion |
|
|
- |
|
|
|
926 |
|
Convertible notes (face value $38,859 and $37,912, including $15,780 and $15,395 held by related parties, respectively) |
|
|
38,164 |
|
|
|
37,129 |
|
Other liabilities |
|
|
683 |
|
|
|
669 |
|
Total liabilities |
|
|
75,882 |
|
|
|
72,051 |
|
Commitments and contingencies (Note 11) |
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
Preferred stock, $0.001 par value; 5,000,000 authorized and zero outstanding |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par value; 350,000,000 shares authorized and 31,881,695 shares issued and 30,164,142 outstanding at March 31, 2024; and 30,651,047 shares issued and 29,546,655 outstanding at June 30, 2023 |
|
|
30 |
|
|
|
30 |
|
Additional paid-in-capital |
|
|
3,317,212 |
|
|
|
3,315,378 |
|
Accumulated deficit |
|
|
(3,252,242 |
) |
|
|
(3,251,566 |
) |
Total Great Elm Group, Inc. stockholders' equity |
|
|
65,000 |
|
|
|
63,842 |
|
Non-controlling interests |
|
|
7,471 |
|
|
|
- |
|
Total stockholders' equity |
|
|
72,471 |
|
|
|
63,842 |
|
Total liabilities and stockholders' equity |
|
$ |
148,353 |
|
|
$ |
135,893 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
Great Elm Group, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
Amounts in thousands (except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, |
|
|
For the nine months ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Revenues |
|
$ |
2,787 |
|
|
$ |
1,898 |
|
|
$ |
8,916 |
|
|
$ |
5,637 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment management expenses |
|
|
2,733 |
|
|
|
2,593 |
|
|
|
8,334 |
|
|
|
6,893 |
|
Depreciation and amortization |
|
|
271 |
|
|
|
281 |
|
|
|
837 |
|
|
|
870 |
|
Selling, general and administrative |
|
|
1,630 |
|
|
|
1,893 |
|
|
|
5,738 |
|
|
|
5,441 |
|
Expenses of Consolidated Funds |
|
|
22 |
|
|
|
- |
|
|
|
22 |
|
|
|
46 |
|
Total operating costs and expenses |
|
|
4,656 |
|
|
|
4,767 |
|
|
|
14,931 |
|
|
|
13,250 |
|
Operating loss |
|
|
(1,869 |
) |
|
|
(2,869 |
) |
|
|
(6,015 |
) |
|
|
(7,613 |
) |
Dividends and interest income |
|
|
2,359 |
|
|
|
1,520 |
|
|
|
6,417 |
|
|
|
4,432 |
|
Net realized and unrealized gain (loss) on investments |
|
|
(2,753 |
) |
|
|
1,989 |
|
|
|
1,735 |
|
|
|
17,434 |
|
Net realized and unrealized gain (loss) on investments of Consolidated Funds |
|
|
131 |
|
|
|
- |
|
|
|
245 |
|
|
|
(16 |
) |
Interest and other income of Consolidated Funds |
|
|
323 |
|
|
|
- |
|
|
|
451 |
|
|
|
- |
|
Gain on sale of controlling interest in subsidiary |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,524 |
|
Interest expense |
|
|
(1,074 |
) |
|
|
(1,095 |
) |
|
|
(3,197 |
) |
|
|
(5,024 |
) |
(Loss) income before income taxes from continuing operations |
|
|
(2,883 |
) |
|
|
(455 |
) |
|
|
(364 |
) |
|
|
19,737 |
|
Income tax benefit (expense) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2 |
) |
Net (loss) income from continuing operations |
|
|
(2,883 |
) |
|
|
(455 |
) |
|
|
(364 |
) |
|
|
19,735 |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income from discontinued operations |
|
|
- |
|
|
|
12,203 |
|
|
|
16 |
|
|
|
13,202 |
|
Net (loss) income |
|
$ |
(2,883 |
) |
|
$ |
11,748 |
|
|
$ |
(348 |
) |
|
$ |
32,937 |
|
Less: net income (loss) attributable to non-controlling interest, continuing operations |
|
|
217 |
|
|
|
- |
|
|
|
328 |
|
|
|
(1,554 |
) |
Less: net income attributable to non-controlling interest, discontinued operations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,504 |
