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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

 

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

 

 

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)

 

 

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:

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.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

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

 

PART I. FINANCIAL INFORMATION

 

 

 

 

Item 1.

 

Financial Statements

3

 

 

Unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and June 30, 2023

3

 

 

Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2024 and 2023

4

 

 

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2024, December 31, 2023 and September 30, 2023

5

 

 

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

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2024 and 2023

7

 

 

Unaudited Notes to Condensed Consolidated Financial Statements

9

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

26

Item 4.

 

Controls and Procedures

26

 

 

 

 

PART II. OTHER INFORMATION

27

 

 

 

 

Item 1.

 

Legal Proceedings

27

Item 1A.

 

Risk Factors

27

Item 5.

 

Other Information

27

Item 6.

 

Exhibits

28

 

 

 

 

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.

1


 

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.

2


 

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)

ASSETS

 

March 31, 2024

 

 

June 30, 2023

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

44,085

 

 

$

60,165

 

Receivables from managed funds

 

 

4,400

 

 

 

3,308

 

Investments in marketable securities

 

 

24,789

 

 

 

24,595

 

Investments, at fair value (cost $46,199 and $40,387, respectively)

 

 

38,244

 

 

 

32,611

 

Prepaid and other current assets

 

 

2,843

 

 

 

717

 

Real estate under development

 

 

8,104

 

 

 

1,742

 

Assets of Consolidated Funds:

 

 

 

 

 

 

Cash and cash equivalents

 

 

5,414

 

 

 

-

 

Investments, at fair value (cost $8,353)

 

 

8,561

 

 

 

-

 

Other assets

 

 

233

 

 

 

-

 

Total current assets

 

 

136,673

 

 

 

123,138

 

Identifiable intangible assets, net

 

 

11,300

 

 

 

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.

3


 

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.

4


 

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.

5


 

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.

6


 

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.

7


 

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