|
Net (loss) income attributable to Great Elm Group, Inc. |
|
$ |
(3,100 |
) |
|
$ |
11,748 |
|
|
$ |
(676 |
) |
|
$ |
32,987 |
|
Basic net income (loss) per share from: |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.10 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
|
$ |
0.74 |
|
Discontinued operations |
|
|
- |
|
|
|
0.42 |
|
|
|
- |
|
|
|
0.41 |
|
Basic net income (loss) per share |
|
$ |
(0.10 |
) |
|
$ |
0.40 |
|
|
$ |
(0.02 |
) |
|
$ |
1.15 |
|
Diluted net income (loss) per share from: |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.10 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
|
$ |
0.56 |
|
Discontinued operations |
|
|
- |
|
|
|
0.42 |
|
|
|
- |
|
|
|
0.29 |
|
Diluted net income (loss) per share |
|
$ |
(0.10 |
) |
|
$ |
0.40 |
|
|
$ |
(0.02 |
) |
|
$ |
0.85 |
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
30,066 |
|
|
|
28,997 |
|
|
|
29,844 |
|
|
|
28,779 |
|
Diluted |
|
|
30,066 |
|
|
|
28,997 |
|
|
|
29,844 |
|
|
|
40,673 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
Great Elm Group, Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
Amounts in thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
Additional
Paid-in |
|
|
Accumulated |
|
|
|
Total Great Elm Group, Inc. Stockholders' |
|
|
Non-
controlling |
|
|
Total Stockholders' |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
|
Equity |
|
|
Interest |
|
|
Equity |
|
BALANCE, June 30, 2023 |
|
|
29,547 |
|
|
$ |
30 |
|
|
$ |
3,315,378 |
|
|
$ |
(3,251,566 |
) |
|
|
$ |
63,842 |
|
|
$ |
- |
|
|
$ |
63,842 |
|
Net income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,774 |
|
|
|
|
2,774 |
|
|
|
- |
|
|
|
2,774 |
|
Issuance of common stock related to vesting of restricted stock |
|
|
322 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
705 |
|
|
|
- |
|
|
|
|
705 |
|
|
|
- |
|
|
|
705 |
|
BALANCE, September 30, 2023 |
|
|
29,869 |
|
|
$ |
30 |
|
|
$ |
3,316,083 |
|
|
$ |
(3,248,792 |
) |
|
|
$ |
67,321 |
|
|
$ |
- |
|
|
$ |
67,321 |
|
Net income (loss) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(350 |
) |
|
|
|
(350 |
) |
|
|
111 |
|
|
|
(239 |
) |
Issuance of common stock related to vesting of restricted stock |
|
|
181 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Issuance of interests in Consolidated Funds |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
6,900 |
|
|
|
6,900 |
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
625 |
|
|
|
- |
|
|
|
|
625 |
|
|
|
- |
|
|
|
625 |
|
BALANCE, December 31, 2023 |
|
|
30,050 |
|
|
$ |
30 |
|
|
$ |
3,316,708 |
|
|
$ |
(3,249,142 |
) |
|
|
$ |
67,596 |
|
|
$ |
7,011 |
|
|
$ |
74,607 |
|
Net income (loss) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,100 |
) |
|
|
|
(3,100 |
) |
|
|
217 |
|
|
|
(2,883 |
) |
Issuance of common stock related to vesting of restricted stock |
|
|
114 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Issuance of interests in Consolidated Funds |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
350 |
|
|
|
350 |
|
Distributions from Consolidated Funds |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(107 |
) |
|
|
(107 |
) |
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
504 |
|
|
|
- |
|
|
|
|
504 |
|
|
|
- |
|
|
|
504 |
|
BALANCE, March 31, 2024 |
|
|
30,164 |
|
|
$ |
30 |
|
|
$ |
3,317,212 |
|
|
$ |
(3,252,242 |
) |
|
|
$ |
65,000 |
|
|
$ |
7,471 |
|
|
$ |
72,471 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
Great Elm Group, Inc.
Condensed Consolidated Statements of Stockholders’ Equity and Contingently Redeemable Non-controlling Interest (Unaudited)
Amounts in thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
Additional
Paid-in |
|
|
Accumulated |
|
|
|
Total Great Elm Group, Inc. Stockholders' |
|
|
Non-
controlling |
|
|
Total Stockholders' |
|
|
|
Contingently Redeemable Non-controlling |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
|
Equity |
|
|
Interest |
|
|
Equity |
|
|
|
Interest |
|
BALANCE, June 30, 2022 |
|
|
28,507 |
|
|
$ |
29 |
|
|
$ |
3,312,763 |
|
|
$ |
(3,279,296 |
) |
|
|
$ |
33,496 |
|
|
$ |
6,533 |
|
|
$ |
40,029 |
|
|
|
$ |
2,225 |
|
Net (loss) income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(8,291 |
) |
|
|
|
(8,291 |
) |
|
|
(910 |
) |
|
|
(9,201 |
) |
|
|
|
662 |
|
Distributions to non-controlling interests in Consolidated Funds |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(634 |
) |
|
|
(634 |
) |
|
|
|
- |
|
Issuance of common stock related to vesting of restricted stock |
|
|
267 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
834 |
|
|
|
- |
|
|
|
|
834 |
|
|
|
- |
|
|
|
834 |
|
|
|
|
- |
|
BALANCE, September 30, 2022 |
|
|
28,774 |
|
|
|
29 |
|
|
$ |
3,313,597 |
|
|
$ |
(3,287,587 |
) |
|
|
$ |
26,039 |
|
|
$ |
4,989 |
|
|
$ |
31,028 |
|
|
|
$ |
2,887 |
|
Net income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
29,530 |
|
|
|
|
29,530 |
|
|
|
108 |
|
|
|
29,638 |
|
|
|
|
90 |
|
Redemption of non-controlling interests upon sale of controlling interest in subsidiary |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(2,120 |
) |
|
|
(2,120 |
) |
|
|
|
- |
|
Issuance of common stock related to vesting of restricted stock |
|
|
202 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
576 |
|
|
|
- |
|
|
|
|
576 |
|
|
|
- |
|
|
|
576 |
|
|
|
|
- |
|
BALANCE, December 31, 2022 |
|
|
28,976 |
|
|
$ |
29 |
|
|
$ |
3,314,173 |
|
|
$ |
(3,258,057 |
) |
|
|
$ |
56,145 |
|
|
$ |
2,977 |
|
|
$ |
59,122 |
|
|
|
$ |
2,977 |
|
Net income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
11,748 |
|
|
|
|
11,748 |
|
|
|
- |
|
|
|
11,748 |
|
|
|
|
- |
|
Redemption of non-controlling interests upon sale of controlling interest in subsidiary |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
(2,977 |
) |
|
|
(2,977 |
) |
|
|
|
(2,977 |
) |
Issuance of common stock related to vesting of restricted stock |
|
|
170 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
Stock-based compensation |
|
|
- |
|
|
|
- |
|
|
|
564 |
|
|
|
- |
|
|
|
|
564 |
|
|
|
- |
|
|
|
564 |
|
|
|
|
- |
|
BALANCE, March 31, 2023 |
|
|
29,146 |
|
|
|
29 |
|
|
|
3,314,737 |
|
|
|
(3,246,309 |
) |
|
|
|
68,457 |
|
|
|
- |
|
|
|
68,457 |
|
|
|
|
- |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
Great Elm Group, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
Dollar amounts in thousands
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net income from continuing operations |
|
$ |
(364 |
) |
|
$ |
19,735 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
837 |
|
|
|
870 |
|
Stock-based compensation |
|
|
1,834 |
|
|
|
1,974 |
|
Unrealized gain on investments |
|
|
(1,813 |
) |
|
|
(12,776 |
) |
Realized loss on investments |
|
|
78 |
|
|
|
(4,658 |
) |
Gain on sale of controlling interest in subsidiary |
|
|
- |
|
|
|
(10,524 |
) |
Non-cash interest and amortization of capitalized issuance costs |
|
|
1,732 |
|
|
|
1,737 |
|
Deferred tax expense |
|
|
- |
|
|
|
4 |
|
Change in fair value of contingent consideration |
|
|
(518 |
) |
|
|
180 |
|
Other non-cash (income) expense, net |
|
|
(406 |
) |
|
|
324 |
|
Adjustments to reconcile net income to net cash used in operating activities of Consolidated Funds: |
|
|
|
|
|
|
Purchases of investments |
|
|
(8,459 |
) |
|
|
- |
|
Sales of investments |
|
|
426 |
|
|
|
1,558 |
|
Amortization |
|
|
(15 |
) |
|
|
- |
|
Net realized and unrealized (gains) losses on investments |
|
|
(245 |
) |
|
|
16 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Receivables from managed funds |
|
|
(1,092 |
) |
|
|
(272 |
) |
Prepaid and other assets |
|
|
(2,143 |
) |
|
|
32 |
|
Real estate under development |
|
|
(6,421 |
) |
|
|
(1,600 |
) |
Operating leases |
|
|
(25 |
) |
|
|
(70 |
) |
Related party payables |
|
|
(1,199 |
) |
|
|
- |
|
Accounts payable, accrued expenses and other liabilities |
|
|
4,779 |
|
|
|
(919 |
) |
Changes in operating assets and liabilities of Consolidated Funds: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
(5,414 |
) |
|
|
- |
|
Other assets |
|
|
(233 |
) |
|
|
746 |
|
Accrued expenses and other liabilities |
|
|
124 |
|
|
|
70 |
|
Net cash used in operating activities - continuing operations |
|
|
(18,537 |
) |
|
|
(3,573 |
) |
Net cash provided by operating activities - discontinued operations |
|
|
- |
|
|
|
766 |
|
Net cash (used in) provided by operating activities |
|
|
(18,537 |
) |
|
|
(2,807 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
Purchases of investments in held-to-maturity securities |
|
|
(49,036 |
) |
|
|
- |
|
Proceeds from settlement of held-to-maturity securities |
|
|
50,000 |
|
|
|
- |
|
Purchases of investments |
|
|
(11,440 |
) |
|
|
(3,105 |
) |
Sales of investments |
|
|
6,752 |
|
|
|
26,527 |
|
Proceeds from sale of controlling interest in subsidiary, net of cash sold |
|
|
- |
|
|
|
17,735 |
|
Other |
|
|
(15 |
) |
|
|
(37 |
) |
Net cash (used in) provided by investing activities - continuing operations |
|
|
(3,739 |
) |
|
|
41,120 |
|
Net cash used in investing activities - discontinued operations |
|
|
(947 |
) |
|
|
67,230 |
|
Net cash (used in) provided by investing activities |
|
|
(4,686 |
) |
|
|
108,350 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
Great Elm Group, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited) (continued)
Dollar amounts in thousands
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
Principal payments on long term debt |
|
|
- |
|
|
|
(41,765 |
) |
Contributions of non-controlling interests in Consolidated Funds |
|
|
7,250 |
|
|
|
- |
|
Distributions to non-controlling interests in Consolidated Funds |
|
|
(107 |
) |
|
|
(634 |
) |
Net cash provided by (used in) financing activities - continuing operations |
|
|
7,143 |
|
|
|
(42,399 |
) |
Net cash provided by financing activities - discontinued operations |
|
|
- |
|
|
|
(5,221 |
) |
Net cash provided by (used in) financing activities |
|
|
7,143 |
|
|
|
(47,620 |
) |
Net decrease in cash and cash equivalents, including cash and cash equivalents classified within current assets held for sale |
|
|
(16,080 |
) |
|
|
57,923 |
|
Less: net increase in cash and cash equivalents classified within current assets held for sale |
|
|
- |
|
|
|
62,775 |
|
Plus: cash received from (used in) discontinued operations |
|
|
- |
|
|
|
66,689 |
|
Net change in cash and cash equivalents |
|
|
(16,080 |
) |
|
|
61,837 |
|
Cash and cash equivalents at beginning of period |
|
|
60,165 |
|
|
|
22,281 |
|
Cash and cash equivalents at end of period |
|
$ |
44,085 |
|
|
$ |
84,118 |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
1,465 |
|
|
$ |
3,348 |
|
|
|
|
|
|
|
|
Non-cash investing and financing activities |
|
|
|
|
|
|
Non-cash contribution to Consolidated Funds |
|
$ |
389 |
|
|
$ |
- |
|
Lease liabilities and right-of-use assets arising from operating leases |
|
|
- |
|
|
|
167 |
|
Partial settlement of Seller Note in exchange for GECC stock |
|
|